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T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, October 24, 2016, Vol. 19, No. 210
Headlines
A U S T R A L I A
21ST CENTURY: Court Declares Land Banking Schemes Unlawful
A.B.M.R PTY: First Creditors' Meeting Set for Nov. 2
AUSTRALIAN CAREERS: ACCC Wins OK to Pursue Phoenix Institute
HOME AUSTRALIA: Customers Call on ASIC to Probe Company Collapse
RAINES CARPETS: First Creditors' Meeting Set for Oct. 31
SCCS (QLD): First Creditors' Meeting Set for Oct. 31
I N D I A
ADAMS MARKETING: Ind-Ra Assigns 'B-' Long-Term Issuer Rating
AKMG ALLOYS: CRISIL Suspends 'D' Rating on INR100MM Cash Loan
ALARD CHARITABLE: CRISIL Suspends 'D' Rating on INR160MM Loan
AR AIRWAYS: Ind-Ra Withdraws 'BB' Long-Term Issuer Rating
B D TRANSPORT: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
B G ROADLINES: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
B T ROADLINES: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
BAJAJ AGRO: CRISIL Reaffirms B+ Rating on INR55MM Cash Loan
CHABBRA'S ASSOCIATES: Ind-Ra Suspends BB Long-Term Issuer Rating
CHEM CORPORATION: CRISIL Reaffirms 'B' Rating on INR12.5MM Loan
CREATIVE BAKERS: Ind-Ra Withdraws 'BB+' Long-Term Issuer Rating
DERBY PLANTATIONS: CRISIL Ups Rating on INR52MM Cash Loan to C
GBA STEELS: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
GIE JEWELS: Ind-Ra Suspends 'BB+' Long-Term Issuer Rating
GULSHAN FASHIONS: Ind-Ra Suspends 'B+' Long-Term Issuer Rating
HARDWARE TRADING: CRISIL Assigns 'B-' Rating to INR25MM Loan
HERALD PUBLICATIONS: CRISIL Ups Rating on INR64.5MM Loan to B+
HYBRO FOODS: CRISIL Suspends 'B' Rating on INR50MM Cash Loan
INDIAN TRADING: CRISIL Cuts Rating on INR120MM Cash Loan to B-
IRULAPPA MILLS: CRISIL Reaffirms 'B' Rating on INR70MM Term Loan
ISHWARLAL HARJIVANDAS: CRISIL Suspends B+ Rating on INR300MM Loan
JALNA SIDDHIVINAYAK: CRISIL Suspends B+ Rating on INR450MM Loan
KALPAKA TRANSPORT: CRISIL Ups Rating on INR90MM Loan to B+
KAURSAIN EXPORTS: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating
KERALA TRANSPORT: CRISIL Ups Rating on INR390MM Cash Loan to B+
KLR INDUSTRIES: Ind-Ra Assigns 'D' Long-Term Issuer Rating
KTL PVT: Ind-Ra Suspends 'BB' Long-Term Issuer Rating
KUDU INDUSTRIES: Ind-Ra Suspends 'BB-' Long-Term Issuer Rating
LOKESH INDUSTRIAL: CRISIL Suspends B- Rating on INR100MM Loan
LOKESH INFRAPROJECT: CRISIL Suspends B- Rating on INR50MM Loan
LOTUS BRANDING: CRISIL Assigns B+ Rating to INR2.5MM LT Loan
M.R. HITECH: CRISIL Suspends B+ Rating on INR28.0MM LT Loan
MANIPUR TEA: CRISIL Ups Rating on INR48MM Cash Loan to 'C'
MANTRI TEA: CRISIL Raises Rating on INR40MM Cash Loan to 'C'
MB SPONGE: Ind-Ra Assigns 'BB' Long-Term Issuer Rating
METALFAB HIGHTECH: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating
MOTOR SALES: Ind-Ra Assigns 'B+' Long-Term Issuer Rating
MYNOR ENTERPRISES: CRISIL Suspends B+ Rating on INR16MM Loan
NIMIT STEELS: CRISIL Lowers Rating on INR1.10BB Loan to 'D'
PRIME CARGO: CRISIL Lowers Rating on INR60MM Cash Loan to B-
PRIME CARGO MOVERS: CRISIL Lowers Rating on INR70MM Loan to B-
R S AGROTECH: Ind-Ra Assigns 'B-' Long-Term Issuer Rating
ROOPAM STEEL: CRISIL Suspends B+ Rating on INR120.1MM Cash Loan
SAR ISPAT: CRISIL Suspends B- Rating on INR120MM Cash Loan
SECUNDERABAD HOTELS: Ind-Ra Suspends BB+ Long-Term Issuer Rating
SHRI LAKSHMI: Ind-Ra Suspends 'B-' Long-Term Issuer Rating
SHYAM TELECOM: Ind-Ra Withdraws 'BB+' Long-Term Issuer Rating
SPM INDIA: CRISIL Lowers Rating on INR70MM Book Debt to B+
SRI VISHNU: Ind-Ra Affirms 'D' Long-Term Issuer Rating
SURANA GREEN: CRISIL Suspends 'D' Rating on INR300MM Term Loan
SVG GRANITES: Ind-Ra Affirms 'B' Long-Term Issuer Rating
SWARNA CONSTRUCTIONS: CRISIL Reaffirms C Rating on INR60MM Loan
TIRUPPUR SURYA: CRISIL Suspends D Rating on INR220.4MM Term Loan
TOYOP RELIEF: CRISIL Reaffirms 'B' Rating on INR180MM Loan
VIDESH COAL: CRISIL Suspends 'D' Rating on INR100MM Cash Loan
VVC MOTORS: Ind-Ra Suspends 'BB+' Long-Term Issuer Rating
ZAMINDARA TIMBER: CRISIL Assign 'B+' Rating to INR27.5MM Loan
P H I L I P P I N E S
EXPRESS SAVINGS: Sandigan Dismisses Sen. Gatchalian'S LWUA Cases
S I N G A P O R E
MMI INTERNATIONAL: Fitch Assigns 'B+' IDR; Outlook Stable
S O U T H K O R E A
DAEWOO SHIPBUILDING: Korea to Go All-Out to Save Shipbuilder
HANJIN SHIPPING: In Talks to Sell Stake in Long Beach Terminal
V I E T N A M
ASIA COMMERCIAL: Moody's Affirms B2 Long-term Bank Deposit Rating
X X X X X X X X
* ASPAC: Protection of Cash Flow From Payment Risk Top Agenda
- - - - -
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A U S T R A L I A
=================
21ST CENTURY: Court Declares Land Banking Schemes Unlawful
----------------------------------------------------------
The Federal Court has declared that land banking developments
operated by Jamie and Dennis McIntyre were unregistered managed
investment schemes in a decision delivered by His Honour Justice
Bromwich on Oct. 17, 2016.
The Court also made orders that Jamie and Dennis McIntyre be
disqualified from managing corporations and restrained from
carrying on financial services for a period of 10 years each, due
to them being officers of companies that had failed, by virtue of
them being wound up, and which had also repeatedly contravened
the Corporations Act.
Jamie and Dennis McIntyre agreed to the banning orders made
against them.
Further, the Court made orders to wind up the unregistered
managed investment schemes, which were promoted and advertised by
the 21st Century land banking companies*.
The unregistered managed investment schemes are known as:
-- Botanica, located at 805 Archer Rd, Kialla, Victoria 3631
-- Secret Valley Estate, located at 955, Old Sydney Road,
Bylands, Victoria 3762
-- Oak Valley Lakes Estate & Resort, located at 124 Booth Road,
Brookhill, Townsville, Qld 4816
-- Bendigo Vineyard Estate & Resort, located at 51 Andrews
Road, Bendigo, Victoria 3551
-- Melbourne Grove Estate, located at 1491 Dohertys Road, Mount
Cottrell, Victoria 3024
Simon Wallace-Smith and Robert Woods of Deloitte have been
appointed as joint liquidators of the unregistered managed
investment schemes.
ASIC Commissioner Greg Tanzer said, "The high banning periods
ordered by the Court in this case are necessary to protect the
public from those who are officers of companies that repeatedly
contravene the Corporations Act. It also serves as a warning to
those involved in unlawful unregistered managed investment
schemes, including those that involve land banking, that ASIC
will take action."
ASIC's investigation into the matter is ongoing.
ASIC commenced proceedings in August 2015 against Jamie and
Dennis McIntyre and the 21st Century land banking companies in
relation to their promotion and sale of interests to investors in
five land banking schemes.
ASIC's proceedings are part of ASIC's wider and ongoing
investigation into land banking schemes.
More information about ASIC's proceedings, including frequently
asked questions.
* Jamie McIntyre refers to his companies as the "21st Century
Group". 21st Century Group Pty is not a defendant to the
proceeding, and ASIC is not aware of any connection between 21st
Century Group Pty Ltd and the defendants.
A.B.M.R PTY: First Creditors' Meeting Set for Nov. 2
----------------------------------------------------
A first meeting of the creditors in the proceedings of A.B.M.R
Pty Ltd, trading as Kri Kri, will be held at the offices of
SV Partners, Level 17, 200 Queen Street, Melbourne, Victoria, on
Nov. 2, 2016, at 11:00 a.m.
Michael Carrafa and Peter Gountzos of SV Partners were appointed
as administrators of A.B.M.R Pty on Oct. 20, 2016.
AUSTRALIAN CAREERS: ACCC Wins OK to Pursue Phoenix Institute
------------------------------------------------------------
Sarah Danckert at The Sydney Morning Herald reports that the
consumer watchdog has won court approval to continue its action
against a defunct vocational education provider accused of
misleading vulnerable members of the community into signing up
for appropriate courses.
SMH relates that the Federal Court on Oct. 21 decided to permit
the Australian Competition and Consumer Commission to pursue the
Phoenix Institute for penalties despite it not technically being
a creditor to the parent of the company, Australian Careers
Network, which collapsed in 2015.
SMH says the ruling is important as it stops companies trying to
avoid prosecution by regulators by placing themselves into
administration and then being shortly after resurrected through a
deed of company arrangement.
"If the allegations made by the ACCC are established, the
respondents sought to procure a very substantial sum of up to
AUD360 million from public revenue through misleading, deceptive
and unconscionable conduct," SMH quotes Justice Melissa Perry as
saying.
Justice Perry's decision also reveals forensic accountants from
McGrathNicol appointed by the federal government to audit the
enrolment data had been frustrated by "unacceptable" delays from
the administrators of Australian Careers Network earlier this
year in April, SMH relays.
"McGrathNicol advised that they had not been provided with access
to the information required to undertake the audit and enclosed a
report prepared by McGrathNicol detailing the various requests
for information by them and responses received," Justice Perry,
as cited by SMH, said.
Australian Careers Network Limited (ACN) is engaged in the
provision of vocational educational and training services in
Australia. The Company delivers training services and outcomes
for students focusing on relevant course content. ACN has an
education offering across a range of industry sectors, including
trades, health and wellness, business, sport and recreation, and
hospitality. It offers both funded and non-funded offerings
ranging from short courses, nationally recognized certificate
qualifications, diplomas and higher education degrees. ACN's
services are distributed through three commercial streams:
training and student services for individuals, consultancy and
skills solutions for business, and employment and recruitment
solutions for industry. The Company also partners with job
seeking agencies and labor hire companies to provide employment
pathway to students seeking employment upon completion of a
course.
Ferrier Hodgson partners, John Lindholm and George Georges were
appointed as Voluntary Administrators of Australian Careers
Network Limited and its subsidiaries on March 21, 2016.
At the second meeting of creditors on May 4, 2016, creditors
resolved that the Group executed a Deed of Company Arrangement
(DOCA), with John Lindholm and George Georges appointed Deed
Administrators.
HOME AUSTRALIA: Customers Call on ASIC to Probe Company Collapse
----------------------------------------------------------------
Ben Butler and Samantha Hutchinson at The Australian report that
customers of Family First senator Bob Day's collapsed Home
Australia building group have called on the corporate regulator
to investigate whether the company traded while insolvent.
Liquidators were appointed to Home Australia on Oct. 17, leaving
more than 200 customers across Australia with unfinished homes.
The Australian relates that Senator Day, who claimed he made the
decision to appoint liquidators after a Philippines investor
failed to come through with cash to save the business, said he
would resign from parliament and would lose his family home in
the Adelaide Hills because of personal guarantees to the failed
company.
Home's customers will now have to rely on state-based insurance
schemes to get their houses finished by other builders, according
to The Australian.
The Australian relates that customers said authorities should
investigate AUD2.6 million dividends the struggling company paid
to Senator Day and business partner John Smith, and hundreds of
thousands of dollars in donations to Family First by the senator.
Some customers, including Sydney homeowner Shane Summerhayes,
have already contacted authorities.
According to the report, Mr. Summerhayes said he had been in
discussion with the Australian Taxation Office on behalf of more
than 31 NSW clients who are still waiting for work to be
completed on their homes. The group has also contacted the
Australian Securities & Investments Commission, but now plans to
push the matter more forcefully.
"ASIC should be looking into this company, absolutely," the
report quotes Mr. Summerhayes as saying.
He laid blame for the company's demise squarely on Senator Day,
arguing matters could have been different if dividends had been
withheld, The Australian relays. "He's saying that there was
mismanagement in the business, but the company was making good
money," he said.
"And who's going to pay for the losses? We are. It's our taxes
and us having to go back to our insurers to make up the
difference, and it's all his doing. He was the one signing the
cheques."
The Australian adds that another NSW customer, Cornelis Duba,
said ASIC should "investigate the timing of Bob Day's realisation
that his companies were insolvent".
"Bob Day and Home Australia need to be held fully accountable for
this disaster," he said.
The Australian says Senator Day defended his Family First
donations but did not respond to questions about dividend
payments.
"All donations have been personal," he told The Australian. "No
donations have ever been made from my companies to the Family
First party."
RAINES CARPETS: First Creditors' Meeting Set for Oct. 31
--------------------------------------------------------
A first meeting of the creditors in the proceedings of Raines
Carpets Pty Ltd will be held at Wesley Mission, Pollard Room,
Lower Ground Level, 220 Pitt Street, in Sydney, NSW, on Oct. 31,
2016, at 11:00 a.m.
Richard Albarran and Brent Kijurina of Hall Chadwick Chartered
Accountants were appointed as administrators of Raines Carpets on
Oct. 20, 2016.
SCCS (QLD): First Creditors' Meeting Set for Oct. 31
----------------------------------------------------
A first meeting of the creditors in the proceedings of SCCS (Qld)
Pty Ltd, formerly trading as "Welsh Family Trust No 2", will be
held at the offices of WRA Insolvency, Level 1, 6 Allison Street,
in Bowen Hills, Queensland, on Oct. 31, 2016, at 11:00 a.m.
Anne-Marie Barley of WRA Insolvency was appointed as
administrator of SCCS (Qld) on Oct. 19, 2016.
=========
I N D I A
=========
ADAMS MARKETING: Ind-Ra Assigns 'B-' Long-Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Adams Marketing
Private Limited a Long-Term Issuer Rating of 'IND B-'. The
Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect AMPL's large scale of operations and weak
credit metrics. AMPL's revenue was INR1,608 mil. in FY16 (FY15:
INR1,401 mil.) with EBITDA of INR45 mil. (INR48 mil.). Its
interest coverage was (operating EBITDA/gross interest expense)
0.9x (1.2x) and net leverage (total adjusted net debt/operating
EBITDAR) was 6.3x (5x).
The ratings further reflect the company's weak liquidity with
average 96.16% utilization of its working capital limits during
the 12 months ended September 2016 with instances of
overutilization.
The ratings however benefit from the decade long experience of
the directors in the retail business.
RATING SENSITIVITIES
Positive: Improvement in the overall credit profile could lead to
a positive rating action.
COMPANY PROFILE
AMPL was incorporated in 2007. The company is based in Howrah
and is an authorized dealer for various electronics goods. AMPL
is also the distributor of Bharti Airtel Limited for the Kolkata
circle.
AMPL's ratings:
-- Long-Term Issuer Rating: assigned 'IND B-'/ Stable
-- INR5.58 mil. term loan: assigned 'IND B-'/Stable
-- INR245 mil. fund-based limits: assigned 'IND B-'/ Stable
-- Proposed INR100 mil. fund-based limits: assigned
'Provisional IND B-'/ Stable
AKMG ALLOYS: CRISIL Suspends 'D' Rating on INR100MM Cash Loan
-------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of AKMG
Alloys Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL D
Inland/Import Letter
of Credit 70 CRISIL D
Long Term Loan 36 CRISIL D
Proposed Long Term
Bank Loan Facility 94 CRISIL D
The suspension of ratings is on account of non-cooperation by
AAPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, AAPL is yet to
provide adequate information to enable CRISIL to assess AAPL'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 2010, AAPL manufactures mild steel ingots. Its
day-to-day operations are managed by its promoter, Mr. G V Kumar.
ALARD CHARITABLE: CRISIL Suspends 'D' Rating on INR160MM Loan
-------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of Alard
Charitable Trust.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 160 CRISIL D
Working Capital
Demand Loan 30 CRISIL D
The suspension of ratings is on account of non-cooperation by ACT
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, ACT is yet to
provide adequate information to enable CRISIL to assess ACT'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.
ACT, based in Pune (Maharashtra) was set up in 1999 by Mr. L R
Yadav. The trust operates five institutes offering a wide array
of courses, including management, engineering and pharmacy. The
courses of the trust are approved by All India Council for
Technical Education, Department of Technical Education and
University of Pune.
AR AIRWAYS: Ind-Ra Withdraws 'BB' Long-Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn AR Airways
Private Limited's (ARAPL) 'IND BB' Long-Term Issuer Rating. The
agency has also withdrawn ARAPL's INR193.4 mil. term loans'
'IND BB-' rating. The Outlook was Stable.
The ratings have been withdrawn as the term loans have been paid
in full and Ind-Ra has received no-dues certificate for the same
from the company's banker. Consequently, Ind-Ra has withdrawn
ARAPL's Long-Term Issuer Rating. Ind-Ra will no longer provide
ratings or analytical coverage for ARAPL.
B D TRANSPORT: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned B D Transport
Company (BDTC) a Long-Term Issuer rating of 'IND BB-'. The
Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect BDT's small scale of operations and moderate
credit profile. According to BDT's provisional financial for
FY16, its revenue was INR44 mil. (FY15: INR22 mil.), net
financial leverage (net debt/EBITDA) was 3.8x (3.5x) and gross
interest coverage (EBITDA/gross interest) was 3.2x (2.7x). The
company's EBITDA margin deteriorated to 43.7% (FY15: 53.8%) due
to high repair and maintenance cost.
The ratings are constrained by BDT's partnership nature of
business.
The ratings, however, are supported by over two decades of
experience of BDT's promoters in the transportation service. The
ratings are further supported by the entity's strong
relationships with its customers and suppliers. Moreover, BDT's
liquidity is comfortable as evident from its 65% average working
capital utilization for the 12 months ended August 2016.
RATING SENSITIVITIES
Positive: A substantial improvement in revenue and the operating
profit could be positive for the ratings.
Negative: A decline in the operating profitability, resulting in
deterioration in the interest coverage, could be negative for the
ratings.
COMPANY PROFILE
BDT, incorporated in 2011, is a subsidiary of Gujral Group of
companies which is engaged in transportation and hotel business
governed by the Board of Directors Mr. Bhupinder Singh Gujral,
Mrs. Tejinder Kaur Gujral, Mr. Gaganjeet Singh Gujral,
Mr. Sudipta Bhattacharya and Mr. Debdulal Talukdar.
BDT started its commercial operations in 2012. The firm is
primarily involved in transportation business. The firm mainly
transports LPG gases for Indian Oil Corporation (IND AAA/Stable),
Bharat Petroleum Corporation Limited and Hindustan Petroleum
Corporation Limited (IND AAA/Stable) in the eastern region of
India.
BDT's ratings:
-- Long-Term Issuer Rating 'IND BB-'/Stable
-- INR13.2 mil. fund-based working capital: assigned
'IND BB-'/Stable
-- INR36.36 mil. Long-term loan: assigned 'IND BB-'/Stable
-- INR1 mil. non-fund-based working capital: assigned
'IND A4+'
B G ROADLINES: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned B G Roadlines a
Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect BGR's small scale of operations and moderate
credit profile. According to BGR's provisional financial for
FY16, its revenue was INR65 mil. (FY15: INR46 mil.), net
financial leverage (net debt/EBITDA) was 2.8x (3.2x) and gross
interest coverage (EBITDA/gross interest) was 3.3x (2.7x). The
firm's EBITDA margin improved to 40.7% (FY15: 38.4%) due to low
repair and maintenance cost.
The ratings are constrained by BGR's partnership nature of
business.
The ratings, however, are supported by over two decades of
experience of BGR's promoters in the transportation services.
The ratings are further supported by the firm's strong
relationships with its customers and suppliers. Moreover, BGR's
liquidity is comfortable as evident from its 68.14% average
working capital utilization for the 12 months ended August 2016.
RATING SENSITIVITIES
Positive: A substantial improvement in revenue and the operating
profit could be positive for the ratings.
Negative: A decline in the operating profitability, resulting in
deterioration in the interest coverage, could be negative for the
ratings.
COMPANY PROFILE
BGR, incorporated in 2011, is a subsidiary of Gujral Group of
companies which is engaged in transportation and hotel business
governed by the Board of Directors Mr. Bhupinder Singh Gujral,
Mrs. Tejinder Kaur Gujral , Mr. Gaganjeet Singh Gujral,
Mr. Sudipta Bhattacharya and Mr. Debdulal Talukdar.
BGR started its commercial operations in 2012. The firm is
primarily involved in transportation business. The firm mainly
transports LPG gases for Indian Oil Corporation (IND AAA/Stable),
Bharat Petroleum Corporation Limited and Hindustan Petroleum
Corporation Limited (IND AAA/Stable) in the eastern region of
India.
BGR's ratings:
-- Long-Term Issuer Rating 'IND BB-'/Stable
-- INR14.3 mil. fund-based working capital: assigned
'IND BB-'/Stable
-- INR45.67 mil. Long-term loan: assigned 'IND BB-'/Stable
-- INR1 mil. non-fund-based working capital: assigned
'IND A4+'
B T ROADLINES: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned B T Roadlines a
Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect BTR's small scale of operations and moderate
credit profile. According to BTR's provisional financial for
FY16, its revenue was INR55 mil. (FY15: INR24 mil.), net
financial leverage (net debt/EBITDA) was 3.1x (3.5x) and gross
interest coverage (EBITDA/gross interest) was 3.3x (2.5x). The
company's EBITDA margin deteriorated to 36.7% (FY15: 55.2%) due
to high repair and maintenance cost.
The ratings are constrained by BTR's partnership nature of
business.
The ratings, however, are supported by over two decades of
experience of BTR's promoters in the transportation services. The
ratings are further supported by the entity's strong
relationships with its customers and suppliers. Moreover, BTR's
liquidity is comfortable as evident from its 59.83% average
working capital utilization for the 12 months ended Aug 2016.
RATING SENSITIVITIES
Positive: A substantial improvement in revenue and the operating
profit could be positive for the ratings.
Negative: A decline in the operating profitability, resulting in
deterioration in the interest coverage, could be negative for the
ratings.
COMPANY PROFILE
BTR, incorporated in 2011, is a subsidiary of Gujral Group of
companies which is engaged in transportation and hotel business
governed by the Board of Directors Mr. Bhupinder Singh Gujral,
Mrs. Tejinder Kaur Gujral, Mr. Gaganjeet Singh Gujral, Mr.
Sudipta Bhattacharya and Mr. Debdulal Talukdar.
BTR started its commercial operations in 2012. The firm is
primarily involved in transportation business. The firm mainly
transports LPG gases for Indian Oil Corporation (IND AAA/Stable),
Bharat Petroleum Corporation Limited and Hindustan Petroleum
Corporation Limited (IND AAA/Stable) in the eastern region of
India.
BTR's ratings:
-- Long-Term Issuer Rating 'IND BB-'/Stable
-- INR12.7 mil. fund-based working capital: assigned
'IND BB-'/Stable
-- INR38.73 mil. Long-term loan: assigned 'IND BB-'/Stable
-- INR1 mil. non-fund-based working capital: assigned
'IND A4+'
BAJAJ AGRO: CRISIL Reaffirms B+ Rating on INR55MM Cash Loan
-----------------------------------------------------------
CRISIL's ratings on the bank loan facilities of Bajaj Agro
Industries continue to reflect BAI's below average financial risk
profile, marked by leveraged capital structure and moderate debt
protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Reaffirmed)
Cash Credit 55 CRISIL B+/Stable (Reaffirmed)
Term Loan 25.1 CRISIL B+/Stable (Reaffirmed)
The ratings also factor in the modest scale of operations in the
intensely competitive basmati rice market and the susceptibility
of operating margin to changes in regulations and to volatility
in raw material prices. These weaknesses are partially offset by
the extensive industry experience of its proprietor.
Outlook: Stable
CRISIL believes BAI will continue to benefit from the extensive
experience of its proprietor in the rice industry. The outlook
may be revised to 'Positive' if increase in revenue and
profitability resulting in high cash accrual or capital infusion
leads to better financial risk profile. The outlook may be
revised to 'Negative' if a large debt-funded capital expenditure
or decline in revenue and profitability or stretch in its working
capital cycle weakens the financial risk profile.
Update
Revenues grew 20% in fiscal 2016 to INR360 million from INR300
million in fiscal 2015 driven by additional revenues from the
increased capacity. The operating profitability has remained
stable at 6.3%.
The working capital requirement has remained moderate with gross
current assets of 119 days as on March 31, 2016, driven by
moderate inventory and large receivables. The financial risk
profile has weakened slightly in fiscal 2016 primarily due to
high year-end bank limit utilisation, resulting in a high gearing
of around 5 times.
Liquidity, adequate driven by adequate cash accrual against debt
repayment obligations and funding support from the promoters,
however has remained constrained by high bank limit utilisation.
Kurud (Raipur) based, BAI is a proprietorship firm set up in
2011. It processes basmati rice and is promoted by Mr Naresh
Kumar Bajaj.
CHABBRA'S ASSOCIATES: Ind-Ra Suspends BB Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Chabbra's
Associates' 'IND BB' Long-Term Issuer Rating to the suspended
category. This rating will now appear as 'IND BB(suspended)' on
the agency's website.
The ratings have been migrated to the suspended category due to
lack of adequate information. Ind-Ra will no longer provide
ratings or analytical coverage for Chabbra's Associates.
The ratings will remain in the suspended category for a period of
six months and be withdrawn at the end of that period. However,
in the event the issuer starts furnishing information during the
six-month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
Chabbra's Associates ratings:
-- Long-Term Issuer Rating: migrated to 'IND BB(suspended)'
from 'IND BB'
-- INR135 mil. fund-based working capital limits: migrated to
'IND BB(suspended)' from 'IND BB'
-- INR200 mil. non-fund-based working capital limits: migrated
to 'IND A4+(suspended)' from 'IND A4+'
CHEM CORPORATION: CRISIL Reaffirms 'B' Rating on INR12.5MM Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Chem Corporation
continue to reflect the firm's moderate financial risk profile,
especially net worth, and total outstanding liabilities to
tangible net worth (TOLTNW) ratio, and modest debt protection
metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 12.5 CRISIL B/Stable (Reaffirmed)
Letter of Credit 40.0 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 7.5 CRISIL B/Stable (Reaffirmed)
The ratings also factor in small scale of operations in the
chemicals trading segment, and large working capital
requirements. These weaknesses are partially offset by the
proprietor's extensive experience and funding support.
Outlook: Stable
CRISIL believes CC will continue to benefit over the medium term
from the proprietor's extensive industry experience and financial
support. The outlook may be revised to 'Positive' if significant
ramp-up in scale of operations, efficient management of working
capital requirements, or sizeable capital infusion strengthens
credit metrics. Conversely, the outlook may be revised to
'Negative' if low cash accrual, or any unexpected stretch in
working capital cycle leads to pressure on liquidity.
Set up as a proprietorship firm in 1994 by Mr Hitesh Shah in
Mumbai, CC trades in organic chemicals, mainly hydrocarbons.
CREATIVE BAKERS: Ind-Ra Withdraws 'BB+' Long-Term Issuer Rating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Creative Bakers
& Confectioners (P) Ltd's 'IND BB+' Long-Term Issuer Rating with
a Stable Outlook.
The ratings have been withdrawn due to the repayment of bank
loans by the company due to which it does not require any
external ratings. Consequently, the agency has also withdrawn
the company's Long-Term Issuer Rating. Ind-Ra will no longer
provide ratings or analytical coverage for CBCPL.
CBCPL's ratings:
-- Long-Term Issuer Rating: 'IND BB+/ Stable'; rating
withdrawn
-- INR149.5 mil. fund-based limits: 'IND BB+'/Stable; rating
withdrawn because of repayment of the entire loan.
-- INR4.4 mil. long-term loans: 'IND BB+'/ Stable; rating
withdrawn because of repayment of the entire loan.
DERBY PLANTATIONS: CRISIL Ups Rating on INR52MM Cash Loan to C
--------------------------------------------------------------
CRISIL has upgraded its rating on long-term bank facilities of
Derby Plantations Private Limited (part of Mantri Group) to
'CRISIL C' from 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 52 CRISIL C (Upgraded from
'CRISIL D')
The upgrade reflects timely servicing of debt repayments over the
six months through September 2016. The upgrade also factors in
CRISIL's expectation that debt obligation will continue to be
serviced in a timely manner, backed by need-based funding support
from promoters.
The rating continues to reflect the modest scale of, and working
capital intensity in, the group's operations, and exposure to
risks related to seasonality in tea production. Moreover, the
group has limited bargaining power and remains susceptible to
volatility in domestic and international tea prices. These
weaknesses are partially offset by extensive experience of
promoters in the tea industry.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of MTCPL, Derby Plantation Pvt Ltd,
Ruttonpore Plantations Pvt Ltd and Manipur Tea Company Pvt Ltd,
together referred to as the Mantri group. This is because the
entities have a common management, and are in the same line of
business, with operational and financial fungibility.
The Mantri group was formed in 1948 by Mr Govind Prasad Mantri.
The Manipur Tea Estate, located in Assam, was the group's first
acquisition in 1954. Subsequently, the group acquired three more
tea gardens in Assam: Ruttonpore Tea Estate in 1986, Derby Tea
Estate in 2005, and Pathini Tea Estate (MTCPL) in 2006. Daily
operations are now overseen by the second and third-generation
members of the promoter's family, along with a professional
management team.
DPPL reported a net loss of INR1.4 million on net sales of
INR94.5 million for fiscal 2016, as against a net loss of INR2.4
million on net sales of INR110 million in fiscal 2015.
GBA STEELS: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned GBA Steels &
Metals Private Limited a Long-Term Issuer Rating of 'IND BB-'.
The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect GBA's short track record of operations and
moderate credit profile coupled with comfortable EBITDA margins.
FY16 financials indicate revenue of INR348.59 mil., (FY15:
INR546.40 mil.), net leverage (total Ind-Ra adjusted net
debt/operating EBITDAR) of 3.23x (FY15:3.43x), interest cover
(operating EBITDA/gross interest expense) of 2.05x (FY15:1.96x)
and EBITDA margins of 8.65% (FY15: 5.95%). EBITDA margins
improved mainly on account of an improvement in income from the
hedging activities undertaken by the company.
The ratings factor in GBA's tight liquidity position as evident
from its 96.97% average utilization of the working capital limits
for the 12 months ended August 2016.
However, the ratings are supported by GBA's promoters' experience
of half a decade in manufacturing MS ingots.
RATING SENSITIVITIES
Negative: Deterioration in the overall credit metrics will lead
to negative rating action.
Positive: A significant improvement in revenue along with
improvement its credit profile will be positive for the ratings.
COMPANY PROFILE
GBA was incorporated in 2010 and is engaged in manufacturing of
mild steel (MS) ingots and trading of pig iron and sponge iron.
Its manufacturing facility is located in Mathura, Uttar Pradesh.
GBA is headed by Mr. Amit Aggarwal and Mr. Praveen Kumar
Aggarwal. The facility has the installed capacity to manufacture
21000 metric tons (MT) of MS ingots per annum as on Sept. 30,
2016.
GBA has achieved revenues of INR106.32 mil. from April 2016 till
August 2016.
GBA's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB-'/Stable
-- INR35.60 mil. term loan: assigned 'IND BB-'/Stable
-- INR40 mil. fund-based working capital limits: assigned
'IND BB-'/Stable/'IND A4+'
-- INR0.50 mil. non fund-based limits: assigned 'IND A4+'
-- Proposed INR3.90 mil. fund-based limits: assigned
'Provisional IND BB-'/Stable/'Provisional IND A4+'
GIE JEWELS: Ind-Ra Suspends 'BB+' Long-Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Gie Jewels'
'IND BB+' Long-Term Issuer Rating to the suspended category. The
Outlook was Stable. The rating will now appear as
'IND BB+(suspended)' on the agency's website.
The ratings have been migrated to the suspended category due to
lack of adequate information. Ind-Ra will no longer provide
ratings or analytical coverage for GIE.
The ratings will remain in the suspended category for a period of
six months and be withdrawn at the end of that period. However,
in the event the issuer starts furnishing information during the
six-month period, the ratings could be reinstated and will be
communicated through a rating action commentary
GIE's ratings:
-- Long-Term Issuer Rating: migrated to 'IND BB+(suspended)'
from 'IND BB+'/Stable
-- INR25.23 mil. term loan: migrated to 'IND BB+(suspended)'
from 'IND BB+'
-- INR100 mil. fund-based working capital limits: migrated to
'IND BB+(suspended)'/'IND A4+(suspended)' from
'IND BB+'/'IND A4+'
GULSHAN FASHIONS: Ind-Ra Suspends 'B+' Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Gulshan
Fashions' (GF) 'IND B+' Long-Term Issuer Rating to the suspended
category. The Outlook was Stable. This rating will now appear as
'IND B+(suspended)' on the agency's website. Ind-Ra has also
migrated GF's INR60 mil. fund-based facilities to
'IND B+(suspended)'/'IND A4(suspended)' from 'IND B+'/Stable/
'IND A4'.
The ratings have been migrated to the suspended category due to
lack of adequate information. Ind-Ra will no longer provide
ratings or analytical coverage for GF.
The ratings will remain in the suspended category for a period of
six months and be withdrawn at the end of that period. However,
in the event the issuer starts furnishing information during the
six-month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
HARDWARE TRADING: CRISIL Assigns 'B-' Rating to INR25MM Loan
------------------------------------------------------------
CRISIL has revoked the suspension and assigned its rating of
'CRISIL B-/Stable/CRISIL A4' on the bank facilities of Hardware
Trading Corporation. CRISIL had, on May 20, 2013, suspended the
rating as HTC had not provided necessary information required to
maintain a valid rating. HTC has now shared the requisite
information, enabling CRISIL to assign ratings to the bank
facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 25 CRISIL B-/Stable (Assigned;
Suspension Revoked)
Letter of Credit 135 CRISIL A4 (Assigned;
Suspension Revoked)
The rating reflects the firm's modest scale of trading operations
and weak risk coverage coupled with significant amount of debtors
which are outstanding for over one year. These rating weaknesses
are partially offset by the partner's extensive industry
experience in the trading chemicals batteries and licenses.
Outlook: Stable
CRISIL believes that HTC will benefit over the medium term from
the extensive experience of the partners and their established
relationships with suppliers and customers in trading business.
The outlook may be revised to 'Positive' if there is substantial
increase in revenues backed by sustained improvement in operating
margins or if there is a substantial improvement in its working
capital cycle. Conversely, the outlook may be revised to
'Negative' in case of lower-than-expected improvement in
profitability, or significant deterioration in capital structure
because of stretch in working capital cycle, or large withdrawal
of funds leading to weakening of financial risk profile.
HTC, was set up in 1960 by Mr. Kantilal Nandalal Vora. The firm
is engaged in trading of chemicals, batteries and licenses. The
firm is promoted by Mr. Mahesh Vora and Mr Pankaj Vora.
HERALD PUBLICATIONS: CRISIL Ups Rating on INR64.5MM Loan to B+
--------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities
of Herald Publications Private Limited to 'CRISIL B+/Stable' from
'CRISIL B/Stable', and reaffirmed its rating on the short-term
facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.5 CRISIL A4 (Reaffirmed)
Cash Credit 70.0 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Letter of Credit 5.0 CRISIL A4 (Reaffirmed)
Term Loan 64.5 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects sustained improvement in liquidity driven by
steady growth in revenue and stable profitability, and efficient
working capital management. Turnover increased to INR490 million
in fiscal 2016 from INR428 million in the previous year, backed
by increasing circulation and growing sales from the printing
division. Operating margin remained healthy at 14.9%, leading to
an increase in cash accrual to INR46 million from INR37 million.
Accrual is likely to exceed INR50 million over the medium term,
led by gradual growth in revenue and will be sufficient to meet
debt obligation. Working capital cycle also improved, reflected
in decline in gross current assets to 147 days as on March 31,
2016, from 185 days in the previous year with faster receivables
realisation. Adequate cash accrual and stable working capital
cycle are expected to improve liquidity over the medium term.
The ratings reflect HPPL's modest, though improving scale of
operations, large working capital requirement, and geographical
concentration in revenue profile. These weaknesses are partially
offset by the extensive experience of its promoters in the
newspaper industry and moderate financial risk profile.
Outlook: Stable
CRISIL believes HPPL will continue to benefit over the medium
term from the experience of its promoters. The outlook may be
revised to 'Positive' in case of a substantial increase in cash
accrual, while maintaining financial risk profile. The outlook
may be revised to 'Negative' if decline in revenue or operating
margins, stretch in working capital cycle, or any large, debt-
funded capital expenditure weakens financial risk profile,
particularly liquidity.
Set up in 1989, HPPL publishes an English daily newspaper
'Herald' in Goa. The company also publishes a Marathi weekly
newspaper 'Dainik Herald' and a Konkani weekly newspaper 'Amcho
Avaz'. It has an operational 24-hour free-to-air (FTA) English
news and entertainment channel, HCN, in Goa. HPPL also prints
labels, cartons, and card board boxes. Mr. Raul Fernandes and his
brother Mr. Oswald Fernandes are the promoters the company and
its facilities are located in Panaji (Goa).
HYBRO FOODS: CRISIL Suspends 'B' Rating on INR50MM Cash Loan
------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Hybro
Foods Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 10.5 CRISIL B/Stable
Term Loan 9.5 CRISIL B/Stable
The suspension of ratings is on account of non-cooperation by
HFPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, HFPL is yet to
provide adequate information to enable CRISIL to assess HFPL'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.
HFPL was set up in 1997 by Mr. Shaikh Shawkat. HFPL is engaged in
processing of poultry products. The company's manufacturing
facility is at Shahapur, Dist. Thane (Maharashtra).
INDIAN TRADING: CRISIL Cuts Rating on INR120MM Cash Loan to B-
--------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility
of Indian Trading Bureau Private Limited to 'CRISIL B-/Negative'
from 'CRISIL B/Stable' while reaffirming its rating on the short-
term bank facilities at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 120 CRISIL B-/Negative
(Downgraded from
'CRISIL B/Stable')
Letter of Credit 60 CRISIL A4 (Reaffirmed)
Proposed Long Term 5.5 CRISIL B-/Negative
Bank Loan Facility (Downgraded from
'CRISIL B/Stable')
The downgrade reflects deterioration in the business risk profile
as reflected in decline in revenue and profitability. The company
has been facing low demand from end-user industries, along with
significant operational challenges owing to unfavourable foreign
exchange (forex) rates. Furthermore, the operating profitability
of the company has also deteriorated to 2.59% in fiscal 2016 from
5.85% in fiscal 2015. Moreover, the working capital cycle has
also been stretched because of delayed receivables. CRISIL
believes the business risk profile will remain susceptible to
volatility in forex rates as ITBPL doesn't hedge its forex
exposure.
The ratings reflect the company's weak financial risk profile,
marked by a highly leveraged capital structure and a weak
interest coverage ratio, and large working capital requirement.
These weaknesses are partially offset by the extensive experience
of promoters in trading in poultry feed additives and products
such as medicines, vaccines, and disinfectants used in poultry
industry, and their established relationships with customer and
suppliers.
Outlook: Negative
CRISIL believes ITBPL's business risk profile will remain
susceptible to volatility in forex rates as the company doesn't
hedge its forex exposure. The rating may be downgraded if any
stretch in working capital cycle or any large, debt-funded
capital expenditure leads to deterioration in the financial risk
profile, particularly liquidity. The outlook may be revised to
'Stable' if material improvement in profitability or working
capital management or capital structure strengthens the financial
risk profile, especially liquidity.
Incorporated in 1948, ITBPL was acquired by the Kolkata-based
Chattha family in 1989. It trades in poultry feed additives such
as amino acids, premix, and enzymes, and products like medicines,
vaccines, and disinfectants. Operations are managed by its
director, Mr Tejvinder Singh Chattha.
IRULAPPA MILLS: CRISIL Reaffirms 'B' Rating on INR70MM Term Loan
----------------------------------------------------------------
CRISIL's rating on the long-term bank facilities of Irulappa
Mills India Private Ltd continues to reflect IMIPL's nascent
stage of operations in intensely competitive textile industry,
susceptibility of operating margins to fluctuations in cotton
prices and regulatory changes and its below-average financial
risk profile marked by small networth, high gearing and weak debt
protection metrics.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL B/Stable (Reaffirmed)
Rupee Term Loan 70 CRISIL B/Stable (Reaffirmed)
These rating strengths are partially offset by extensive
experience of promoters in textile industry.
Outlook: Stable
CRISIL believes that IMIPL will continue to benefit over the
medium term from the extensive experience of the promoters in
textile industry. The outlook may be revised to 'Positive' in
case the company generates healthy revenue and profitability,
while improving its capital structure and debt protection
metrics. Conversely, the outlook may be revised to 'Negative' in
case of lower than expected revenues or profitability, or stretch
in working capital cycle, leading to significant impact on its
debt servicing ability.
IMIPL was incorporated in 2013 by Mr. I Periyasamy and Mr. P
Prabhu. The company is engaged in spinning of cotton yarn and
started commercial production in April 2015. Its manufacturing
unit is based in Dindigul, Tamil Nadu.
ISHWARLAL HARJIVANDAS: CRISIL Suspends B+ Rating on INR300MM Loan
-----------------------------------------------------------------
CRISIL has suspended its rating on the bank facility of Ishwarlal
Harjivandas Jewellers Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 300 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by
IHJPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, IHJPL is yet to
provide adequate information to enable CRISIL to assess IHJPL'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.
IHJPL was set up in 1989 by the Choksi family. The company
retails gold, platinum, and diamond-studded jewellery, and gold
bullion in Ahmedabad (Gujarat). IHJPL has a retail showroom in
Ahmedabad and has opened a second showroom in the city,
commercial operations of which started in March 2014.
JALNA SIDDHIVINAYAK: CRISIL Suspends B+ Rating on INR450MM Loan
---------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Jalna
Siddhivinayak Alloys Pvt Ltd (part of the Jalna group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 40 CRISIL A4
Cash Credit 450 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 2.3 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by
JSAPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, JSAPL is yet to
provide adequate information to enable CRISIL to assess JSAPL'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.
JSAPL, incorporated in 2000, manufactures mild steel (MS)
billets. The company sells 75 to 80 per cent of its output to
RSRM.
KALPAKA TRANSPORT: CRISIL Ups Rating on INR90MM Loan to B+
----------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
Kalpaka Transport Co Private Limited (part of the KTC group) to
'CRISIL B+/Stable' from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft Facility 90 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects improvement in the group's liquidity on
account of higher cash accrual and continued financial support
from the promoters. Revenue improved to an estimated INR2.79
billion in fiscal 2016 from INR2.47 billion the previous fiscal,
while operating margin remained stable, leading to substantially
higher cash accrual. The group's liquidity is also supported by
the promoters' unsecured loans of INR80 million, which will be
retained in the business over the medium term. Cash accrual
should continue to comfortably cover maturing debt. Fund support
from the promoters is also likely to come in whenever necessary,
underpinning liquidity over the medium term.
The ratings continue to reflect the group's below-average
financial risk profile, with high gearing and weak debt
protection metrics. The ratings also factor in susceptibility to
intense competition in the freight transport industry. These
rating weaknesses are partially offset by moderate scale of
operations, and benefits from the promoters' extensive
experience.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of KTCPL and Kerala Transport Company
(KTC). This is because the two entities, together referred to as
the KTC group, are in the same line of business, under a common
management, and have significant operational linkages and
fungible cash flows between them.
Outlook: Stable
CRISIL believes the KTC group will continue to benefit over the
medium term from its promoters' extensive industry experience and
established tie-ups with clients. The outlook may be revised to
'Positive' if significant improvement in profitability and
prudent working capital management lead to a stronger financial
risk profile. Conversely, the outlook may be revised to
'Negative' if debt protection metrics deteriorate, most likely
because of low growth in revenue, decline in profit margin, or
any large capital expenditure.
Set up in 1958, KTC and KTCPL provide freight transportation
services to players in the fast-moving consumer goods,
automobiles, paints, and tyres industries all over India. The
firms also own and operate Indian Oil Corporation's fuel bunks in
Kozhikkode, Kerala and provide clearing and shipping services at
the airport and seaport in Kochi.
KAURSAIN EXPORTS: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Kaursain Exports
Limited a Long-Term Issuer Rating of 'IND BB+'. The Outlook is
Stable.
KEY RATING DRIVERS
The ratings reflect KEL's moderate scale of operations and
improving but still moderate credit metrics. According to
provisional financials for FY16, the company's revenue declined
to INR963.21 mil. in FY16 (FY15: INR981.06 mil.), interest
coverage (operating EBITDA/gross interest expense) increased to
2.33x (2.05x) and net leverage (adjusted net debt/operating
EBITDA) improved to 3.96x (4.25x).
The ratings factor in the company's lack of any expansion plans
and also the risk of decline in EBITDA margins caused by decrease
in sales as the sales is order-backed and is highly subject to
realizations, forex etc.
The ratings, however, are supported by promoter's more than a
decade of experience in the readymade garments manufacturing
industry.
RATING SENSITIVITIES
Negative: Decease in margins leading to deteriorated credit
metrics could be negative for the ratings.
Positive: A significant improvement in the topline,
diversification of the revenue sources while maintaining the
current credit profile could be positive for the ratings.
COMPANY PROFILE
KEL, incorporated in 2001 and promoted by Mr. Amneesh Mittal and
Mr Rajneesh Mittal, manufactures readymade and hosiery garments
and exports them mainly to the USA, the UAE and Saudi Arabia.
Its manufacturing facility is in Ludhiana (Punjab).
KEL's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB+'/Stable
-- INR28.85 mil. term loan facilities: assigned
'IND BB+'/Stable
-- INR80 mil. non-fund-based facilities: assigned 'IND A4+'
-- Proposed INR16.15 mil. non-fund-based facilities: assigned
'Provisional IND A4+'*
KERALA TRANSPORT: CRISIL Ups Rating on INR390MM Cash Loan to B+
---------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
Kerala Transport Company (part of the KTC group) to 'CRISIL
B+/Stable' from 'CRISIL B/Stable'. The rating on KTC's short-term
facility has been reaffirmed at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 30 CRISIL A4 (Reaffirmed)
Cash Credit 390 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects improvement in the group's liquidity on
account of higher cash accrual and continued financial support
from the promoters. Revenue improved to an estimated INR2.79
billion in fiscal 2016 from INR2.47 billion the previous fiscal,
while operating margin remained stable, leading to substantially
higher cash accrual. The group's liquidity is also supported by
the promoters' unsecured loans of INR80 million, which will be
retained in the business over the medium term. Cash accrual
should continue to comfortably cover maturing debt. Fund support
from the promoters is also likely to come in whenever necessary,
underpinning liquidity over the medium term.
The ratings continue to reflect the group's below-average
financial risk profile, with high gearing and weak debt
protection metrics. The ratings also factor in susceptibility to
intense competition in the freight transport industry. These
rating weaknesses are partially offset by moderate scale of
operations, and benefits from the promoters' extensive
experience.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of KTC and Kalpaka Transport Company Pvt
Ltd. This is because the two entities, together referred to as
the KTC group, are in the same line of business, under a common
management, and have significant operational linkages and
fungible cash flows between them.
Outlook: Stable
CRISIL believes the KTC group will continue to benefit over the
medium term from its promoters' extensive industry experience and
established tie-ups with clients. The outlook may be revised to
'Positive' if significant improvement in profitability and
prudent working capital management lead to a stronger financial
risk profile. Conversely, the outlook may be revised to
'Negative' if debt protection metrics deteriorate, most likely
because of low growth in revenue, decline in profit margin, or
any large capital expenditure.
Set up in 1958, KTC and KTCPL provide freight transportation
services to players in the fast-moving consumer goods,
automobiles, paints, and tyres industries all over India. The
firms also own and operate Indian Oil Corporation's fuel bunks in
Kozhikkode, Kerala and provide clearing and shipping services at
the airport and seaport in Kochi.
KLR INDUSTRIES: Ind-Ra Assigns 'D' Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned KLR Industries
Limited (KLRIL) a Long-Term Issuer Rating of 'IND D'.
KEY RATING DRIVERS
The ratings reflect KLRIL's continuous delays in term debt
servicing for the 12 months ended August 2016. Also, the company
fully used the working capital facility over the 12 months ended
August 2016, indicating its stressed liquidity position.
RATING SENSITIVITIES
Positive: Timely debt servicing for a period of at least three
consecutive months could result in positive rating action.
COMPANY PROFILE
KLRIL was initially established as a small unit - KLR Universal -
by Mr. K. Laxma Reddy in 1985. KLR Universal was engaged in
manufacturing button bits, a tool used in water well drilling
applications, before being incorporated as KLR Industries Limited
in January 2002. The company has a manufacturing facility in
Cherlapally, Hyderabad. KLRIL is engaged in the business of
manufacturing drilling equipment such as drilling rigs, hammers,
and bits, for the application of water wells, mining, piling,
geological survey, construction, etc.
KLRIL's ratings:
-- Long-Term Issuer Rating: assigned 'IND D'
-- INR30 mil. long term loan: assigned Long-term 'IND D'
-- INR282 mil. fund-based working capital limits: assigned
Long-term 'IND D'
-- INR125 mil. non-fund-based working capital limits: assigned
Short-term 'IND D'
KTL PVT: Ind-Ra Suspends 'BB' Long-Term Issuer Rating
-----------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated KTL Pvt. Ltd's
'IND BB' Long-Term Issuer Rating to the suspended category. The
Outlook was Stable. The rating will now appear as
'IND BB(suspended)' on the agency's website.
The ratings have been migrated to the suspended category due to
lack of adequate information. Ind-Ra will no longer provide
ratings or analytical coverage for KTL.
The ratings will remain in the suspended category for a period of
six months and be withdrawn at the end of that period. However,
in the event the issuer starts furnishing information during this
six-month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
KTL Pvt. Ltd's ratings:
-- Long-Term Issuer Rating: migrated to 'IND BB(suspended)'
from 'IND BB'
-- INR590 mil. fund-based working capital limits: migrated to
Long-term 'IND BB(suspended)' from 'IND BB' and Short-term
'IND A4+(suspended)' from 'IND A4+'
-- INR25 mil. non-fund-based working capital limits: migrated
to Short-term 'IND A4+(suspended)' from 'IND A4+'
KUDU INDUSTRIES: Ind-Ra Suspends 'BB-' Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Kudu Industries
Limited's 'IND BB-' Long-Term Issuer Rating to the suspended
category. The Outlook was Stable. The rating will now appear as
'IND BB-(suspended)' on the agency's website.
The ratings have been migrated to the suspended category due to
lack of adequate information. Ind-Ra will no longer provide
ratings or analytical coverage for KIL.
The ratings will remain in the suspended category for a period of
six months and be withdrawn at the end of that period. However,
in the event the issuer starts furnishing information during this
six-month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
KIL's ratings:
-- Long-Term Issuer Rating: migrated to 'IND BB-(suspended)'
from 'IND BB-'/Stable
-- INR75 mil. fund-based limits: migrated to
'IND BB-(suspended)' from 'IND BB-'/Stable
-- INR25 mil. long-term loan: migrated to 'IND BB-(suspended)'
from 'IND BB-'/Stable
LOKESH INDUSTRIAL: CRISIL Suspends B- Rating on INR100MM Loan
-------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Lokesh Industrial Services Pvt Ltd (LISPL; a part of the Lokesh
Group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B-/Stable
The suspension of ratings is on account of non-cooperation by
LISPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, LISPL is yet to
provide adequate information to enable CRISIL to assess LISPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information.
LISPL was set up in 2007 by Mr. Lokesh Jain and his family
members. The company is engaged in the execution of material
handling, civil construction (only earthwork), and logistics
based in Nagpur (Maharashtra). LIPL, set up in 2011, is engaged
in mining and excavation activities.
LOKESH INFRAPROJECT: CRISIL Suspends B- Rating on INR50MM Loan
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of Lokesh
Infraproject Pvt Ltd (LIPL; a part of the Lokesh group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B-/Stable
The suspension of ratings is on account of non-cooperation by
LIPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, LIPL is yet to
provide adequate information to enable CRISIL to assess LIPL'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.
LSIPL was set up in 2007 by Mr. Lokesh Jain and his family
members. The company is engaged in the execution of material
handling, civil construction (only earthwork), and logistics
based in Nagpur (Maharashtra). LIPL, set up in 2011, is engaged
in mining and excavation activities.
LOTUS BRANDING: CRISIL Assigns B+ Rating to INR2.5MM LT Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Lotus Branding Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 2.5 CRISIL B+/Stable
Letter of Credit 50.0 CRISIL A4
Packing Credit 50.0 CRISIL A4
The ratings reflect modest scale of operations and working
capital-intensive operations. These weaknesses are mitigated by
the extensive experience of promoters in the retail branding and
packaging solutions industry and moderate financial risk profile
because of moderate gearing and comfortable debt protection
metrics.
Outlook: Stable
CRISIL believes LBPL will benefit from the extensive industry
experience of promoters. The outlook may be revised to 'Positive'
if significantly higher-than-expected revenue and profitability
result in substantial cash accrual and better financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
low revenues or profitability or stretched working capital cycle
result in constrained liquidity or if large, debt-funded capital
expenditure results in weak financial risk profile.
Incorporated in 2016, LBPL provides retail branding and packaging
solutions for garment manufacturers. The company started
operations in October 2016, and manufactures textile and garment
accessories such as Radio Frequency Identification (RFID) chips,
hangers and clips, and labels. LBPL is in Tirupur (Tamil Nadu),
and the operations are managed by Mr. Venkatesh.
M.R. HITECH: CRISIL Suspends B+ Rating on INR28.0MM LT Loan
-----------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
M.R. Hitech Engineers Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 20 CRISIL A4
Cash Credit 8 CRISIL B+/Stable
Long Term Loan 1.5 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 28.0 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by MR
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, MR is yet to
provide adequate information to enable CRISIL to assess MR'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.
MR was established as private limited company by Mr. G
Ramakrishnan along with his brother, Mr. G Ramamoorthy, in 2003.
The company undertakes civil construction works in Tamil Nadu.
MANIPUR TEA: CRISIL Ups Rating on INR48MM Cash Loan to 'C'
----------------------------------------------------------
CRISIL has upgraded its rating on long-term bank facilities of
Manipur Tea Co. Private Limited (MTCPL; part of Mantri Group) to
'CRISIL C' from 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 48 CRISIL C (Upgraded from
'CRISIL D')
Long Term Loan 15.4 CRISIL C (Upgraded from
'CRISIL D')
The upgrade reflects timely servicing of debt repayments over the
six months through September 2016. The upgrade also factors in
CRISIL's expectation that debt obligation will continue to be
serviced in a timely manner, backed by need-based funding support
from promoters.
The rating continues to reflect the modest scale of, and working
capital intensity in, the group's operations, and exposure to
risks related to seasonality in tea production. Moreover, the
group has limited bargaining power and remains susceptible to
volatility in domestic and international tea prices. These
weaknesses are partially offset by extensive experience of
promoters in the tea industry.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of MTCPL, Derby Plantation Pvt Ltd,
Ruttonpore Plantations Pvt Ltd and Mantri Tea Company Pvt Ltd,
together referred to as the Mantri group. This is because the
entities have a common management, and are in the same line of
business, with operational and financial fungibility.
The Mantri group was formed in 1948 by Mr Govind Prasad Mantri.
The Manipur Tea Estate, located in Assam, was the group's first
acquisition in 1954. Subsequently, the group acquired three more
tea gardens in Assam: Ruttonpore Tea Estate in 1986, Derby Tea
Estate in 2005, and Pathini Tea Estate (Mantri) in 2006. Daily
operations are now overseen by the second and third-generation
members of the promoter's family, along with a professional
management team.
MTCPL reported a net loss of INR25.9 million on net sales of
INR72.0 million for fiscal 2016, as against net losses of INR21.5
million on net sales of INR70.6 million in fiscal 2015.
MANTRI TEA: CRISIL Raises Rating on INR40MM Cash Loan to 'C'
------------------------------------------------------------
CRISIL has upgraded its rating on long-term bank facilities of
Mantri Tea Company Pvt Ltd (part of Mantri Group) to 'CRISIL C'
from 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 40 CRISIL C (Upgraded from
'CRISIL D')
Proposed Fund- 26.3 CRISIL C (Upgraded from
Based Bank Limits 'CRISIL D')
Term Loan 31.1 CRISIL C (Upgraded from
'CRISIL D')
The upgrade reflects timely servicing of debt repayments over the
six months through September 2016. The upgrade also factors in
CRISIL's expectation that debt obligation will continue to be
serviced in a timely manner, backed by need-based funding support
from promoters.
The rating continues to reflect the modest scale of, and working
capital intensity in, the group's operations, and exposure to
risks related to seasonality in tea production. Moreover, the
group has limited bargaining power and remains susceptible to
volatility in domestic and international tea prices. These
weaknesses are partially offset by extensive experience of
promoters in the tea industry.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of MTCPL, Derby Plantation Pvt Ltd,
Ruttonpore Plantations Pvt Ltd and Manipur Tea Company Pvt Ltd,
together referred to as the Mantri group. This is because the
entities have a common management, and are in the same line of
business, with operational and financial fungibility.
The Mantri group was formed in 1948 by Mr Govind Prasad Mantri.
The Manipur Tea Estate, located in Assam, was the group's first
acquisition in 1954. Subsequently, the group acquired three more
tea gardens in Assam: Ruttonpore Tea Estate in 1986, Derby Tea
Estate in 2005, and Pathini Tea Estate (MTCPL) in 2006. Daily
operations are now overseen by the second and third-generation
members of the promoter's family, along with a professional
management team.
MTCPL reported a net loss of INR16.4 million on net sales of
INR100.3 million for fiscal 2016, as against a net loss of
INR24.3 million on net sales of INR103.7 million in fiscal 2015.
MB SPONGE: Ind-Ra Assigns 'BB' Long-Term Issuer Rating
------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned MB Sponge and
Power Limited a Long-Term Issuer Rating of 'IND BB'. The Outlook
is Stable.
KEY RATING DRIVERS
The ratings reflect MBSPL's moderate scale of operations and
credit profile. According to FY16 financials, its revenue was
INR603 mil. (FY15: INR694 mil.), EBITDA margins were 5% (6.1%),
gross interest coverage (EBITDA/interest) was 1.5x (1.7x) and net
leverage (net debt/EBITDA) was 5.1x (3.3x).
The ratings further reflect MBSPL's tight liquidity as evident
from its 98.78% average utilization of the working capital
facilities over the 12 months ended September 2016.
The ratings, however, are supported by more than a decade of
experience of the company's directors in sponge iron
manufacturing.
RATING SENSITIVITIES
Positive: Improvement in the company's scale of operations along
with improvement in the overall credit metrics could be positive
for the ratings.
Negative: Decline in the profitability leading to deterioration
in the credit metrics could be negative for the ratings.
COMPANY PROFILE
Incorporated in 2004, MBSPL manufactures sponge iron at its
manufacturing facility (with an installed capacity of 60,000mtpa)
located in Burdwan, West Bengal.
MBSPL ratings:
-- Long-Term Issuer Rating: assigned 'IND BB'/Stable
-- INR112 mil. fund-based limits - CC: assigned
'IND BB'/Stable
-- INR4 mil. fund-based limits - ODBD: assigned 'IND A4+'
-- INR21 mil. non-fund-based limits: assigned 'IND A4+'
METALFAB HIGHTECH: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Metalfab
Hightech Private Limited a Long-Term Issuer Rating of 'IND BB+'.
The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect MHPL's moderate credit profile, with EBITDA
interest coverage (operating EBITDA/gross interest expense) of
1.6x in FY16 (FY15: 1.4x) and net financial leverage (total
adjusted net debt/operating EBITDA) of 2.2x (2.2x). The EBITDA
margin was slightly volatile yet comfortable and ranged from
12.6%-14.5% during FY12-FY16 on account of fluctuations in raw
material prices. The company's liquidity position has been tight
with utilization at around 89% over the 12 months ended July
2016.
Revenue rose at a CAGR of 25.7% over FY13-FY16, and increased to
INR1,366 mil. in FY16 from INR1,290 mil. in FY15. The company
reported revenue of INR259 mil. in 1QFY17. FY16 financial are
provisional in nature.
The ratings derive support from the promoter's two-decade long
experience in manufacturing tubular towers and undertaking
fabrication projects.
RATING SENSITIVITIES
Positive: Substantial growth in the revenue or an improvement in
profitability leading to a sustained improvement in the overall
credit metrics may lead to a positive rating action.
Negative: Deterioration in the operating profitability or stress
in liquidity leading to deterioration in the overall credit
metrics could be negative for the ratings.
COMPANY PROFILE
MHPL, incorporated in 1980, is engaged in the manufacture of
tubular towers for windmills and power plant fabrication. MHPL
earns around 50% of its revenue from tubular tower manufacturing
and 15% from equipment fabrication and the remaining 35% from
structure fabrication.
MHPL's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB+'; Outlook
Stable
-- INR310 mil. fund-based facilities: assigned
'IND BB+'/Stable
-- INR525 mil. non-fund-based facilities: assigned 'IND A4+'
-- INR150 mil. long term loans: assigned 'IND BB+'/Stable
MOTOR SALES: Ind-Ra Assigns 'B+' Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Motor Sales
Limited a Long-Term Issuer Rating of 'IND B+'. The Outlook is
Stable.
KEY RATING DRIVERS
The ratings are constrained by MSL's small scale of operations as
evident from its revenue of INR582.14 mil. in FY16P (FY15:
INR617.84 mil.), and its presence in a competitive business. The
ratings are further constrained by the firm's weak credit metrics
as reflected by its gross interest coverage (operating
EBITDA/gross interest expense) of 1.21x in FY16P (FY15: 1.12x)
and net financial leverage of 4.88x in FY16P (FY15: 4.97x).
The ratings are, however, supported by the four decades of
experience of MSL's promoters in the same line of business, the
company's tie-up with Tata Motors and strong relationships with
customer. The ratings also take into account the company's
strong operating EBITDA margins of 8.29% in FY16 (FY15: 7.29%).
The ratings are also supported by the firm's comfortable
liquidity position as evident from 93.20% working capital
utilization on average during the 12 months ended August 2016.
RATING SENSITIVITIES
Negative: A decline in the scale of operations and deterioration
in the profitability could result in a negative rating action.
Positive: An improvement in the scale of operations along with
improvement in the profitability could result in a positive
rating action.
COMPANY PROFILE
MSL was established in 1955 by Late Mr. H C Gupta. It is is
engaged in the dealership of Tata Motors in Uttar Pradesh. It
has a 3S (sales-spares-service) outlet, engaged in the sales of
spare parts and accessories and cars.
The firm is diversifying its business into designing and
integration of premium luxury home theatres. The major portion
of the revenue comes from the automobile dealership, which
contributed around 97% to the total revenue in FY16, while the
rest is contributed by the cinema.
MSL's ratings:
-- Long Term Issuer Rating: assigned 'IND B+'/Stable
-- INR186 mil. fund-based facilities: assigned
'IND B+'/Stable/'IND A4'
-- INR65.68 mil. term loan: assigned 'IND B+'/Stable
MYNOR ENTERPRISES: CRISIL Suspends B+ Rating on INR16MM Loan
------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Mynor Enterprises Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 40 CRISIL A4
Overdraft Facility 16 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by
MEPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, MEPL is yet to
provide adequate information to enable CRISIL to assess MEPL'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.
MEPL, incorporated in 1996, derives its revenue from civil
construction. The company's day-to-day operations are managed by
Mr. N Govindaraj.
NIMIT STEELS: CRISIL Lowers Rating on INR1.10BB Loan to 'D'
-----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Nimit Steels and Alloys Private Limited to 'CRISIL D/CRISIL D'
from 'CRISIL BB+/Stable/CRISIL A4+. The rating action is based on
available information and discussion with relevant external
parties.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 400 CRISIL D (Downgraded from
'CRISIL BB+/Stable')
Letter of Credit 1100 CRISIL D (Downgraded from
'CRISIL A4+')
The rating downgrade reflects irregularity of over 30 days in
company's cash credit and letter of credit accounts, which has
been caused by weakened liquidity on account of stretched
receivables and slowdown in offtake.
NSAPL also has weak financial risk profile, marked by high total
outside liabilities to tangible networth ratio and subdued debt
protection measures, large working capital requirement and
slowdown in offtake by the end-user industry. These weaknesses
are partially offset by the extensive experience of the promoters
in the steel trading industry.
NSAPL was incorporated in April 2003 by Mr Haresh Bhansali and
his son, Mr Akshay Bhansali. It is engaged in trading of special
alloy steels wire rods, round bars and billets. The company is
based out of Mumbai (Maharashtra).
PRIME CARGO: CRISIL Lowers Rating on INR60MM Cash Loan to B-
------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility
of Prime Cargo Movers (a part of the Prime group) to 'CRISIL B-
/Stable' from 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 60 CRISIL B-/Stable (Downgraded
from 'CRISIL B+/Stable')
The downgrade reflects deterioration in Prime group's credit
profile on account of lower-than-expected operating profitability
along with increased dependence on external borrowings in the
form of vehicle loans. The group's operating margin declined to
about 3.4 percent in 2015-16 (refers to financial year, April 1
to March 31) from 4 percent in 2014-15 and 6.4 per cent in 2014-
15. This decline was due to increased competition and the group's
low bargaining power with its customers. Furthermore, the group
availed of additional loans for purchase of commercial vehicles
and trailers. Therefore, while the topline increased by close to
50 percent in 2015-16 driven by ramp up of operations, lower
operating margin and higher interest expense led to losses of
close to Rs.7 million thereby further eroding net worth and
deteriorating its financial risk profile. As capital structure is
highly leveraged with gearing of over 4.5 times as on March 31,
2016, timely infusion of funds from the promoters will determine
the rating direction over the medium term.
The rating continues to reflect the group's constrained financial
risk profile because of high gearing and stretched liquidity
driven by modest cash accrual against high scheduled debt
repayments. The rating also factors in the group's modest scale
and working-capital-intensive operations in the competitive
logistics industry. These weaknesses are partially offset by the
extensive experience of the Prime group's promoters in the
logistics industry and the group's established relationship with
key customers.
For arriving at the rating, CRISIL has consolidated the business
and financial risk profiles of PCM and Prime Cargo Movers &
Logistics Pvt Ltd. This is because both entities, together
referred to as the Prime group, have a common management, are in
the same line of business, and have shared resources.
Outlook: Stable
CRISIL believes the Prime group will continue to benefit over the
medium term from the extensive industry experience of its
promoters and its reputed clientele. The outlook may be revised
to 'Positive' in case of significant increase in its scale of
operations and profitability leading to sizeable cash accrual.
Conversely, the outlook may be revised to 'Negative' in case of
further deterioration in the Prime group's financial risk
profile, particularly liquidity, due to lower cash accrual,
stretch in the working capital cycle, or large unanticipated
debt-funded capital expenditure (capex). Timely fund support from
promoters in order to meet term debt obligations will remain a
key rating sensitivity factor over the medium term.
The Prime group primarily provides logistics and transportation
services to FMCG players. The promoters commenced its business as
a carry and forward agent in 1988 through another firm. PCM and
PCMLPL were set up in 2003 and 2013, respectively, to provide
transportation services to its clients.
PRIME CARGO MOVERS: CRISIL Lowers Rating on INR70MM Loan to B-
--------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility
of Prime Cargo Movers & Logistics Pvt Ltd (a part of the Prime
group) to 'CRISIL B-/Stable' from 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL B-/Stable (Downgraded
from 'CRISIL B+/Stable')
The downgrade reflects deterioration in Prime group's credit
profile on account of lower-than-expected operating profitability
along with increased dependence on external borrowings in the
form of vehicle loans. The group's operating margin declined to
about 3.4 percent in 2015-16 (refers to financial year, April 1
to March 31) from 4 percent in 2014-15 and 6.4 per cent in 2014-
15. This decline was due to increased competition and the group's
low bargaining power with its customers. Furthermore, the group
availed of additional loans for purchase of commercial vehicles
and trailers. Therefore, while the topline increased by close to
50 percent in 2015-16 driven by ramp up of operations, lower
operating margin and higher interest expense led to losses of
close to Rs.7 million thereby further eroding net worth and
deteriorating its financial risk profile. As capital structure is
highly leveraged with gearing of over 4.5 times as on March 31,
2016, timely infusion of funds from the promoters will determine
the rating direction over the medium term.
The rating continues to reflect the group's constrained financial
risk profile because of high gearing and stretched liquidity
driven by modest cash accrual against high scheduled debt
repayments. The rating also factors in the group's modest scale
and working-capital-intensive operations in the competitive
logistics industry. These weaknesses are partially offset by the
extensive experience of the Prime group's promoters in the
logistics industry and the group's established relationship with
key customers.
For arriving at the rating, CRISIL has consolidated the business
and financial risk profiles of PCMLPL and Prime Cargo Movers
(PCM). This is because both entities, together referred to as the
Prime group, have a common management, are in the same line of
business, and have shared resources.
Outlook: Stable
CRISIL believes the Prime group will continue to benefit over the
medium term from the extensive industry experience of its
promoters and its reputed clientele. The outlook may be revised
to 'Positive' in case of significant increase in its scale of
operations and profitability leading to sizeable cash accrual.
Conversely, the outlook may be revised to 'Negative' in case of
further deterioration in the Prime group's financial risk
profile, particularly liquidity, due to lower cash accrual,
stretch in the working capital cycle, or large unanticipated
debt-funded capital expenditure (capex). Timely fund support from
promoters in order to meet term debt obligations will remain a
key rating sensitivity factor over the medium term.
The Prime group primarily provides logistics and transportation
services to FMCG players. The promoters commenced its business as
a carry and forward agent in 1988 through another firm. PCM and
PCMLPL were set up in 2003 and 2013, respectively, to provide
transportation services to its clients.
R S AGROTECH: Ind-Ra Assigns 'B-' Long-Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned R S Agrotech a
Long-Term Issuer Rating of 'IND B-'. The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect completion risk for the firm given the
construction phase of its cotton ginning and pressing plant.
Although there are uncertainties regarding the time and receipt
of requisite regulatory approvals, the project is progressing on
schedule.
The ratings, however, are supported by the project's locational
advantage as it is being set up in Asifabad district of Telangana
where raw cotton is in abundance. The ratings are further
supported by the partner's around two decade of experience in the
cotton is ginning and pressing and cotton trading business.
RATING SENSITIVITIES
Positive: Scheduled completion of the project enabling
generation of revenue and cash flow required for debt servicing
as projected by the management could lead to a positive rating
action.
Negative: Time and cost overruns due to delays in meeting project
completion deadlines and availing necessary regulatory approvals
could lead to a negative rating action.
COMPANY PROFILE
Incorporated in November 2015, RSA is a Telangana-based
partnership firm engaged in cotton ginning and pressing. The
firm's plant (equipped with 52 ginning machines and one pressing
machine) is being set up in the Godavalley village of Asifabad
district. Total cost of the project is INR67.5 mil. with a debt
equity ratio of 1.5:1. The commercial operation is expected to
start from November 2016.
RSA's ratings:
-- Long-Term Issuer Rating: assigned 'IND B-'/Stable
-- INR40 mil. fund-based working capital limits: assigned
'IND B-'/Stable and 'IND A4'
-- INR40 mil. term loan limits: assigned: assigned
'IND B-'/Stable
ROOPAM STEEL: CRISIL Suspends B+ Rating on INR120.1MM Cash Loan
---------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Roopam Steel Rolling Mills (part of the Jalna group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 7.5 CRISIL A4
Cash Credit 120.1 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by
RSRM with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, RSRM is yet to
provide adequate information to enable CRISIL to assess RSRM'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 its ratings, CRISIL has combined the business and
financial risk profiles of RSRM and Jalna Siddhivinayak Alloys
Pvt Ltd. This is because these entities, together referred to as
the Jalna group, have significant business synergies and fungible
cash flows.
RSRM, a partnership firm of the Jalna (Maharashtra)-based Agrawal
family, manufactures thermo-mechanically treated (TMT) bars. The
firm chiefly sells these bars through large traders in and around
central India.
SAR ISPAT: CRISIL Suspends B- Rating on INR120MM Cash Loan
----------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of SAR
Ispat Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 120 CRISIL B-/Stable
Letter of Credit 120 CRISIL A4
The suspension of ratings is on account of non-cooperation by SAR
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SAR is yet to
provide adequate information to enable CRISIL to assess SAR'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 1998, SAR was acquired by Mr. N C Kothari and Mr.
Sanjay Sharma in 2007. The company earlier produced mild steel
(MS) ingots; it shifted to production of MS billets in April
2013. Its manufacturing facility is in Puducherry.
SECUNDERABAD HOTELS: Ind-Ra Suspends BB+ Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Secunderabad
Hotels Pvt. Ltd.'s 'IND BB+' Long-Term Issuer Rating to the
suspended category. The Outlook was Stable. The rating will now
appear as 'IND BB+(suspended)' on the agency's website.
The ratings have been migrated to the suspended category due to
lack of adequate information. Ind-Ra will no longer provide
ratings or analytical coverage for SHPL.
The ratings will remain in the suspended category for a period of
six months and be withdrawn at the end of that period. However,
in the event the issuer starts furnishing information during this
six-month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
SHPL's ratings:
-- Long-Term Issuer Rating: migrated to 'IND BB+(suspended)'
from 'IND BB+'/Stable,
-- INR107.5 mil. fund-based limits: migrated to
'IND BB+(suspended)' from 'IND BB+'/Stable
-- INR226.4 mil. long-term loan: migrated to
'IND BB+(suspended)' from 'IND BB+'/Stable
-- INR11.5 mil. non-fund-based limits: migrated to
'IND A4+(suspended)' from 'IND A4+'
SHRI LAKSHMI: Ind-Ra Suspends 'B-' Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Shri Lakshmi
Ganapathy Industries Pvt Ltd's 'IND B-' Long-Term Issuer Rating
to the suspended category. The Outlook was Stable. The rating
will now appear as 'IND B-(suspended)' on the agency's website.
The agency has also migrated the rating on the company's INR165
mil. fund-based limits to 'IND B-(suspended)' from
'IND B-'/Stable.
The ratings have been migrated to the suspended category due to
lack of adequate information. Ind-Ra will no longer provide
ratings or analytical coverage for SLGIPL.
The ratings will remain in the suspended category for a period of
six months and be withdrawn at the end of that period. However,
in the event the issuer starts furnishing information during the
six-month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
SHYAM TELECOM: Ind-Ra Withdraws 'BB+' Long-Term Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Shyam Telecom
Limited's 'IND BB+' Long-Term Issuer Rating with a Stable
Outlook. The agency has also withdrawn the Long-term 'IND BB+'
rating with a Stable Outlook and Short-term 'IND A4+' rating on
the company's INR650 mil. non-fund-based limits.
The ratings have been withdrawn as the company has surrendered
its non-fund-based limits with the banks and Ind-Ra has received
no-objection certificate for the same from the company's lenders.
Consequently, the agency has withdrawn the Long-Term Issuer
Rating. Ind-Ra will no longer provide ratings or analytical
coverage for STL.
SPM INDIA: CRISIL Lowers Rating on INR70MM Book Debt to B+
----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities SPM
India Ltd to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB-
/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 60.7 CRISIL A4 (Downgraded from
'CRISIL A4+')
Cash Credit-Book 70 CRISIL B+/Stable (Downgraded
Debt from 'CRISIL BB-/Stable')
Cash Credit-Stock 60 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Letter of Credit 5 CRISIL A4 (Downgraded from
'CRISIL A4+')
The downgrade reflects significant weakening in business and
financial risk profiles. Sales declined by 66% to INR231 million
for fiscal 2016 from INR704 million in the previous year as the
company shifted one of its unit from Bengaluru to the city's
outskirts, which led to lower capacity utilisation during June-
October 2015. Also sales were INR396 million till July 2016 with
order book of INR470 million. Furthermore, promoters infused need
based unsecured loan of INR76 million to meet working capital
requirement, which weakened gearing to 2.5 times as on March 31,
2016, from 1.5 times previously. Debt protection metrics remained
modest, with interest coverage and net cash accrual to total debt
ratios of 1.6 times and 0.04 time, respectively, for fiscal 2016.
The ratings reflect SPM's modest scale of operations, exposure to
revenue concentration risks, and large working capital
requirement. These weaknesses are partially offset by the
extensive extensive experience of its promoters and established
relationship with customers.
Outlook: Stable
CRISIL believes SPM will continue to benefit over the medium term
from the extensive experience of its promoters and established
relationship with customers. The outlook may be revised to
'Positive' in case of improvement in scale of operations and
networth and diversification of revenue profile, while sustaining
profitability. The outlook may be revised to 'Negative' if a
sharp decline in profitability or large, debt-funded capital
expenditure weakens financial risk profile.
Set up as a partnership firm in 1990 in Bengaluru by Mr. G D
Venkatesh and Mr. G D R Krishna and reconstituted as a deemed
public limited company in 1997, SPM manufactures special-purpose
machines for assembling various sub-assemblies in the automotive
industry; special-purpose leak test machines for automotive
components; and special-purpose machines used in process
verification and industrial washing machines.
SRI VISHNU: Ind-Ra Affirms 'D' Long-Term Issuer Rating
------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Sri Vishnu
Granites Limited's Long-Term Issuer Rating at 'IND D'.
KEY RATING DRIVERS
The affirmation reflects SVGL's tight liquidity leading to delays
in debt servicing for the 12 months ended September 2016.
RATING SENSITIVITIES
Positive: Timely debt servicing and the use of working capital
facilities within limits for three consecutive months would be
positive for the ratings.
COMPANY PROFILE
SVGL was incorporated in 1994 as a private limited company and
later converted into a limited company. Its registered office is
situated in Secunderabad, Andhra Pradesh. The company processes
rough granite blocks into granite slabs and exports them. The
company is promoted by Kishan Agarwal, Kiran Agarwal and Naman
Agarwal.
SVGL's ratings:
-- Long-Term Issuer Rating: affirmed at 'IND D'
-- INR64 mil. fund-based working capital limit: affirmed at
long-term 'IND D'
-- INR11.3 mil. long-term loan (decreased from INR17.4 mil.):
affirmed at long-term 'IND D'
-- INR6 mil. non-fund-based working capital limit: affirmed at
short-term 'IND D'
SURANA GREEN: CRISIL Suspends 'D' Rating on INR300MM Term Loan
--------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of Surana
Green Energy Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Term Loan 25 CRISIL D
Term Loan 300 CRISIL D
The suspension of ratings is on account of non-cooperation by
SGEL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SGEL is yet to
provide adequate information to enable CRISIL to assess SGEL'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 March 2012, SGEL generates wind power; the entity was
formed by taking over the windmills of its group company Surana
Green Power Ltd.
SVG GRANITES: Ind-Ra Affirms 'B' Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed SVG Granites
Limited's Long-Term Issuer Rating at 'IND B'. The Outlook is
Stable.
KEY RATING DRIVERS
The affirmation reflects SVGGL's tight liquidity profile with
instances of over-utilisation during the 12 months ended
September 2016, which were however regularised within 15 days.
The ratings continue to remain constrained by its small scale of
operations and moderate credit metrics. In FY16, the net revenue
was INR299 mil. (FY15: INR274 mil.), EBITDA interest coverage
(operating EBITDA/gross interest expenses) was 2.1x (1.9x) and
net financial leverage (Ind-Ra-adjusted net debt/operating
EBITDAR) was 3.4x (3.6x).
The ratings, however, are supported by the promoters' over a
decade of experience in the granite manufacturing business.
RATING SENSITIVITIES
Positive: An improvement in the liquidity profile would lead to a
positive rating action.
Negative: Deterioration in the liquidity profile would lead to a
negative rating action.
COMPANY PROFILE
SVGGL was incorporated in October 2005 as a private limited
company and was converted into a limited company in 2007. Its
registered office is in Secunderabad, Andhra Pradesh. The
company processes rough granite blocks to derive granite slabs of
various dimensions and exports the same. The company is headed
by Kishan Agarwal, Kiran Agarwal and Naman Agarwal.
SVGGL's ratings:
-- Long-Term Issuer Rating: affirmed at 'IND B'/Stable
-- INR110 mil. fund-based working capital limit: affirmed at
'IND B'/Stable
-- INR32.5 mil. non-fund-based working capital limit: affirmed
at 'IND A4'
SWARNA CONSTRUCTIONS: CRISIL Reaffirms C Rating on INR60MM Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Swarna Constructions
continue to reflect the firm's stretched liquidity, driven by
high bank limit utilisation due to working capital-intensive
operations.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 70 CRISIL A4 (Reaffirmed)
Proposed Cash
Credit Limit 60 CRISIL C (Reaffirmed)
Secured Overdraft
Facility 55 CRISIL C (Reaffirmed)
SWC is also exposed to intense competition in the construction
industry. However, it benefits from the extensive experience of
its promoters.
Set up in 1968 in Vijayawada, Andhra Pradesh, as a partnership
firm by Mr. Kishore Babu, Mr. Ramamohana Rao, Mr. Ramesh Babu,
Mr. Jaya Prakasha Rao, and Mr. R Srinivas, SWC (formerly, G
Ramamohan Rao & Co) undertakes irrigation and water supply
distribution contracts for government agencies.
TIRUPPUR SURYA: CRISIL Suspends D Rating on INR220.4MM Term Loan
----------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Tiruppur Surya Hitech Apparel Private Limited (part of the
Thirupur Suriya group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 97 CRISIL D
Cash Credit 8 CRISIL D
Export Packing Credit 135 CRISIL D
Term Loan 85.3 CRISIL D
Working Capital
Term Loan 220.4 CRISIL D
The suspension of ratings is on account of non-cooperation by
TSHAPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, TSHAPL is yet
to provide adequate information to enable CRISIL to assess
TSHAPL'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.
The Thirupur Suriya group is a four-decade-old player in the
textile industry. Its operations are vertically integrated, with
spinning, knitting, dyeing, compacting, printing, stitching, and
embroidery facilities. It owns end-to-end facilities for
conversion of cotton into ready-made knitwear. The group is
managed by Mr. K Kuppusamy.
TOYOP RELIEF: CRISIL Reaffirms 'B' Rating on INR180MM Loan
----------------------------------------------------------
CRISIL's ratings on the bank facilities of Toyop Relief Private
Limited continue to reflect company's weak financial risk profile
marked by a weak capital structure and subdued debt protection
metrics. The ratings also factor in working capital-intensive
operations and volatile operating margin.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Export Packing Credit 180 CRISIL B/Stable (Reaffirmed)
Letter of Credit 120 CRISIL A4 (Reaffirmed)
These weaknesses are partially offset by an established presence
in the disaster relief material industry, healthy relationships
with non-governmental organisations and diversified revenue
streams.
Outlook: Stable
CRISIL believes TRPL will continue to benefit over the medium
term from its promoters extensive industry experience. The
outlook may be revised to 'Positive' if improvement in scale of
operations and profitability leads to sizable cash accruals and
strengthening of key credit metrics. Conversely, the outlook may
be revised to 'Negative' if a decline in profitability margins,
further stretch in working capital cycle or large, debt-funded
capital expenditure leading to deterioration in the financial
risk profile and liquidity.
TRPL, based in Mumbai, was originally set up in 1994 as a
proprietorship firm, Sabra Exim Investments, by Mr Sachin Shah.
In 2004, the firm was renamed Toyop Relief, and it was
reconstituted as a private limited company in 2008. TRPL is a
supplier of disaster relief material, including kitchen
accessories, plastic toiletries, hygiene kits, blankets, buckets,
tarpaulin tents, and other products. It caters to various non-
governmental organizations located overseas. The company is also
a leading authorized distributer and stockist of LyondellBasell
specialty polymers.
VIDESH COAL: CRISIL Suspends 'D' Rating on INR100MM Cash Loan
-------------------------------------------------------------
CRISIL has suspended its rating on the bank facility of Videsh
Coal Services Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL D
The suspension of ratings is on account of non-cooperation by
VCSPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, VCSPL is yet to
provide adequate information to enable CRISIL to assess VCSPL'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 2009 and promoted by Mr. Udaybhaskar Nair, VCSPL
is engaged in domestic coal trading and providing logistics and
liaison services to end users in the power and cement sectors.
The company's day-to-day operations are managed by the Mr. Nair
along with his family members. VCSPL has its registered office at
Nagpur (Maharashtra).
VVC MOTORS: Ind-Ra Suspends 'BB+' Long-Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated VVC Motors Pvt.
Ltd.'s 'IND BB+' Long-Term Issuer Rating to the suspended
category. The Outlook was Stable. The rating will now appear as
'IND BB+(suspended)' on the agency's website. The agency has
also migrated the rating on the company's INR200 mil. fund-based
working capital limits to 'IND BB+(suspended)' from 'IND BB+'.
The ratings have been migrated to the suspended category due to
lack of adequate information. Ind-Ra will no longer provide
ratings or analytical coverage for VMPL.
The ratings will remain in the suspended category for a period of
six months and be withdrawn at the end of that period. However,
in the event the issuer starts furnishing information during the
six-month period, the ratings could be reinstated and will be
communicated through a rating action commentary.
ZAMINDARA TIMBER: CRISIL Assign 'B+' Rating to INR27.5MM Loan
-------------------------------------------------------------
CRISIL has revoked the suspension of its rating on the bank
facilities of Zamindara Timber Private Limited and assigned its
'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities.
CRISIL had, on August 31, 2016, suspended the rating as ZTT had
not provided necessary information required to maintain a valid
rating. WIPL has now shared the requisite information, enabling
CRISIL to assign ratings to the bank facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 27.5 CRISIL B+/Stable (Assigned;
Suspension Revoked)
Letter of Credit 160.0 CRISIL A4 (Assigned;
Suspension Revoked)
Proposed Long Term 12.5 CRISIL B+/Stable (Assigned;
Bank Loan Facility Suspension Revoked)
The ratings reflect ZTT's weak financial risk profile marked by a
small net worth, a high gearing and weak debt protection metrics,
and small scale of operations in the intensely competitive timber
trading industry resulting in a low operating margin. These
rating weaknesses are partially offset by the benefits that ZTT
derives from its promoters' extensive experience in the timber
trading industry and the funding support that it receives from
them.
Outlook: Stable
CRISIL believes that ZTT will continue to benefit over the medium
term from its promoters' extensive experience in the timber
trading industry and its established relationships with its
customers and suppliers. The outlook may be revised to 'Positive'
in case the firm improves its financial risk profile,
particularly its liquidity, because of higher-than-expected cash
accruals, better-than-expected working capital management, or
funding support from its promoters. Conversely, the outlook may
be revised to 'Negative' in case ZTT's financial risk profile,
particularly its liquidity, weakens because of lower-than-
expected cash accruals, more-than-expected increase in its
working capital requirements, or larger-than-expected debt-funded
capital expenditure.
ZTT is engaged in the processing and trading of timber. The firm
was established as a proprietorship concern in 1975; it was
reconstituted as a partnership firm in 2001, with Mr. Amit Kamboj
and his brother, Mr. Shailesh Kamboj, as its partners. The firm
is based in Karnal (Haryana), with its processing facilities
located at Gandhidham (Gujarat).
=====================
P H I L I P P I N E S
=====================
EXPRESS SAVINGS: Sandigan Dismisses Sen. Gatchalian'S LWUA Cases
----------------------------------------------------------------
Marc Jayson Cayabyab at INQUIRER.net reports that the
Sandiganbayan Fourth Division has dismissed the criminal charges
of graft, malversation and violations of bank regulations against
Senator Sherwin Gatchalian over the allegedly anomalous buy-out
of a bank the family co-owns.
The anti-graft court in a 53-page resolution said there was no
probable cause to try Senator Gatchalian over the case.
However, the court also dismissed the malversation cases of
Senator Gatchalian's co-accused: the patriarch "Plastics King"
business magnate William Gatchalian, Gatchalian's mother Dee Hu
Gatchalian, and siblings Valenzuela Rep. Weslie Gatchalian and
Kenneth Gatchalian.
But the court said it found probable cause to try them for graft
and violations of the bank manual, INQUIRER.net relays.
They were each accused of one count of violation of Section 3(e)
of Republic Act No. 3019 or the Anti-Graft and Corrupt Practices
Act, one count of Malversation of Public Funds as defined under
Article 217 of the Revised Penal Code, and one count of violation
of the Manual of Regulation for Banks (MORB), according to
INQUIRER.net.
They were charged as executives of Wellex Group Inc., which co-
owns the insolvent bank Express Savings Bank Inc. (ESBI), the
report notes.
According to INQUIRER.net, the court has also dismissed the three
counts of malversation against the principal accused, former
Local Water Utilities Administration (LWUA) chair now Surigao Del
Sur Rep. Prospero Pichay.
But the court found probable cause to try Mr. Pichay for graft
and violation of banking rules.
INQUIRER.net relates that Mr. Pichay was charged with three
counts of graft, and one count of violation of MORB and one count
of violation of Republic Act 8791 or General Banking Law of 2000,
for leading the purchase by LWUA of the insolvent bank to save it
from the brink of bankruptcy.
According to the report, the Ombudsman said Mr. Pichay and other
LWUA officials approved the acquisition of the insolvent bank in
2009 despite audit findings that show that the bank suffered net
losses and capital deficits for five straight years from 2005 to
2009.
INQUIRER.net says the acquisition took the effect of a financial
rescue, as the LWUA officials bought 445,377 ESBI shares worth
PHP101.363 million from the Gatchalian group that gave the agency
60-percent equity in the bankrupt bank.
Mr. Pichay and the other officials later injected PHP780 million
LWUA funds to the bank to increase its authorized capital stock.
The Gatchalians of Wellex and other owners of the bank were also
paid PHP80 million in the acquisition, the report notes.
According to the report, the LWUA made the acquisition and
transactions despite warnings by the Bangko Sentral ng Pilipinas
(BSP), the Monetary Board of the BSP, and the Department of
Finance (DOF) about the ESBI's fragile financial condition
following a due diligence review that showed high liquidity and
credit risks.
The acquisition was also made without the requisite regulatory
approvals from the BSP, its Monetary Board, the DOF and the
Office of the President, the report states.
In ordering the filing of charges to the Sandiganbayan, Ombudsman
Conchita Carpio-Morales said "in view of the bank's precarious
financial standing at the time of the sale, the windfall received
by herein private respondents must be deemed unwarranted benefit,
advantage or preference," adds INQUIRER.net.
Express Savings Bank was a four-unit thrift bank based in Laguna,
Philippines. It engaged in the business of granting loans,
receiving deposits and paying interest on such deposits.
The Bangko Sentral ng Pilipinas (BSP) ordered the closure of
Express Savings Bank in July 2011.
=================
S I N G A P O R E
=================
MMI INTERNATIONAL: Fitch Assigns 'B+' IDR; Outlook Stable
---------------------------------------------------------
Fitch Ratings has assigned 'B+' Long-Term Foreign-Currency Issuer
Default Ratings to Singapore's MMI International Ltd and its 100%
parent Precision Capital Private Limited (PCPL). The Outlooks
are Stable.
Fitch has also assigned an expected rating of 'B+(EXP)'/'RR4' to
MMI's proposed senior secured notes. The notes will be
guaranteed by certain subsidiaries in Singapore, Thailand and the
US. The final rating of the proposed notes is contingent upon
the receipt of documents conforming to information already
received. Proceeds from the notes will be used to partly
refinance MMI's existing borrowings.
KEY RATING DRIVERS
Slow Recovery on HDD Weakness: The IDR reflects our expectations
of MMI's continued vulnerability to the hard disk drive (HDD)
market. Fitch expects EBITDA recovery to be slow, with EBITDA
growth totalling around 5% or less for the financial year ending
June 30, 2017, (FY17) and FY18. This is supported by cost-
cutting initiatives to trim expenses in FY17, through headcount-
reduction and the relocation of manufacturing facilities from
China to Thailand.
Fitch believes MMI's credit risk is weighted towards the
downside, in view of the HDD market weakness; research company
Trendfocus is projecting global HDD unit shipments to decline at
a 5% compound annual growth rate (CAGR) in 2016-2020.
High Leverage: The ratings are also constrained by MMI's high
FFO-adjusted leverage - Fitch forecasts 4.6x-4.8x in FY17 and
FY18 (FY16: 6.7x) - limiting its financial flexibility. Fitch
expects cash flow from operations will readily cover capex (USD25
mil.) and meet other near-term financial commitments. Management
says it is committed to deleveraging its balance sheet. Fitch
has assumed no dividend payments or acquisitions, for which MMI
is likely to have little headroom at the current rating.
Seagate Interdependence: MMI faces high customer-concentration
risk due to its heavy reliance on US HDD manufacturer Seagate
Technology Public Limited Company (BBB-/Negative), which
accounted for 83% of its revenue in FY16. However, we believe
the high interdependence between MMI and Seagate mitigates this
risk, as MMI is Seagate's largest supplier for three key HDD
components. Furthermore, MMI's ratings factor in moderate-to-high
barriers to entry into the HDD component manufacturing industry.
Stable Competition: Fitch expects the consolidated HDD industry
structure to improve producers' market power, which should help
to stabilise pricing. Seagate and Western Digital Corp. (WD,
BB+/Stable) control about 80% of the global HDD market. An
imminent consolidation among HDD components suppliers could also
reduce competition and drive market-share gains for MMI in the
longer term. The company derives 93% of its FY16 revenue from
HDD components, and 7% in automation system integration.
Risk from SSDs: Solid state drives (SSDs) represent a significant
long-term threat to MMI's business if they become the standard
medium for data storage. However, Fitch expects HDD sales
volumes to be protected in the medium term by the growth in the
overall data storage market and a continuing substantial per-
gigabyte price differential between SSDs and HDDs.
Debt Ranking with Existing Debt: The proposed senior secured
notes will rank pari passu with the existing term loans, and all
debt is at the MMI level. The notes would be subordinated to
potential debt at non-guarantor subsidiaries - accounting for 10%
of MMI's operating liabilities as of end-June 2016. However,
management does not plan to raise debt at these subsidiaries, and
therefore our rating assumes no such subordination.
Average Recovery on Bonds: The results of our recovery analysis
indicate average recovery on the proposed bonds in the event of
financial distress, hence the notes are rated at the same level
as the IDR. This analysis is based on a going-concern enterprise
value (EV)/EBITDA multiple of 3.5x, which reflects a discount to
the 5x-7x multiples at which Seagate and WD are currently
trading. This discount takes into account MMI's weaker market
position and the general weakening effect of distress on market
EV.
PCPL Shares Rating: PCPL is rated at the same level as MMI as it
has no debt or other significant operations which either
strengthen or weaken its credit profile compared to MMI.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case include:
-- Revenue to decline by low- to- mid-single-digit
percentages, as the secular decline in the PC market
more than offsets growth in nearline (high-capacity) HDD
products;
-- Operating EBITDA margins to improve to by 1-2 percentage
points in FY17-FY19 due to cost-cutting measures;
-- Annual capex of around USD25m or 5% of revenue;
-- No dividend payments or acquisitions; and
-- Debt repayment according to mandatory amortization
schedule.
RATING SENSITIVITIES
Negative: Developments that may, individually or collectively,
lead to negative rating action include:
-- Worse-than-expected performance leading to an FFO-adjusted
leverage of above 5.0x on a sustained basis
-- FFO fixed-charge coverage of below 2.5x (FY16: 2.6x) on a
sustained basis
-- Persistent negative FCF.
Positive rating action is not expected in the medium term.
However, developments that may, individually or collectively,
lead to positive rating action include:
-- An improvement in FFO-adjusted leverage to below 4.0x on a
sustained basis
-- FFO fixed-charge coverage of above 3.0x on a sustained
basis.
LIQUIDITY
Refinancing to Improve Liquidity: MMI's unrestricted cash balance
of USD42 mil. and undrawn committed bank lines of USD50 mil. as
of end-June 2016 are sufficient to cover its debt maturities of
USD36m in FY17 and USD52 mil. in FY18 under the existing senior
secured credit facilities. Post-refinancing, Fitch expects MMI's
liquidity profile to improve, as the proposed bonds will extend
the average debt tenure to 4.2 years (from 2.9 years), thus
enhancing its cash flow flexibility in the near term.
====================
S O U T H K O R E A
====================
DAEWOO SHIPBUILDING: Korea to Go All-Out to Save Shipbuilder
------------------------------------------------------------
Park Yong-beom and Chung Seok-woo at Pulse report that despite a
recent outside audit report questioning the viability of Daewoo
Shipbuilding & Marine Engineering (DSME), the Korean government
and state lenders are determined to turn the shipbuilder around
instead of sending it to the bankruptcy court for reorganization.
According to Pulse, sources from financial authorities and the
largest stakeholder Korea Development Bank (KDB) said on Oct. 20,
the two state lenders will convert their outstanding loans --
KDB's KRW1.8 trillion ($1.6 billion) and the Export-Import Bank
of Korea's KRW1.1 trillion -- into equity in the shipbuilder
within the year to reduce the debt load. Pulse says the loans
were part of the KRW4.2 trillion rescue funds arranged by
policymakers in October last year, making the debt-to-equity
conversion an extension of public bailout.
The shipbuilder meanwhile will cut workforce by 3,000 within the
year and sell off all of its floating docks next year so that it
would be able to operate without requiring fresh funding from
creditors, Pulse relays.
If the normalization plan does not go well and the shipbuilder
has trouble meeting the payment obligation on KRW940 billion
worth bonds that are due in April and November, creditors could
consider conditional roll-over on the bonds, according to Pulse.
Such conditional relief would depend on the shipbuilder's own
efforts to turn business around and save costs, Pulse says.
"If the asset sales plan and payment from Angola's oil company
Sonangol is further delayed to make the shipbuilder run into
liquidity crisis, we will have the state and commercial lenders
all chip in to keep the company afloat," the report quotes a
senior government official as saying.
According to the report, the government is going all-out to
normalize the state-owned shipbuilder that it has repeatedly
subsidized since the company came under the KDB following the
collapse of Daewoo Group in the wake of 1997-1998 financial
crisis because of the hefty cost of its insolvency.
Pulse notes that McKinsey & Company that had been consigned by
the government to examine the state of DSME and two other
shipbuilding majors to come up with overall industrial
restructuring claimed DSME would be operating at negative 10
percent income in the next five years to conclude it would not be
worth trying to save the company.
The industry estimates public fund loss of as much as
KRW13 trillion if the shipbuilder goes insolvent, Pulse
discloses. The vessels that usually take three years to build
would have to be dumped on the dockyard as no one would buy them
from a bankrupt builder. Since the shipbuilder has been bailed
out through tax funds, a decision to send it to the bankruptcy
court also would require parliamentary approval, adds Pulse.
Headquartered in Seoul, South Korea, Daewoo Shipbuilding &
Marine Engineering Co. -- http://www.dsme.co.kr/-- is engaged in
building ships and offshore structures. Its product portfolio
includes commercial ships, such as liquefied natural gas (LNG)
carriers, oil tankers, containerships, liquefied petroleum gas
(LPG) carriers, pure car carriers; offshore structures, such as
FPSO vessels, drilling rigs, drillships and fixed platforms, and
naval vessels, including submarines, destroyers, rescue ships and
patrol boats.
The shipyard, along with two other major South Korean
shipbuilders, are currently undergoing self-created debt-
restructuring plans in the face of a decrease in new orders
caused by the protracted global economic slump, according to
Yonhap News.
HANJIN SHIPPING: In Talks to Sell Stake in Long Beach Terminal
--------------------------------------------------------------
Joyce Lee at Reuters reports that Hanjin Shipping Co Ltd is in
talks to sell its stake in the Long Beach Terminal in California
to Geneva-based Mediterranean Shipping Company S.A.(MSC), a
spokesman for the Seoul court overseeing the shipper's
receivership said on Oct. 21.
Hanjin Shipping owns a 54% stake in Total Terminals International
LLC, which operates Long Beach Terminal in the U.S. MSC owns the
remaining 46%, Reuters discloses.
It has appointed an advisor, an overseas firm specializing in
shipping industry talks, to help with the negotiations, the court
spokesman, as cited by Reuters, said.
Reuters relates that Hanjin, the first major shipping line to be
dragged down by global industry overcapacity and low freight
rates, put up other assets such as its U.S.-Asia route manpower
and logistics systems, five container ships and 10 overseas
businesses, for sale earlier this month.
According to Reuters, Hyundai Merchant Marine Co Ltd said it is
considering submitting a preliminary bid for Hanjin assets used
in its U.S.-Asia routes, but prospects for additional interest
are unclear.
Hanjin, which filed for court receivership on Aug. 31 after its
creditors cut off financial support for the firm, had total debt
of KRW6.03 trillion ($5.4 billion) as of end-June, Reuters 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.
=============
V I E T N A M
=============
ASIA COMMERCIAL: Moody's Affirms B2 Long-term Bank Deposit Rating
-----------------------------------------------------------------
Moody's Investors Service has concluded its review of eight
Vietnamese banks.
At the same time, Moody's has affirmed the long-term B1 local
currency deposit and issuer ratings of Bank for Investment &
Development of Vietnam (BIDV). Its caa1 baseline credit
assessment (BCA) has also been affirmed. The outlook on the
bank's ratings remains stable.
A summary of Moody's rating actions on the eight banks which were
under review for upgrade are as follows:
-- Upgrade of the long-term credit ratings and BCAs of
Military Commercial Joint Stock Bank (Military Bank) and
Saigon-Hanoi Commercial Joint Stock Bank (SHB). The banks'
ratings outlooks are stable.
-- Confirmation/Affirmation of the long-term credit ratings of
five banks, with their BCAs upgraded by one notch. These
five banks are: Vietnam Bank for Industry and Trade
(Vietinbank), Vietnam International Bank (VIB), An Binh
Commercial Joint Stock Bank (ABB), Asia Commercial Bank
(ACB) and Vietnam Technological and Comm'l JSB
(Techcombank). The banks' ratings outlooks are stable.
-- Confirmation of the B3 long-term credit ratings and caa1
BCA for Saigon Thuong Tin Commercial Joint-Stock Bank
(Sacombank). The bank's ratings outlook was revised to
negative.
Moody's review of the eight banks' ratings for upgrade was
initiated on 5 September 2016, following Moody's change of
Vietnam's (B1 stable) banking system Macro Profile to "Weak" from
"Weak-". The Macro Profile captures the risks related to the
banks' operating and economic environment.
The BCA of JSC Bank for Foreign Trade of Vietnam (Vietcombank)
remains on review for upgrade, pending regulatory approvals and
finalization of an announced capital increase. The B1/B2 long-
term local and foreign currency deposit ratings of that bank are
not on review.
RATINGS RATIONALE
The positive rating actions are broadly driven by Moody's view
that the more benign operating and economic conditions for banks
in Vietnam (B1 stable) have resulted in somewhat lower solvency
and liquidity risks for the majority of Moody's-rated banks in
the country.
Vietnamese banks will continue to benefit from the country's
robust economic growth, as well as from Vietnam's enhanced -- but
still weak -- institutional strength. These positive developments
support the banks' funding profiles.
Moody's has captured the abovementioned macroeconomic
improvements by changing the Macro Profile for Vietnam's banking
system to "Weak" from "Weak-" in early September 2016.
Despite today's broadly positive rating actions, Moody's
considers that the banking system in Vietnam remains
undercapitalized, against the backdrop of rapid credit growth and
a high share of legacy problem assets which are not always
adequately disclosed on the banks' balance sheets. Moody's
expects that these challenges will continue to persist in the
medium term, despite some improvements.
DETAILED RATING ACTIONS ON DEPOSIT RATINGS AND OUTLOOK
RATINGS RATIONALE FOR MILITARY BANK AND SHB
Military Bank's BCA was upgraded to b2 from caa1, broadly driven
by a steady improvement in its financial fundamentals.
Specifically, the bank's asset quality metrics have stabilized,
as it made progress on resolving or writing off its problem
exposures. The bank's loss absorbing buffers have also increased.
Military Bank received fresh capital from new and existing
shareholders in 2015 that boosted its capital ratios above that
of many of its domestic peers. Additionally, the active
provisioning on loans in the past two years -- with a large part
of its pre-provision income channeled into loan loss reserves --
has helped strengthen its capacity to cushion against losses.
As a result, the bank's solvency position -- as indicated by the
risk that it faces relative to its loss absorbing resources --
has improved tangibly. Problem loans and net Vietnam Asset
Management Company (VAMC) exposures represented 37% of the bank's
loan loss reserves and tangible common equity at end-2015, down
from 52% the year before.
At the same time, its long-term deposit and issuer ratings have
been upgraded to B2 from B3. However, the ratings do not
incorporate any uplift for government support above the bank's b2
BCA, because the BCA is positioned just one notch lower relative
to the government's B1 rating.
SHB's BCA has been upgraded to b3 from caa1, broadly driven by
improvements in its funding profile, against the backdrop of
benign operating conditions. Specifically, deposits are
increasingly funding the bank's total assets, which stand at 75%
of its balance sheet as of 30 June 2016, from 63% as of 31
December 2013. Elevated asset risks in the context of low capital
buffers remain its key credit challenge.
SHB's long-term deposit and issuer ratings have been upgraded to
B2 from B3 because Moody's expects that SHB will receive a
moderate level of support from the Government of Vietnam, in case
of need.
RATINGS RATIONALE FOR VIETINBANK, VIB, ABB, ACB AND TECHCOMBANK
The BCAs of Vietinbank, VIB, ABB, ACB and Techcombank have been
upgraded to b2, broadly driven by improvements in the banks'
financial profiles, against the backdrop of Vietnam's benign
operating and economic environment.
The upgrade of Vietinbank's BCA to b2 from b3 is mainly driven by
the bank's improved funding profile. The bank's market funds /
tangible banking assets ratio fell to around 16% as of June 2016
from 24% in December 2015. The main challenges in terms of its
financial profile include high asset risks and a weak and
decreasing core capital buffer.
Vietinbank's B1/B2 long-term local and foreign currency deposit
ratings have been affirmed because Moody's expects that the bank
will receive a very high level of support from the Government of
Vietnam, in case of need, given the high level of government
ownership and the bank's systemic importance.
VIB's BCA was upgraded to b2 from b3 because of improving asset
quality metrics and the bank's good capital buffer with a
Tangible Common Equity / Risk Weighted Assets ratio of 12.8% at
end-June 2016. Key risk factors include modest provisioning
coverage, low profitability and elevated reliance on market
funds.
ACB's BCA has been upgraded to b2 from b3 to reflect the gradual
progress it has made in the resolution of legacy assets, and its
generally comfortable funding and liquidity profile, supported by
a moderate growth strategy in 2014 and 2015. Key risk factors
include pressured capital levels, because growth picked up
considerably in the first half of 2016.
For Techcombank, the upgrade of its BCA reflects an improving
asset quality trend and a generally healthy funding and liquidity
profile. Similar to other banks in Vietnam, Techcombank's core
capital buffer is under pressure because of rapid loan growth.
The upgrade of ABB's BCA to b2 from b3 reflects the bank's steady
funding and liquidity profile, and continued improvements in its
asset quality since year-end 2014. The bank's capital buffer is
also higher when compared to most domestic peers, but it is
facing negative pressure because of the expansion of its balance
sheet.
The B2 long-term local currency deposit and issuer ratings of
VIB, ACB, Techcombank and ABB have been confirmed/affirmed,
despite the upgrading of their BCAs. Moody's continues to
incorporate a moderate probability of government support in these
ratings, however this does not result in any ratings uplift
because the banks' b2 BCAs are just one notch lower than the B1
sovereign rating for Vietnam.
RATINGS RATIONALE FOR SACOMBANK
Moody's has confirmed Sacombank's B3 long-term ratings and caa1
BCA, and changed the outlook to negative.
The confirmation of the caa1 BCA reflects the high solvency and
liquidity risks faced by Sacombank, following its merger with
Southern Bank in the fourth quarter of 2015. At end-June 2016,
Sacombank's problem assets increased substantially from the pre-
merger period, while its credit provisions were very slim.
The BCA also incorporates the risks related to Sacombank's
corporate behavior and opacity and complexity. Corporate behavior
risks originate from a situation where the majority of
Sacombank's shares is managed by the State Bank of Vietnam, which
create uncertainty around the financial health and future
development of the bank. Opacity risks stem from the fact that
the bank has not yet published its audited financial report for
2015, which introduces the risk that the unaudited financials
might be restated.
The B3 long-term ratings of Sacombank were confirmed because
Moody's continues to incorporate one notch of uplift, based on
the rating agency's expectation of moderate support from the
government of Vietnam.
The negative outlook on Sacombank's ratings reflects the
uncertainty around the strategic direction of the bank, its
unclear ownership structure and the true scope of asset quality
challenges.
RATINGS RATIONALE FOR BIDV
Moody's has affirmed BIDV's local currency deposit and issuer
ratings of B1 and its BCA of caa1. BIDV's foreign currency
deposit rating is positioned at B2, in line with Vietnam's
foreign currency deposit ceiling. The outlook on its long-term
credit ratings is stable.
The affirmation of the caa1 BCA reflects the elevated risks in
BIDV's balance sheet, namely a higher stock of problem assets in
the first half of 2016. BIDV's single borrower and industry
concentration risks remain high against weak capital levels. The
bank has a strategy to improve its capital buffer, however these
efforts are yet to materialize. The BCA also incorporates our
assessment that BIDV's funding and liquidity profile benefits
from its depositary relationships with SOEs as well as its 12%
system deposit market share.
BIDV's B1 long-term local currency deposit rating has been
affirmed because Moody's continues to incorporate in the rating,
a very high level of support for the bank in times of need from
the Government of Vietnam, based on the fact that BIDV is the
largest state-owned bank in the system by total assets.
WHAT COULD CHANGE THE RATINGS UP/DOWN
Substantial improvements in the asset quality and core capital
levels of Vietnamese banks will be positive for the ratings.
The ratings could be downgraded if problem loan ratios - as
adjusted by Moody's - increase to in excess of 10% of gross
loans, or if core capital buffers drop well below 8%. The ratings
are also sensitive to a significant weakening in the banks'
funding and liquidity profiles.
Moody's notes that Sacombank's ratings carry a negative outlook
and could be downgraded if asset risks increase further and
demonstrate a substantial negative effect on the bank's solvency
and liquidity profiles.
The principal methodology used in these ratings was Banks
published in January 2016.
Taking into account today's announcement, the affected ratings
are as follows:
An Binh Commercial Joint Stock Bank
-- Upgrade the BCA and Adjusted BCA to b2 from b3
-- Affirm foreign currency long-term bank deposit ratings at
B2; outlook stable
-- Confirm local currency long-term bank deposit ratings at
B2; outlook stable
-- Confirm local and foreign currency long-term issuer ratings
at B2; outlook stable
-- Upgrade long-term CR Assessment to B1(cr) from B2(cr)
-- Affirm local currency and foreign currency short-term
deposit ratings at NP
-- Affirm local currency and foreign currency short-term
issuer ratings at NP
-- Affirm short-term CR Assessment at NP(cr)
-- Outlook is stable
Headquartered in Ho Chi Minh, the bank reported total assets of
VND 70,353 billion (USD 2.8 billion) at end-June 2016.
Asia Commercial Bank
-- Upgrade the BCA and Adjusted BCA to b2 from b3
-- Affirm foreign currency long-term bank deposit ratings at
B2; outlook stable
-- Confirm local currency long-term bank deposit ratings at
B2; outlook stable
-- Confirm local and foreign currency long-term issuer ratings
at B2; outlook stable
-- Upgrade long-term CR Assessment to B1(cr) from B2(cr)
-- Affirm local currency and foreign currency short-term
deposit ratings at NP
-- Affirm local currency and foreign currency short-term
issuer ratings at NP
-- Affirm short-term CR Assessment at NP(cr)
-- Outlook is stable
Headquartered in Ho Chi Minh, the bank reported total assets of
VND 211,887 billion (USD 8.5 billion) at end-June 2016.
Bank for Investment & Development of Vietnam
-- Affirmed the BCA and Adjusted BCA at caa1
-- Affirm local currency long-term bank deposit ratings at B1;
outlook stable
-- Affirm foreign currency long-term bank deposit ratings at
B2; outlook stable
-- Affirm local and foreign currency long-term issuer ratings
at B1; outlook stable
-- Affirm long-term CR Assessment to B1(cr)
-- Affirm local currency and foreign currency short-term
deposit ratings at NP
-- Affirm local currency and foreign currency short-term
issuer ratings at NP
-- Affirm short-term CR Assessment at NP(cr)
-- Outlook is stable
Headquartered in Hanoi, the bank reported total assets of
VND930,268 billion (USD 37.2 billion) at end-June 2016.
Military Commercial Joint Stock Bank
-- Upgrade BCA and Adjusted BCA to b2 from caa1
-- Upgrade local and foreign currency long-term bank deposit
ratings to B2 from B3; outlook stable
-- Upgrade local and foreign currency long-term issuer ratings
to B2 from B3; outlook stable
-- Upgrade long-term CR Assessment to B1(cr) from B2(cr)
-- Affirm local currency and foreign currency short-term
deposit ratings at NP
-- Affirm local currency and foreign currency short-term
issuer ratings at NP
-- Affirm short-term CR Assessment at NP(cr)
-- Outlook is stable
Headquartered in Hanoi, the bank had total assets of VND312,375
billion (USD 12.5 billion) at end-June 2016.
Saigon - Hanoi Commercial Joint Stock Bank
-- Upgrade BCA and Adjusted BCA to b3 from caa1
-- Upgrade local and foreign currency long-term bank deposit
ratings to B2 from B3; outlook stable
-- Upgrade local and foreign currency long-term issuer ratings
to B2 from B3; outlook stable
-- Confirm long-term CR Assessment at B2(cr)
-- Affirm local currency and foreign currency short-term
deposit ratings at NP
-- Affirm local currency and foreign currency short-term
issuer ratings at NP
-- Affirm short-term CR Assessment at NP(cr)
-- Outlook is stable
Headquartered in Hanoi, the bank had total assets of VND211,887
billion (USD 9.3 billion) at end-June 2016.
Saigon Thuong Tin Commercial Joint-Stock Bank
-- Confirm BCA and Adjusted BCA at caa1
-- Confirm local and foreign currency long-term bank deposit
ratings at B3; outlook negative
-- Confirm local and foreign currency long-term issuer ratings
at B3; outlook negative
-- Confirm long-term CR Assessment to B2(cr)
-- Affirm local currency and foreign currency short-term
deposit ratings at NP
-- Affirm local currency and foreign currency short-term
issuer ratings at NP
-- Affirm short-term CR Assessment at NP(cr)
-- Outlook is negative
Headquartered in Ho Chi Minh City, the bank had total assets of
VND312,375 billion (USD 13.8 billion) at end-June 2016.
Vietnam Bank for Industry and Trade
-- Upgrade BCA and Adjusted BCA to b2 from b3
-- Affirm local currency long-term bank deposit ratings at B1;
outlook stable
-- Affirm foreign currency long-term bank deposit ratings at
B2; outlook stable
-- Affirm local and foreign currency long-term issuer ratings
at B1; outlook stable
-- Affirm foreign currency senior unsecured rating at B1;
outlook stable
-- Confirm long-term CR Assessment to B1(cr)
-- Affirm local currency and foreign currency short-term
deposit ratings at NP
-- Affirm local currency and foreign currency short-term
issuer ratings at NP
-- Affirm short-term CR Assessment at NP(cr)
-- Outlook is stable
Headquartered in Hanoi, the bank had total assets of VND850,210
billion (USD 34.0 billion) at end-June 2016.
Vietnam International Bank
-- Upgrade BCA and Adjusted BCA to b2 from b3
-- Affirm foreign currency long-term bank deposit ratings at
B2; outlook stable
-- Confirm local currency long-term bank deposit ratings at
B2; outlook stable
-- Confirm local and foreign currency long-term issuer ratings
at B2; outlook stable
-- Upgrade long-term CR Assessment to B1(cr) from B2(cr)
-- Affirm local currency and foreign currency short-term
deposit ratings at NP
-- Affirm local currency and foreign currency short-term
issuer ratings at NP
-- Affirm short-term CR Assessment at NP(cr)
-- Outlook is stable
Headquartered in Hanoi, the bank had total assets of VND 86,707
billion (USD 3.5 billion) at end-June 2016.
Vietnam Technological and Comm'l JSB
-- Upgrade BCA and Adjusted BCA to b2 from b3
-- Affirm foreign currency long-term bank deposit ratings at
B2; outlook stable
-- Confirm local currency long-term bank deposit ratings at
B2; outlook stable
-- Confirm local and foreign currency long-term issuer ratings
at B2; outlook stable
-- Upgrade long-term CR Assessment to B1(cr) from B2(cr)
-- Affirm local currency and foreign currency short-term
deposit ratings at NP
-- Affirm local currency and foreign currency short-term
issuer ratings at NP
-- Affirm short-term CR Assessment at NP(cr)
-- Outlook is stable
Headquartered in Hanoi, the bank had total assets of VND 212,676
billion (USD 9.4 billion) at end-June 2016.
===============
X X X X X X X X
===============
* ASPAC: Protection of Cash Flow From Payment Risk Top Agenda
-------------------------------------------------------------
Around 40% of the suppliers surveyed in the Asia Pacific region
anticipate increasing the use of credit management tools to
protect cash flow from B2B customers' late payment over the next
year. Nearly half of the suppliers surveyed in the region plan on
checking their customers' creditworthiness and payment history
significantly more often over the same time frame. This reflects
concern over the protection of corporate profitability, which
ensures the viability of the business as well as its safe growth.
Asia Pacific frontrunner position as leader of global growth is
forecast to remain unchanged in the coming years. Emerging Asia
will outpace other world regions in terms of GDP growth again
this year with 5.7% growth forecast. The two Asian giants, India
(7.5% growth forecast this year) and China (6.6%), are expected
to be in the lead. This despite the slowdown of China, which is
driven by a rebalancing of the economy towards services and
consumption-led growth. Against this background, businesses focus
on the protection of their receivables' portfolio from customers'
late payment
As highlighted by the October 2016 Atradius Payment Practices
Barometer for Asia Pacific, around 90% of the suppliers
respondents in Asia Pacific reported having experienced late
payment of invoices from their B2B customers. Due to this, most
of the suppliers interviewed in Asia Pacific (34%) reported that
they had to take specific measures to correct cash flow, and that
they had to pay their own suppliers late (33%). 25% had to pursue
additional financing from banks, factors or others to get the
necessary funds to pay their own creditors, and 22% had to
request a bank overdraft extension. This may explain why most of
the businesses in Asia Pacific (20% of respondents) are of the
opinion that cost containment and maintaining adequate cash flow
will be the greatest challenges to the profitability of their
business this year.
Andreas Tesch, Chief Market Officer of Atradius commented "Global
growth, which is set to expand 2.4% this year (steady with last
year) continues to be held back by low commodity prices,
insufficient consumer demand in advanced markets, Chinese
economic rebalancing, uncertainty surrounding global monetary
policy, and geo-political risks. All this gives rise to concerns
about increasing debt and deteriorating credit quality, being
very likely to cause an increase in corporate bankruptcies in
many emerging markets, especially in those depending on trade
with China and/or commodities".
Eric den Boogert, Director of Atradius Asia commented "Credit
conditions across most emerging markets continue to tighten in
response to elevated regional and global economic uncertainty.
Although economies in Asia-Pacific show decent economic growth
compared to rest of the world, a record number of companies have
seen delayed payments which is also supported by our own claims
data".
The Atradius Payment Practices Barometer for Asia Pacific gives
insights into the key factors for customer payment delay, the
challenges to business profitability, and the respondents'
opinion on payment practice trends by industry in the next 12
months.
The complete report highlighting the survey findings of the 2016
Atradius Payment Practices Barometer for Asia Pacific can be
found in the Reports & advice section of the
http://www.atradius.comwebsite.
About Atradius
Atradius provides trade credit insurance, surety and collections
services worldwide through a strategic presence in 50 countries.
Atradius has access to credit information on 200 million
companies worldwide. Its credit insurance, bonding and
collections products help protect companies throughout the world
from payment risks associated with selling products and services
on trade credit. Atradius forms part of Grupo Catalana Occidente
(GCO.MC), one of the leading insurers in Spain and worldwide in
credit insurance.
*********
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 ***