/raid1/www/Hosts/bankrupt/TCRAP_Public/161031.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, October 31, 2016, Vol. 19, No. 215
Headlines
A U S T R A L I A
ACCO BRANDS: Fitch Expects to Rate New Term Loans 'BB+/RR1'
CITI RECRUITMENT: First Creditors' Meeting Set for Nov. 4
DEH ELECTRICAL: First Creditors' Meeting Set for Nov. 9
GEOWASH PTY: First Creditors' Meeting Slated for Nov. 4
MANBAND PTY: First Creditors' Meeting Slated for Nov. 7
SHOOTERS JV: First Creditors' Meeting Scheduled for Nov. 8
C H I N A
CIFI HOLDINGS: Fitch Revises Outlook to Pos. & Affirms 'BB-' IDR
FUTURE LAND: Fitch Affirms 'BB-' IDR & Revises Outlook to Pos.
GENERAL STEEL: Common Stock Delisted from NYSE
GOLDEN WHEEL: Fitch Assigns 'B(EXP)' Rating to Proposed US$ Notes
GOLDEN WHEEL: Moody's Affirms B2 Corporate Family Rating
TEXHONG TEXTILE: Equity Placement No Impact on Moody's Ba3 CFR
YINGDE GASES: Fitch Affirms 'B+' IDR; Outlook Stable
I N D I A
AMALTAS EDUCATIONAL: Ind-Ra Assigns 'B' Rating to INR370MM Loan
ANGEL EXIM: CRISIL Suspends 'D' Rating on INR150MM Loan
APS STEELS: CRISIL Lowers Rating on INR65MM Cash Loan to 'D'
ARIHANT SPINTEX: CRISIL Suspends B+ Rating on INR160.6MM Loan
ASHTECH BUILDPRO: CRISIL Cuts Rating on INR110MM Term Loan to B
B. NISHANT: CRISIL Suspends 'D' Rating on INR150MM Cash Loan
BAGPET PAPER: CRISIL Suspends 'D' Rating on INR97.5MM Term Loan
BUTTA CONVENTION: CRISIL Suspends 'D' Rating on INR150MM Loan
CHUNILAL MOTIRAM: Ind-Ra Suspends B- Long-Term Issuer Rating
DHANLAXMI BOARD: CRISIL Suspends 'B' Rating on INR51.9MM LT Loan
EMPEROR TEXTILES: CRISIL Suspends B+ Rating on INR127.5MM Loan
HASTHSHILP DESIGNER: CRISIL Suspends D Rating on INR317.8MM Loan
JAYAMUKHI EDUCATIONAL: CRISIL Rates INR12MM LT Loan at B+
JINDAL FINE: CRISIL Reaffirms 'B' Rating on INR38.9MM Cash Loan
K. C. SOLVENT: CRISIL Reaffirms B+ Rating on INR480MM Cash Loan
KODEL UNIQUOTERS: CRISIL Assigns B+ Rating to INR52.5MM Loan
LAHARIYA OIL: CRISIL Assigns B+ Rating to INR60MM Term Loan
LAKSHMI VENKAT: CRISIL Upgrades Rating on INR42MM Loan to 'B'
LIZZART GRANITO: CRISIL Assigns B+ Rating to INR176.4MM Term Loan
M/S SUDHAKARAN: Ind-Ra Affirms BB Long-Term Issuer Rating
MAHAJAN RICE: CRISIL Suspends B+ Rating on INR90MM Cash Loan
MAYURI BROILER: CRISIL Ups Rating on INR65MM Term Loan to 'B'
MEHADIA & SONS: CRISIL Suspends B- Rating on INR31.5MM Cash Loan
MGM STEELS: CRISIL Assigns B+ Rating to INR30MM Cash Loan
SACHI STEEL: CRISIL Suspends 'B' Rating on INR100MM Cash Loan
SAI POINT: CRISIL Reaffirms 'B' Rating on INR90MM Inventory Loan
SHRADDHA MOTORS: CRISIL Upgrades Rating on INR100MM Loan to 'B'
SHUBHAM INFRASTRUCTURE: CRISIL Suspends B- Rating on INR150M Loan
SRI LAXMI: CRISIL Assigns B+ Rating to INR80MM Cash Loan
SRI PRIYANKA: CRISIL Suspends 'C' Rating on INR80MM Cash Loan
SRI RAMA: CRISIL Assigns 'B' Rating to INR100MM Warehouse Loan
STUDIOKON VENTURES: Ind-Ra Assigns BB+ Long-Term Issuer Rating
SUNJYOT GEMS: CRISIL Suspends B+ Rating on INR10MM LT Loan
THANE STEELS: Ind-Ra Affirms BB Long-Term Issuer Rating
THANGAVELU SPINNING: CRISIL Suspends 'B' Rating on INR91.1MM Loan
TONZA PAPER: CRISIL Assigns B+ Rating to INR74.4MM Term Loan
VENMITRA SYSTEMS: CRISIL Suspends B+ Rating on INR35MM Bank Loan
VIJAY AQUA: CRISIL Suspends 'B' Rating on INR40MM Cash Loan
VINDHYA CEREALS: Ind-Ra Withdraws B Long-Term Issuer Rating
VVF INDIA: CRISIL Reaffirms 'D' Rating on INR2.2BB Cash Loan
I N D O N E S I A
ALAM SUTERA: Fitch Assigns 'B+' Rating on USD245MM Sr. Notes
LIPPO KARAWACI: Fitch Assigns 'BB-' Rating on USD425MM Notes
M A L A Y S I A
KINSTEEL BHD: Auditors' Disclaimer Opinion Prompts PN17 Listing
PERISAI PETROLEUM: Bondholder Files Wind-Up Petition
N E W Z E A L A N D
PUMPKIN PATCH: Receivers to Close 7 stores, Axe 57 Jobs
WYNYARD GROUP: May Halt Lucrative Services Contract With Jade
S O U T H K O R E A
HANJIN SHIPPING: Gets 5 Bids as Court Kicks Off Sale Process
V I E T N A M
VIETNAM: Government Will Let Commercial Banks Fail, Official Says
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A U S T R A L I A
=================
ACCO BRANDS: Fitch Expects to Rate New Term Loans 'BB+/RR1'
-----------------------------------------------------------
In Fitch's view, ACCO Brands Corporation's (ACCO) announcement
that it will acquire Esselte Group Holdings AB (Esselte), a $458
million manufacturer of office products, predominantly operating
in Europe, is neutral to the company's Long-Term Issuer Default
Rating (IDR) of 'BB'. At $60 million in EBITDA, the $333 million
purchase price implies a 5.5x enterprise value (EV)/EBITDA
multiple. The company plans to fund the acquisition with a new
Euro-denominated term loan and Fitch expects the acquisition,
together with the company's $78 million term loan paydown in
third quarter 2016 (3Q16), would have minimal impact on the
company's current leverage of around 3x.
In addition, Fitch expects to rate ACCO's new EUR300 million Term
Loan A and AUD80 million Term Loan A 'BB+/RR1'/Outlook Stable.
The proposed Esselte acquisition would improve ACCO's
geographical diversification (ACCO is primarily exposed to the
U.S.) and provide synergy opportunities in duplicative costs (up
to $23 million per management guidance), as well as some
potential revenue synergies through cross-marketing the expanded
product portfolio to the combined entity's sales teams. However,
while the acquisition diversifies ACCO's geographic profile, the
exposure to the challenged office products industry will not
change significantly.
KEY RATING DRIVERS
Fitch's ratings on ACCO are predicated on the company's stable
free cash flow and ongoing debt paydown, but constrained by
concerns regarding secular challenges and channel shifts within
the company's merchandise mix, as well as the risk of further
debt-financed acquisitions. The time management (calendars) and
storage categories represent approximately 30% of ACCO's sales,
and both categories have seen declines given ongoing shifts
online. In addition, the office supply superstores, which
currently represent 24% of ACCO's sales, have been losing share
to other players including general merchants and online-only
competitors.
Limited Organic Growth Yields Tight Margin Management
The office products industry is experiencing a slow secular
decline due to the shift towards digital technologies. The growth
of private label penetration in the industry has further
pressured sales of branded products (including many of those in
ACCO's portfolio). Finally, channel shift away from the
traditional office products retailers and toward discounters and
online-only players have forced vendors like ACCO to optimize
channel management to maintain share. While ACCO benefits from
its market leading position, with over 80% of sales generated
from products ranked #1/#2 in their respective categories, the
company has not been immune to industry challenges.
To preserve and improve margin in the difficult operating
environment, ACCO has maintained a tight focus on its cost
structure and improved profitability despite negative or limited
organic growth. Further, the company has been and is likely to
continue exiting unprofitable business lines and relationships,
such as the 2015 exit from the tablet accessories market. As a
result of the company's efforts, EBITDA margins steadily
increased from the upper single digits in 2008 to almost 12% by
2011. Then, through the highly accretive acquisition of
MeadWestvaco Corporation's Consumer & Office Products division
(Mead) in May 2012, margin growth accelerated even further to
more than 15% in 2015. To mitigate ongoing sector pressure, Fitch
expects the company will continue to actively manage its cost
structure.
Growth through Acquisitions
ACCO intends to be a leader in this consolidating industry. Fitch
expects the company to focus on accretive acquisitions to reduce
costs with a positive benefit to profitability and free cash flow
(FCF). However, this will result in periodic increases in
leverage. It partially addressed the move to faster-growing mass
channels with the 2012 Mead acquisition.
In addition to Esselte, in 2Q16 ACCO announced the acquisition of
the remaining 50% of Pelikan Artline Pty Limited, its joint
venture (JV) company serving the Australia and New Zealand
markets, as well as the buyout of a minority interest in a
subsidiary of the JV. From a strategic standpoint, Fitch views
the buyout as a modest positive, as it will give ACCO control
over its Australian business and allow for cost synergies with
existing operations.
Strong Cash Flow and Improving Leverage
ACCO has generated positive FCF every year since 2007, except for
2012, which was modestly negative after adjusting for
approximately $78 million in transaction and refinancing fees
related to the Mead acquisition. The company has an excellent
track record in meeting its public FCF goals. ACCO generated
$146.6 million FCF in 2015, and Fitch expects it to be flat at
around $140 million in 2016, and around $150 million annually
thereafter.
Leverage, FCF, and margins have improved, supporting good
liquidity and access to the capital markets despite secular
challenges. Fitch views the company's focus on maintaining solid
metrics and directing much of its FCF to debt reduction as
positive for the rating. ACCO has demonstrated a strong track
record in deleveraging since its strategic acquisition of Mead in
2012. Bank covenant leverage ratio was reduced from over 3.5x in
2012 to below 3x in 2015, and Fitch expects the company to
continue directing a meaningful portion of its FCF to debt
paydown, as further illustrated by the company's $78 million of
term loan reduction in 3Q16.
ASSUMPTIONS
-- Revenue is expected to increase 5% to $1.58 billion in 2016
as a result of the incremental $70 million in sales from the
Australian JV purchase. Revenue for the existing ACCO
business is expected to be flattish on a constant currency
basis annually. Assuming the Esselte acquisition closes in
January 2017, Fitch expects ACCO to add Esselte's full-year
sales of $457 million, resulting in $2 billion total revenue
in 2017; flattish revenue growth is assumed thereafter.
-- EBITDA is expected to be in the $250 million range in 2016,
as positive EBITDA from the Australian JV will be somewhat
mitigated by the impact of the strong U.S. dollar on ACCO's
operating results. EBITDA is expected to reach around $330
million in 2017 due to the incremental contribution from the
Esselte acquisition and the realization of full-year impact
from Pelikan Artline integration.
-- FCF is expected to be around $140 million in 2016, in line
with 2015 results, and grow toward $180 million thereafter
due to the Esselte acquisition. FCF in 2016 is expected to
be used to reduce existing debt balances. Absent further
acquisitions, which ACCO could finance with a combination of
FCF and debt, Fitch assumes that beginning 2017 FCF is used
to repurchase shares and reduce debt, driving leverage from
the low-3x range in 2016 to below 3x.
RATING SENSITIVITIES
Future developments that may, individually or collectively, lead
to a positive rating action include:
-- An upgrade beyond the 'BB' range is possible if the company
makes acquisitions that change its business mix or model to
one with less cyclical or higher growth prospects while
maintaining leverage below 3x. However, an upgrade is not
anticipated in the near term given existing business model
issues.
Future developments that may, individually or collectively, lead
to a negative rating action include:
-- Inability of the company to cut costs to offset the impact
of declining sales and maintain current credit protection
measures and cash flows.
-- Sustained gross leverage at or above 4x, with FCF
Materially below expectations.
-- A large debt-financed acquisition without a concrete plan
to reduce debt meaningfully below 4x in the 24-month
timeframe post a transaction could lead to a negative
rating action.
LIQUIDITY AND DEBT STRUCTURE
ACCO had ample liquidity as of Sept. 30, 2016, composed of $101
million cash and cash equivalents and revolver availability. The
company's debt includes borrowings under its $300 million
revolver, term loans, and $500 million in unsecured notes. Annual
term loan amortization on the company's U.S. and Australian term
loans is manageable, with no significant maturities until 2020.
Fitch has assigned Recovery Ratings (RRs) to the various debt
tranches in accordance with criteria, which allows for the
assignment of RRs for issuers with IDRs in the 'BB' category.
Given the distance to default, RRs in the 'BB' category are not
computed by bespoke analysis. Instead, they serve as a label to
reflect an estimate of the risk of these instruments relative to
other instruments in the entity's capital structure. Fitch
assigned (and would expect to assign) an 'RR1' to first lien
secured debt, notching up one from the IDR, indicating
outstanding recovery prospects (91%-100%) given default. The
revolver, US Term Loan A and Euro Term Loan A are secured by
substantially all assets of ACCO while the AUD Term Loans are
secured by substantially all assets of ACCO's Australian
subsidiary, ACCO Brands Australia Holding Pty. Unsecured debt
will typically achieve average recovery, and thus was assigned an
'RR4', or 31% - 50% recovery.
FULL LIST OF RATING ACTIONS
Fitch expects to rate the following:
ACCO Brands Corporation
-- EUR300 million five-year senior secured Euro Term Loan A
'BB+/RR1'.
ACCO Brands Australia Holding Pty.
-- AUD 80 million five-year AUD Term Loan A at 'BB+/RR1'.
Fitch currently rates ACCO as follows:
ACCO Brands Corporation
-- Long-term Issuer Default Rating (IDR) 'BB';
-- $300 million senior secured revolving credit facility due
April 2020 'BB+/RR1';
-- Senior secured US Term Loan A due April 2020 'BB+/RR1';
-- $500 million senior unsecured 6.75% notes due April 2020
'BB/RR4'.
ACCO Brands Australia Holding Pty.
-- AUD Term Loan A 'BB+/RR1'.
The bank revolving credit facility, US Term Loan A, Euro Term
Loan A and the senior unsecured notes are guaranteed by domestic
(mostly Delaware and Nevada) subsidiaries.
Both of the AUD Term Loans are guaranteed by ACCO Brands
Australia Holding Pty, a wholly owned subsidiary of ACCO Brands
Corporation, and secured by substantially all assets of the
subsidiary.
The Rating Outlook is Stable.
CITI RECRUITMENT: First Creditors' Meeting Set for Nov. 4
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Citi
Recruitment Pty Ltd will be held at the offices of Jirsch
Sutherland, Level 27, 259 George Street, in Sydney, on Nov. 4,
2016, at 10:30 a.m.
Amanda Young and Sule Arnautovic of Jirsch Sutherland were
appointed as administrators of Citi Recruitment on Oct. 25, 2016.
DEH ELECTRICAL: First Creditors' Meeting Set for Nov. 9
-------------------------------------------------------
A first meeting of the creditors in the proceedings of DEH
Electrical Services Pty Ltd will be held at the offices of
HLB Mann Judd (Insolvency WA), Level 3, 35 Outram Street, in
West Perth, on Nov. 9, 2016, at 10:00 a.m.
Kimberley Stuart Wallman of HLB Mann Judd (Insolvency WA) was
appointed as administrator of DEH Electrical on Oct. 27, 2016.
GEOWASH PTY: First Creditors' Meeting Slated for Nov. 4
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Geowash
Pty Ltd will be held at the offices of Cor Cordis Chartered
Accountants, Level 29, 360 Collins Street, in Melbourne, on
Nov. 4, 2016, at 3:00 p.m.
Sam Kaso and Daniel Juratowitch of Cor Cordis Chartered
Accountants were appointed as administrators of Geowash Pty on
Oct. 24, 2016.
MANBAND PTY: First Creditors' Meeting Slated for Nov. 7
-------------------------------------------------------
A first meeting of the creditors in the proceedings of
MANBAND PTY. LIMITED will be held at the offices of Cor Cordis
Chartered Accountants, Level 6, 55 Clarence Street, in Sydney, on
Nov. 7, 2016, at 11:00 a.m.
Ozem Kassem and Jason Tang of Cor Cordis were appointed as
administrators of Manband Pty on Oct. 26, 2016.
SHOOTERS JV: First Creditors' Meeting Scheduled for Nov. 8
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Shooters
JV Pty Ltd will be held at Level 1, 50 Davenport Street, in
Southport, Queensland, on Nov. 8, 2016, at 11:00 a.m.
Steven Staatz and Nick Combis of Vincents Chartered Accountants
were appointed as administrators of Shooters JV on Oct. 27, 2016.
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C H I N A
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CIFI HOLDINGS: Fitch Revises Outlook to Pos. & Affirms 'BB-' IDR
----------------------------------------------------------------
Fitch Ratings has revised the Outlook on China-based property
developer CIFI Holdings (Group) Co. Ltd. to Positive from Stable,
and affirmed the Long-Term Foreign-Currency Issuer Default Rating
at 'BB-'. Fitch has also affirmed CIFI's senior unsecured rating
at 'BB-'.
The Outlook revision reflects the increased likelihood that CIFI
can sustain attributable contracted sales of more than CNY30 bil.
a year from 2016, after it repositioned its land bank to focus on
cities that have strong housing demand. CIFI has shown financial
discipline in its business expansion by keeping leverage below
40% and focusing on high-margin projects to maintain EBITDA
margin above 25%.
KEY RATING DRIVERS
Larger Scale: Fitch estimates CIFI's attributable contracted
sales will reach CNY30bn in 2016 and remain above that in 2017,
based on its plans for project launches. Total contracted sales
in January-September 2016 rose 139% yoy to CNY41.3 bil., with
attributable sales making up about 60% of total sales. The
increase was mainly because CIFI increased the number of
properties that were ready for sale and the projects had higher
selling prices. The average selling price for contracted sales
in January-September 2016 rose to CNY18,000 per square metre (sq
m) from CNY14,692/sq m in 2015. CIFI's larger scale gives the
company a more stable sales base and greater financial
flexibility in making land acquisitions.
Disciplined Land Acquisitions: Fitch expects CIFI to maintain its
current pace of land acquisitions, and expects attributable land
premium for 2016-2017 to be around CNY12 bi. a year, or around
40% of its estimated full-year attributable contracted sales.
This follows an expanded land acquisition programme in 2015, when
CIFI replenished its land bank mostly with sites in Tier 1 and 2
cities, where property demand remains robust.
CIFI has been targeting to add land in Tier 2 cities, such as
Shenyang, Suzhou, Wuhan, Changsha and Foshan, where land and
selling prices have yet to rise as quickly as in some top tier
cities. As a result, CIFI's average land acquisition cost in the
first nine months of 2016 was only CNY3,837/sq m compared with
CNY6,680/sq m a year earlier. CIFI's attributable land bank of
8.7 million sq m in gross floor area is sufficient for around
four years of development activity.
Leverage to Remain Stable: CIFI's net leverage, as measured by
net debt to adjusted inventory with proportionate consolidation
of JV/associates, was at 33.4% at end-June 2016, compared with
38.6% at end-2015. The improvement was mainly driven by a lower
leverage at the JV level. CIFI actively manages JV cash flow and
collaborates with leading industry players such as Henderson
China, Hongkong Land and Greenland. The adoption of the JV model
helps CIFI to improve operational efficiency, lower land
acquisition cost and funding cost. Fitch expects leverage to be
stable in the next 12-18 months as CIFI increases participation
in JV projects and keeps the current land acquisition pace.
Healthy Margin: CIFI's EBITDA margin, excluding the effect of
acquisition revaluation, has been consistently around 25%. Fitch
expects CIFI's EBITDA margin to widen to 30% by 2018. This will
be supported by the increase in average selling prices and
decline in average land acquisition cost this year. CIFI's large
portfolio of projects in Tier 1 and 2 cities, and its shift to
offer products that appeal to upgraders rather than the mass
market have enhanced its profit structure.
Focus on Tier 1 and 2 Cities: CIFI has a diversified presence in
the Yangtze River Delta, Pan Bohai Rim, Central Western Region
and Guangdong Province, which reduces its exposure to
uncertainties in local policies and local economies while
providing room to expand. More than 90% of the company's
attributable land bank at mid-2016 was in Tier 1 and 2 cities,
which means CIFI is less exposed to the oversupply plaguing
lower-tier cities. In addition, its projects are spread over 17
cities, which helps to mitigate risks arising from policy
intervention in individual cities. Nevertheless, strong and
widespread implementation of the home-purchase restrictions by
the authorities may delay CIFI's growth.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for CIFI include:
-- No aggressive land acquisitions in 2017 and 2018. All
future land acquisitions are assumed to be 100%-owned by
CIFI in forecasts
-- Average land cost to rise 15% a year in 2017 and 2018 due
to limited land supply and fierce competition for land in
target cities
-- Contracted sales growth in the mid-to-high single digits on
an attributable basis in 2017 and 2018
-- Adjusted EBITDA margin to improve to 30% by 2018
RATING SENSITIVITIES
Positive: Developments that may, individually or collectively,
lead to positive rating action include:
-- Annual contracted sales on an attributable basis rising
above CNY30 bil., with a healthy financial profile and
current product mix
-- Maintaining high cash flow turnover despite the JV business
model, and consolidated contracted sales to debt sustained
at over 1.2x
-- EBITDA margin, excluding the effect of acquisition
revaluations, of over 25% on a sustained basis
-- Leverage, measured by net debt/adjusted inventory,
sustained below 40%
Negative: Failing to maintain the positive guidelines will lead
to the Outlook reverting to Stable
FULL LIST OF RATING ACTIONS
Long-Term Foreign-Currency IDR affirmed at 'BB-'; Outlook
revised to Positive from Stable
Senior unsecured rating affirmed at 'BB-'
USD400 mil. 8.875% senior unsecured notes due 2019 affirmed at
'BB-'
USD400 mil. 7.75% senior unsecured notes due 2020 affirmed at
'BB-'
FUTURE LAND: Fitch Affirms 'BB-' IDR & Revises Outlook to Pos.
--------------------------------------------------------------
Fitch Ratings has affirmed China-based Future Land Development
Holdings Limited's Long-Term Foreign- and Local-Currency Issuer
Default Ratings at 'BB-' and revised the Outlook to Positive from
Stable.
Fitch has also affirmed Future Land's senior unsecured rating at
'BB-'. Future Land's ratings will continue to be driven by its
68.27% owned Future Land Holdings Co. Ltd.'s credit profile.
KEY RATING DRIVERS
Outlook Revised to Positive: The Outlook revision reflects
Fitch's view of Future Land's strategic positioning in the
Yangtze River Delta region. Its positioning continues to support
its scale, which compares well against 'BB' rated peers. Future
Land's recent aggressive land banking, if not supported by
continued expansion in its scale, could put pressure on its
leverage. This is, however, mitigated by its strong sales
turnover, as measured by contracted sales/gross debt, which was
1.8x at 1H16 and averaged at 1.5x annually since 2010. This
demonstrated the company's ability to rapidly generate sales from
new land acquisitions. Fitch estimates Future Land's recurring
EBITDA/interest expense will remain 0.15x-0.2x over the next
three years as it starts to expand its shopping mall portfolio,
which also supports the rating.
Critical Scale Achieved: Future Land recorded exceptionally
strong presales in 2016, driven by better sell-through rates on
projects located in Tier-3 and Tier-4 cities, as well as a higher
average selling price (ASP) in the Yangtze River Delta.
Consolidated gross floor area sold in 1H16 increased 79% yoy to
2.2 million square metres (sq m) and the ASP increased 9% yoy to
CNY9,800 per sq m. The ASP further increased in 3Q16 to
CNY10,108/sq m after the homebuilder launched more projects in
higher-tier cities. Fitch expects Future Land to maintain
consolidated contracted sales of more than CNY40 bil. a year.
Leverage May Pressure Rating: Future Land increased its land
purchases in 3Q16, after a slow 1H16, with year-to-date land
premiums reaching CNY27 bil.; representing 79% of consolidated
presales. Future Land has been sourcing JV partners to share
costs for the more expensive land sites it bought in Shanghai,
Nanjing and Suzhou. Based on our projection that its land
premium will reduce to 40%-50% of consolidated contracted sales
this year, this is likely to lead to a temporary spike in
leverage to 45%-50% at end-2016, from 42% at end-1H16 and 33% at
end-2015. The company intends to reduce land purchases in 4Q16
and 2017 due to the government's tightening policies for the
property market. Fitch will continue to monitor the company's
ability to deleverage while maintaining its scale.
Fair Land Bank Quality: Future Land has sufficient land bank for
development activity the next three to four years, with the
attributable land bank held by its subsidiary Future Holdings at
21 million sq m in 1H16. The homebuilder improved its
diversification, reducing the percentage of its land bank located
in the Yangtze River Delta to around 75% in 1H16, from around 91%
in 2013. The homebuilder expects to reduce the proportion of its
land in the Yangtze River Delta to around 65%-70% and expand into
the Pearl River Delta region, Central and West China as well as
the Bohai Economic Rim. Only 44% of Future Holdings' land bank
was located in Tier 1 (Shanghai) and Tier 2 cities (Suzhou,
Nanjing and Hangzhou) at end-1H16, with the rest mainly located
in the Tier 3 and 4 cities in Jiangsu and Zhejiang provinces.
Improving Margins: Fitch expects Future Land's gross margins to
remain around 23%-24% and the EBITDA margin to improve to 18%-19%
in 2016 from 16.1% in 2015. Future Land's EBITDA margin is low
relative to its 'BB' category peers as its rapid turnover (which
is the highest among 'BB-' rated peers) sacrifices profitability
for faster returns for its investment. Future Land's gross
margins have started to recover from 22% in 2014 due to the
rising ASP in the Yangtze River Delta since 2H15, reaching 24% in
2015 and 1H16.
Selling, general and administrative (SG&A) expenses will have a
more negative impact on EBITDA margin during periods of strong
contracted sales growth due to the mismatch between sales and
revenue numbers. However, Future Land's SG&A costs are generally
in line with peers at around 8%-10% of revenue. Margin
improvement from 2017 will depend on the rise in the ASP as it
has recently acquired more expensive lands. The average cost of
land acquired in 3Q16 rose to CNY6,096/sqm, from CNY4,074/sqm in
1H16; this includes three sites where homebuilders paid record-
breaking prices - one plot in Shanghai Hongkou that cost
CNY67,000/sq m and two plots in Nanjing Jiangning that cost
CNY20,000-22,000/sq m.
Structural Subordination Mitigated: Its subsidiary Future
Holdings, which is listed in Shanghai, remains a crucial platform
for Future Land's offshore financing, especially as the onshore
financing environment tightens in 2H16. Future Land has extended
a shareholder loan to Future Holdings to ensure sufficient
liquidity at the holding company level in the medium term. The
loan ranks equally with Future Holdings' onshore senior unsecured
debt and can be repaid upon Future Land's demand. Future Land's
CNY2.8 bil. shareholder loan to the subsidiary and CNY11.1 bil.
in unrestricted cash provides a sufficient source of liquidity to
cover Future Land's CNY4bn outstanding offshore debt as at end-
1H16. The ratio of the shareholder loan to the holding company's
net debt was over 0.8x at end-1H16. Fitch will continue to
monitor the ratio and expect coverage to increase after Future
Land accumulates interest and dividends from Future Holdings.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the issuer
include:
-- contracted sales to grow 8%-10% in 2017-2018
-- gross margins to improve to 23%-24% in 2016-2017
-- land acquisition to slow in 4Q16 and 2017, with total land
premium of CNY23 bil.-24 bil. in 2016 and CNY21 bil. in
2017
-- Future Land maintaining a controlling shareholding in
Future Holdings
-- the ratio of the shareholder loan extended to Future
Holdings and JV interest to the holding company's net debt
to be higher than 0.7x
RATING SENSITIVITIES
Positive: developments that may, individually or collectively,
lead to positive rating action include:
-- contracted sales, excluding JVs, to remain above CNY40bn
-- contracted sales/total debt sustained above 1.5x
-- consolidated net debt/adjusted inventory sustained below
40%
-- EBITDA margin sustained above 18%
-- the ratio of shareholder loan extended to Future Holdings
and JV interest to the holding company's net debt falling
to lower than 0.7x with no significant decrease in Future
Land's shareholding in the Shanghai-listed subsidiary
Negative: failure to maintain the positive guidelines will lead
to the Outlook being revised to Stable from Positive.
LIQUIDITY
Sufficient Liquidity. Fitch expects Future Land to maintain
sufficient liquidity, with available cash of CNY11.2 bil. and
unutilized credit facilities (uncommitted) of CNY34 bil. at end-
June 2016 to cover repayments on its short-term debt of CNY4.2
bil. and Fitch-estimated 2016 outstanding land premium of
CNY20 bil.
GENERAL STEEL: Common Stock Delisted from NYSE
----------------------------------------------
Benjamin Sawyer, manager of The New York Stock Exchange LLC,
filed a Form 25 with the Securities and Exchange Commission
notifying the removal from listing or registration of General
Steel Holdings' common stock on the Exchange.
About General Steel Holdings
General Steel Holdings, Inc., headquartered in Beijing, China,
produces a variety of steel products including rebar, high-speed
wire and spiral-weld pipe. General Steel --
http://www.gshi-steel.com/-- has operations in China's Shaanxi
and Guangdong provinces, Inner Mongolia Autonomous Region and
Tianjin municipality with seven million metric tons of crude
steel production capacity under management.
Net loss attributable to the Company for the year ended Dec. 31,
2015, was $789 million as compared to $48.7 million for the same
period in 2014.
As of Dec. 31, 2015, General Steel had $35.8 million in total
assets, $78.2 million in total liabilities, and a total
deficiency of $42.4 million.
Friedman LLP, in New York, NY, issued a "going concern"
qualification on the consolidated financial statements for the
year
ended Dec. 31, 2015, citing that the Company has an accumulated
deficit, has incurred continued losses from operations, and has a
working capital deficiency at Dec. 31, 2015. In addition, the
majority of the Company's operating assets and business has been
divested at year-end or in the first quarter of 2016 to related
parties. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
GOLDEN WHEEL: Fitch Assigns 'B(EXP)' Rating to Proposed US$ Notes
-----------------------------------------------------------------
Fitch Ratings has assigned China-based homebuilder Golden Wheel
Tiandi Holdings Company Limited's (GWTH; B/Stable) proposed US
dollar senior notes a 'B(EXP)' expected rating and a Recovery
Rating of 'RR4'.
The notes are rated at the same level as GWTH's senior unsecured
rating because they constitute the company's direct and senior
unsecured obligations. The final rating is subject to the
receipt of final documentation conforming to information already
received.
GWTH intends to use the net proceeds from the proposed US dollar
senior notes to refinance its existing debt.
KEY RATING DRIVERS
Niche Positioning: GWTH is focused on developing small commercial
and residential projects linked to metro stations. The company
has seven projects under development and launched presales for
six projects in 2016. Such projects usually fetch higher average
selling prices because of their convenient location and better
foot traffic for commercial property components. Potential
competition from large national developers for metro-linked
projects may squeeze GWTH's margin over the longer-term, although
volume-driven developers are less likely to participate in small
niche projects.
Negative Margins Temporary: Fitch expects GWTH's EBITDA margins
to stay around 25% over the medium-term, supported by existing
integrated projects connected to metro stations, which have
historical gross margins of around 40%. The company's EBITDA
turned negative in the last 12 months, mainly because GWTH
delivered only a limited stock of properties during the year, and
the majority of property sold will be delivered in 2H16 and 2017.
EBITDA was also squeezed by higher expenses driven by rising
sales activities. GWTH may face margin pressure from 2018 as
well-located metro-linked land sites are usually expensive.
Limited Headroom for Land Acquisition: Fitch expects GWTH's
leverage, as measured by net debt/adjusted inventory, to trend
towards 40% (end-1H16: 26%), with a land replenishment rate of
around 1x in the next two to three years. The company plans to
spend around 40% of total contracted sales for the next two years
on development to increase its saleable resources. This will
restrict its ability to make large land acquisitions. Fitch
expects GWTH to maintain a land acquisition budget of 35%-40% of
yearly contracted sales from 2H16.
Rising Recurring Income: Fitch expects GWTH's investment property
and metro-leasing divisions to expand steadily over the medium-
term, with new investment property assets opening from 2017 and
the business of leasing out shops in metro stations starting to
contribute to profit from 2018. These divisions will provide
recurring income for interest servicing, which will mitigate cash
flow volatility in the development property business. Fitch
expects the company's recurring gross profit/gross interest to
increase to around 0.7x in 2018, from 0.4x in 1H16.
Expansion in Metro Leasing: The metro-leasing division's gross
profit margin was 11.7% in 1H16 (2015: -19%; 2014: 27%; 2013:
44%), beating Fitch's expectation of breakeven in full-year 2016.
The company is expanding its metro-leasing business and plans to
open four to five metro malls a year for the next two years.
Fitch expects the average breakeven period for a new mall is
around nine months. The metro-leasing business is likely to
contribute a stable portion of profit from 2018 as more malls
mature. A failure to turn in profit for this segment could
negatively affect GWTH's ratings, as the company has already
signed the long-term master lease contract with local government.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the issuer
include:
-- annual contracted sales value (excluding JVs) to remain
above CNY2 bil., with an average selling price above
CNY15,000 per square metre over 2016-2017
-- substantial sales from the second to third year after land
is acquired
-- only investment properties that are completed or under
development and existing metro-leasing businesses to
contribute to recurring gross profit
-- land replenishment rate of 1.0x over 2016-2018
RATING SENSITIVITIES
Negative: developments that may, individually or collectively,
lead to negative rating action include:
-- net debt/adjusted inventory rising above 40% on a sustained
basis (end-1H16: 26%)
-- deviation from the current focus on metro-linked projects
-- EBITDA margin falling below 25% on a sustained basis
(1H16: -3.2%)
-- Metro leasing business suffering sustained losses
Positive: No positive rating action is expected over the next 12-
18 months due to the company's small scale. However, over the
long-term, positive rating action may result from:
-- investment property value exceeding CNY5.0 bil. (end-1H16:
CNY4.8 bil.) and annual development property sales
sustained above CNY3.0 bil. on an attributable basis (1H16:
CNY1.4 bil.)
-- recurring gross profit/ interest coverage rising over 1.0x
on a sustained basis (2015: 0.6x)
GOLDEN WHEEL: Moody's Affirms B2 Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service has affirmed Golden Wheel Tiandi
Holdings Company Limited's B2 corporate family rating.
Additionally, Moody's has assigned a B2 senior unsecured rating
to the proposed USD bond to be issued by Golden Wheel.
The stable outlook is maintained.
The company plans to use the proceeds from the proposed USD bond
to refinance existing debt, fund new development projects and for
other general corporate purposes.
RATINGS RATIONALE
"The affirmation reflects the expected improvement in Golden
Wheel's credit metrics over the next 12-18 months, as well as its
adequate liquidity position, driven by the strong contracted
sales growth in 2016," says Anthony Lee, a Moody's Analyst.
Golden Wheel achieved contracted sales of RMB1.5 billion in 1H
2016 and RMB733 million in 2H 2015, compared to a low RMB190
million in 1H 2015, and is on track to meet its full year sales
target of RMB2 billion. These improved contracted sales over the
past year should contribute to improved revenue recognition over
the next 12 to 18 months.
Moody's expects its adjusted EBIT/interest to improve to above
2.0x, revenue to adjusted debt to above 30% and adjusted debt to
book capitalization to stay around 40%-45% in the next 12-18
months, compared to 0.8x, 8.7% and 37% for the 12 months to June
2016, respectively.
However, if the expected improvement does not materialize in the
next 12-18 months, the company's ratings will come under
pressure.
At end-June 2016, Golden Wheel's cash to short-term debt ratio
also improved to 111% from 96% at end-2015. Moody's expects
Golden Wheel to maintain sufficient liquidity in the next 12-18
months, supported by its prudent land acquisition.
Moody's expects Golden Wheel will use the majority of the
proceeds from the proposed bond issuance to repay its existing
debt, including the secured onshore bank debt at its
subsidiaries, and that the impact on its credit metrics will
therefore be limited.
"The company's stable recurring rental income stream partly
mitigates its weak and volatile credit metrics," adds Lee.
Golden Wheel recorded annual net rental income of RMB80-90
million and net rental income interest coverage of over 50% in
2014 and 2015.
As of end-June 2016, Golden Wheel owned 109,024 square meters of
gross floor area across nine investment properties projects in
Nanjing, Zhuzhou and Yangzhou, with occupancy rates of 85%-100%.
Moody's expects overall net rental income to improve gradually
over the next few years, supported by its land bank under
development reserved for investment properties and the increasing
contributions from the metro sub-lease segment.
Golden Wheel's B2 corporate family rating reflects its (1) track
record in Nanjing; (2) diversified product mix; and (3) stable
recurring income from investment properties.
On the other hand, its credit profile is constrained by its small
operating scale, and weak and volatile credit metrics as a result
of its weak contracted sales in 2014 and 1H 2015.
The stable rating outlook reflects Moody's expectation that the
company will refinance its maturing debt and preserve adequate
liquidity levels, adopt a disciplined approach to expansion, and
maintain a stable recurring income stream.
Upward rating pressure could emerge if Golden Wheel: (1) expands
its scale through stable revenue growth and demonstrates a
stronger and less volatile financial profile; (2) maintains a
solid liquidity profile.
Credit metrics that could trigger an upgrade include: (1) net
rental income that covers 1.0 times of gross interest expenses;
(2) revenue to debt above 60%-70%; and (3) cash to short-term
debt above 1.3x on a sustained basis.
The ratings could be downgraded if Golden Wheel: (1) experiences
a significant shortfall in sales or rental income; (2) materially
increases its debt-funded investment projects; or (3) fails to
maintain an adequate liquidity profile.
Credit metrics that could trigger a downgrade include: (1) net
rental income to gross interest below 0.3x on a sustained basis;
(2) adjusted EBIT to gross interest below 1.5x; or (3) cash to
short-term debt below 1.0x.
The principal methodology used in this rating was Homebuilding
And Property Development Industry published in April 2015.
Golden Wheel Tiandi Holdings Company Limited is an integrated
commercial and residential property developer, owner and
operator, focused on projects in Jiangsu and Hunan provinces. Its
projects are either connected or close to metro stations or other
transportation hubs.
The company also engages in the leasing and operational
management of shopping malls owned by third parties.
Golden Wheel was established in April 2012 in the Cayman Islands
and listed on the Hong Kong Stock Exchange in January 2013.
The group was founded in 1994 by its chairman, Mr. Wong Yam Yin,
a businessman who resides outside China. Mr. Wong has extensive
business experience in Asia, including China.
At 30 June 2016, the company's land bank totaled 877,674 sqm in
GFA, situated in Nanjing, Yangzhou, Changsha, Wuxi and Zhuzhou.
TEXHONG TEXTILE: Equity Placement No Impact on Moody's Ba3 CFR
--------------------------------------------------------------
Moody's Investors Service says that Texhong Textile Group
Limited's completion of an equity placement is credit positive,
but has no immediate impact on its Ba3 corporate family and
senior unsecured bond ratings.
The ratings outlook remains stable.
"The proceeds of the equity placement will alleviate Texhong's
funding needs to support its capital expenditure for projects in
Vietnam and working capital needs," says Chenyi Lu, a Moody's
Vice President and Senior Analyst.
"However, any impact on Texhong's financial leverage will be
modest, given the small size of the transaction relative to its
total debt," says Lu.
On 25 October 2016, Texhong announced that it had completed the
issuance of 30.3 million new shares at a price of HKD9.5 per
share. The transaction has increased Texhong's total issued share
capital by about 3.4% to 915 million shares.
Mr. Tianzhu Hong, Chairman and CEO of the company, will remain
the controlling shareholder of Texhong following the transaction,
although his stake has fallen slightly to 59.53% from 61.57% at
end-June 2016.
The net proceeds of HKD283 million (RMB208 million) -- excluding
issuance-related expenses -- accounted for about 2.8% of total
adjusted debt of RMB7.3 billion at end-June 2016.
Moody's expects Texhong's adjusted debt/EBITDA to decline to
about 3.0x-3.5x over the next 12-18 months from 4.0x for the 12
months ended 30 June 2016. Specifically, its continued strong
earnings will only be partially offset by: (1) continued capital
expenditure to support capacity expansion and downstream business
expansion, and (2) higher inventory levels to support its
expanded operations. This level of leverage is in line with its
Ba3 ratings.
Moody's also expects revenue to grow at 20% in 2016 and 10% in
2017, underpinned mainly by sales volume growth stemming from its
capacity expansion in Vietnam and Xinjiang, China in 1H 2016. Its
total production capacity increased to 2.84 million spindles at
end-June 2016 from 2.20 million at end-2015.
Texhong's adjusted EBITDA margin will remain stable at around 15%
over the next two years, supported by relatively stable average
selling prices and input cotton costs, and continued cost and
expense controls.
Moody's projects capital expenditure of RMB1.6 billion in 2016 to
support its capacity expansion in Vietnam and Xinjiang, China and
downstream business expansion. Its capital expenditure will be
RMB900 million in 2017 to support its expanded operations.
The principal methodology used in these ratings was Global
Manufacturing Companies published in July 2014.
Established in 1997 and listed on the Hong Kong Stock Exchange
since 2004, Texhong Textile Group Limited specializes in
producing core-spun yarn and textile products.
The company currently operates 17 yarn production bases: 13 in
China, three in Vietnam and one in Cambodia. Its chairman, Mr.
Tianzhu Hong, holds an approximate 59.5% stake in the company.
YINGDE GASES: Fitch Affirms 'B+' IDR; Outlook Stable
----------------------------------------------------
Fitch Ratings has affirmed Yingde Gases Group Company Limited's
Long-Term Issuer Default Rating at 'B+'. The Outlook is Stable.
The agency has also affirmed the senior unsecured debt ratings of
Yingde Gases at 'B+'; with Recovery Rating of 'RR4'. A full list
of rating actions is at the end of this commentary.
The affirmation is driven by Yingde's ability to sustain strong
EBITDA margin given its take-or-pay business model, recent
reduction in selling, general and administrative expenses (SG&A)
and positive trends on receivable collections. Yingde's
financial metrics have improved and Fitch will consider positive
rating actions if the trend is sustained in the next 12 months.
KEY RATING DRIVERS
Stronger EBITDA Margin: Yingde's EBITDA margin widened to 36.7%
in 1H16 from 33.6% in 1H15, primarily due to reduction in SG&A
expenses (6% of revenue in 1H16 compare to 9% in 1H15). As a
result, Fitch expects the company to record a wider-than-expected
EBITDA margin of 35% in 2016. Fitch expects Yingde's EBITDA
margin to remain above 30% in the next few years, although it
expects average selling prices (ASPs) to decline as new plants
are completed. In addition, Fitch expects Yingde's revenue to
increase by 6% in 2016, driven by higher sales volume despite
lower ASP due to construction of new oxygen capacity.
Improving Receivable Collection: Yingde managed to decrease its
receivable days slightly in 1H16, mostly through reduction in
bills receivable days to 25 days from 32 days at end-2015. Its
trade receivable days remained around the same level as in 2015.
The improvement was likely due to recovery in the Chinese steel
sector so far in 2016, as steel plants account for around 70% of
Yingde's customer base.
However, company's receivables past due in 1H16 formed 48% of
total receivables, the highest ratio since 2012, which led to an
increase in the delinquency rate to 69% in 1H16 from 67% in 2015.
Fitch will continue to monitor how the company's receivables will
fare as the steel industry recovers and Yingde expands into non-
steel sectors.
Lower Capex Helps Deleveraging: Yingde's capex of CNY244 mil. in
1H16 was much lower than previously expected. As a result, Fitch
now expects capex for the full year 2016 to be around CNY1 bil.,
down from the previously guided CNY1.5 bil., resulting in lower
leverage of 4.3x. Fitch has revised its capex forecast for
Yingde to around CNY1 bil. each year for 2017 and 2018, assuming
the company will keep capex spending at current levels, which
will result in FFO-adjusted net leverage trending below 4.0x in
2017 and 2018.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for Yingde Gases
include:
-- Revenue growth of 6% in 2016 and 9% in 2017
-- Gross profit margin to be around 30% in 2016 and 2017
-- Capex of CNY1 bil. a year for 2016 and beyond
RATING SENSITIVITIES
Negative: Developments that may, individually or collectively,
lead to negative rating action include:
-- Material deterioration of its onsite gas supply business
model, which may be evident in a significant decline of its
top line or operating EBITDA margin;
-- Sustained high delinquency rate on trade receivables, after
adjusting for the impact of any large write-offs;
-- Account receivable days sustained above 105 days (end-1H16:
95 days);
-- FFO-adjusted net leverage sustained above 5.5x.
Positive: Developments that may, individually or collectively,
lead to positive rating action include:
-- Significant, sustainable improvement in the delinquency
rate on trade receivables, after adjusting for the impact
of any large write-offs;
-- Account receivable days sustained below 70 days;
-- FFO-adjusted net leverage sustained below 4.0x
FULL LIST OF RATING ACTIONS
Yingde Gases Group Company Limited
Long-Term Issuer Default Rating affirmed at 'B+'; Outlook
Stable
Senior unsecured debt rating affirmed at 'B+'; Recovery Rating
of 'RR4'
Yingde Gases Investment Limited
Rating on USD425 mil. 8.125% senior unsecured notes due 2018
affirmed at 'B+'; Recovery Rating of 'RR4'
Rating on USD250 mil. 7.25% senior unsecured notes due 2020
affirmed at 'B+'; Recovery Rating of 'RR4'
The notes were issued by Yingde Gases Investment Limited and
guaranteed by Yingde Gases Group Company Limited.
=========
I N D I A
=========
AMALTAS EDUCATIONAL: Ind-Ra Assigns 'B' Rating to INR370MM Loan
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Amaltas
Educational Welfare Society's INR370 mil. term loans and
INR100 mil. bank guarantees an 'IND B' rating. The Outlook is
Stable.
KEY RATING DRIVERS
The rating reflects the society's limited operational track
record as its operations started only in October 2015. AEWS has,
under its aegis, a hospital which started in mid-FY15 and a
medical college which will commence its first session in November
2016.
The society plans to increase the capacity of the 300-bed
hospital to 700 beds by FY19 and increase the capacity of the
medical college to 750 seats from 150 seats in the next five
years.
According to Ind-Ra, the majority of the income will be
contributed by the hospital's earnings and tuition fee income
will contribute a smaller chunk to the total income.
The management expects both the tuition fee and hospital income
to increase due to the expansion in the scale of operations in
the coming years. Ind-Ra expects the debt/CBBID to decrease
owing to an increase in CBBID and repayment of debt.
Project cost and Financing:
The land on which this project has been initiated is a freehold
property covering 11.8 acres. The total cost of the project is
INR870 mil. which is partly funded by debt of INR470 mil. and the
remaining by promoter's contribution of INR400 mil.
The society availed a term loan and a bank guarantee from the
Bank of Maharashtra.
RATING SENSITIVITIES
Positive: Timely commencement of the medical college, strong
operating performance, and a higher-than-expected increase in the
size of operations coupled with improvements in the debt metrics
and debt servicing ability could be positive for the ratings.
Negative: A deteriorating financial profile resulting from a
lower-than-expected headcount coupled with a disproportionate
increase in debt in relation to the operating income could be
negative for the rating.
COMPANY PROFILE
AEWS has been registered as a society under the Society
Registration Act, 1860. It was established on 18 December, 2013
with a registered office in Manoramaganj, Indore and is engaged
in providing medical services and education. The hospital and
the medical school are located in village Bangar, Madhya Pradesh.
ANGEL EXIM: CRISIL Suspends 'D' Rating on INR150MM Loan
-------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Angel Exim Private Limited (part of the Majolica group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL D
Letter of Credit 150 CRISIL D
The suspension of ratings is on account of non-cooperation by
AEPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, AEPL is yet to
provide adequate information to enable CRISIL to assess AEPL's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL views information availability risk as a key
factor in its assessment of credit risk.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of MIPL, Angel Exim Private Ltd, and
STMPL Enterprises Pvt Ltd. This is because all these entities,
together referred to as the Majolica group, are under the same
management team, have common promoters, and are engaged in
similar lines of business.
The Majolica group trades in ceramic and porcelain tiles and
timber. Incorporated in 1997, AEPL is promoted by members of the
Mithiborwala family based in Ahmedabad (Gujarat).
APS STEELS: CRISIL Lowers Rating on INR65MM Cash Loan to 'D'
------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
APS Steels Limited to 'CRISIL D/CRISIL D' from 'CRISIL
B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 65 CRISIL D (Downgraded from
'CRISIL A4')
Inland/Import 50 CRISIL D (Downgraded from
Letter of Credit 'CRISIL A4')
The downgrade reflects delays by APS in servicing its term loan,
overutilisation of its cash credit facility for more than 30
days, and instance of devolvement of letter of credit, which was
unpaid for more than 30 days, on account of weak liquidity.
APS has a modest scale of operations in the fragmented mild steel
(MS) ingots industry, and its operating margin is susceptible to
downturns in its end-user industry and to volatility in steel
prices. Also, its financial risk profile is below average,
because of modest networth, subdued capital structure, and weak
debt protection metrics. However, the company benefits from its
promoter group's extensive experience in the steel industry.
APS, incorporated in 2006, manufactures MS ingots at its facility
at Hindupur in Andhra Pradesh. The company was acquired by the OP
Gupta group in 2012.
ARIHANT SPINTEX: CRISIL Suspends B+ Rating on INR160.6MM Loan
-------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of Arihant
Spintex Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 39.4 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 150.0 CRISIL B+/Stable
Term Loan 160.6 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by
ASPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, ASPL is yet to
provide adequate information to enable CRISIL to assess ASPL'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.
ASPL, incorporated in 2011, manufactures cotton yarn. The company
has its manufacturing facility at Amloh (Punjab) and is promoted
by Mr. Surinder Kumar and Mr. Manoj Mittal.
ASHTECH BUILDPRO: CRISIL Cuts Rating on INR110MM Term Loan to B
---------------------------------------------------------------
CRISIL has downgraded its long-term rating on the bank facilities
of Ashtech Buildpro India Pvt. Ltd. to 'CRISIL B/Stable' from
'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 15 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Term Loan 110 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The rating downgrade reflects CRISIL's expectation that liquidity
will be weak over the medium term. In fiscal 2016, operating
income was reported at INR53 million significantly lower than
CRISIL's expectation of INR247 million. This led to lower than
expected net cash accrual of INR4 million in fiscal 2016. For
fiscal 2017, company is expected to generate adequate cash
accruals of INR16 million against which it has repayment
obligation of INR9 million.
The rating reflects ABIPL's early stage of operations and modest
financial risk profile, with modest networth and debt protection
metrics. These rating weaknesses are partially offset by the
promoters' healthy relationships with customers and suppliers,
and strong demand prospects for aerated autoclave concrete (AAC)
blocks.
Outlook: Stable
CRISIL believes ABIPL will continue to benefit over the medium
term from the promoters' established relationships with customers
and suppliers. The outlook may be revised to 'Positive' if
substantial increase in revenue, profitability and cash accrual,
or sizeable capital infusion by the promoters strengthens
financial risk profile. Conversely, the outlook may be revised to
'Negative' if liquidity weakens, driven by decline in
profitability and accrual, stretch in working capital cycle, or
any large capital expenditure.
Incorporated in 2013, promoted by Mr. Sandeep Kumar Jindal and
Mr. Shiv Kumar Agarwal, ABIPL manufactures AAC blocks, and has a
capacity of 150,000 cubic metre per annum.
B. NISHANT: CRISIL Suspends 'D' Rating on INR150MM Cash Loan
------------------------------------------------------------
CRISIL has suspended its rating on the bank facility of B.
Nishant Jewels Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 150 CRISIL D
The suspension of ratings is on account of non-cooperation by
BNJPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, BNJPL is yet to
provide adequate information to enable CRISIL to assess BNJPL'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.
BNJPL was originally set up as a proprietorship concern named
Nishu Creations in December 2010 by Mr. Bhavin Shah; it was
reconstituted as a private limited company in March 2011. The
company manufactures gold jewellery as well as diamond-studded
jewellery. Currently, the operations of BNJPL are managed by Mr.
Bhavin Shah, his son Mr. Nishant Shah, and his father Mr.
Nalinkant Shah. BNJPL's registered office is in Mumbai
BAGPET PAPER: CRISIL Suspends 'D' Rating on INR97.5MM Term Loan
---------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Bagpet Paper Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL D
Cash Credit 50 CRISIL D
Letter of Credit 20 CRISIL D
Term Loan 97.5 CRISIL D
The suspension of ratings is on account of non-cooperation by
BPPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, BPPL is yet to
provide adequate information to enable CRISIL to assess BPPL'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.
BPPL, incorporated in 2010, manufactures machines utilized in the
paper industry and commenced commercial operations in July 2014.
The company is promoted and managed by Mr. K A Sharma and his son
Mr. Vijay Sharma. Its manufacturing unit is at Bavla in Ahmedabad
(Gujarat).
BUTTA CONVENTION: CRISIL Suspends 'D' Rating on INR150MM Loan
-------------------------------------------------------------
CRISIL has suspended its rating on the bank facility of Butta
Convention Services Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 150 CRISIL D
The suspension of ratings is on account of non-cooperation by
BCSPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, BCSPL is yet to
provide adequate information to enable CRISIL to assess BCSPL'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 May 2012, Butta Convention Services Pvt Ltd is in
the hospitality business and operates a convention center.
Located in Madhapur (Hyderabad,) the company hosts social as well
as corporate events. The Company is promoted by Mr. Butta S
Neelakanta and his wife Mrs. Butta Renuka and is part of the
BUTTA group of companies. The group has presence in the
Hospitality, Education, Branded Retail and Automobile space in
Hyderabad.
CHUNILAL MOTIRAM: Ind-Ra Suspends B- Long-Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated The Chunilal
Motiram Ginning Factory's (TCMGF) '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 INR60 mil. fund-based working capital limits to
'IND B-(suspended)' from 'IND B-'.
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 TCMGF.
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.
DHANLAXMI BOARD: CRISIL Suspends 'B' Rating on INR51.9MM LT Loan
----------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Dhanlaxmi Board and Papers Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B/Stable
Long Term Loan 13.1 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 51.9 CRISIL B/Stable
The suspension of ratings is on account of non-cooperation by
DBPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, DBPL is yet to
provide adequate information to enable CRISIL to assess DBPL'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 Bareja, Kheda district (Gujarat) in 2001, DBPL is
promoted by Mr. Sanjay Garg and his family. The company
manufactures absorbent kraft and corrugated kraft paper. It is
planning to set up a facility to manufacture paper for newspaper
printing; the facility is expected to begin commercial production
by August 2015.
EMPEROR TEXTILES: CRISIL Suspends B+ Rating on INR127.5MM Loan
--------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Emperor Textiles Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL B+/Stable
Letter of Credit 2.5 CRISIL A4
Long Term Loan 127.5 CRISIL B+/Stable
Packing Credit 120 CRISIL A4
The suspension of ratings is on account of non-cooperation by
ETPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, ETPL is yet to
provide adequate information to enable CRISIL to assess ETPL'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 2005, ETPL is a vertically integrated textile
manufacturer based in Tirupur (Tamil Nadu). The company's day-to-
day operations are managed by Mr. A Palanisamy and Mr. P
Karthikeyan.
HASTHSHILP DESIGNER: CRISIL Suspends D Rating on INR317.8MM Loan
----------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Hasthshilp Designer Crete Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 2.2 CRISIL D
Term Loan 317.8 CRISIL D
The suspension of ratings is on account of non-cooperation by
HDCPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, HDCPL is yet to
provide adequate information to enable CRISIL to assess HDCPL'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.
HDCPL was set up in 2012 by Mr. Hasmukh Jain and his family. The
company manufactures pavers, designer bricks, and fly ash bricks
at its manufacturing facility in Pune. The unit started
operations in October 2014.
JAYAMUKHI EDUCATIONAL: CRISIL Rates INR12MM LT Loan at B+
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' rating to
the bank facilities of Jayamukhi Educational Society.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 12 CRISIL B+/Stable
Long Term Loan 8 CRISIL B+/Stable
Overdraft Facility 50 CRISIL A4
The rating reflects its modest scale- and highly working capital
intensive nature of operations due to stretched receivables,
exposure to intense competition, and susceptibility to changes in
regulation in the education sector. The rating also factors in
its below-average financial risk profile marked by high gearing,
modest debt protection metrics and networth. These rating
weaknesses are partially offset by the benefits derived from the
long standing experience of its promoters and its established
track record in the education sector.
Outlook: Stable
CRISIL believes that JES will continue to benefit from its
trustees' extensive industry experience over the medium term. The
outlook may be revised to 'Positive' if JES substantially
improves its scale of operations, driven by an increase in the
number of courses offered or in intake capacity, while it
sustains its profitability margins resulting in an improvement in
its financial risk profile. Conversely, the outlook may be
revised to 'Negative' if JES's liquidity and financial risk
profile are impacted by sizeable debt-funded capital expenditure,
or any regulatory change, or deterioration in its cash flow
management.
Established in 2001, JES runs six colleges offering different
courses in various streams in Warangal, Telangana. The day-to-day
operations of the society are managed by its Joint Secretary -
Mr. T.V.R.N. Reddy.
JES reported an estimated surplus (excess of income over
expenditure) of around INR15 million on an operating income of
around INR126 million for 2015-16 (refers to the financial year,
April 1 to March 31) against a surplus of around INR26 million on
an operating income of around INR121 million for 2014-15.
JINDAL FINE: CRISIL Reaffirms 'B' Rating on INR38.9MM Cash Loan
---------------------------------------------------------------
CRISIL's ratings on the bank facilities of Jindal Fine Industries
continue to reflect the firm's modest scale of operations and
below-average financial risk profile because of muted debt
protection metrics. These weaknesses are partially offset by the
extensive experience of its proprietor in the cycle industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 38.9 CRISIL B/Stable (Reaffirmed)
Foreign Exchange
Forward 40.0 CRISIL A4 (Reaffirmed)
Packing Credit 45.7 CRISIL A4 (Reaffirmed)
Proposed Working
Capital Facility 8.4 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes JFI's credit risk profile will remain weak over
the medium term because of below-average financial risk profile.
The outlook may be revised to 'Positive' in case of higher-than-
expected cash accrual and decline in funding to group company.
The outlook may be revised to 'Negative' if significant decline
in cash accrual, incremental funding support to group company, or
large, debt-funded capital expenditure further weakens overall
financial risk profile.
Update
Operating income, on provisional basis increased to INR690
million in fiscal 2016 from INR648 million in fiscal 2015 driven
by increased demand from existing customers and addition of new
clients. Sales growth is expected to be moderate at 3-5% per
annum over the medium term on account of established industry
presence and clientele. Operating margin was low at 5.2% in
fiscal 2016 (on provisional basis) and is likely to remain at
this level over the medium term.
The financial risk profile remains below average because of a
high total outside liabilities to tangible net worth ratio of
around 3 times as on March 31, 2016 (on provisional basis).
Working capital requirement is large, with gross current assets
of 135-150 days as on March 31, 2016, due to high receivables and
sizeable inventory of 60 days and 58 days, respectively.
Cash accrual of INR8.5-10 million will be just sufficient to meet
debt obligation of INR8 million in fiscal 2017. However, cash
credit limit was utilised at an average of 93% in the 12 months
ended April 2016 due to working capital-intensive operations.
During fiscal 2016, on provisional basis, the exposure in group
companies reduced to INR93.3 million from previous year's
INR116.6 million.
Set up as a proprietorship firm in 1977 in Ludhiana by Mr.
Rajinder Kumar Jindal, JFI manufactures cycles and cycle
components for the domestic and global markets.
K. C. SOLVENT: CRISIL Reaffirms B+ Rating on INR480MM Cash Loan
---------------------------------------------------------------
CRISIL's rating on the long-term bank facility of K. C. Solvent
Extractions Private Limited continues to reflect KCSE's below-
average financial risk profile, with a modest networth and weak
debt protection metrics. The rating also factors in its working
capital-intensive operations in the fragmented rice industry.
These weaknesses are partially offset by the extensive experience
of promoters and the company's diversified product mix.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 480 CRISIL B+/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes KCSE will maintain its business risk profile,
supported by its diversified product-mix. The outlook may be
revised to 'Positive' if the capital structure improves
significantly, driven by promoter's capital infusion, or
substantial improvement in profitability or working capital
management. Conversely, the outlook may be revised to 'Negative'
if the financial risk profile weakens, because of a decline in
sales, or a large debt-funded capital expenditure.
Update
KCSE's revenue is estimated to have slipped to INR1671.20 million
in fiscal 2016 from INR1698.00 million in fiscal 2015 on account
of a decline in revenue from rice milling unit, due to fall in
rice prices. Operating margin is estimated at 4.7% for fiscal
2016, and is expected to remain at 4.5% over the medium term.
Financial risk profile is below average on account of modest
networth of INR74.90 million as on March 31, 2016, and weak debt
protection metrics, with interest coverage and net cash accrual
to total debt ratios of 1.28 times and 0.03 time, respectively,
in fiscal 2016. It is, however, supported by moderate total
outside liabilities to tangible networth ratio of 2.12 times as
on
March 31, 2016.
Liquidity is expected to remain adequate because of sufficient
net cash accrual of INR17.90 million against debt obligation of
INR8.0 million in fiscal 2017. The company had unsecured loans of
INR202.80 million as on March 31, 2016. Its bank limit
utilisation was moderate, averaging 85% over the 12 months
through August 2016. Large working capital requirement is
reflected in gross current assets of 170 days as on March 31,
2016, driven by substantial inventory. Its operations will remain
working capital intensive over the medium term.
KCSE was incorporated in Jalalabad (Punjab) and is currently
being managed by Mr. Prem Kumar. The company primarily mills rice
and extracts rice bran oil; it has an extraction and refining
plant in Jalalabad. The capacity of the extraction plant is 150
tonne per day (tpd), and that of the refining plant is 50 tonne
per day. It has milling and sorting capacity of 10 tonne per
hour.
KODEL UNIQUOTERS: CRISIL Assigns B+ Rating to INR52.5MM Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to long-term
bank loan facilities of Kodel Uniquoters Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 52.5 CRISIL B+/Stable
Cash Credit 40 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 7.5 CRISIL B+/Stable
The rating reflects exposure to risks related to project
implementation and timely stabilisation and commensurate ramp-up
in sales, during the initial phase of operations. The rating also
factors in expectation of an average financial risk profile,
because of the debt-funded project. These rating weaknesses are
partly offset by entrepreneurial experience of promoters and
their funding support.
Outlook: Stable
CRISIL believes that KUPL will benefit from the diversified
entrepreneurial experience of its promoters. The outlook may be
revised to 'Positive' if timely implementation and stabilisation
of the project leads to the anticipated revenue, profitability
and cash accrual. The outlook may be revised to 'Negative' if
delay in implementation or stabilisation of the project leads to
lower revenue and cash accrual, or if a stretch in the working
capital cycle weakens the financial risk profile, especially
liquidity.
KUPL was incorporated in February 2016 by promoters, Mr. Kalpesh
Tilava, Mr. Sanjay Ranipa and Mr. Dharmesh Ghatodia. The company
is setting up a greenfield project for manufacturing rexine
(synthetic leather cloth), with an installed capacity of 10,000
meters per day. The manufacturing facility will be located in
Morbi district of Gujarat and is expected to commence commercial
operations from January 2017.
LAHARIYA OIL: CRISIL Assigns B+ Rating to INR60MM Term Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facilities of Lahariya Oil Industries Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 60 CRISIL B+/Stable
Cash Credit 50 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facilit 10 CRISIL B+/Stable
The rating reflects LOIPL's exposure to risks relating to funding
and implementation on the ongoing project, start-up phase of
operations, and intense competition. These weaknesses are
partially offset by the extensive experience of the promoter in
the edible oil industry.
Outlook: Stable
CRISIL believes LOIPL will maintain a stable business risk
profile over the medium term on the back of its promoters'
extensive experience in the industry. The outlook may be revised
to 'Positive' if substantial cash flows on timely completion of
project lead to healthy cash accrual. Conversely, the outlook may
be revised to 'Negative' if time and cost overrun on ongoing
project, or significant pressure on liquidity, revenue and
profitability, considerably weakens debt servicing ability.
LOIPL incorporated in 2015, is setting up a refinery to produce
refined edible oil, wax and fatty acid oil. The company is
promoted by Mr. Satyendra Gupta and Ms Indra Gupta, and the plant
is being set up at village Umran (Akbarpur) in Kanpur-Dehat
district of Uttar Pradesh.
LAKSHMI VENKAT: CRISIL Upgrades Rating on INR42MM Loan to 'B'
-------------------------------------------------------------
CRISIL's rating on the long-term bank loan facilities of Lakshmi
Venkat Farms Limited (part of the Mayuri group) to 'CRISIL
B/Stable' from 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 42 CRISIL B/Stable (Upgraded
from 'CRISIL D')
Proposed Cash 33 CRISIL B/Stable (Upgraded
Credit Limit from 'CRISIL D')
Term Loan 39 CRISIL B/Stable (Upgraded
from 'CRISIL D')
The upgrade reflects timely servicing of debt by the Mayuri
group, over the six months through September 2016. The upgrade
also reflects CRISIL's expectation that the group will continue
to service debt obligation on time, backed by substantial cash
accrual and need-based funding support from promoters.
The rating continues to reflect stretched liquidity, as cash
accrual remains tightly matched against the term-debt obligation.
The rating also factors in exposure to volatile raw material
prices, intense competition and inherent risks, and the below-
average financial risk profile, marked by modest networth, high
gearing, and weak debt protection metrics. These rating
weaknesses are partially offset by extensive experience of the
promoter in the poultry industry.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of LVFL; Mayuri Broiler Breeding Farms
Pvt Ltd, and Krishika Farms Private Limited; these companies are
together referred to as the Mayuri group. This is because the
three companies, collectively referred to as the Mayuri group,
have operational synergies being in the same line of business,
and have a common promoter and fungible cash flows.
Outlook: Stable
CRISIL believes that the Mayuri group will continue to benefit
over the medium term from its promoter's extensive industry
experience and its need based fund support from promoters. The
outlook may be revised to 'Positive' in case of a substantial and
sustained improvement in revenue and profitability margins, or in
capital structure or net worth backed by sizeable equity infusion
by promoter. Conversely, the outlook may be revised to 'Negative'
in case of a steep decline in profitability margins, or
significant deterioration in capital structure, caused most
likely by large debt-funded capital expenditure or stretch in
working capital cycle.
LVFL, incorporated in 1995 by Mr. V. Harshvardhan Reddy, produces
hatching eggs and day-old chicks. MBFPL, incorporated in 2006 by
Mr. V Harshvardhan Reddy, produces hatching eggs and broiler
birds. KFPL, incorporated in 2010, produces table eggs. The group
is based in Hyderabad, Telangana.
LIZZART GRANITO: CRISIL Assigns B+ Rating to INR176.4MM Term Loan
-----------------------------------------------------------------
CRISIL has assigned its ' CRISIL B+/Stable ' ratings to bank
facilities of Lizzart Granito LLP.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Term Loan 176.4 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 1.6 CRISIL B+/Stable
Proposed Bank
Guarantee 32 CRISIL B+/Stable
Proposed Cash
Credit Limit 70 CRISIL B+/Stable
The ratings reflect exposure to project implementation risks and
timely stabilisation of operations, modest scale of operations,
amidst intense competition and the average financial risk profile
because of debt-funded capital expenditure. These rating
weaknesses are partially offset by extensive experience of
promoters, funding support received from them and potential
benefits from the favourable location in Morbi Gujarat, the hub
of the ceramics industry in India.
Outlook: Stable
CRISIL believes LGL will continue to benefit from extensive
industry experience of its promoters. The outlook may be revised
to 'Positive' if timely implementation of project and
stabilisation of operations, leads to higher cash accrual during
the initial phase. The outlook may be revised to 'Negative' if
delayed project implementation, and/or slower ramp-up in sales
and accrual, or sizeable working capital requirement, weakens the
financial risk profile, especially liquidity.
LGL was set up in May 2016 by promoters, Mr. Anilkumar Surani,
Mr. Ramesh Desai, Mr. Chetan Varasada and their family members.
The firm will manufacture vitrified tiles and is likely to
commence operations by December 2016.
M/S SUDHAKARAN: Ind-Ra Affirms BB Long-Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed M/s Sudhakaran
Nair and Company Pvt. Ltd.'s (SNC) Long-Term Issuer Rating at
'IND BB'. The Outlook is Stable.
KEY RATING DRIVERS
The rating affirmation reflects SNC's continued small scale of
operations with revenue of INR278 mil. in FY16 (FY15: INR259
mil.). The ratings continued to factor in the company's moderate
credit profile, with interest coverage of 2x (2.8x), net
financial leverage of 3.1x (FY14: 1.7x) and an EBITDA margin of
5% (7.1%). The detoriation in the credit metrics was mainly due
to an increase in the overhead expenses.
The ratings factor in SNC's tight liquidity as evident from the
multiple instances of overutilization in its fund-based working
capital facility up to nine days during the 12 months ended
September 2016.
The ratings however benefit from the more than two-decade long
experience of the promoter in the current line of business.
RATING SENSITIVITIES
Positive: A sustained improvement in the scale of operations and
interest coverage will be positive for the ratings.
Negative: Deterioration in the scale of operations and interest
coverage will be negative for the ratings.
COMPANY PROFILE
Incorporated in 1986 in Chennai, SNC provides plumbing and
sanitary installation, fire protection installation as well as
specialized installation services.
SNC's Ratings:
-- Long-Term Issuer Rating: affirmed at 'IND BB'; Outlook
Stable
-- INR20 mil. fund-based facilities: affirmed at 'IND BB';
Outlook Stable
-- INR11 mil. (increased from INR4.86 mil.) term loan:
affirmed at 'IND BB'; Outlook Stable
-- INR95 mil. non-fund-based facilities: affirmed at 'IND A4+'
MAHAJAN RICE: CRISIL Suspends B+ Rating on INR90MM Cash Loan
------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of Mahajan
Rice Mill Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 90 CRISIL B+/Stable
Term Loan 30 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by
MRMPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, MRMPL is yet to
provide adequate information to enable CRISIL to assess MRMPL'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.
MRMPL, incorporated on March 31, 2011, is engaged in milling of
non-basmati parboiled rice and also operates a whole wheat flour
mill. Its manufacturing facility is located at Nokha, Rohtas
(Bihar). The day-to-day operations of the company are looked
after by its promoter director Mr. Mayank Mahajan. The company
markets its products under the Suprio brand. Its rice mill has
been in operations since December 2012, while the flour mill
commenced operations in January 2015.
MAYURI BROILER: CRISIL Ups Rating on INR65MM Term Loan to 'B'
-------------------------------------------------------------
CRISIL has upgraded its ratings on bank facilities of Mayuri
Broiler Breeding Farms Pvt Ltd (part of the Mayuri Group) to
'CRISIL B/Stable' from 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 50 CRISIL B/Stable (Upgraded
from 'CRISIL D')
Proposed Long Term 4 CRISIL B/Stable (Upgraded
Bank Loan Facility from 'CRISIL D')
Term Loan 65 CRISIL B/Stable (Upgraded
from 'CRISIL D')
Working Capital 30 CRISIL B/Stable (Upgraded
Term Loan from 'CRISIL D')
The upgrade reflects timely servicing of debt by the Mayuri
group, over the six months through September 2016. The upgrade
also reflects CRISIL's expectation that the group will continue
to service debt obligation on time, backed by substantial cash
accrual and need-based funding support from promoters.
The rating continues to reflect stretched liquidity, as cash
accrual remains tightly matched against the term-debt obligation.
The rating also factors in exposure to volatile raw material
prices, intense competition and inherent risks, and the below-
average financial risk profile, marked by modest networth, high
gearing, and weak debt protection metrics. These rating
weaknesses are partially offset by extensive experience of the
promoter in the poultry industry.
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of KFPL, Mayuri Broiler Breeding Farms
Pvt Ltd and Lakshmi Venkat Farms Ltd. This is because the three
companies, collectively referred to as the Mayuri group, have
operational synergies, being in the same line of business, and
have a common promoter and fungible cash flows.
Outlook: Stable
CRISIL believes that the Mayuri group will continue to benefit
from its extensive experience of, and need-based funding support
extended by, the promoter. The outlook may be revised to
'Positive' in case of substantial and sustained improvement in
revenue and profitability margin, or in capital structure or
networth, backed by sizeable equity infusion by the promoter. The
outlook may be revised to 'Negative' in case of a steep decline
in profitability, or significant deterioration in capital
structure, caused most likely by large debt-funded capital
expenditure or stretch in working capital cycle.
LVFL and MBFPL were incorporated in 1995 and 2006, respectively,
by promoter, Mr. V Harshvardhan Reddy. LVFL produces hatching
eggs and day-old chicks, while MBFPL, produces hatching eggs and
broiler birds. KFPL, incorporated in 2010, produces table eggs.
The group is based in Hyderabad.
MEHADIA & SONS: CRISIL Suspends B- Rating on INR31.5MM Cash Loan
----------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Mehadia & Sons C & F Division (part of the Mehadia group).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3 CRISIL A4
Cash Credit 31.5 CRISIL B-/Stable
Proposed Long Term
Bank Loan Facility 15.5 CRISIL B-/Stable
The suspension of ratings is on account of non-cooperation by
MSCF with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, MSCF is yet to
provide adequate information to enable CRISIL to assess MSCF's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL views information availability risk as a key
factor in its assessment of credit risk.
For arriving at the ratings, CRISIL has combined the business and
financial risk profile of MSCF, Mehadia & Sons and RJ Trade
Links. This is because, the three entities, together referred to
as the Mehadia group, are under a common management, are engaged
in related lines of business, and have financial fungibility.
The Mehadia group is promoted by the Nagpur (Maharashtra)-based
Mehadia family. The group is primarily engaged in two lines of
business: trading in pharmaceuticals and fabrics.
The group started operations in 1935 with the establishment of MS
as a proprietorship firm; the firm was reconstituted as a
partnership firm in 1997. MS is a distributor/stockiest for over
35 pharmaceutical companies in Nagpur and operates 6 wholesale
shops. It also trades in fabric.
MSCF was established in 1981. The firm is a cost and freight
agent in Nagpur for several pharmaceutical companies, and also
trades in fabric.
MGM STEELS: CRISIL Assigns B+ Rating to INR30MM Cash Loan
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
bank facilities of MGM Steels.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 30 CRISIL B+/Stable
Letter of Credit 65 CRISIL A4
The ratings reflect the firm's modest scale of operations and low
operating margin in the intensely competitive steel trading
industry. The rating also reflects below-average financial risk
profile, marked by small networth, high total outside liabilities
to tangible networth ratio, and modest debt protection metrics.
These rating weakness are partially offset by the extensive
experience of the partners.
Outlook: Stable
CRISIL believes MGM will continue to benefit over the medium term
from its partners' extensive experience in the steel industry.
The outlook may be revised to 'Positive' if higher-than-expected
growth in revenue, profitability and cash accrual, or infusion of
capital by the partners strengthens financial metrics, including
capital structure. Conversely, the outlook may be revised to
'Negative' if decline in revenue or profitability, or stretch in
working capital cycle leads to deterioration in financial risk
profile, particularly liquidity.
MGM, a partnership firm, was taken over by the current partners
in 2005. The firm trades in iron and steel products. The firm
deals in products such as thermos-mechanically treated bars,
sheets and plates and is based in Chennai. Mr. Govind Prasad and
Mr. Bobby Sonthalia are the partners.
SACHI STEEL: CRISIL Suspends 'B' Rating on INR100MM Cash Loan
-------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of Sachi
Steel Solutions Pvt Ltd.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 20 CRISIL B/Stable
The suspension of ratings is on account of non-cooperation by
SSSPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SSSPL is yet to
provide adequate information to enable CRISIL to assess SSSPL'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, SSSPL is promoted by the Ahmedabad-based
Mr. Atul Shah and his family members, who have been active in the
steel industry for over 20 years. The firm is a channel partner
of TATA Steel through Tiscon readyBuild, which is a downstream
service offering cut and bend service aimed at providing
customised rebar shapes which are required at construction sites.
SAI POINT: CRISIL Reaffirms 'B' Rating on INR90MM Inventory Loan
----------------------------------------------------------------
CRISIL ratings continue to reflect Sai Point Cars Private Limited
average financial risk profile, marked by a small net worth, a
high gearing, and weak debt protection metrics, and small scale
of operations. These rating weaknesses are partially offset by
the benefits that SCPL derives from its promoter's extensive
industry experience.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL A4 (Reaffirmed)
Cash Credit 5 CRISIL B/Stable (Reaffirmed)
Inventory Funding
Facility 90 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 45 CRISIL B/Stable (Reaffirmed)
Outlook: Stable
CRISIL believes that SCPL will continue to benefit over the
medium term from its promoter's extensive industry experience.
CRISIL, however, also believes that the company's financial risk
profile will remain weak during this period, marked by high
gearing and weak debt-protection metrics. The outlook may be
revised to 'Positive' if SCPL generates higher-than-expected cash
accruals, primarily led by increase in its scale of operations
and profitability. Conversely, the outlook may be revised to
'Negative' if the company's liquidity deteriorates significantly
because of inadequate support from its group concern, or decline
in its profitability.
SCPL was set up in 2008 by Mr. Dilip Patil. The company is an
authorised dealer for Maruti Suzuki India Ltd (MSIL) in Salcette
(Goa). SCPL also deals in MSIL's spare parts and provides
workshop facilities.
SHRADDHA MOTORS: CRISIL Upgrades Rating on INR100MM Loan to 'B'
---------------------------------------------------------------
CRISIL has upgraded its rating on long-term bank loan facilities
of Shraddha Motors Pvt Ltd to 'CRISIL B/Stable' from 'CRISIL B-
/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 100 CRISIL B/Stable (Upgraded
from 'CRISIL B-/Stable')
The upgrade reflects CRISIL's expectation of sustained
improvement in business performance, as reflected in positive
cash accrual of INR2.7 million in fiscal 2016, vis-a-vis (Rs 5.8
million) in fiscal 2015. Though revenue declined by 6%, operating
profit margin improved to 7.5% in fiscal 2016, as compared to
1.5% in fiscal 2015. The rating also factors in improved
liquidity, as debt-funded capital expenditure (capex), planned in
fiscal 2016 was shelved. Hence, CRISIL believes that absence of
any major debt-funded capex should help sustain the financial
risk profile over the medium term.
The rating continues to reflect large working capital
requirement, modest scale of operations and exposure to intense
competition in the automotive dealership business. These rating
weaknesses are partially offset by extensive experience of
promoters and their established relationship with principal, Tata
Motors Ltd.
Outlook: Stable
CRISIL believes that SMPL will benefit over the medium term from
its association with Tata Motors. The outlook may be revised to
'Positive' if significant improvement in accrual and capital
structure, leads to a stronger financial risk profile. The
outlook may be revised to 'Negative,' if large, debt-funded capex
or stretch in the working capital cycle, weakens the financial
risk profile.
Incorporated in November 2006, SMPL is an authorised dealer of
passenger vehicles of Tata Motors in Bharuch (Gujarat). The
company has been promoted by Mr. Pankaj Desai and his family
members.
SHUBHAM INFRASTRUCTURE: CRISIL Suspends B- Rating on INR150M Loan
-----------------------------------------------------------------
CRISIL has suspended its rating on the bank facility of Shubham
Infrastructure Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 150 CRISIL B-/Stable
The suspension of ratings is on account of non-cooperation by
SIPL's with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SIPL's is yet
to provide adequate information to enable CRISIL to assess
SIPL's'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.
Shubham infrastructure private limited is developing a hotel cum
banquet in Alipur in New Delhi. The proposed structure of the
hotel is a single story building with lobby, kitchen, and office
area at basement floor, banquet, reception, kitchen area, lobby
and eleven rooms at ground floor and eleven rooms at the first
floor. The total site area is 16032.5 sq. Yards. Based on the
permissible coverage the total area covered comes to be
35217.07sq ft.
SRI LAXMI: CRISIL Assigns B+ Rating to INR80MM Cash Loan
--------------------------------------------------------
CRISIL has revoked the suspension of its rating on the long-term
bank facilities of Sri Laxmi Narasimhaa Spinning Mill Private
Limited and assigned its 'CRISIL B+/Stable' rating to the
facilities. CRISIL had, on June 22, 2016, suspended the rating as
SLN had not provided the necessary information required for a
review. The company has now shared the requisite information,
enabling CRISIL to assign a rating to its facilities.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL B+/Stable (Assigned;
Suspension Revoked)
Long Term Loan 70 CRISIL B+/Stable (Assigned;
Suspension Revoked)
Proposed Long Term 20 CRISIL B+/Stable (Assigned;
Bank Loan Facility Suspension Revoked)
Working Capital 30 CRISIL B+/Stable (Assigned;
Term Loan Suspension Revoked)
The rating reflects SLN's small scale of operations in highly
fragmented industry, its below-average financial risk profile
marked by high gearing and below average debt protection metrics.
The rating weaknesses are partially offset by the extensive
experience of promoters in textile industry.
Outlook: Stable
CRISIL believes that SLN will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if there is a substantial
and sustained improvement in the company's revenues and
profitability margins, coupled with a substantial improvement in
its capital structure on the back of sizeable equity infusion
from its promoters or healthy accretions. Conversely, the outlook
may be revised to 'Negative' in case of a steep decline in the
company's profitability margins, or significant deterioration in
its capital structure caused most likely by a large debt-funded
capital expenditure or a stretch in its working capital cycle.
Set up in 2007 and based in Tirupur, Tamil Nadu, Sri Laxmi
Narasimhaa Spinning Mill Pvt Ltd (SLN) is engaged in the
manufacturing of cotton yarn. The company's manufacturing
facility in Tirupur has 11520 spindles.
SRI PRIYANKA: CRISIL Suspends 'C' Rating on INR80MM Cash Loan
-------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Sri Priyanka Raw and Boiled Rice Mill.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 80 CRISIL C
Long Term Bank Facility 5 CRISIL C
Long Term Loan 14.8 CRISIL C
The suspension of ratings is on account of non-cooperation by SPB
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SPB is yet to
provide adequate information to enable CRISIL to assess SPB'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.
SPB was set up in 2008 as a partnership firm by Mr. P. Bala
Bhaskara Reddy, and his wife Mrs. P Pavani. SPB mills and process
paddy into rice; they also generate by-products such as broken
rice, bran, and husk. The firm's rice milling unit is located in
Prakasam district in Andhra Pradesh.
SRI RAMA: CRISIL Assigns 'B' Rating to INR100MM Warehouse Loan
--------------------------------------------------------------
CRISIL has assigned 'CRISIL B/Stable' rating to the bank facility
of Sri Rama Chandra Traders.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Warehouse Financing 100 CRISIL B/Stable
The rating reflects SRT's below-average financial risk profile
marked by weak capital structure and debt protection metrics. The
rating also factors in large working capital requirement and
exposure to risks inherent in the agricultural commodities
trading business. These weaknesses are partially offset by the
extensive experience of the proprietor in commodity product
trading business and diversified revenue profile.
Outlook: Stable
CRISIL believes SRT will continue to benefit from the extensive
industry experience and funding support of its proprietor. The
outlook may be revised to 'Positive' if increase in scale of
operations and prudent working capital management improves the
financial risk profile. The outlook may be revised to 'Negative'
if low cash accrual or stretch in working capital cycle weakens
the financial risk profile, particularly liquidity.
Formed in 2007 as a proprietorship firm by Mr. K. Y. Naidu, SRT
is engaged in trading of jute, waste paper, pulses, oil and
others. It is based in Srikakulam, Andhra Pradesh.
STUDIOKON VENTURES: Ind-Ra Assigns BB+ Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Studiokon
Ventures Private Limited a Long-Term Issuer Rating of
'IND BB+'. The Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect SVPL's moderate scale of operations, strong
credit metrics and moderate EBITDA margins. Provisional FY16
financials indicate revenue of INR927.54 mil. (FY15: INR606.43
mil.). Net leverage (total Ind-Ra adjusted net debt/operating
EBITDAR) was negative 0.42x in FY16 (FY15: negative 0.45x),
interest cover (operating EBITDA/gross interest expense) was
21.08x (16.79x) and EBITDA margins were 6.78% (6.67%).
Ind-Ra expects the revenue to improve according to FY17 estimates
on the back of an increase in the current order book position.
Ind-Ra also expects the credit metrics to remain comfortable in
the coming financial years.
The ratings, however, are supported by the over eight years of
operating experience of SVPL's promoters in providing office
design solutions. The ratings are further supported by the
company's strong relationships with customers and suppliers.
The ratings factor in SVPL's comfortable liquidity position with
79.71% average utilization of its non-fund-based facilities
during the 12 months ended August 2016.
RATING SENSITIVITIES
Positive: Substantial growth in the scale of operations and
improvement in the margins leading to improvement in the overall
credit metrics will be positive for the ratings.
Negative: Deterioration in the margins and an elongated working
capital cycle leading to substantial deterioration in the overall
credit metrics will be negative for the ratings.
COMPANY PROFILE
SVPL was established in 2008 under the aegis of Mr. Tushar Mittal
and Mrs. Swati Mittal and is engaged in designing workspaces. It
provides office design solutions for corporate, retail, and
hospitality spaces.
SVPL's ratings:
-- Long-Term Issuer Rating: assigned 'IND BB+'/Stable
-- INR60 mil. term loan: assigned 'IND BB+'/Stable
-- INR70 mil. non-fund-based limits: assigned 'IND A4+'
SUNJYOT GEMS: CRISIL Suspends B+ Rating on INR10MM LT Loan
----------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Sunjyot Gems.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Packing Credit in
Foreign Currency 40 CRISIL A4
Post Shipment Credit 40 CRISIL A4
Proposed Long Term
Bank Loan Facility 10 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by SG
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, SG is yet to
provide adequate information to enable CRISIL to assess SG'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 1999, SG is a Mumbai-based partnership firm that
trades and exports polished diamonds. The Gulechha family manages
SG's day-to-day operations.
THANE STEELS: Ind-Ra Affirms BB Long-Term Issuer Rating
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Thane Steels
Private Limited's (TSPL) Long-Term Issuer Rating at 'IND BB'.
The Outlook is Stable.
KEY RATING DRIVERS
The affirmation reflects TSPL's continued moderate scale of
operations and moderate credit profile. Its FY16 revenue was
INR1,837 mil. (FY15: INR1,249 mil.), interest coverage
(operating EBITDAR/gross interest expense + rents) was 1.7x
(1.0x), EBITDA margins were 3.4% (2.5%) and net leverage (total
adjusted net debt/operating EBITDAR) was 6.4x (13.1x). The
operating margins improved due to decline in the manufacturing
cost and overhead expenses.
Liquidity continued to be tight, with full use of its working
capital limits during the 12 months ended September 2016.
The ratings, however, continue to benefit from TSPL's founder-
promoter's experience of more than two decades in the steel
industry.
RATING SENSITIVITIES
Positive: A substantial improvement in the scale of operations
along with an improvement in the overall credit metrics could be
positive for the ratings.
Negative: A sustained deterioration in the credit metrics could
be negative for the ratings.
COMPANY PROFILE
Incorporated in 1995, TSPL is engaged in manufacturing of MS
Ingot and TMT bars at its manufacturing facility in Thane,
Maharashtra.
TSPL is operating with an annual installed capacity of 60000MT of
TMT bars
TSPL's ratings:
-- Long-Term Issuer Rating: affirmed at 'IND BB'; Outlook
Stable
-- INR210 mil. fund-based facilities (increased from
INR160 mil.): affirmed at 'IND BB'; Outlook Stable
-- INR29.64 mil. term loan (decreased from INR59.4 mil.):
affirmed at 'IND BB'; Outlook Stable
-- INR31.1 mil. non-fund-based facilities (increased from
INR20 mil.): affirmed at 'IND A4+'
THANGAVELU SPINNING: CRISIL Suspends 'B' Rating on INR91.1MM Loan
-----------------------------------------------------------------
CRISIL has suspended its rating on the bank facilities of
Thangavelu Spinning Mills Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 70 CRISIL B/Stable
Corporate Loan 10.7 CRISIL B/Stable
Long Term Loan 10 CRISIL B/Stable
Proposed Long Term
Bank Loan Facility 91.1 CRISIL B/Stable
The suspension of ratings is on account of non-cooperation by
TSML with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, TSML is yet to
provide adequate information to enable CRISIL to assess TSML'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 1980 by Mr. P Thangavelu, TSML was reconstituted as a
public limited company in 1995, TSML manufactures polyester yarn.
Its manufacturing facility is in Bommidi (Tamil Nadu).
TONZA PAPER: CRISIL Assigns B+ Rating to INR74.4MM Term Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISILB+/Stable' rating to long-term
bank facilities of Tonza Paper LLP.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Term Loan 74.4 CRISIL B+/Stable
Proposed Long Term
Bank Loan Facility 0.6 CRISIL B+/Stable
Proposed Bank
Guarantee 10.0 CRISIL B+/Stable
Proposed Cash
Credit Limit 65.0 CRISIL B+/Stable
The ratings reflect the nascent stage of operations in the
intensely competitive paper industry, small scale of operations
and susceptibility to volatile waste paper prices. These
weaknesses are partially offset by favourable location of the
plant and proximity to packaging players, and extensive
entrepreneurial experience of, and funding support received from,
promoters.
Outlook: Stable
CRISIL believes TPL will benefit over the medium term from
extensive entrepreneurial experience of its promoters. The
outlook may be revised to 'Positive' in case of timely
stabilisation of operations at the upcoming plant, and higher-
than-expected growth in revenue, profitability, and cash accrual.
The outlook may be revised to 'Negative' if delay in ramp-up of
operations, or lower-than-expected cash accrual during the
initial phase, weakens liquidity.
TPL was established in 2016 by promoters, Mr. Dineshbhai Detroja,
Mr. Jaykumar Detroja, Mr. Narendrabhai Nayakpara, Mr. Baldevbhai
Nayakpara and Mr. Girishkumar Detroja and their family members.
The company is setting up a plant at Morbi, Gujarat for
manufacturing kraft paper, mainly used in product packaging and
corrugated boxes. Commercial production is expected to start in
January 2017.
VENMITRA SYSTEMS: CRISIL Suspends B+ Rating on INR35MM Bank Loan
----------------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Venmitra Systems.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 35 CRISIL A4
Bill Discounting
under Letter of
Credit 10 CRISIL A4
Overdraft Facility 35 CRISIL B+/Stable
The suspension of ratings is on account of non-cooperation by VS
with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, VS is yet to
provide adequate information to enable CRISIL to assess VS's
ability to service its debt. The suspension reflects CRISIL's
inability to maintain a valid rating in the absence of adequate
information. CRISIL views information availability risk as a key
factor in its assessment of credit risk.
Established in 1987, VS primarily provides system integration
services; it also provides a range of services including
consulting, design, implementation, commissioning, and management
of systems solutions to public sector units and other large and
mid-sized corporates.
VIJAY AQUA: CRISIL Suspends 'B' Rating on INR40MM Cash Loan
-----------------------------------------------------------
CRISIL has suspended its ratings on the bank facilities of
Vijay Aqua Pipes Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 40 CRISIL B/Stable
Letter of Credit 20 CRISIL A4
The suspension of ratings is on account of non-cooperation by
VAPPL with CRISIL's efforts to undertake a review of the ratings
outstanding. Despite repeated requests by CRISIL, VAPPL is yet to
provide adequate information to enable CRISIL to assess VAPPL'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.
VAPPL, established in 1995 in Chennai (Tamil Nadu), manufactures
PVC pipes. The company is promoted by Mr. Chidambaram
Thiyagarajan.
VINDHYA CEREALS: Ind-Ra Withdraws B Long-Term Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Vindhya Cereals
Pvt Ltd's 'IND B (suspended)' Long-Term Issuer Rating.
The ratings have been withdrawn due to lack of adequate
information. Ind-Ra will no longer provide ratings or analytical
coverage for VCPL.
Ind-Ra suspended VCPL's ratings on Nov. 3, 2015.
VCPL's ratings:
-- Long-Term Issuer Rating: 'IND B(suspended)'; rating
withdrawn
-- INR200 mil. fund-based limits: 'IND B(suspended)'; rating
withdrawn
-- INR68.34 mil. long-term loans: 'IND B(suspended)'; rating
withdrawn
VVF INDIA: CRISIL Reaffirms 'D' Rating on INR2.2BB Cash Loan
------------------------------------------------------------
CRISIL's ratings on the bank facilities of VVF India Limited
(VVFIL; part of the VVF group) continue to reflect instances of
delay by VVFIL in servicing its debt, owing to weak liquidity
following slump in its oleochemicals business, which hampered
cash flow.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2200 CRISIL D (Reaffirmed)
Letter of Credit 5110 CRISIL D (Reaffirmed)
Proposed Cash
Credit Limit 300 CRISIL D (Reaffirmed)
Proposed Long Term
Bank Loan Facility 1650 CRISIL D (Reaffirmed)
Term Loan 4740 CRISIL D (Reaffirmed)
The VVF group also has a leveraged capital structure and weak
debt protection metrics, and is exposed to intense competition
and risk related to commoditised business. However, the group
benefits from its moderate business risk profile supported by its
leadership position in the domestic oleochemicals business, and
stability from the contract manufacturing business.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of VVFIL, its subsidiaries (VVF Singapore
Pte Ltd and PT VVF Indonesia), VVF Ltd, and VVF Ltd's overseas
subsidiaries. This is because VVFIL and VVF Ltd have common
promoters and are in the same business. VVFIL's bank facilities
are secured by a corporate guarantee from VVF Ltd, and a charge
on VVF Ltd's assets in addition to personal guarantees from the
promoters. Furthermore, VVFIL will receive need-based financial
support from VVF Ltd's subsidiaries. During fiscals 2014 and
2015, VVF Ltd extended INR800 million to VVFIL, and is likely to
extend a further INR200 million in the near term. All these
companies are referred to as the VVF group.
Promoted by Mr. Godrej Pallonji Joshi, the VVF group commenced
operations in 1939 with The Vegetable Vitamin Foods Co Pvt Ltd.
The group is currently owned by the second generation of
promoters: Mr. Rustom Joshi, Ms. Shanaz Diwan, and Mr. Faraz
Joshi.
In fiscal 2012, the oleochemicals, domestic contract
manufacturing, and branded manufacturing businesses of VVF Ltd
were transferred to VVFIL, which received private equity of
INR1.35 billion.
VVFIL manufactures fatty oils, fatty alcohols, and glycerine,
which account for around 60% of total revenue. Exports comprise
around 50% of sales in the oleochemicals segment. The company has
an oleochemicals plant in Taloja, Maharashtra. It also contract
manufactures personal care products (PCPs) at its plants in
Baddi, Himachal Pradesh; Kolkata; and Daman (25% of revenue). A
small portion of revenue comes from sales under own brands:
Doycare, Jo, and Shiff.
VVF Ltd is the holding company for the group's entities that
contract manufacture PCPs overseas. VVF Ltd also has land
holdings in Mumbai. Its major and step-down subsidiaries are VVF
Intervest LLC (holding company for US-based operations), Green
Planet Industrial LLC (Dubai), and VVF S.P.Z.O.O (Poland).
=================
I N D O N E S I A
=================
ALAM SUTERA: Fitch Assigns 'B+' Rating on USD245MM Sr. Notes
------------------------------------------------------------
Fitch Ratings has assigned Indonesia-based PT Alam Sutera Realty
Tbk's (ASRI, B+/Negative) USD245 mil. 6.625% senior unsecured
notes due in 2022 a final rating of 'B+', and a Recovery Rating
of 'RR4'. The notes are issued by ASRI's wholly owned subsidiary
Alam Synergy Pte Ltd and guaranteed by ASRI and its subsidiaries.
The final rating follows the receipt of documents conforming to
the information already received and is in line with the expected
rating assigned on Oct. 14, 2016. The notes are rated in line
with ASRI's senior unsecured rating, as they represent
unconditional, unsecured and unsubordinated obligations of the
company.
ASRI intends to use the net proceeds of the proposed notes to buy
back its existing USD225m 9% senior unsecured notes, which are
due in 2019. The new notes will push back ASRI's earliest
significant debt maturity to 2020, when its USD235 mil. 6.95%
senior unsecured notes fall due.
The Negative Outlook on ASRI's 'B+' Long-Term Issuer Default
Rating reflects the potential challenges it may face in improving
contracted sales. The high proportion of commercial property
sales and bulk land sales to institutional buyers in its pipeline
has increased ASRI's business risk profile, but may be
counterbalanced by a more conservative capital structure. Fitch
may downgrade ASRI's ratings if the company cannot improve
contracted sales to at least IDR3.5 tril. by end-2017 or if the
ratio of contracted sales/gross debt remains lower than 0.6x.
KEY RATING DRIVERS
Weaker Sales Largely Cyclical: ASRI recorded IDR1.2 tril. of
contracted sales in the eight months to August 2016, which was
just 23% of its full-year target of IDR5trn; a similar
performance to 2015. This was mostly due to a higher proportion
of commercial property in the company's sales mix at a time of
slower domestic economic activity and weak property demand. The
company's inability to sell its office tower, The Tower, in
Jakarta's central business district amid an office space glut is
a key reason behind continued weak contracted sales. However,
Fitch expects better sales from this project in 2017 with
improved domestic economic sentiment.
Long-Term Credit-Profile Intact: ASRI's business risk is
fundamentally unchanged, with a large low-cost land bank and
established domestic franchise. The company had a land bank of
over 19 million square meters (sqm) available for development,
with a carrying value of over IDR8.6 tril., at end-June 2016.
Overall, we expect ASRI's contracted sales to improve to at least
IDR3.5 tril. in 2017, supported by better domestic demand. Cash
flows will also be driven by its agreement with China Fortune
Land Development Co. Ltd to sell its land bank in the Pasar Kemis
district in Tangerang, a region situated 30km west of Jakarta.
ASRI received a deposit of IDR1.45 tril. in July 2016 as part of
this agreement and is expected to sell around 1 million sqm of
land to CFLD annually for the next five years.
Improving Macroeconomic Sentiment: Domestic consumer sentiment
has been improving since 2Q16, fuelled by lower commodity price
volatility and a more stable exchange rate. The government's
infrastructure expansion programme also had better traction
compared with 2015 and its tax amnesty programme, announced in
June 2016, has performed better than the government expected.
The real estate industry directly benefits from any wealth
repatriated as part of the programme, which has to be invested in
either real estate or government securities. Fitch expects
increased domestic declarations of wealth to help more consumers
purchase property, which had been put on hold following the
government's increased scrutiny around tax evasion since 2015.
Indicators of real economic activity, such as domestic traffic
volumes and automobile sales, are also rising.
Execution Risks Remain: Fitch believes ASRI may find it
challenging to sell 1 million sqm of land annually to CFLD. The
cooperation agreement delineates 5 million sqm of land in Pasar
Kemis. Fitch expects it to be difficult and costly to acquire
the requisite land beyond the first two years. CFLD also has the
right to set-off part of the land value purchased from ASRI
against the advance payment, and ASRI will have to return the
balance to CFLD if the agreement is terminated.
Large Low-Cost Land Bank: The average cost of the company's land
bank was IDR0.5 mil. per sqm at end-June 2016. ASRI sold its
residential land plots at an average price of IDR5 mil. per sqm
in 2015, and its commercial plots in its mature township of Alam
Sutera fetched an average price of IDR23 mil. The company
reduced incremental land purchases in 2015 to IDR409 bil., from
IDR1.3 tril. in 2014, to conserve cash amid weaker property
sales. It expects to purchase between IDR1trn-1.3trn annually in
2017 and 2018.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for ASRI include:
-- IDR1.4 tril. of contracted sales for 2016 and IDR3.5 tril.
for 2017
-- cash collections from contracted sales to be made over two
to three years on average, in line with historical cash
collections
-- contracted sales/gross debt ratio to improve to around 0.6x
in 2017 (LTM to June 2016: 0.4x; 2015: 0.3x)
-- Net debt/adjusted inventory to remain less than 50% over
the next three years (end-June 2016: 49%).
RATING SENSITIVITIES
Negative: Future developments that may individually or
collectively lead to a downgrade include:
-- inability to improve annual contracted sales to at least
IDR3.5 tril. by end-2017
-- inability to improve contracted sales/gross debt to more
than 0.6x by end-2017
-- net debt/adjusted inventory sustained at more than 50%
-- higher spending on non-core businesses.
Positive: Not meeting the negative rating sensitivities for an
extended period may result in the Outlook being revised to
Stable.
LIQUIDITY
ASRI's earliest significant debt maturity is in 2019, when the
USD225 mil. (around IDR3 tril.) five-year 9% senior unsecured
bond falls due. ASRI has drawn a further IDR1.5trn of
construction finance from banks as at end-June 2016, which it has
used to complete its high-rise projects amid weak cash flows.
Repayments of these loans are manageable, as they are spread
across the next four to five years.
LIPPO KARAWACI: Fitch Assigns 'BB-' Rating on USD425MM Notes
------------------------------------------------------------
Fitch Ratings has assigned Indonesia-based PT Lippo Karawaci
Tbk's (Lippo, BB-/A+(idn)/Stable) USD425 mil. 6.75% senior
unsecured notes due in 2026 a final rating of 'BB-'. The notes
are issued by Lippo's wholly owned subsidiary Theta Capital Pte
Ltd, and guaranteed by Lippo and its subsidiaries.
The final rating follows the receipt of documents conforming to
the information already received and is in line with the expected
rating assigned on Oct. 24, 2016. The notes are rated in line
with Lippo's senior unsecured rating, as they represent
unconditional, unsecured and unsubordinated obligations of the
company.
Lippo expects to utilise the net proceeds from the issuance to
buy back its existing USD403.3 mil. senior unsecured 6.125%-
coupon notes due in 2020, which will push back the bulk of its
debt maturities. The company's earliest significant debt
maturity will then be in 2022, when its USD410 mil. senior
unsecured 7%-coupon notes fall due.
Lippo's ratings reflect our view that the slowdown in contracted
sales in 2015 and 6M16 is mostly cyclical and that the company's
credit profile remains intact. This is supported by its strong
recurring cash flows from its leading domestic hospital network,
retail malls, asset management fees and two Singapore-listed
REITs. Lippo also owns a land bank of around 15.5 million square
meters as of June 30, 2016, and has a strong domestic franchise
as a leading property developer. The company cut its capex
significantly this year to conserve liquidity. Fitch expects
these factors to help Lippo maintain its financial profile within
the parameters of its 'BB-' Long-Term Issuer Default Rating.
KEY RATING DRIVERS
Slower Presales, Asset Sales: Lippo sold just IDR602 bil. of
residential property in 6M16 - a sharp decline from the IDR2.7
tril. sold in 6M15. This was due to the company postponing its
property launches until after the government's tax-amnesty ruling
was passed in July 2016. Lippo has since scheduled new launches
for 4Q16 to take advantage of improving domestic consumer
sentiment. Fitch continues to expect the company to achieve
around IDR3trn in annual property sales in 2016 (2015: IDR3.6
tril.). Although Fitch expected Lippo to sell two of its mature
malls/hospitals worth IDR1.7 tril. to its Singapore-listed REITs
this year, the company now expects to sell the second property
worth IDR900 bil. only in 1Q17.
Flexible Capex: Lippo has significant flexibility to defer capex
during times of weak presales, which supports its ratings. The
company has curtailed its 2016 capex to around IDR3.3 tril.,
which is less than half of its initial budget. This is because
much of its capex included discretionary land banking and
construction costs contingent on selling a minimum value of new
projects.
Improving Macroeconomic Sentiment: Domestic consumer sentiment
has been improving since 2Q16, fuelled by lower commodity price
volatility and a more stable exchange rate. The government's
infrastructure expansion programme also had better traction
compared with 2015 and its tax amnesty programme, announced in
July 2016, has performed better than the government expected.
Real estate developers, such as Lippo, stand to directly benefit
from any wealth repatriated as part of the programme, which has
to be invested in either real estate or government securities.
Fitch expect increased domestic declarations of wealth to help
more consumers purchase property, which they had put on hold
following the government's increased scrutiny around tax evasion
since 2015. Indicators of real economic activity, such as
domestic traffic volumes and automobile sales, are also rising;
see Fitch: Indonesia Economic Rebound to Spur Industrial-Land
Demand, dated Aug. 29, 2016.
Strong Recurring Cash Flows: Lippo owns a large portfolio of
assets that generated recurring operating EBITDAR (before
operating lease rents) of IDR2.2 tril. in the 12 months to end-
June 2016 (LTM 2Q16). Over 60% of these recurring cash flows
stem from one of Indonesia's largest private hospital networks,
which Lippo owns, for which there is stable demand. The
remainder comprises of one of Indonesia's largest retail mall
franchises, several hotels and educational institutions as well
as dividend income from its REITs. Recurring EBITDAR covered
Lippo's consolidated interest and operating lease payments by
1.3x in LTM 2Q16, which underpins its ratings.
Limited Rating Headroom: Lippo's leverage stood at 48% at end-
June 2016, broadly flat from end-June 2015 despite significantly
lower contracted sales this year. This was supported by cash
collected on presales made in prior years, capex cuts and a
stronger Indonesian rupiah. However, Lippo's leverage is close
to the 50% threshold beyond which the ratings may be negatively
affected.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Residential contracted sales of IDR3 tril. in 2016
-- Asset sales to REITs of IDR800 bil. in 2016 and IDR900 bil.
in 1Q17.
-- Capex of IDR3.3 tril. in 2016
RATING SENSITIVITIES
Negative: Future developments that may, individually or
collectively, lead to negative rating action include:
-- A sustained increase in leverage to more than 50%
-- A sustained weakening in the ratio of EBITDAR from
recurring sources/interest cost and operating lease rent to
below 1.2x
-- Inability to pre-fund capex
Positive: A rating upgrade is not expected in the medium-term due
to Lippo's smaller operating scale and recurring income-base
compared with higher-rated international peers. Fitch also
expects Lippo's leverage to remain high over the medium-term as
it executes its expansion plans.
===============
M A L A Y S I A
===============
KINSTEEL BHD: Auditors' Disclaimer Opinion Prompts PN17 Listing
---------------------------------------------------------------
BERNAMA reports that Kinsteel Bhd has triggered the criteria
pursuant to Practice Note 17 (PN17) of the Main Market listing
requirements of Bursa Malaysia Securities Bhd.
BERNAMA relates that Bursa Malaysia said, it would continue to
monitor the progress of Kinsteel in respect of compliance with
the listing requirements.
"To date, there are 18 companies under PN17 which represented
1.99% of the total number of 905 listed on Bursa Malaysia," Bursa
Malaysia said on Oct. 27.
According to the report, the integrated steel manufacturer said
it was considered a PN17 company pursuant to paragraph 2.1(d) of
PN17 as the company's auditors have expressed a disclaimer
opinion in the Kinsteel's latest audited financial statements for
the financial year ended June 30, 2016.
Malaysia-based Kinsteel Berhad (KLSE:KINSTEL)--
http://www.kinsteel.com.my/home/home.php-- is an integrated
steel manufacturer and steel millers in Malaysia. The Company
manufactures a range of long steel products used in the
manufacturing, construction and infrastructure industries. The
Company, with a product portfolio encompassing upstream,
midstream and downstream steel products, fully integrated and
streamlined manufacturing processes, serves the need for steel in
the region. It produces mild steel round bars, high tensile
deformed bars, angle bars and flat bars servicing, in particular,
the construction and infrastructure industries. There steel bars
and sections manufactured by the Company are also known as long
products. The Company has eight production lines with a total
steel bars production capacity of 800,000 metric tonnes per
annum. The types of steel bars produced are round and deformed
bars, angle bars, U-channel, wire rods and flat bars.
PERISAI PETROLEUM: Bondholder Files Wind-Up Petition
----------------------------------------------------
Reuters reports that a Perisai Petroleum Teknologi Bhd bondholder
has filed a petition in a Malaysian court to wind up the company,
which defaulted on a SGD125 million ($90 million) bond after
investors rejected a request for an extension on its Oct. 3
maturity date.
According to Reuters, the petition was filed by Ravi Murarka, who
says he holds SGD15 million of the issue, according to the
company's statement to the stock exchanges on Oct. 27.
Reuters relates that the company, an oil and gas services
provider, said the petition itself isn't expected to have a
significant financial or operational impact. The firm has sought
preliminary legal advice and intends to challenge the petition.
The company earlier this month said it received a notice from the
bonds trustee demanding immediate repayment of the bonds and
interest, Reuters relays.
About Perisai Petroleum
Perisai Petroleum Teknologi Bhd. (KLSE:PERISAI) --
http://www.perisai.biz/-- is a Malaysia-based investment holding
company engaged in the provision of management, administrative
and financial support services to its subsidiaries. The Company
operates in three segments: Drilling Units, which is engaged in
the operations and maintenance service and the provision of
offshore assets, which are primarily for oil and gas offshore
drilling; Production units, which is engaged in the operations
and maintenance service and the provision of offshore assets,
which are primarily for oil and gas production, and Marine
Vessels, which is engaged in the provision of vessels, barges and
equipment on vessel charter services. Its subsidiaries include
Alpha Perisai Sdn. Bhd., which is engaged in the provision of
administrative support services; Perisai Offshore Sdn. Bhd.,
which is engaged in the provision of oil and gas services in
upstream oil sector, and Perisai production Holdings Sdn. Bhd.,
which is an investment holding company, among others.
As reported in the Troubled Company Reporter-Asia Pacific on
Oct. 14, 2016, The Star Online said Perisai Petroleum Teknologi
Bhd has been classified as a Practice Note 17 (PN17) company
after its unit Perisai Capital (L) Inc defaulted on SGD125
million debt notes due on Oct. 3.
The Star related that the upstream oil and gas provider said in a
statement to Bursa Malaysia that it therefore must regularize its
financial position within 12 months and implement the
regularization plan within the timeframe stipulated by either the
Securities Commission or Bursa Malaysia Securities Bhd.
====================
N E W Z E A L A N D
====================
PUMPKIN PATCH: Receivers to Close 7 stores, Axe 57 Jobs
-------------------------------------------------------
BusinessDesk reports that the receivers of failed retail chain
Pumpkin Patch will close seven stores over the next week-and-a-
half with 57 staff to lose their jobs.
KordaMentha's Neale Jackson and Brendon Gibson were appointed by
the retailer's lender -- ANZ Bank New Zealand -- on Oct. 26 after
Pumpkin Patch failed to convince the bank to let it keep trading,
and immediately signalled store closures and job losses were
likely, according to BusinessDesk. The receiver said Oct. 29
stores in Ponsonby, Takapuna, Henderson, Te Rapa, Wanganui,
Hornby, and a Charlie's & Me site at Coastlands will be shut by
Nov. 8, with 57 jobs lost, Bloomberg relates.
"Unfortunately, having now had time to assess these stores'
financial viability, it is necessary to close them in an effort
to stabilise the broader business," Gibson said in a statement,
notes the report. "Staff have been advised of their store closure
and the receivers' intention to pay all entitlements to a maximum
of NZ$22,160 (gross) per employee. They have also been given
access to EAP (employee assistance programme) support services."
Earlier this week, Gibson said Pumpkin Patch's existing plans to
shut down some outlets would be accelerated "in an effort to
improve saleability and viability" which would likely lead to job
losses amongst the 600 New Zealand staff and 1,000 Australian
employees.The receivers want to keep the retailer operating as
they hunt for a buyer, says the report.
According to BusinessDesk, Mr. Gibson said the Australian
operations were still under review and no closures have been
confirmed.
In its full-year results published last month, Pumpkin Patch told
investors its directors had given an undertaking to the bank that
it would put forward proposals by Oct. 20, which was later pushed
out to Oct. 31, BusinessDesk recalls. The capital constraints
were highlighted in the accounts as a "material risk" to the
ongoing viability of the business. Pumpkin Patch's debt to ANZ
Bank rose to NZ$46 million from NZ$39.1 million in the year to
the end of July 2016. It posted a loss of NZ$15.5 million in the
same period, BusinessDesk discloses.
Last year the retailer spurned a number of parties interested in
buying the business, saying at the time that they offers weren't
compelling enough for the board to consider seriously, the report
recalls. Instead, it tried to lift its trading performance in a
four-year turnaround programme, which it claimed was starting to
show improvements, adds BusinessDesk.
About Pumpkin Patch
Based in New Zealand, Pumpkin Patch Limited (NZE:PPL) --
http://www.pumpkinpatch.biz/-- is a designer, marketer, retailer
and wholesaler of children's clothing. The Company's product
range encompasses all stages of a child's growth, from baby to
toddler, primary school kid to pre and early teen, including
clothing, nightwear, accessories, rainwear, footwear and teddy
collection. Pumpkin Patch also caters for mums-to-be with a
maternity collection. The Company also has a fashion mini-brand
for discerning pre and early-teen girls, Urban Angel Girls. The
Company's collections are available in numerous countries and
regions, including New Zealand, Australia, the United Kingdom,
the United States, South Africa and the Middle East. Pumpkin
Patch predominantly sells through its own store network in
New Zealand, Australia, the United Kingdom and the United States.
The Company's subsidiaries include Torquay Enterprises Limited,
Pumpkin Patch Originals Limited, Pumpkin Patch LLC, Pumpkin Patch
Direct Limited, Patch Kids Limited and Urban Angel Girls Limited.
On Oct. 26, the Board of Pumpkin Patch has placed the company
into Voluntary Administration under Part 15A of the Companies Act
1993.
The board has therefore appointed Andrew Grenfell and Conor
McElhinney of McGrathNicol as administrators for Pumpkin Patch
and a number of its subsidiaries. Pumpkin Patch's bank has
appointed Neale Jackson and Brendon Gibson of KordaMentha as
receivers.
WYNYARD GROUP: May Halt Lucrative Services Contract With Jade
-------------------------------------------------------------
BusinessDesk reports that the collapse of Wynyard Group is likely
to slash returns for former parent Jade Software, which had about
six-and-a-half years left to run on a lucrative 10-year services
contract with the intelligence software developer.
According to BusinessDesk, Christchurch-based Jade said it will
cooperate fully with Wynyard and its voluntary administrators to
the extent that it can but wouldn't comment on its former
subsidiary's current situation.
BusinessDesk says Jade spun out Wynyard as a standalone business
in early 2013, just nine months after launching the crime-
fighting software maker with high expectations the subsidiary
would be unleashed to blossom into a contender on an
international stage.
Six months later Wynyard was listed on the NZX, raising NZ$65
million in an initial public offering, though it kept just NZ$26
million to fund its plans for expansion, with the remainder
paying out Jade for the intellectual property and covering
outstanding debt, BusinessDesk relates.
BusinessDesk adds that the split also included a services
agreement where Wynyard would pay Jade for the sale and support
of licenses, managed services, development, consulting services
and administrative support. The other leg of the deal saw Jade
buy development services from Wynyard.
That 10-year agreement has been tilted in favor of Jade over the
past three-and-a-half years, generating about NZ$25.4 million of
revenue while attracting just NZ$8.6 million in costs. As at
June 30, Wynyard's first-half balance date, Jade was owed
NZ$714,000 by its former subsidiary and had a NZ$198,000 payment
due to Wynyard, BusinessDesk discloses.
In the year to June 2015 Jade received net revenue of NZ$5.5
million from Wynyard, a significant portion of the NZ$29.8
million of revenue the software developer generated in 2015.
According to BusinessDesk, the Christchurch company returned
NZ$14.9 million to its shareholders through a share buyback in
early 2014 after the float of Wynyard left it flush with cash,
but bereft of compelling new investment opportunities.
About Wynyard Group
Based in Auckland, New Zealand, Wynyard Group Limited (NZE:WYN)
-- https://www.wynyardgroup.com/ -- provides software and
solutions to help protect companies and countries from threat,
crime and corruption. The Company has designed and developed
software to operate and connect three mission cycles: Risk
Management, Intelligence and Investigations. Wynyard products and
solutions are used by fortune 500 companies, national security
agencies and critical infrastructure operators across government,
financial services and infrastructure sectors. The Company
provides consulting and bureau services to government agencies
and financial institutions engaged in software to help protect
companies and countries from threat, crime and corruption. The
Company's solutions include risk management, intelligence,
investigations and digital forensics.
On Oct. 26, Wynyard Group Limited was placed into voluntary
administration (VA), along with its trading subsidiary Wynyard
NZ. KordaMentha partners, Grant Graham and Neale Jackson were
appointed Administrators. The Administrators have taken full
control of the company.
KordaMentha partner and Wynyard Group Administrator, Mr. Graham
said the company has effectively exhausted its options to secure
its working capital needs.
"As Administrators, we are focused on identifying any strategies
to realise value for the intellectual property Wynyard has
built," Mr. Graham said.
The Administrators are now working with the company to prepare an
independent report for creditors within the statutory timeframes.
====================
S O U T H K O R E A
====================
HANJIN SHIPPING: Gets 5 Bids as Court Kicks Off Sale Process
------------------------------------------------------------
Kyunghee Park at Bloomberg News reports that Hanjin Shipping Co.
received five initial bids for its Asia-U.S. business as a South
Korean court kicked off the process to sell the nation's largest
container line that fell victim to excess capacity and slowing
global trade.
Bloomberg relates that Hyundai Merchant Marine Co., Korea
Shipping Association, Korea Line Corp. and private equity firm
Hahn & Co. were among those that have expressed interest,
according to the companies, while the Seoul Central District
Court, overseeing the receivership, declined to disclose the
fifth bidder. According to the report, the submissions will be
followed by a due diligence of the assets, which include offices
and vessels that operate on the trans-Pacific trade. Final bids
are due by Nov. 7.
Bloomberg says the process heralds the beginning of the end of
Hanjin, which filed for bankruptcy protection late August after
creditors balked, setting off disruptions in supply chains around
the world. Hanjin Shipping, once the world's seventh largest
container line, last week said it's winding down its Europe
route.
"The real issue will be the price and how one evaluates
intangible assets," Bloomberg quotes Ma Ji-hwang, a senior
researcher at Hana Institute of Finance in Seoul, as saying.
"That's why the due diligence process will be important to shed
light on what assets will be available in the sale. The Asia-U.S.
shipping operation is pretty much what's going to be left of
Hanjin."
A decision on the winning bid is due later next month. The South
Korean company, whose market value is about KRW196 billion
($171 million), is also in talks to sell its 54 percent stake in
the Long Beach port container terminal, according to the Seoul
court, Bloomberg relays.
Bloomberg relates that the government has said that Hyundai
Merchant, which is owned by state-owned Korea Development Bank,
will serve as the national flag carrier for the country's exports
and is looking at measures to help improve the industry's
competitiveness.
"Exports are very important for South Korea," Hana's Ma said,
notes the report. "That's why the government will try to bolster
Hyundai Merchant and buying Hanjin's asset could help build up
scale."
According to Bloomberg, Hyundai Merchant said in a separate
e-mailed statement that it's considering various measures to
strengthen its position, including taking over Hanjin's assets
and manpower.
Michael Storgaard, a spokesman for A.P. Moeller-Maersk A/S,
declined to comment if the Copenhagen-based company's shipping
line was interested in buying the Hanjin assets before the
initial bidding deadline, Bloomberg notes.
Hanjin had 7 percent market share on the Asia-U.S. trade in the
first six months of this year, according to the company. It
hauled 1.85 million 20-foot containers on the route in 2015,
accounting for 40 percent of its total 4.62 million.
Of the 97 container vessels it operated, unloading of cargo from
82 ships has been completed as of Oct. 26, Bloomberg discloses
citing Hanjin's website. On the court's advice, the company has
been returning chartered vessels to owners as soon as they are
unloaded, Bloomberg 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
=============
VIETNAM: Government Will Let Commercial Banks Fail, Official Says
-----------------------------------------------------------------
Vietnam.net reports that the Government will consider the
possibility of letting poor performing commercial banks go
bankrupt, instead of them as it did in the past, Deputy Prime
Minister Vuong Dinh Hue has said.
He affirmed on Oct. 22 that the Government is determined to
restructure the banking system with top priorities being
protecting the interests of depositors and preventing the
"domino" effect which happens when one bank stops operation,
Vietnam.net relates. In fact, there has been no precedent for
such bank bankruptcy in Viet Nam due to the fears of systematic
failure. In 2015, the SBV acquired three banks, namely Viet Nam
Construction Bank, Ocean Bank and GP Bank, at 0 dong per share
due to the banks' ailing performance and failure to meet the
required charter capital increase, Vietnam.net recalls.
With this determination, it is unlikely that history will repeat
itself as Hue said "the Government would take tougher measures to
deal with weak credit institutions," Vietnam.net relays.
According to Vietnam.net, Minister of Finance Dinh Tien Dung, who
is also a deputy of the northern province of Ninh Binh, said that
it is necessary to ensure the safety of the banking system but
ensuring the interests of depositors is more important.
Before that, talking to the press on the sidelines of the
National Assembly, Dung also made the comment that a safety
system is needed for the Government to ensure the interests of
depositors, but the bank cannot be forced to survive, relays
Vietnam.net.
"We can not let 'zombie' banks survive", the report quotes Dung
as saying. "People and society need stability, the market needs
transparency, thus to keep running ailing banks is not
transparent," Dung said.
Nguyen Viet Khoa, lecturer at the HCM City University of
Economics' Faculty of Economic Laws, said that the bankruptcy of
a bank is normal. Monetary policy aims to ensure the interests of
hundreds of thousands of businesses, not the sake of a few dozen
banks, he said, notes the report.
Therefore, the State should save hundreds of thousands of
businesses which are in difficulties, because when they are
bankrupt, a lot of people will face unemployment and even more
hardship, Khoa said, Vietnam.net relates.
According to Vietnam.net, Nguyen Phuoc Thanh, Deputy Governor of
the State Bank of Viet Nam said to avoid going bankrupt,
commercial banks had to strengthen their financial capacity,
especially those with a small scale, as well as improve their
risk management capability to limit bad debts.
Vietnam.net relates that the most important thing is that banks
must increase capital in a transparent and proper manner,
otherwise it will struggle sooner or later, Thanh stressed.
In the immediate future, the SBV will let the market eliminate
ailing credit funds, financial companies and small banks, so as
to not cause shocks to people and minimize the impact on industry
insiders, says Vietnam.net.
*********
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
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Information contained herein is obtained from sources believed
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*** End of Transmission ***