/raid1/www/Hosts/bankrupt/TCRAP_Public/170310.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
Friday, March 10, 2017, Vol. 20, No. 50
Headlines
A U S T R A L I A
AGENT PROVOCATEUR: First Creditors' Meeting Set for March 20
BLUESTONE MORTGAGES: Fitch Affirms BB- Rating on Class E Notes
INTEGRATED ENGINEERING: First Creditors' Meeting Set for March 17
JOALICAM PTY: First Creditors' Meeting Set for March 16
KT GOLD: First Creditors' Meeting Scheduled for March 21
MMG LIMITED: US$98.7MM 2016 Annual Net Loss Larger Than Expected
MOZZART INVESTMENTS: First Creditors' Meeting Set for March 17
C H I N A
KWG PROPERTY: Fitch Rates Proposed US Dollar Senior Notes 'BB-'
I N D I A
AAREN EXPORTS: CARE Reaffirms B+ Rating on INR4.0cr Cash Loan
AARK INDIA: CRISIL Reaffirms 'B' Rating on INR5.5MM Overdraft
AATHI VELAN: CRISIL Reaffirms B+ Rating on INR6.5MM Cash Loan
ANRAK ALUMINIUM: CARE Assigns 'D' Issuer Not Cooperating Rating
ANUBANDANA INFRATECH: CRISIL Cuts Rating on INR7MM Loan to D
AQUA GENO: CRISIL Reaffirms B+ Rating on INR6.25MM Packing Loan
ARSHAD CASHEW: CRISIL Reaffirms 'B+' Rating on INR5.55MM LT Loan
BALKRUSHNA GINNING: ICRA Reaffirms B+ Rating on INR6cr Loan
BITCORP PRIVATE: CRISIL Lowers Rating on IRN12.75MM Loan to B-
BRAHMANI RIVER: Ind-Ra Affirms 'D' Long-Term Issuer Rating
DEKSON CASTINGS: CARE Upgrades Rating on INR12.62cr Loan to BB-
DHANALAXMI COTTON: Ind-Ra Assigns 'B+' Long-Term Issuer Rating
FLORESSENCE PERFUMES: CARE Assigns B+ Rating to INR19cr Loan
GALAXY GLASS: CRISIL Reaffirms B+ Rating on INR5MM Cash Loan
GAYATRI MICRONS: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
GOVIND RUBBER: CRISIL Reaffirms 'D' Rating on INR40.18MM Loan
GRANITE MART: CRISIL Reaffirms 'B' Rating on INR6.3MM LT Loan
HMT MACHINE: CARE Upgrades Rating INR44.82cr LT Loan to 'C'
HOMERA TANNING: ICRA Reaffirms 'B' Rating on INR30cr LT Loan
KADINYA ENTERPRISES: CRISIL Reaffirms B+ Rating on INR5MM Loan
KAMAKHYA SHIVALIK: CARE Puts B+ Rating on Notice of Withdrawal
KAMALA BOARD: ICRA Reaffirms B+ Rating on INR8cr Loan
KASHI KANCHAN: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
KAUSHALYA SPINNERS: CRISIL Assigns B+ Rating to INR5.0MM Loan
KHR INFRASTRUCTURES: CRISIL Ups Rating on INR6.43MM Loan to B+
L.S. RICE: CARE Reaffirms B+ Rating on INR4.83cr LT Loan
LICHCHHWI FOOD: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
M.D. AGRO: ICRA Reaffirms B+ Rating on INR25cr LT Loan
MFAR REALTORS: CARE Assigns 'B' Issuer Not Cooperating Rating
OPTIFLEX INDUSTRIES: Ind-Ra Assigns 'B+' Long-Term Issuer Rating
P.S. CONSTRUCTION: CRISIL Reaffirms B+ Rating on INR1MM Overdraft
PRECISE SEAMLESS: Ind-Ra Assigns 'BB' Rating to INR60.19MM Loan
RAMDEV COLD: CARE Assigns 'B' Rating to INR6cr LT Loan
RING FORGINGS: CRISIL Reaffirms B+ Rating on INR6MM Cash Loan
SAI SPACECON: CRISIL Reaffirms 'D' Rating on INR30.75MM Loan
SHIV CARRIERS: CRISIL Reaffirms B Rating on INR12.5MM Term Loan
SHIVA METTALICKS: Ind-Ra Assigns 'BB-' Rating to INR120MM Loan
SHREE RAJESHWAR: CARE Assigns 'D' Issuer Not Cooperating Rating
SHRI AGRAWAL: Ind-Ra Affirms 'BB-' Rating on Bank Facilities
SNQS INTERNATIONAL: ICRA Reaffirms B+ Rating on INR8cr Loan
SONI SOYA: CARE Assigns 'B+' Rating to INR2.34cr LT Loan
SRI RAM: ICRA Reaffirms 'D' Rating on INR9cr Cash Credit
SRI VASAVI: Ind-Ra Assigns 'BB' Rating to INR32.09MM Term Loan
SUNDARAM MULTI: CRISIL Lowers Rating on INR15.75MM Loan to 'D'
TIRUPATI STRUCTURES: Ind-Ra Affirms 'BB-' Long-Term Issuer Rating
TRIVENI ENTERPRISES: ICRA Reaffirms B+ Rating on INR6cr Loan
VATCO ELEC-POWER: CRISIL Reaffirms B+ Rating on INR7.5MM Loan
VIVEK REALTY: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
J A P A N
TOSHIBA CORP: US Nuclear Unit Brings in Bankruptcy Lawyers
N E W Z E A L A N D
M. WEBSTER: 10 NZ Marcs and David Lawrence Stores to Close
PUMPKIN PATCH: Put Into Liquidation After Failure to Find Buyer
VILLAGE STEWARDS: Son of Financiers Buys Up Liquidated Land
S O U T H K O R E A
DAEWOO SHIPBUILDING: Former CEO Accused of Accounting Fraud
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A U S T R A L I A
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AGENT PROVOCATEUR: First Creditors' Meeting Set for March 20
------------------------------------------------------------
A first meeting of the creditors in the proceedings of Agent
Provocateur Holdings Pty Ltd will be held at the offices of
KordaMentha, Level 5 Chifley Tower, 2 Chifley Square, in
Sydney, NSW, on March 20, 2017, at 2:00 p.m.
Rahul Goyal and David Winterbottom of KordaMentha were appointed
as administrators of Agent Provocateur on March 8, 2017.
BLUESTONE MORTGAGES: Fitch Affirms BB- Rating on Class E Notes
--------------------------------------------------------------
Fitch Ratings has upgraded 10 and affirmed 24 tranches from
Bluestone Mortgages Warehouse Trust and four Sapphire Series
transactions. The transactions are securitisations of Australian
non-conforming residential loans originated by Bluestone Group
Pty Limited.
KEY RATING DRIVERS
The upgrades of the class B to F notes for both Sapphire XII
Series 2013-1 Trust and Sapphire XIII Series 2014-1 Trust reflect
the build-up of credit enhancement, which Fitch assesses as
sufficient to mitigate concentration issues that are expected to
be more pronounced as the pool amortises. The magnitude of rating
upgrades for these notes is constrained by concentration risk.
The affirmations reflect Fitch's view that available credit
enhancement is sufficient to support the notes' current ratings
and the agency's expectations of Australian economic conditions.
The credit quality and performance of loans in the collateral
pools remain in line with Fitch's expectations.
As at 31 December 2016, the majority of the underlying pools of
Bluestone Mortgages Warehouse Trust and Sapphire Series consist
of self-certified loans, which ranged between 53.4% for Sapphire
2014-1 and 65.6% for Sapphire XIV Series 2016-1 Trust as at end-
2016.
Arrears are high across all transactions; a common feature of the
non-conforming market. The 30+ days arrears range between 4.52%
(Bluestone Mortgage Warehouse Trust) and 12.25% (Sapphire 2016-
1), compared with Fitch's 3Q16 non-conforming Dinkum RMBS index
of 5.27%.
RATING SENSITIVITIES
Unexpected increases in defaults and losses would be necessary
before any negative rating action would be considered on the
transactions' senior notes. Credit enhancement levels of the
affirmed notes can support multiples of reported arrears.
Fitch has evaluated the sensitivity of the upgraded ratings of
the class B to F notes for Sapphire 2013-1 and 2014-1. Its
analysis found that the notes can withstand a simultaneous
moderate default stress and moderate recovery scenarios (15%
increase in defaults and 15% decrease in recoveries).
Additionally, a severe default stress of a 30% increase was
conducted to assess stability, given the performance volatility
inherent in non-conforming portfolios.
DATA ADEQUACY
Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset
pools and transactions. There were no findings that were material
to this analysis. Fitch conducted a review of the origination
files as part of its ongoing monitoring.
As part of its ongoing monitoring, Fitch reviewed a small
targeted sample of Bluestone's origination files and found the
information contained in the reviewed files to be adequately
consistent with the originator's policies and practices and the
other information provided to the agency about the asset
portfolio.
Overall, Fitch's assessment of the asset pool information relied
upon for the agency's rating analysis according to its applicable
rating methodologies indicates that it is adequately reliable.
SOURCES OF INFORMATION
The information below was used in the analysis:
Loan-by-loan data provided by Bluestone Group as at end-2016
Transaction reporting data provided by Bluestone Group as at the
January 2017 payment date
Loan enforcement details provided by Bluestone Group as at end-
2016
The issuer has informed Fitch that not all relevant underlying
information used in the analysis of the rated notes is public.
The full list of rating action is shown below, with note balance
as of the January 2017 payment date:
Bluestone Mortgages Warehouse Trust
AUD158.4 million Class A (ISIN AU3FN0024139) notes affirmed at
'AAAsf'; Outlook Stable
AUD9.0 million Class B notes affirmed at 'AAsf'; Outlook Stable
AUD10.8 million Class C notes affirmed at 'Asf'; Outlook Stable
AUD7.6 million Class D notes affirmed at 'BBBsf'; Outlook Stable
AUD5.2 million Class E notes affirmed at 'BB-sf'; Outlook Stable
Sapphire XII Series 2013-1 Trust
AUD33.5 million Class A1 (ISIN AU3FN0021424) notes affirmed at
'AAAsf'; Outlook Stable
AUD8.8 million Class A2 (ISIN AU3FN0021432) notes affirmed at
'AAAsf'; Outlook Stable
AUD5.9 million Class B (ISIN AU3FN0021440) notes upgraded to
'AAAsf' from 'AAsf'; Outlook Stable
AUD6.8 million Class C (ISIN AU3FN0021457) notes upgraded to 'AA-
sf' from 'Asf'; Outlook Stable
AUD4.6 million Class D (ISIN AU3FN0021465) notes upgraded to 'A-
sf' from 'BBBsf'; Outlook Stable
AUD2.6 million Class E (ISIN AU3FN0021473) notes upgraded to
'BB+sf' from 'BBsf'; Outlook Stable
AUD2.0 million Class F (ISIN AU3FN0021481) notes upgraded to 'BB-
sf' from 'Bsf'; Outlook Stable
Sapphire XIII Series 2014-1 Trust
AUD64.9 million Class A1 (ISIN AU3FN0025243) notes affirmed at
'AAAsf'; Outlook Stable
AUD18.9 million Class A2 (ISIN AU3FN0025250) notes affirmed at
'AAAsf'; Outlook Stable
AUD7.6 million Class B (ISIN AU3FN0025268) notes upgraded to
'AA+sf' from 'AAsf'; Outlook Stable
AUD7.4 million Class C (ISIN AU3FN0025276) notes upgraded to
'A+sf' from 'Asf'; Outlook Stable
AUD4.8 million Class D (ISIN AU3FN0025284) notes upgraded to
'BBB+sf' from 'BBBsf'; Outlook Stable
AUD2.7 million Class E (ISIN AU3FN0025292) notes upgraded to
'BB+sf' from 'BBsf'; Outlook Stable
AUD2.1 million Class F (ISIN AU3FN0025300) notes upgraded to
'B+sf' from 'Bsf'; Outlook Stable
Sapphire XIV Series 2016-1 Trust
AUD53.3 million Class A1a (ISIN AU3FN0031175) notes affirmed at
'AAAsf'; Outlook Stable
AUD40.0 million Class A1b (ISIN AU3FN0031183) notes affirmed at
'AAAsf'; Outlook Stable
AUD21.1 million Class A2 (ISIN AU3FN0031191) notes affirmed at
'AAAsf'; Outlook Stable
AUD8.2 million Class B (ISIN AU3FN0031209) notes affirmed at
'AAsf'; Outlook Stable
AUD9.6 million Class C (ISIN AU3FN0031217) notes affirmed at
'Asf'; Outlook Stable
AUD6.6 million Class D (ISIN AU3FN0031225) notes affirmed at
'BBBsf'; Outlook Stable
AUD3.6 million Class E (ISIN AU3FN0031233) notes affirmed at
'BBsf'; Outlook Stable
AUD3.0 million Class F (ISIN AU3FN0031241) notes affirmed at
'Bsf'; Outlook Stable
The note balance is as of the issuance date for the list of
rating action below:
Sapphire XV Series 2016-2 Trust
AUD140.0 million Class A1 (ISIN AU3FN0033346) notes affirmed at
'AAAsf'; Outlook Stable
AUD22.0 million Class A2 (ISIN AU3FN0033353) notes affirmed at
'AAAsf'; Outlook Stable
AUD7.8 million Class B (ISIN AU3FN0033361) notes affirmed at
'AAsf'; Outlook Stable
AUD10.5 million Class C (ISIN AU3FN0033379) notes affirmed at
'Asf'; Outlook Stable
AUD8.1 million Class D (ISIN AU3FN0033387) notes affirmed at
'BBBsf'; Outlook Stable
AUD3.0 million Class E (ISIN AU3FN0033395) notes affirmed at
'BBsf'; Outlook Stable
AUD3.0 million Class F (ISIN AU3FN0033403) notes affirmed at
'Bsf'; Outlook Stable
INTEGRATED ENGINEERING: First Creditors' Meeting Set for March 17
-----------------------------------------------------------------
A first meeting of the creditors in the proceedings of Integrated
Engineering Services Pty Ltd will be held at Level 5, 55-57
Hunter Street, in Newcastle, on March 17, 2017, at 11:00 a.m.
Chad Rapsey of Rapsey Griffiths Insolvency + Advisory was
appointed as administrator of Integrated Engineering on March 7,
2017.
JOALICAM PTY: First Creditors' Meeting Set for March 16
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Joalicam
Pty Ltd, trading as City Stay Apartments Hotel, will be held at
the offices of HLB Mann Judd (Insolvency WA), Level 3, 35 Outram
Street, in West Perth, on March 16, 2017, at 2:00 p.m.
Kimberley Wallman of HLB Mann was appointed as administrator of
Joalicam Pty on March 7, 2017.
KT GOLD: First Creditors' Meeting Scheduled for March 21
--------------------------------------------------------
A first meeting of the creditors in the proceedings of KT Gold
Pty Ltd as Trustee For The Tuckwell Family Trust will be held at
the offices of McLeod & Partners, Hermes Building, Level 1, 215
Elizabeth Street, in Brisbane, Queensland, on March 21, 2017, at
10:00 a.m.
Jonathan Paul McLeod of McLeod & Partners was appointed as
administrator of KT Gold on March 9, 2017.
MMG LIMITED: US$98.7MM 2016 Annual Net Loss Larger Than Expected
----------------------------------------------------------------
Eric Ng at South China Morning Post reports that MMG, Asia's
largest listed copper miner by output, was under pressure in
Hong Kong trading on March 9, after the company reported a larger
than expected net loss for 2016 and unveiled plans to raise
copper output by up to 22 per cent this year.
The report says the overseas mining unit of state-backed metals
trading giant China Minmetals posted a net loss of US$98.7
million for 2016, including a one-off tax-related accounting
write-down of US$63 million and US$52 million of low-grade ore
inventory write-downs.
It had a net loss of US$1 billion in 2015, when it booked almost
US$900 million of asset impairments on the back of lower metal
prices, SCMP discloses.
Analysts had predicted a net profit of US$54 million for 2016,
according to the average estimate of three analysts polled by
Thomson Reuters, the report relays.
Operating profit, as measured in earnings before interests,
taxes, depreciation and amortisation jumped 126 per cent last
year to US$949 million, thanks to last year's commissioning of
its mainstay Las Bambas copper project in Puru that was acquired
in 2014, SCMP discloses.
This offset the impact of a 12 per cent decline in last year's
average copper price compared to 2015, according to SCMP.
According to the report, MMG is targeting to grow its total
copper output by 11 to 22% this year to between 560,000 and
615,000 tonnes. Last year's total of 503,510 tonnes exceeded its
target of 415,000 to 477,000 tonnes, thanks mainly to growth from
Las Bambas.
"The challenges associated with the ramp-up of an asset of this
scale were exceptionally well managed," the report Jiao as
saying.
MMG has budgeted US$850 million to US$900 million of capital
expenditure this year, of which US$330 million has been ear-
marked for the Dugald River zinc mine under construction in
Queensland, Australia, the report relays.
"Our strategy has not changed," chief executive Jerry Jiao Jian
said in a filing to Hong Kong's bourse on March 9 after he took
the helm from Andrew Michelmore in February, SCMP relays. "MMG
is increasingly important to China Minmetals and our unique model
of international experience backed by a major Chinese shareholder
is key to our growth."
Jiao was formerly MMG's non-executive chairman, adds SCMP.
MMG Limited is an Australia-based company engaged in the
exploration, development and mining of zinc, copper, gold, silver
and lead deposits across the world. The Company's segments
include Las Bambas, Sepon, Kinsevere, Australian Operations and
Other. The Las Bambas mine is an open-pit mining operation with
prospective exploration options. It is located in Cotabambas,
Apurimac region of Peru. Sepon is an open-pit copper mining
operation located in southern Laos. The Australian Operations
segment includes Rosebery and Golden Grove. Rosebery is an
underground polymetallic base metal mining operation located on
Tasmania's west coast. Golden Grove is an underground and open-
pit base and precious metals mining operation located in Western
Australia's mid-west. The Other segment includes Century mine,
which is an open-pit zinc mine located in North-West Queensland
Australia. The Other segment also includes exploration and
development projects, including the Dugald River project.
MOZZART INVESTMENTS: First Creditors' Meeting Set for March 17
--------------------------------------------------------------
A first meeting of the creditors in the proceedings of Mozzart
Investments Pty Ltd, Mroc Car Wholesalers Pty Ltd, Mroc
Investments Pty Ltd, Plush Services Pty Ltd and Zegna Holdings
Pty Ltd, will be held at the offices of Jirsch Sutherland, Level
27, 259 George Street, in Sydney, on March 17, 2017, at
10:00 a.m.
Andrew John Spring & Amanda Young of Jirsch Sutherland were
appointed as administrators of Mozzart Investments on March 7,
2017.
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C H I N A
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KWG PROPERTY: Fitch Rates Proposed US Dollar Senior Notes 'BB-'
---------------------------------------------------------------
Fitch Ratings has assigned KWG Property Holding Limited's
(BB-/Stable) proposed US dollar senior notes a 'BB-(EXP)'
expected rating.
The notes are rated at the same level as KWG's senior unsecured
rating because they constitute its direct and senior unsecured
obligations. The final rating is subject to the receipt of final
documentation conforming to information already received.
China-based KWG's ratings are supported by its established
homebuilding operations in Guangzhou, strong brand recognition in
higher-tier cities across China, consistently high margin, strong
liquidity and healthy maturity profile. KWG's ratings are
constrained by the small scale of its development and investment
property business, as well as the higher leverage after its land
purchases in 2016.
KEY RATING DRIVERS
Established in Guangzhou; Diverse Coverage: KWG's land bank is
diversified across the Pearl River Delta, Yangtze River Delta,
Bohai Rim and southern China. The company ranked among the top 10
homebuilders by sales in 2015 in Guangzhou, the capital of
China's southern Guangdong province. KWG had 10.4 million square
metres (sq m) of good-quality land at end-June 2016 that was
spread across 11 cities in China. The land bank had average land
cost of CNY3,470/sq m and is sufficient for 4-5 years of
development.
Sites in Tier 1 cities made up 53% of the land bank by area, or
58% by value; while sites in Tier 1 cities and upper Tier 2
cities made up 70% of the land bank by area or 73% by value. KWG
has a prudent approach when entering new cities - it conducts due
diligence for around three years before entering, usually with
one or two projects in partnership with reputable local
developers.
Strong Brand Name: KWG has established strong brand recognition
in its core cities by focusing on first-time buyers and
upgraders, and appeals to these segments by engaging
international architects and designers, and setting high building
standards. KWG's high-quality products enable it to attract
affluent purchasers, and command higher pricing than some nearby
projects by reputable developers. The company's sell-through rate
has been high at 60%-68% since 2012.
Diverse Property Products: KWG develops both residential and
commercial properties to meet demand from the market and respond
to changes in the property sector. Commercial properties
accounted for about 32% of its pre-sales in 1H16, with about one
third of the sales from office and retail units, and the
remainder from serviced apartments.
High Margin Through Cycles: KWG's EBITDA margin has remained at
30%-35% through different business cycles and is one of the
highest among Chinese homebuilders. The company has made
protecting the margin one of its key business objectives. To this
end, KWG strives to maintain higher-than-average selling prices
through its consistent, high-quality products. Its experienced
project teams also ensure strong execution capability and strict
cost controls. KWG's selling, general and administrative expenses
cost is lower than peers' at 6% of revenue.
Moreover, KWG has low unit land cost of 20%-25% of its average
selling price due to its strong foothold in Guangzhou, where land
prices have not increased as much as in other Tier 1 cities over
the years. However, KWG's EBITDA margin may decline from the high
30% range to lower 30% range from 2H17 if growth in selling
prices lags the land price surge in 2016 in KWG's core cities.
Land Costs Drive Up Leverage: Fitch expects KWG's proportionate
consolidated leverage, measured by net debt-to-adjusted
inventory, to increase to 43% by the end of 2016 (2015: 35%,
1H16: 29%). The increase will be driven by the high land
premiums, with around CNY10bn scheduled to be paid in 2H16..
KWG acquired 14 land parcels in 2016 with attributable gross
floor area (GFA) of 2.32 million sq m and land premium of
CNY18.4bn. Some of the parcels were in Shanghai, Hangzhou and
Tianjin, where land costs have surged, resulting in an increase
in land cost to CNY4,030/sq m, compared with CNY3,819/sq m in
2015 and CNY3,300/sq m in 2014.
Leverage Reasonable, To Improve: The rise in KWG's leverage is
mitigated by the good quality of the recent land purchases and
that the acquisitions maintain its land bank at 4-5 years of
development activity. Fitch expects leverage to gradually trend
down to 40% in 2017-2019, as KWG's presales grow and land
acquisition in higher-tier cities slows down.
JVs with Leading Industry Peers: As a result of KWG's prudent
expansion strategy, it has a long record of partnership with
leading industry peers, including Sun Hung Kai, Hongkong Land,
Shimao Property, China Vanke, China Resources Land and Guangzhou
R&F. These partnerships helped KWG achieve lower financing costs,
reduce competition in land bidding, and improve operational
efficiency. JV presales made up 48% and 45% of KWG's total
attributable presales in 2015 and 1H16, respectively. JV cash
flows are well-managed, and investments in new JV investments are
mainly funded by excess cash from mature JVs. Leverage is also
lower at the JV level because land premiums are usually funded at
the holding company level, and KWG pays construction costs only
after cash is collected from presales.
DERIVATION SUMMARY
KWG is well positioned among its peers with 'BB-' ratings.
KWG's contracted sales of CNY20bn-25bn are comparable to Logan
Property Holdings Company Limited's (BB-/Stable) around CNY29bn,
Yuzhou Properties Company Limited's (BB-/Stable) around CNY23bn
and China Aoyuan Property Group Limited's (BB-/Stable) around
CNY26bn. However, KWG's EBITDA margin of over 35% is one of the
best within the 'BB-' peer group and is better than that of 'BB'
rated companies such as, Guangzhou R&F Properties Co. Ltd.
(BB/Stable) and Sunac China Holdings Limited (BB/Negative). This
is offset by KWG's slower churn of around 0.7x, compared with
around 1.5x for CIFI Holdings (Group) Co. Ltd. (BB-/Positive) and
Future Land Development Holdings Limited (BB-/Positive), both of
which have lower EBITDA margins of around 25% and 19%,
respectively. In addition, KWG's leverage of around 40% is
slightly weaker than CIFI's at around 35% and Aoyuan's at around
35%.
KEY ASSUMPTIONS
Fitch's key assumptions within Fitch ratings case for the issuer
include:
-- Contracted sales GFA to grow at 0% in 2016, 5% in 2017 and
8% in 2018
-- Average selling price to increase 10% a year in 2016 and
2017, and 1% a year from 2018
-- EBITDA margin (excluding capitalised interest) to slowly
trend down from 35% to 32% for 2016-2019
-- Land replenishment rate at 0.8x contracted sales GFA
(attributable), assuming KWG maintains a land bank at about
5 years of development activity
-- Land acquisition cost (attributable) at 60% of contracted
sales in 2016, 40%-45% from 2017
-- Leverage to improve, but remain at about 40%-45% for 2016-
2019
RATING SENSITIVITIES
Future developments that may individually or collectively, lead
to positive rating action include:
- EBITDA margin sustained above 30%;
- Net debt/adjusted inventory sustained below 35%;
- Attributable contracted sales sustained above CNY30bn (2016:
CNY22bn)
Future developments that may individually or collectively, lead
to negative rating action include:
- EBITDA margin sustained below 25%;
- Net debt/adjusted inventory sustained above 45%
LIQUIDITY
KWG has well-established diversified funding channels, and strong
relationships with most foreign, Hong Kong and Chinese banks. KWG
has strong access to both domestic and offshore bond markets, and
was among the first few companies to issue panda bonds. KWG's
funding cost fell to 6.8% in 1H16 from 7.4% in 2015 following a
series of refinancing activities.
At end-June 2016, KWG had available cash of CNY20.5bn and
unutilised credit facilities (uncommitted) of CNY16bn, which were
enough to cover the repayment of its short-term borrowing
(CNY5.5bn) and outstanding land premium. The company repaid most
of its US dollar debt financing when the opportunity arose. Fitch
expects the group to maintain sufficient liquidity to fund
development costs, land premium payments and debt obligations
during 2016-2018 due to its diversified funding channels, healthy
maturity profile and flexible land acquisition strategy.
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I N D I A
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AAREN EXPORTS: CARE Reaffirms B+ Rating on INR4.0cr Cash Loan
-------------------------------------------------------------
The ratings assigned to the bank facilities of Aaren Exports
continue to be constrained by its small scale of operations,
working capital intensive nature of operations and weak solvency
position.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities
(Term Loan) 0.80 CARE B+ Withdrawn
Long-term Bank
Facilities
(Cash Credit Limit) 4.00 CARE B+; Stable Reaffirmed
Short-term Bank
Facilities 15.40 CARE A4 Reaffirmed
The ratings are further constrained by the constitution of the
entity as a partnership firm, foreign exchange fluctuation risk
and its presence in a highly fragmented and competitive industry.
The ratings, however, derive strength from the experienced
partners and long track record of operations of the firm.
Going forward the ability of AAR to profitably scale-up its
operations while improving its overall solvency position will
remain the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Strengths
Experienced partners and long track record of operations: The
firm has been engaged in the manufacturing and exporting of
garden tools, hand tools, etc, since two decades and is currently
being managed by Mr. Subash Chander Aggarwal and Mr. Deepak
Aggarwal. Mr. Subash Chander Aggarwal has more than two decades
of experience in this industry. Mr. Deepak Aggarwal has an
experience of one and half decades through his association with
AAR.
Key Rating Weaknesses
Small scale of operations: Despite being operational for nearly
two decades, the scale of operations has remained low marked by a
total operating income and gross cash accruals of INR45.86 crore
and INR1.61 crore, respectively, during FY16 (refers to the
period April 1 to March 31).
Leveraged capital structure and weak debt coverage indicators:
The capital structure continued to remain leveraged reflected by
overall gearing ratio of 8.33x as on March 31, 2016. Furthermore,
the debt coverage indicators of the firm stood weak as reflected
by interest coverage ratio of 1.42x in FY16 and total debt to GCA
of 20.70x for FY16.
Working capital intensive nature of operations: The firm's
operations are working capital intensive in nature as reflected
by average operating cycle of 149 days for FY16. The working
capital requirements were met largely through bank borrowings
which resulted in average utilization of around 90% of its
sanctioned working capital limits for last 12 months
period ended January 2017.
Foreign exchange fluctuation risk: AAR's business operations
involve both imports and exports resulting in sales realization
and payments in foreign currency. AAR does not have any foreign
exchange hedging initiative like forward contract etc. which
exposes the firm to any adverse fluctuations in the foreign
currency.
Constitution of the entity being a partnership firm: AAR's
constitution as a partnership firm has the inherent risk of
possibility of withdrawal of the partner's capital at the time of
personal contingency and the firm being dissolved upon the
death/retirement/insolvency of partners.
Highly competitive and fragmented nature of industry: The
industry is characterized by low entry barriers due to minimal
capital required which has resulted in proliferation of large
number of small and big players spread across the country.
Established in 1992, AAR is a partnership firm with Mr. Subash
Chander Aggarwal and Mr. Deepak Aggarwal as partners having 60%
and 40% share in profit and loss, respectively. The firm is
engaged in manufacturing of garden tools and hand tools at its
manufacturing facility located in Jalandhar, Punjab, with an
installed capacity of 16 lakh pieces per annum (LPA) and 12 LPA,
respectively, along with trading of polyvinyl chloride (PVC)
resin. The firm also started manufacturing of PVC pipes fittings
in September 2013 and plastic water tanks in January 2015 with an
installed capacity of 240 metric tonnes per annum (MTPA) and
2,000 MTPA, respectively. The raw materials required for
manufacturing of tools are steel parts, fasteners etc., which are
procured from Punjab while the wood is imported from Denmark and
U.S.A. Furthermore, the firm imports PVC resin from Korea, China
and Dubai, while HDPE (High-Density Polyethylene) granules
(required for manufacturing of water tanks) are procured from
Indian Oil Corporation Limited and GAIL India Limited. AAR
exports all its garden tools and hand tools under the brand name
of "HORIZON" and covers the markets of U.K, Dubai, Russia, etc,
while the PVC pipes fittings and water tanks are supplied to
various dealers located in North India. Besides this, the
partners are also engaged in Prabh Dayal Om Prakash (POP) and
Horizon Polymers (HPY), engaged in trading of PVC pipes &
fittings since 1950 and manufacturing of PVC pipes & fittings
since 2001, respectively.
In FY16, AAR has achieved a total operating income of INR45.86
crore with PAT of INR0.30 crore, as against the total operating
income of INR44.94 crore with PAT of INR0.76 crore in FY15.
Furthermore, AAR has achieved a total operating income of
INR36.57 crore in 10MFY17 (Provisional).
AARK INDIA: CRISIL Reaffirms 'B' Rating on INR5.5MM Overdraft
-------------------------------------------------------------
CRISIL's rating on the bank loan facilities of Aark India
Educational Trust continues to reflect AARK's weak financial risk
profile marked by high gearing and weak liquidity. These
weaknesses are partly offset by extensive experience of AARK's
trustees in the education sector and established infrastructure
of the institute.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft 5.5 CRISIL B/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weakness
* Weak financial risk profile: Financial risk profile of AARK is
weak marked by high gearing and weak debt protection metrics.
While the gearing was 2.18 times as on March 31, 2016, Interest
coverage remained at 1.23 times.
* Weak liquidity: Average cash accrual and high bank limit
utilization constrain liquidity. Also, no liquid fund is
maintained to overcome seasonality of fee collection against the
yearly expenses
Strengths
* Experience of promoter: Benefits from the two-decade long
experience of the promoter will continue to support the trust.
* Established infrastructure: As necessary infrastructure is
already in place to accommodate future expansion growth, no major
capital expenditure is required over the medium term
Outlook: Stable
CRISIL believes Aark will continue to benefit over the medium
term from the promoter's experience. The outlook may be revised
to 'Positive' if sustainable ramp-up in scale of operations with
increase in the intake of students significantly improves
liquidity. Conversely, the outlook may be revised to 'Negative'
if financial risk profile, particularly liquidity, weakens due to
sizeable debt-funded capital expenditure, an adverse impact of
any regulatory change, or inefficient cash flow management.
Set up in 2009 and based in Tirunelveli (Tamil Nadu), Aark runs a
school in Chennai. Dr S Cletus Babu, the key promoter-trustee,
looks after the trust's operations.
Aark incurred a loss of INR0.4 crore on revenue of INR2.38 crore
in fiscal 2016, against loss of INR1.7 crore on revenue of
INR0.85 crore in fiscal 2015.
AATHI VELAN: CRISIL Reaffirms B+ Rating on INR6.5MM Cash Loan
-------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long-
term bank loan facilities of Aathi Velan Mills.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6.5 CRISIL B+/Stable (Reaffirmed)
Proposed Working
Capital Facility 1.5 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect the firm's modest scale of
operations in the intensely competitive and highly fragmented
textile industry, and its below-average financial risk profile
because of modest networth and weak debt protection metrics.
These weaknesses are partially offset by its promoter's extensive
experience in the textile industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations in the intensely competitive and
highly fragmented textile industry: AVM's modest scale, reflected
in revenue of INR30.6 crore in fiscal 2016, in the intensely
competitive and largely unorganised textile industry, limits
pricing and bargaining powers, and consequently, operating
margin.
* Below-average financial risk profile: Capital structure is
leveraged, indicated by high gearing of 2.1 times as on March 31,
2016, due to large short-term borrowings, and modest networth of
INR3.13 crore. Debt protection metrics were weak, with interest
coverage ratio of 1.21 time for fiscal 2016 due to low operating
margin and modest scale of operations.
Strength
* Promoter's extensive experience in the textile industry: The
promoter, Mr. P Gopalsamy, has experience of two decades in the
textile industry. He has associated himself as a project
consultant with many textile mills and has established
relationships with suppliers and customers, resulting in timely
availability of high-quality raw material and repeat orders.
Outlook: Stable
CRISIL believes AVM will continue to benefit from its promoter's
extensive industry experience. The outlook may be revised to
'Positive' if there is a sustainable increase in revenue and
profitability, strengthening the financial risk profile. The
outlook may be revised to 'Negative' if AVM generates lower-than-
expected cash accrual, or undertakes large, debt-funded capital
expenditure, resulting in deterioration in its financial risk
profile.
Established in 2006 as a proprietorship firm of Mr. P Gopalsamy,
AVM manufactures cotton yarn. The firm is based in Coimbatore,
Tamil Nadu.
Profit after tax was INR0.08 core on net sales of INR30.6 crore
for fiscal 2016, vis-a-vis INR0.06 crore and INR30.15 crore,
respectively, in fiscal 2015.
ANRAK ALUMINIUM: CARE Assigns 'D' Issuer Not Cooperating Rating
---------------------------------------------------------------
CARE has been seeking information from Anrak Aluminium Limited to
monitor the rating vide letter dated September 21, 2016 and
numerous phone calls. However, despite our repeated requests, the
company has not provided the requiste information for monitoring
the ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the publicly available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. The rating on Anrak Aluminium Limited's
bank facilities will now be denoted as CARE D; ISSUER NOT
COOPERATING. The ratings take into account delays in debt
servicing on account of stretched liquidity position of the
company.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 2995.00 CARE D; ISSUER NOT
COOPERATING; Based on
best available information
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on March 7, 2016 the following were
the rating weaknesses and strengths:
Key Rating Weaknesses
Delays in debt servicing on account of stretched liquidity
position at the back of delay in commencement of operations:
There are delays in servicing of debt obligations by Anrak
Aluminium Limited (AAL). Due to non-availability of raw material,
AAL has not been able to commence operations in alumina refinery.
AAL's inability to generate requisite cash accruals from its
power plant operations considering high debt obligations has led
to delays in debt servicing.
ANRAK Aluminium Limited promoted by Penna Group along with Ras Al
Khaimah Investment Authority (RAKIA - Investment Body of
Government of Ras Al Khaimah) in 2007 to set up a 1.5 million
tons per annum (MTPA) Alumina refinery along with 3*75 (225 MW)
coal based co-generation power plant at Vishakhapatnam.
ANUBANDANA INFRATECH: CRISIL Cuts Rating on INR7MM Loan to D
------------------------------------------------------------
CRISIL has downgraded its rating on the long term bank facility
of Anubandana Infratech Private Limited to 'CRISIL D' from
'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 7 CRISIL D (Downgraded from
'CRISIL B/Stable')
The rating downgrade reflects the recent instances of delay by
AIPL in servicing its term debt obligations. The delays have been
on account of weak liquidity arising out of low customer
advances.
The ratings also factors in AIPL's susceptibility to risks
related to completion and salability of its ongoing real estate
residential projects and to cyclicality in the Indian real estate
industry. These weaknesses are partially offset by the extensive
experience of AIPL's promoters in the residential real estate
development business.
Key Rating Drivers & Detailed Description
Weaknesses
* Delays in servicing debt obligations: AIPL has been delaying in
repayment of debt obligations on account of stretched liquidity.
The company's t first installment amounting to around INR1 crore
which was due for payment on December 31 2016 remains unpaid
currently
* Susceptibility to risks related to completion and salability of
its ongoing projects: AIPL has 5 ongoing projects. Funding of
majority of its projects depends upon advances from customers.
This exposes the company to risks related to completion and
salability of its ongoing projects.
* Risk arising due to cyclicality in the Indian real estate
industry: With Indian real estate sector being cyclical marked by
volatile prices and highly fragmented market structure, AIPL is
exposed to the risk arising due to the same.
Strengths
* Extensive experience and established track record of AIPL's
promoters: AIPL is promoted by Mr. K Sridhar. The promoter has
been in the real estate business for nearly two decades and have
successfully completed many projects in the past. AIPL would
benefit from the extensive experience of its promoters over the
medium term.
Incorporated in 2010 and promoted by Mr. K Sridhar, AIPL
constructs and sells residential apartments in Karnataka and
Andhra Pradesh.
AIPL reported a profit after tax of INR0.19 crore on revenue of
INR3.0 crore in fiscal 2016, vis-a-vis INR0.04 crore and INR1.28
crore, respectively, in fiscal 2015.
AQUA GENO: CRISIL Reaffirms B+ Rating on INR6.25MM Packing Loan
---------------------------------------------------------------
CRISIL has reaffirmed its rating on the bank facilities of
Aqua Geno Exim at 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 4.25 CRISIL A4 (Reaffirmed)
Packing Credit 6.25 CRISIL B+/Stable (Reaffirmed)
Term Loan 0.5 CRISIL B+/Stable (Reaffirmed)
CRISIL's ratings on the bank facilities of AGE continue to
reflect the modest scale of operations in the intensively
competitive seafood processing industry, and below-average
financial risk profile because of weak net worth, gearing and
debt-protection metrics. These weaknesses are partially offset by
promoters' extensive experience in the seafood industry.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations in an intensely competitive sea food
processing industry:
AGE's scale of operations is modest, as reflected in its
operating income of about INR27.84 crore in 2015-16 (refers to
financial year, April 1 to March 31). The modest scale of
operations limits its bargaining power with customers, thereby
affecting profitability, which has remained modest at 2.9 percent
in fiscal 2016. The seafood export industry is highly fragmented,
marked by the presence of several small players operating in
India's coastal areas. CRISIL believes that AGE's scale of
operations will remain modest over the medium term.
* Weak financial risk profile:
The company has a weak financial risk profile, marked by modest
net worth of INR1.04 crores, weak TOLTNW & gearing of 3.5 times &
3.02 times respectively and weak debt protection metrics as
reflected in interest coverage ratio of 1.41 time and net cash
accruals to total debt (NCATD) of (1.01) time as on March 31,
2016.
Strengths
* Extensive experience of promoters in marine seafood industry:
AGE benefits from the extensive industry experience of its
promoters, who have over three decades of experience in the
seafood industry. Prior to setting up AGE, the promoters were
involved in the seafood industry through their other firms.
CRISIL believes that AGE will continue to benefit from its
promoter's extensive industry experience.
Outlook: Stable
CRISIL believes AGE will continue to benefit over the medium term
from its promoters' extensive industry experience. The outlook
may be revised to 'Positive' if revenue and operating
profitability improve, resulting in a better financial risk
profile. Conversely, the outlook may be revised to 'Negative' in
case of decline in accrual, or significant debt-funded capital
expenditure, or larger-than-expected working capital requirement,
leading to weakening of financial risk profile.
Set up in 2013, AGE processes sea food. The firm is promoted by
Mr. Akbar Sherief and his family members.
AGE's profit after tax (PAT) was INR0.23 crore on sales of
INR27.84 crore in fiscal 2016, vis-a-vis PAT of INR0.22 crore on
sales of INR30.62 crore, for fiscal 2015.
ARSHAD CASHEW: CRISIL Reaffirms 'B+' Rating on INR5.55MM LT Loan
----------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long-
term bank facilities of Arshad Cashew Industry (ACI).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 4.95 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 5.55 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect the firm's small scale of
operations, large working capital requirement, and susceptibility
to volatility in raw material prices. These weaknesses are
partially offset by its promoters' extensive experience in the
cashew processing business.
Key Rating Drivers & Detailed Description
Weaknesses
* Large working capital requirement
Gross current assets were at 228 days as on March 31, 2016,
driven by large inventory (115 days) and receivables (87 days).
On the other hand, payables were at 3-4 days. Consequently, bank
limit was utilised at an average of 95 percent on an average.
* Modest scale of operations and exposure to intense competition
Business risk profile remains constrained by small scale of
operations due to short track record in a highly fragmented
industry. The firm faces intense competition from small players
across the country as limited differentiation in technology and
low capital requirement result in low entry barriers to the
industry.
Strengths
* Extensive experience of promoters in the cashew industry
The promoters have been trading cashews for over three decades,
and have built strong relationships with suppliers and customers,
enabling procurement of raw cashews at favourable prices.
Outlook: Stable
CRISIL believes ACI will continue to benefit from its promoters'
extensive industry experience. The outlook may be revised to
'Positive' if business risk profile improves because of higher
profitability and revenue. The outlook may be revised to
'Negative' if financial risk profile weakens because of sizeable
capital withdrawal, or larger-than-expected capital expenditure,
or a stretch in working capital cycle.
ACI is a partnership firm of Mr. Ruknuddin Mohammad Ibrahim and
his wife Ms Nadima Misbah. It was started as a proprietorship
concern in December 2011 and was reconstituted as a partnership
firm in October 2015. The firm processes and sells cashew
kernels.
For fiscal year 2016 the firm has registered a profit after tax
of INR0.12 crore on an operating income of INR9.75 crore vis-a-
vis a profit after tax of INR0.06 crore on an operating income of
INR8.32 crore for the previous year.
BALKRUSHNA GINNING: ICRA Reaffirms B+ Rating on INR6cr Loan
-----------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ on the
INR1.00-crore term-loan facility and the INR5.00-crore working
capital facility of Balkrushna Ginning and Pressing Industries.
The outlook assigned on the long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based Limits 6.00 [ICRA]B+ (Stable); Reaffirmed
Rationale
The rating reaffirmation continues to remain constrained by
BGPI's modest operating scale and weak financial profile evident
in low profitability, stretched capital structure and weak debt
coverage indicators. The working capital intensity of the firm
remained stretched because of high inventory holdings. The firm
witnesses intense competition because of the highly fragmented
industry structure due to low-entry barriers and low product
differentiation. The rating also takes into account the
vulnerability of the firm's profit margins to raw material
(cotton) prices, which are subject to seasonality, crop harvest
and regulatory risks.
The rating, however, continues to favorably factor in the
proximity of the firm's manufacturing unit to raw material
source, easing procurement. The rating also draws comfort from
the long experience of the partners in the cotton ginning
industry.
The firm's ability to increase its scale of operation, maintain
adequate profitability and improve its capital structure, given
the seasonality in the business, volatility in prices of cotton
bales, intense competition and high working capital requirement
will remain crucial for the credit metrics. ICRA also notes that
BGPI is a partnership concern and any substantial withdrawal from
the capital account in future could adversely impact the credit
profile of the firm.
Key rating drivers
Credit strengths
* Long experience of the partners in the cotton ginning industry
* Proximity of the manufacturing unit to the cotton producing
belt of Gujarat provides regular and easy access to raw
materials.
Credit Weaknesses
* Modest scale of operations; financial profile characterized
by low profitability, stretched capital structure as well
as weak debt coverage metrics
* Limited value addition; highly competitive and fragmented
industry structure due to low entry barriers leads to low
operating and net margins
* Partnership firm, any substantial withdrawal from capital
accounts would impact the net worth and thereby the gearing
levels.
Description of key rating drivers highlighted:
BGPI gins and presses raw cotton to produce cotton bales and
cotton seeds. The firm's financial profile is characterised by
low profitability on account of lower sales realisations caused
by sluggish demand in the market. Higher inventory holdings in
FY2016 weakened the liquidity position, resulting in high working
capital requirement, which further impacted the capital structure
as most of the working capital was funded through bank
borrowings. Further, the working capital intensity of the firm
declined mainly because of elongated payables as on FY2016 year-
end.
The firm procures Shankar-6 quality of raw cotton either directly
from local farmers or from agriculture marketing yards. Raw
cotton is procured between September and April, when the supply
is generally high. BGPI's entire sales proceeds are made to the
domestic market. The firm's revenue is largely dependent on the
sales of cotton bales. Sales of cotton bales are channeled
through brokers/agents.
The cotton ginning industry is highly fragmented due to the
presence of numerous players operating in Gujarat, leading to
high competition. The industry is also exposed to regulatory
risks with the Government imposing MSP for the purchase of raw
cotton during over-supply in the market and restricting export of
cotton bales in order to support the domestic cotton textile
industry.
Analytical approach:
For arriving at the ratings, ICRA has taken into account the debt
servicing track record of BGPI, its business risk profile,
financial risk drivers and management profile.
Established in 2006, Balkrushna Ginning & Pressing Industries is
a partnership firm and is owned and managed by Mr. Patabhai
Kalasaria, Mr. Dulabhai Kalasaria and Mr. Karshanbhai Baladania
along with two other partners. BGPI currently gins and presses
raw cotton to produce cotton bales and cotton seeds. The
manufacturing unit is located in Una, Junagadh district of
Gujarat and is currently equipped with 18 ginning machines and
one pressing machine, with an installed capacity to produce 180
cotton bales per day (24 hours operation). The manufacturing unit
is spread accross an area of 2.25 acres.
On March 31, 2016, the firm reported an operating income of
INR25.05 crore with a net profit of INR0.14 crore against an
operating income of INR22.44 crore with a net profit of INR0.26
crore as on March 31, 2015.
BITCORP PRIVATE: CRISIL Lowers Rating on IRN12.75MM Loan to B-
--------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Bitcorp Private Limited to 'CRISIL B-/Stable' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 12.75 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Export Packing Credit 7.00 CRISIL B-/Stable (Downgraded
from 'CRISIL B/Stable')
Proposed Long Term 0.25 CRISIL B-/Stable (Downgraded
Bank Loan Facility from 'CRISIL B/Stable')
The rating downgrade reflects stretched liquidity, mirrored in
fully-utilised cash credit facility because of large working
capital requirement and negative cash accrual. Revenue is likely
to decline 45% to INR25 crore in fiscal 2017. Debt servicing was
supported by unsecured loans of INR6.0 crore from promoters in
fiscal 2016.
The ratings continue to reflect the company's limited track
record of operations in the intensely competitive tobacco
business and its large working capital requirement. The ratings
are also constrained on account of below-average financial risk
profile marked by small networth, high gearing, and below-average
debt protection metrics. These weaknesses are partially offset by
the benefits that BPL derives from the extensive industry
experience of its promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Limited track record of operations amid intense competition
BPL has limited track record of business in the tobacco industry.
A modest player in a highly fragmented industry, BPL is expected
to remain susceptible to price competition with pressure on
profitability margin.
* Large working capital requirement
Operations are working capital intensive, as reflected in gross
current asset (GCA) days of 234 as on March 31, 2016, driven by
inventory and receivables of 208 and 40 days, respectively.
* Below-average financial risk profile: The financial risk
profile is below-average, marked by small networth of INR4.8
crore, high total outside liabilities to tangible networth ratio
of 6.2 times, and average debt protection metrics. Interest
coverage and risk coverage ratios were 1.5 and 2.0 times,
respectively, for fiscal 2016.
Strength
* Extensive experience of promoters: Presence of over three
decades in the tobacco industry has helped the promoters
establish strong relationships with customers and suppliers.
Outlook: Stable
CRISIL believes BPL will continue to benefit from the extensive
experience of its promoters in the tobacco industry. The outlook
may be revised to 'Positive' if equity infusion improves capital
structure or working capital management is efficient. The outlook
may be revised to 'Negative' if profitability margin declines, or
stretch in working capital cycle weakens capital structure.
Incorporated in 1971, Guntur (Andhra Pradesh)-based BPL is
promoted by Mr. R Hanumantha Rao. The company, processes tobacco
leaves. It commenced operations in 2014.
Profit after tax stood at INR0.08 crore on net sales of INR45.3
crore for fiscal 2016, against INR0.32 crore and INR14.4 crore,
respectively, for fiscal 2015.
BRAHMANI RIVER: Ind-Ra Affirms 'D' Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Brahmani River
Pellets Limited's (BRPL) Long-Term Issuer Rating at 'IND D'. The
agency has also affirmed BRPL's non-convertible debentures (NCDs)
at 'IND B(SO)' while placing it on Rating Watch Positive (RWP).
The Outlook on NCDs was Negative. The instrument-wise rating
actions are:
-- INR4.614 bil. Term loan affirmed with IND D rating;
-- INR1.140 bil. NCD affirmed and placed on CreditWatch
Positive
KEY RATING DRIVERS
The rating affirmation reflects BRPL's continuing defaults on its
term loan since February 2015, due to continuing poor operations
amid industry down cycle. The RWP on its NCDs reflects the
likelihood of a change in the company's management after Tata
Steel Ltd. ('IND AA'/Rating Watch Evolving (RWE)) acquires BRPL.
The 'IND B(SO)' rating on NCDs reflect the corporate guarantee
extended by the existing parent Aryan Mining and Trading
Corporation ('IND B(ISSUER NON CO-OPERATIVE)/ Negative').
For 10MFY17, the company reported revenue of INR4.825.4 billion
(FY16: INR4.518 billion) and EBITDA of INR767.7 million (negative
INR68 million). The interest coverage was around 1.7x for
10MFY17 whereas net leverage improved to below 1x, supported by
reviving industry fundamentals.
RATING SENSITIVITIES
Timely debt servicing for at least three consecutive months could
result in a positive rating action. Ind-Ra will resolve the RWP
after receiving clarity on BRPL's operations post acquisition.
COMPANY PROFILE
BRPL was founded in 2006 by the Stemcor group for setting up a
4mtpa iron ore pellet production facility at Jajpur, Orissa, a
4mtpa beneficiation plant at Barbil and a 230km slurry pipeline
from Barbil to Jajpur. BRPL is a 100% subsidiary of Aryan Mining
and Trading Corp, an operating iron-ore mining company in Orissa.
DEKSON CASTINGS: CARE Upgrades Rating on INR12.62cr Loan to BB-
---------------------------------------------------------------
The revision in the rating assigned to the bank facilities of
Dekson Castings Limited takes into account the growth in scale of
operations along with improvement in capital structure, debt
coverage indicators and operating cycle and stabilisation of the
project undertaken.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 12.62 CARE BB-; Stable Revised
from CARE B+
The rating, however, continues to remain constrained on account
of the relatively small scale of operations with high working
capital intensity, leveraged capital structure, high customer
concentration risk, cyclical nature of the automobile
industry and risk associated with non-moving inventory of
aluminium alloy business in light of fluctuation in input prices.
The rating continues to derive strength from the long track
record of operations, wide experience of the promoters in the
casting business, location advantage with respect to the
proximity to its key customer and moderate profitability.
The ability of the company to further increase its scale of
operations, along with improvement in profit margins and solvency
position while efficiently managing its working capital
requirement remains the key rating sensitivity.
Detailed description of the key rating drivers
Key Rating Strengths
Long track record of operations and experience of the promoters:
The company has an established track record of operations and is
promoted by Mr. Vikram Dekate and Mr. Chetan Dekate, having an
experience of over two decades in the industry. Furthermore, the
entity deals with reputed players in the industry and has been
able to get regular orders from them.
Location advantage: The manufacturing unit of the company is
located at Aurangabad, in close proximity to its key customer
resulting in lower logistic cost.
Moderate profitability margins: Profit margins of the company
remained at moderate level in the range of 9%-12% and have been
improving in the last three years ended FY16 (refers to the
period April 1 to March 31). However, the same remained
susceptible to fluctuation in input prices in light of high
inventory holding.
Key Rating Weaknesses
Small scale of operations: Despite into operations for over two
decades the size of operations of the company remains small as
marked by a total operating income of INR31.48 crore in FY16 and
a tangible net-worth of INR5.19 crore as on March 31, 2016. The
small size restricts financial flexibility and deprives it of
benefits of economies of scale. High customer concentration risk:
The revenue stream of the company is dominated with the top
customer constituting more than 90% of the total income during
last three years ending FY16 resulting in high concentration.
Leveraged capital structure and modest debt coverage indicators:
The high debt profile of the company as against the low net worth
base resulted in a leveraged capital structure. Moreover, the
debt coverage indicators of the company remain modest with high
fixed cost resulting in moderately with low PAT margins.
Working capital intensive nature of operations: The operations of
the entity remained working capital intensive with funds being
mainly blocked in inventory and debtors as reflected by high
gross current asset days of over 171 days during last three years
ending FY16. The same resulted in high utilization of its working
capital limits.
Dekson Castings Limited was established in the year 1993 as a
proprietorship concern and was later reconstituted as a private
limited company in the year 2005 and later as a public limited
company in February, 2014. DCL is promoted by Mr. Vikram Dekate
and his brother Mr. Chetan Dekate. DCL is engaged in the
manufacturing of aluminium sand castings and gravity die castings
(GDC) components and caters mainly to the two-wheeler segment in
the auto industry as well as non-auto applications, viz,
electrical energy. Aluminium is the primary raw material for DCL
which the company procures from the local market. The
manufacturing unit of the company is located in Aurangabad with
an installed capacity of 1,290 Metric Tonne Per Annum (MTPA).
During FY16, the company reported profit after tax of INR0.55
crore over a total operating income of INR31.48 crore (as against
INR0.40 crore and INR22.58, respectively, in FY16).
DHANALAXMI COTTON: Ind-Ra Assigns 'B+' Long-Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Dhanalaxmi
Cotton Industries (DLCI) a Long-Term Issuer Rating of 'IND B+'.
The Outlook is Stable. The instrument-wise rating action is:
-- INR80 mil. Fund-based working capital limits assigned with
IND B+/Stable/IND A4 rating; and
-- INR17.85 mil. Term loan assigned with IND B+/Stable rating
KEY RATING DRIVERS
The ratings reflect DLCI's weak credit metrics due to low
operating margins, which are sensitive to fluctuations in raw
cotton prices. In FY16, net leverage (net adjusted
debt/operating EBITDAR) was 7.96 (FY15: negative 31.43x) and
interest coverage (operating EBITDA/gross interest expense) was
1.59x (negative 0.29x) and EBITDA margins were 1.74% (negative
0.6%).
The ratings also reflect DLCI's short operational track record as
it started commercial operations in FY14 and its tight liquidity
position. The company's average peak utilization of the fund-
based limits during the 12 months ended January 2017 was about
99%. The ratings also factor its partnership nature of the
organization.
The ratings, however, are supported by the firm's moderate scale
of operations with revenue of INR658.58 million in FY16 (FY15:
INR374.41 million). Revenue grew at a CAGR of 57% over FY13-
FY16. Furthermore, the firm's managing partner has an experience
of around two decades in the cotton ginning and pressing
business.
RATING SENSITIVITIES
Negative: A decline in revenue and/or EBITDA margin leading to a
sustained deterioration in the credit metrics and/or liquidity
position could lead to a negative rating action.
Positive: Substantial growth in the revenue and/or EBITDA margin
leading to a sustained improvement in the credit metrics will
lead to a positive rating action.
COMPANY PROFILE
Established in 2013 as a partnership firm, by Mr. Yerra
Harishankar and other family members, DLCI is engaged in the
ginning and pressing of raw cotton and sells cotton lint and
cotton seeds. It is based out of Parkal (Dist. Warangal),
Telangana. The firm earned revenue of INR820 million during
April 2016 to February 2017.
FLORESSENCE PERFUMES: CARE Assigns B+ Rating to INR19cr Loan
------------------------------------------------------------
The ratings assigned to the bank facilities of Floressence
Perfumes Private Limited are constrained on account of customer
concentration risk, working capital intensive nature of
operations, moderate scale of operations, debt-funded capital
expenditure incurred in FY16 (refers to the period April 1 to
March 31) and revenues majorly derived from exports being
dependent on eastern markets performance to a large extent. The
ratings derive strength from the long-standing track record of
the company in the perfume business of over 16 years, experienced
and resourceful promoters, financial risk profile marked by
moderate profit margins and moderate debt coverage indicators as
on
March 31, 2016.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities
(Fund-based) 19.00 CARE B+, Stable Assigned
Short-term Bank
Facilities
(Non-fund-based) 0.50 CARE A4 Assigned
The ability of the company to improve scale of operations with
effective management of working capital and maintain comfortable
debt coverage indicators are key rating sensitivities.
Key Rating Drivers
Qualified and resourceful promoter having strong experience in
perfumes business
The promoters Mr. Yasin N. Sayani, Mrs Meenaz Y. Sayani (wife of
Mr. Yasin Sayani) and Mr. Danesh Sayani (brother of Mr. Yasin
Sayani) have been in the perfume business for nearly 23 years
through their association with Natural Fragrance (NF) since 2000,
before which they were involved in trading activities of perfumes
and deodorants. The promoter's longstanding industry experience
has enabled the group to establish strong track record and
established good relationships with their customers and
suppliers.
Moderate scale of operations with customer concentration risk
The company operates in niche segment of perfumes, deodorants and
roll-ons and has a relatively moderate scale of operations with
total operating income (TOI) of INR26.93 crore for FY16 (refers
to period from April 1 to March 31) and tangible net worth of
INR29.50 crore as on March 31, 2016. FPPL derives its revenue
from various clientele majorly based out of Dubai and other
middle-east countries and countries from Russia, South Africa.
FPPL is susceptible to customer segmentation risk with top 5
customers contributing 65.93% of total operating income (TOI) in
FY16 as against 66.41% of TOI in FY15.
Financial risk profile marked by revenue growth and moderate
profitability
FPPL reported EBIDTA margin of 16.56% during FY16 as compared
with 13.04% on account of increase in total operating income
majorly on account of increase sale of caps and closures to the
tune of INR6.00 crore as well as decline in raw material cost.
However, its PAT margin declined to 1.97% for FY16 from 2.25% for
FY15 due to increase in interest cost on term loan availed to
fund the capital expenditure (capex) for capacity expansion and
higher depreciation cost. During FY16, the company increased its
capacity for bottles of deodorants perfumes from 50 lakh units
per annum to 150 lakh units per annum and installed capacity of
caps and closures of 200 lakh units annum. On account of the term
loan, the
debt to equity ratio moderated to 0.35x as on March 31, 2016 from
0.02x as on March 31, 2015, and overall gearing stood at 0.48x as
at March 31, 2016, as against 0.20x as at March 31, 2015.
Working capital intensive nature of operations
The working capital cycle for company stood at 132 days in FY16
as against 155 days in FY15 primarily on account of increase in
creditor days from 195 days in FY15 to 261 days in FY16 further
restricted by marginal increase in collection period which stood
at 181 days in FY16 (vis-a-vis 172 days in FY15) and increase in
inventory period which stood at 212 days in FY16 as against 177
days in FY15. Current ratio stood at 1.28x as on March 31, 2016
against 1.11x on March 31, 2015. The average monthly utilization
of the working capital facility remained high at over 90% during
period ending December 2016.
Floressence Perfumes Private Limited, incorporated in August
2005, is a private limited company and is currently being managed
by Dubai based Sayani family. FPPL is 100% Export oriented unit
(EOU) of Natural Fragrance (NF) which is a Dubai based LLC . FPPL
is engaged into manufacturing and trading of perfumes, deodorants
and roll-ons from its owned manufacturing facility located at
Daravali, Taluka Mulshi, Pune, Maharashtra, spread across 6
acres.
FPPL registered flat TOI of INR26.93 crore in FY16 (Audited)
vis-a-vis INR20.78 crore in FY15 (Audited) and PAT of INR0.53
crore in FY16 vis-a-vis INR0.47 crore in FY15.
GALAXY GLASS: CRISIL Reaffirms B+ Rating on INR5MM Cash Loan
------------------------------------------------------------
CRISIL's ratings on the bank facilities of Galaxy Glass Products
Pvt Ltd continue to reflect a below-average financial risk
profile because of low capital base, leveraged capital structure,
modest scale, and working capital-intensive operations. These
weaknesses are partially offset by the extensive experience of
promoter in the glass processing industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2 CRISIL A4 (Reaffirmed)
Cash Credit 5 CRISIL B+/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations: Scale is modest, with revenue of
about INR23 crore in fiscal 2016. The company is one among
numerous players in the glass processing industry, and therefore,
pricing flexibility and bargaining power are limited.
* Below-average financial risk profile: GGPPL has a low capital
base owing to accumulated losses and moderate debt protection
metrics.
Strengths
* Extensive experience of promoter in the glass processing
industry: The promoter Mr. Omanakuttan has been associated with
the glass industry for over 35 years and has also developed a
strong sourcing network.
Outlook: Stable
CRISIL believes GGPPL will continue to benefit over the medium
term from its promoter's extensive experience. The outlook may be
revised to 'Positive' if significant increase in scale of
operations and operating profitability, or improvement in working
capital management strengthens the financial risk profile.
Conversely, the outlook may be revised to 'Negative' if cash
accrual declines or if further increase in working capital
requirement results in deterioration in the financial risk
profile.
Established in 2005 in Chennai by Mr. Omanakuttan, GGPPL
manufactures toughened and double-glazed unit glass.
For fiscal 2016 (refers to financial year, April 1 to March 31),
GGPPL reported net profit of INR1.52 Crore on total revenue of
INR23.29 Crore, against net loss of INR0.70 Crore on total
revenue of INR17.4 Crore for fiscal 2015.
GAYATRI MICRONS: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Gayatri Microns
Limited (GML) a Long-Term Issuer Rating of 'IND BB-'. The
Outlook is Stable. The instrument-wise rating actions are:
-- INR31.8 mil. Fund-based limit assigned with IND BB-/Stable/
IND A4+ rating; and
-- INR50.62 mil. Term loan assigned with IND BB-/Stable rating
KEY RATING DRIVERS
The ratings reflect GML's small scale of operations and moderate
credit metrics. During FY16 its revenue declined to
INR192 million (FY15: INR200 million) due to decline in the
orders. Interest coverage (operating EBITDA/ gross interest
expense) was 2.5x in FY16 (FY15: 2.2x), while net financial
leverage (total adjusted net debt/ operating EBITDAR)
deteriorated to 6.7x (3.5x) due to increase in debt.
Liquidity is moderate as reflected in the average maximum
utilization of fund-based limits being around 96.58% in the 12
months ended January 2017.
The ratings, however, are supported by a decade of experience of
the company's directors in the business of mineral manufacturing
The operating margins increased to 8.1% in FY16 (FY15: 7.2%) as
the raw material cost declined.
The company expects the revenue to increase in FY17 as it has
booked revenue of INR160.54 million during 10MFY17.
RATING SENSITIVITIES
Positive: A substantial increase in the scale of operations
leading to improvement or maintenance of the credit metrics could
be positive for the ratings.
Negative: A decline in the scale of operations, leading to
deterioration in the credit metrics could be negative for the
ratings.
COMPANY PROFILE
GML was originally incorporated as Gayatri Microns Private
Limited in February 1998 by promoters Mr. Rashminbhai Mohanbhai
Patel and Mr. Kantibhai Patel. It was converted into a limited
company under its current name in April 2003.
The company is engaged in manufacturing of micronised minerals
such as coated mineral powder (calcite) ranging from 16 Microns
to 25 Microns, calcite (uncoated), dolomite, china clay, talc,
baryts, mica, and silica which are used as raw material in
plastic, rubber and paints.
GOVIND RUBBER: CRISIL Reaffirms 'D' Rating on INR40.18MM Loan
-------------------------------------------------------------
CRISIL ratings on the bank facilities of Govind Rubber Limited
reflects instances of delays in servicing term debt obligations
by GRL , GRL's weak financial risk profile marked by high gearing
and weak debt protection metrics, and susceptibility of GRL's
margins to volatility in raw material prices.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3.5 CRISIL D (Reaffirmed)
Bill Discounting 4.29 CRISIL D (Reaffirmed)
Bills - Inland 1.26 CRISIL D (Reaffirmed)
Cash Credit 40.18 CRISIL D (Reaffirmed)
Letter of Credit 28.6 CRISIL D (Reaffirmed)
Packing Credit 3.6 CRISIL D (Reaffirmed)
Proposed Long Term
Bank Loan Facility 36.65 CRISIL D (Reaffirmed)
Term Loan 10.92 CRISIL D (Reaffirmed)
Working Capital
Demand Loan 21 CRISIL D (Reaffirmed)
These rating weaknesses are partially offset by the GRL's
established market position coupled with extensive experience of
its promoters in the tyre industry.
Key Rating Drivers & Detailed Description
Weakness
* Delays in repayment of term loan obligation owing to weak
liquidity
There have been instances of delay by GRL in servicing its term
debt owing to weak liquidity. The delays are mainly on account of
insufficient cash accrual to meet debt obligations.
* Weak financial risk profile
GRL has a weak financial risk profile because of high gearing and
weak debt protection metrics. GRL's gearing was high due to high
debt level from large working capital requirement. The company
had weak debt protection metrics, with interest coverage and net
cash accruals to total debt ratios.
* Susceptibility of operating margin to volatility in prices of
natural rubber: The cost of rubber comprises more than 40 per
cent of GRL's material cost and is the single largest cost
element. The prices of natural rubber have been volatile in the
past five years. This can be primarily attributed to volatility
in the price of synthetic rubber, a substitute for natural
rubber. Rubber prices have been declining in the last couple of
quarters due to the dip in crude prices. Though the raw material
prices are falling, weak demand is expected to impact the
company's profitability in the near term.
Strengths
* Extensive experience of promoter and established relationships
with customers and suppliers: Set up in 1985 in Ludhiana, GRL
took over a sick unit, Pavan Tyres, in 1986 and combined its
operations with itself in 1991. GRL came out with a public issue
in October 1992 to part-finance an export-based project to
manufacture nylon colour/gum wall tyres and tubes. GRL's
manufacturing facilities in Ludhiana have an installed
manufacturing capacity of around 25 million tubes and 25 million
tyres. Over the years, the promoters have developed strong
relationships with major suppliers and customers. They have also
established the company's brand, GRL, across the country. Their
extensive experience helps the company understand price trends
and calibrate purchasing decisions. They have also developed
healthy relations with large players such as TI Cycles, Hero
Cycles, Avon, and Milton.
GRL, incorporated in 1985, is engaged in manufacturing of tyres
and tubes. The company's business operations are overseen by Mr.
Vinod Poddar. GRL has its manufacturing facilities located at
Ludhiana, Punjab.
GRL reported profit after tax (PAT) of INR0.13 crore on net sales
of INR294.97 crore for fiscal 2016 and negative PAT of INR0.37
crore on net sales of INR338 crore for fiscal 2015.
GRANITE MART: CRISIL Reaffirms 'B' Rating on INR6.3MM LT Loan
-------------------------------------------------------------
CRISIL ratings on the bank facilities of Granite Mart Limited
continue to reflect GML's established relationship with key
customers and promoters' extensive industry experience.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 13.5 CRISIL A4 (Reaffirmed)
Cash Credit 0.5 CRISIL B/Stable (Reaffirmed)
Letter of Credit 5 CRISIL A4 (Reaffirmed)
Packing Credit 8 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 6.3 CRISIL B/Stable (Reaffirmed)
The rating also factors in its above-average financial risk
profile. These rating strengths are partially offset by the
company's large working capital requirements and exposure to
intense competition.
Key Rating Drivers & Detailed Description
Weakness
* Working Capital Intensive Operations
The Company sources the blocks and maintains minimum inventory of
3 months. The inventory days as on March 31, 2016 stands high at
303 days. The high inventory levels maintained, by the Company is
on the account of the usual 3-4 days taken for cutting slabs.
Given the huge time that goes into processing of granite blocks,
inventory is high. The Finished Goods are dispatched with 3-4
days with maximum time of 7 days.
* Exposure to Intense Competition
The industry is highly fragmented and also has large numbers of
players. The same results in constraining the Company in having
bargaining power hence exposing the Company to intense
competition and hence the operating margins.
Strengths
* Promoter's extensive industry experience.
The Company is promoted by Mr. Mudit Kumar Agarwal, Mr. Kamal
Kumar Agarwal and Mr. Ashok Kumar Agarwal. The Chief Executive
Officer of the Company is Mr. Bimal Kumar Agarwal. All the
promoters have vast experience in export of granite slabs.Mr.
Bimal aged 60 years has around 25 years of experience in granite
slabs exports.
* Above average financial risk
The Company has above average financial risk profile marked by
moderate net worth, moderate gearing and below average debt
protection metrics.The net worth is INR16.1 Cr as on March 31,
2016 with the gearing at 1.7 times being moderate. The debt
protection metrics, NCATD and Interest coverage at 0.04 and 1.9
times are below average.
Outlook: Stable
CRISIL believes that GML will continue to benefit over the medium
term from its promoters' extensive industry experience and its
established relations with customers. The outlook may be revised
to 'Positive' if there is a sustained improvement in the
company's working capital management, or if there is substantial
increase in its scale of operations while it maintains its
profitability margins. Conversely, the outlook may be revised to
'Negative' in case of a steep decline in GML's profitability
margins or significant deterioration in its capital structure,
most likely because of larger-than-expected working capital
requirements.
GML was set up in 1999 by Mr. Kamal Kumar Agarwal, Mr. Ashok
Kumar Agarwal, and Mr. Mudit Agarwal. The company processes and
polishes rough granite blocks to manufacture granite slabs and
monuments. It is based in Hyderabad (Andhra Pradesh).
For the fiscal 2016, the Company has recorded PAT of INR1.1 lac
on operating income of INR30.9 Crore vis-a-vis PAT of INR3.4 lacs
on operating income of INR28.5 Crore for fiscal 2015.
HMT MACHINE: CARE Upgrades Rating INR44.82cr LT Loan to 'C'
-----------------------------------------------------------
The revision in the rating assigned to the bank facilities of
HMT Machine Tools Limited takes into account marginal improvement
in liquidity position supported by fresh equity infusion of funds
by GoI while overdrawals in cash credit account continues. The
operation continues to be loss making with company deferring its
dues on long-term loans extended by Government of India (GOI).
The rating continues to be constrained by weak financial risk
profile of the company with eroded networth. However, the company
benefits from the parentage, experienced promoters and management
team and funding support from GOI.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 44.82 CARE C; Stable Revised
from CARE D
Short-term Bank
Facilities 77.90 CARE A4 Reaffirmed
Detailed description of the key rating drivers
Key Rating Weakness
Marginal improvement in liquidity: The company's CC limits
remains fully utilized. Interest debit at the end of the month
results in overdrawal which are subsequently cleared in 7 to 10
days time as against longer time taken to regularize earlier. The
liquidity was supported by fresh infusion of funds from GoI
(INR19.5 crore during FY16 [refers to the period April 1 to March
31]).
Weak financial risk profile: The company continues to post losses
during FY16 with company incurring net loss of INR 121.6 crore
during the year (FY15: Loss of INR134.9 crore). Low capacity
utilization, ageing machineries, rising overhead expenses,
employee costs and ballooning capital charge is behind the
company's losses. As on March 2016, the company's accumulated
losses were at INR1,256 crore.
Key Rating Strengths
Support from GOI: Being a part of HMT Ltd, a central Government
entity, HMTML has received support from GoI. During FY16, the
company received INR 31.7 crore from GOI. During FY15 also,
company has received Rs 75 cr from GOI as a working capital loan
to help address the company's acute working capital shortage.
HMT Ltd (parent of HMT Machine Tools Ltd) was incorporated in
1953 by the Government of India (GOI) as a Hindustan Machine
Tools Pvt Ltd, subsequently renamed as HMT Limited on August 31,
1978. HMTMTL is engaged in manufacturing of turning, grinding,
gear cutting, special purpose machines, die casting machines and
plastic injection molding machines, presses and press brakes,
printing machines, CNC control systems and precision components.
Its manufacturing plants are located at Bangalore, Pinjore
(Haryana), Hyderabad (Andhra Pradesh), Ajmer, and Kalamassery
(Kerala). It has an installed capacity of 1102 machines tools as
of March 31, 2016.
HMTMTL registered a total operating income of INR208.6 crore and
net loss of INR121.6 crore in FY16 (refers to the period April 1
to March 31) as against operating income of INR181.9 crore and
net loss of INR134.9 crore in FY15.
HOMERA TANNING: ICRA Reaffirms 'B' Rating on INR30cr LT Loan
------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B and short-
term rating of [ICRA]A4 for the INR46.86-crore bank facilities of
Homera Tanning Industries Private Limited. The outlook on the
long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Fund
Based 30.00 [ICRA]B (Stable); Reaffirmed
Short-Term Non-
Fund Based 12.24 [ICRA]A4; Reaffirmed
Long-Term/Short- 4.50 [ICRA]B (Stable)/A4;
Term (Interchangeable) Reaffirmed
Unallocated 0.12 [ICRA]B (Stable)/A4;
Reaffirmed
Detailed rationale
The ratings reaffirmation continues to take into account the
company's stretched liquidity position on account of long cash
conversion cycle, which coupled with modest level of accruals,
continues to result in high reliance on credit from suppliers
(thus high outside liabilities) as well as working capital
borrowings. The ratings further factor in the revenue de-growth
witnessed in FY2016 due to lower orders received by the company.
In addition, being majorly in exports, the business also remains
susceptible to volatility in exchange rates. Further,
profitability remains modest majorly being supported by export
incentives. The rating however continues to favourably take into
account the satisfactory track record of the company in the
leather manufacturing business and its established relationship
with clients as evident in repeat orders.
Going forward, the ability of the company to improve
profitability on a sustainable basis, effectively manage working
capital cycle and maintain adequate liquidity position while
increasing its scale of operations would remain the key rating
sensitivities.
Key rating drivers
Credit Strengths
* Long track record of the promoters in the leather
manufacturing business
* Established relationship with clients as evident in repeat
orders formatting
Credit Weaknesses
* Modest financial profile on account of low profitability;
profitability largely supported by duty drawback schemes and
export incentives.
* High working capital intensive nature of operations and
limited accruals resulted in stretched liquidity profile
* Susceptibility of revenues to demand in export markets
* Profitability exposed to forex risks as ~60% of positions
remained un-hedged
Detailed description of key rating drivers:
Incorporated in 1987, HTIPL is engaged in the manufacturing and
exporting of finished leather and shoe uppers from its
manufacturing facilities located at Kanpur, Uttar Pradesh. The
company's promoter Mr. Rizwan Ullah has an extensive experience
of over four decades in the leather business.
The company's profitability indicators witnessed a dip in FY2016
compared to previous year as evident from revenue of INR131.49
crore in FY2016 against INR148.06 crore in FY2015 due to lower
orders received by the company. With regard to the cash
conversion cycle, it improved slightly to 86 days compared to 100
days in previous year. However, with decline in operating income,
the working capital intensity rose to 36.09% w.r.t. previous year
number of 32.97%. The company continues to focus on overseas
markets with almost 97-100% of products being exported to
countries such as USA, Italy, Russia, Bangladesh, Tunisia etc.
exposing the company to the risk of adverse foreign exchange
fluctuations.
HTIPL was incorporated in 1987 by Mr. Rizwan Ullah and his family
members. The company is engaged in the manufacturing and
exporting of finished leather and shoe uppers. The company's
tannery is located in Kanpur which manufactures cow finished
leather for shoes & bags and buffalo finished leather for
upholstery. In addition, the company also manufactures buffalo
finished leather for fashion and safety shoes with DIN standards.
HTIPL reported a net profit of INR2.92 crore on an operating
income of INR131.49 crore in FY2016 as against a net profit of
INR9.62 crore on an operating income of INR148.06 crore in the
previous year.
KADINYA ENTERPRISES: CRISIL Reaffirms B+ Rating on INR5MM Loan
--------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable/CRISIL A4' ratings on
the bank facilities of Kadinya Enterprises (KE; formerly known as
Rajkar Bros).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 5 CRISIL A4 (Reaffirmed)
The ratings continue to reflect the firm's modest scale of
operations in a highly fragmented industry, and its below-average
financial risk profile because of high total outside liabilities
to tangible net worth (TOLTNW) ratio and weak debt protection
metrics. These weaknesses are partially offset by its promoters'
extensive experience in the metal scrap trading business, and its
established customer base.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: KE's modest scale, reflected in
revenue of INR69 crore in fiscal 2016, in industry that has
numerous small and mid-sized players, constrains its business
risk profile.
* Below-average financial risk profile: KE's financial risk
profile is constrained by high TOTLTNW ratio, modest net worth,
and weak debt protection metrics
Strengths:
* Extensive experience of promoters in the metal scrap trading
business, and established customer base: The promoters have been
associated with metal scrap trading and metal extraction for
several years and have developed a strong sourcing network. KE
has a strong clientele and has been associated with customers for
more than a decade.
Outlook: Stable
CRISIL believes KE will continue to benefit from its promoters'
extensive industry experience. The outlook may be revised to
'Positive' if the firm scales up operations while improving
profitability, resulting in higher-than-expected cash accrual.
The outlook may be revised to 'Negative' if KE records lower-
than-expected revenue, or if profitability declines, or if
promoters make a substantial capital withdrawal.
Set up in 1996 by Mr. Karthik Sabanayagam, KE (formerly known as
Rajkar Bros) imports and trades in metal scrap.
For fiscal 2016, KE's profit after tax (PAT) was INR0.15 crore on
total revenue of INR69.18 crore, against a PAT of INR0.36 crore
on total revenue of INR43.33 crore for fiscal 2015.
KAMAKHYA SHIVALIK: CARE Puts B+ Rating on Notice of Withdrawal
--------------------------------------------------------------
CARE has placed the outstanding ratings assigned to the bank
facilities of Kamakhya Shivalik Enterprises Private Limited on
'Notice of Withdrawal' with immediate effect. The aforesaid
ratings would continue to remain on 'Notice of Withdrawal' for a
period of ninety days, after which they would stand withdrawn.
The above action has been taken at the request of Kamakhya
Shivalik Enterprises Private Limited and 'No Objection
Certificate' received from State Bank of India that have extended
the facilities rated by CARE.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 6.00 CARE B+ Rating placed on
Notice of withdrawal for
90 days
Short-term Bank
Facilities 1.25 CARE A4 Rating placed on
Notice of withdrawal for
90 days
Jaipur-based (Rajasthan) KSEPL was incorporated in February 2004
by Mr. Vikram Agarwal. KSEPL is the authorized distributor for
tractors of Eicher Motors Limited (Eicher), Swaraj Enterprise
(Swaraj), division of Mahindra and Mahindra Limited, and New
Holland Fiat (India) Private Limited (Fiat). For Eicher and
Swaraj, KSEPL is an exclusive distributor of tractors for
Rajasthan region and for Fiat, in five districts in Rajasthan
namely Jaipur, Sawai Madhopur, Dausa, Tonk and Karauli.
Presently, the company has distribution network of 30 dealers
across Rajasthan.
KAMALA BOARD: ICRA Reaffirms B+ Rating on INR8cr Loan
-----------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ to the
INR1.15 crore term loan and INR6.85 crore cash credit facilities
of Kamala Board Box Private Limited. The outlook on the long-term
rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 8.00 [ICRA]B+ (Stable) reaffirmed
Rationale
The reaffirmation of the rating takes into account KBBPL's
relatively small scale of current operations and weak financial
profile as reflected by its low net profit margin, a leveraged
capital structure and subdued level of coverage indicators. The
rating also takes into account the high working capital intensity
of business on account of high inventory holding and receivables
that exert pressure on the liquidity position of the company, and
significant debt-repayment obligations in the near future, which
is likely to keep its cash flows under pressure. The rating also
takes note of the competitive business environment due to
fragmented nature of the industry and the presence of multiple
players in the organised as well as unorganised segments, which
exert pressure on its margin.
The rating, however, derives comfort from the long experience of
the promoters in the packaging industry, reputed customer
profile, which mitigates counterparty credit risk to a large
extent, and favourable demand outlook of the end-user industries
with the company catering mainly to the FMCG and beverage sectors
at present.
In ICRA's opinion, the ability of the company to scale up
operations while improving its profitability, capital structure
and coverage indicators, and managing its working capital
requirement efficiently would remain key rating sensitivities,
going forward.
Key rating drivers
Credit Strengths
* Long experience of the promoters in the packaging industry
* Reputed customer profile, which mitigates counterparty credit
risk to a large extent
* Favourable demand outlook of the end-user industries with the
company catering mainly to the FMCG and beverage sectors at
present
Credit Weakness
* Relatively small scale of current operations
* Weak financial profile characterised by low net profit margin,
a leveraged capital structure and subdued level of coverage
indicators
* High working capital intensity of business exerts pressure on
the liquidity position of the company
* Significant debt-repayment obligations in the near future,
likely to put pressure on cash flows
* Competitive business environment due to fragmented nature of
the industry with presence of multiple players in the
organised and unorganised segments
Description of key rating drivers highlighted:
The entity was set up in 1984 as a proprietorship concern, Kamala
Board Box, and was converted into a private limited company in
2006. The company is managed by the Kolkata-based Das family who
has an experience of more than three decades in the packaging
industry. KBBPL manufactures corrugated boxes and offset-printed
duplex board cartons at its facility in Barasat, West Bengal with
an annual installed capacity of 12,000 MT. The company caters to
various reputed players in the FMCG and beverage sectors, which
mitigates counterparty credit risk to a large extent. The
production levels of the company have improved over the years on
the back of healthy demand conditions; however, the overall
production levels continues to remain low, which leads to small
scale of current operations. India's packaging industry has grown
at a healthy rate over the last few years, and the long-term
fundamental drivers for growth in demand for packaging products
remain favourable. However, the market for packaging products is
highly competitive in nature and includes some large players as
well as numerous players in the unorganised segment. Kraft paper
is a key raw material for the company, and the profitability
remains exposed to any adverse fluctuations in Kraft paper
prices.
The company's operating income increased from INR22.05 crore in
FY2015 to INR22.45 crore in FY2016, depicting a growth of ~2%,
primarily on account of increase in the sales volume of the
company. The operating margin of the company increased marginally
in FY2016; however, the net profit margin and the Return on
Capital Employed (ROCE) continue to stand at a low level. The
capital structure continues to remain aggressive. High debt
level, coupled with low profitability has kept the debt coverage
indicators weak. The firm's working capital intensity of
operations has remained high due to high receivables and
inventory holding, as reflected by net working capital relative
to operating income (NWC/OI) of 51% in FY2016. This in turn, has
stretched its liquidity position and resulted in high utilisation
of its cash credit limit as reflected by an average utilisation
of ~97% in the last six months. ICRA notes that the company has
significant debt-servicing obligations in the near term, which is
likely to keep its cash flows under pressure.
Analytical approach: For arriving at the ratings, ICRA has taken
into account the debt servicing track record of KBBPL, its
business risk profile, financial risk drivers and the management
profile.
Kamala Board Box Private Limited manufactures corrugated boxes
and offset-printed duplex board cartons at its facility in
Barasat, West Bengal, with an annual installed capacity of 12,000
metric tonnes (MT). Promoted by the Kolkata-based Das family, the
entity was set up in 1984 as a proprietorship concern, Kamala
Board Box, and was converted into a private limited company in
2006. The promoters have an experience of more than three decades
in the packaging industry.
KASHI KANCHAN: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Kashi Kanchan
Private Limited (KKPL) a Long-Term Issuer Rating of 'IND BB-'.
The Outlook is Stable. The instrument-wise rating actions are:
-- INR150 mil. Fund-based limits assigned with IND BB-/Stable
rating;
-- INR40 mil. Non-fund-based limits assigned with IND A4+
rating
KEY RATING DRIVERS
The ratings reflect KKPL's small scale of operations and moderate
credit metrics. Revenue was INR241.3 million in FY16 (FY15:
INR396.2 million), interest coverage (operating EBITDA/gross
interest expense) was 1.7x (2.3x) and net leverage (adjusted net
debt/operating EBITDAR) was 4.2x (3.3x). The decline in FY16
revenue was due to low work order execution during the period.
The ratings also reflect the company's moderate liquidity
position, indicated by a 95.93% average utilization of the
working capital facility for the 12 months ended January 2017.
The ratings are, however, supported by KKPL's promoters'
experience of over four decades in civil construction and a
strong operating margin of 14.1% in FY16 (FY15: 10.1%).
RATING SENSITIVITIES
Negative: Further deterioration in credit metrics on a sustained
basis could be negative for ratings.
Positive: A sustained improvement in scale of operations, along
with credit profile, could be positive for ratings.
COMPANY PROFILE
KKPL was incorporated as a partnership concern in 1974 by
Mr. Surendra Kumar Padhi and Mr. Abhimanyu Padhi. It was
reconstituted as a private limited company in 2005. KKPL
undertakes civil construction such as road, drainage and building
construction, primarily in Odisha.
KKPL registered INR283.9 million in revenue for 9MFY17 and had
pending work orders worth INR455.45 million. The majority of
these work orders will be executed in FY18.
KAUSHALYA SPINNERS: CRISIL Assigns B+ Rating to INR5.0MM Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facilities of Kaushalya Spinners.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 0.72 CRISIL B+/Stable
Cash Credit 5.00 CRISIL B+/Stable
Long Term Loan 5.28 CRISIL B+/Stable
The rating reflects KS's below-average financial risk profile
because of high gearing, and modest scale of operations in an
intensely competitive industry. These weaknesses are partially
offset by its partners' extensive experience in textile industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Below-average financial risk profile: The financial risk
profile is constrained by high gearing likely to be at 10-11
times as on March 31, 2017, and weak debt protection metrics,
with interest coverage and net cash accrual to total debt ratio
at 2.5 times and 0.03 time, respectively, in fiscal 2016.
* Modest scale of operations and susceptibility to intense
competition: Scale is small as reflected in expected operating
income at INR25.0-26.0 crore in fiscal 2017. The industry for the
products in this range is fragmented, as cost of setting up plant
is relatively low, resulting in intense competition and hence
pricing pressure.
Strength
* Promoters' extensive experience textile industry: The
promoters' experience of around two decades in the textile
industry helped them gain a sound understanding of the market
dynamics and establish relations with customers and suppliers.
Outlook: Stable
CRISIL believes KS will continue to benefit from its promoters'
extensive experience. The outlook may be revised to 'Positive' if
significant ramp-up in scale of operations leads to healthy cash
accrual, leading to an improved financial risk profile.
Conversely, the outlook may be revised to 'Negative' in case of
low cash accrual, or weakening of working capital management, or
a substantial debt-funded capital expenditure.
About the Firm
Established in 1995 by the Jain family as a partnership firm, KS
currently manufactures mink blanket. It manufactured woollen yarn
till fiscal 2016. The firm has a manufacturing facility at
Panipat, Haryana, with total production capacity of 10,000
kilogram per day for mink blankets.
KS's profit after tax (PAT) was INR1.61 lakh on net sales of
INR1.5 crore for fiscal 2016, vis-a-vis INR9.24 lakh and INR5.70
crore, respectively, for fiscal 2015.
KHR INFRASTRUCTURES: CRISIL Ups Rating on INR6.43MM Loan to B+
--------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
KHR Infrastructures Private Limited to 'CRISIL B+/Stable' from
'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term 6.43 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B/Stable')
Term Loan 1.07 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects CRISIL's belief that KHR would
benefit from its improved liquidity over the medium term. The
improvement in liquidity would be driven by the expected increase
in cash accruals supported by steady growth in revenues and
stable profitability margins. KHR is expected to generate net
cash accruals of INR1.3 crore to INR1.5 crore per annum against
retiring debt of around INR1 crore per annum due in 2017-18. KHR
also maintains an escrow account with the bank through which the
sale proceeds are routed. The escrow account follows a waterfall
mechanism which prioritizes debt servicing. Furthermore, KHR
maintains adequate balances to service the interest obligation
aiding the liquidity profile.
The rating also reflects, KHR's modest scale and seasonal nature
of operations, and high degree of customer concentration in its
revenue profile. These rating weaknesses are partially offset by
the extensive experience of KHR's promoters in the seed
processing industry, its long-term agreement with Monsanto India
Ltd (MIL), and the company's moderate financial risk profile
marked by low gearing and robust debt protection metrics albeit
constrained by a modest net worth.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale and seasonal nature of operations: KHR's scale of
operations remains modest marked by revenues of INR3.3 crore in
fiscal 2016. Modest scale of operations limits the ability of the
company to avail the benefits associated with economies of scale
that other companies with large scale are able to leverage.
Furthermore KHR processes and conditions seeds, as farming is a
seasonal activity, company's operations remain seasonal with
majority of the revenue (around 80%) booked during February to
May.
* High degree of customer concentration risk in revenue profile:
KHR derives majority of its revenue from Monsanto India Limited
which exposes the company to significant customer concentration
risk.
Strengths
* Promoter's experience in the seed-processing industry: KHR's
promoters hail from an agricultural family that has been into
agriculture operations for past four decades. Over the period the
promoters have established strong customer and supplier
relationships. KHR will continue to benefit from the extensive
experience of the promoters over the medium term.
* Moderate financial risk profile: KHR has a moderate financial
risk profile marked by low gearing and robust debt protection
metrics albeit constrained by a modest net worth. Its net worth
and gearing stood at INR3.3 crore and 0.69 times as on March 31
2016, and are expected to improve to INR3.8 crore and 0.32 times
as on March 31, 2017. The debt protection metrics are expected to
remain robust over the medium term in the absence of large debt
funded capex plans.
* Long-term agreement with MIL: KHR has a long term agreement
with MIL for processing corn seeds. which gives revenue
visibility for KHR over the medium term.
Outlook: Stable
CRISIL believes that KHR will continue to benefit over the medium
term from its promoters' extensive industry experience and its
agreement with its customer, MIL. The outlook may be revised to
'Positive' if there is a substantial and sustained improvement in
the company's revenues and profitability margins, and there is a
substantial improvement in its net-worth on the back of sizeable
equity infusion from its promoters. 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.
KHR, set up in 2010 was promoted by Ms. K Karthika and MR.
Hemanth Kumar: it commenced operations in April 2011. The company
is engaged in processing and conditioning of corn seeds and is
based out of Hyderabad.
KHR reported a profit after tax of INR0.36 crore on revenue of
INR3.3 crore in fiscal 2016, vis-a-vis INR0.38 crore and INR3.7
crore, respectively, in fiscal 2015.
L.S. RICE: CARE Reaffirms B+ Rating on INR4.83cr LT Loan
--------------------------------------------------------
The rating assigned to the bank facilities of L.S. Rice Exports
Private Limited continue to be constrained by its small
scale of operations with low net worth base, low profitability
margins and elongated operating cycle. Furthermore, the
rating is constrained by susceptibility of margins to fluctuation
in raw material prices and fragmented nature of industry
coupled with high level of government regulation. The rating,
however, derives strength from long experienced promoters,
favourable processing location and moderate capital structure.
Going forward, the ability of LSR to increase its scale of
operations while improving its profitability margins will be the
key rating sensitivities.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 4.83 CARE B+; Stable Reaffirmed
Detailed description of the key rating drivers
Key Rating Strengths
Experienced promoters: Mr. Sanjay Kumar (Managing director) has
an experience of nearly 2 decades in the industry. Other
directors of the company, Mr. Vikas Kumar, Mr. Jiwan Kumar, Mr.
Ankur Goyal and Mr. Sunil Kumar have an experience ranging from
5-18 years and are actively involved in the day to day operations
of the company
Favourable processing location: LSR's manufacturing unit is
located in Samna, Punjab. The area is one of the hubs for
paddy/rice, leading to its easy availability. The favorable
location also puts the company in a position to cut on the
freight
component of incoming raw materials.
Moderate capital structure: LSR has moderate capital structure
marked by overall gearing ratio of 1.82x as on March 31,
2016, as compared with 3.24x, as on March 31, 2015.
Key Rating Weaknesses
Small scale of operations with low net worth base: Despite being
in the operations for around one decade, the company's scale of
operations has remained small marked by the total operating
income (TOI) of INR47.65 crore in FY16 (refers to the period
April 01 to March 31). Furthermore, the net worth base of the
company stood low at INR4.38 crore as on March 31, 2016.
Low profitability margins: The profitability margins stood low as
marked by PBILDT margin of 3.82% and PAT margin of 0.19% in FY16.
Elongated operating cycle: The average operating cycle of the
company stood elongated at 80 days for FY16.
Susceptibility of margins to fluctuation in raw material prices:
The company is exposed to susceptibility to fluctuation in raw
material prices and monsoon dependent operations. Fragmented
nature of industry coupled with high level of government
regulation: The company is further exposed to fragmented nature
of industry coupled with high level of government regulation.
Incorporated in 2008, L.S Rice Exports Private Limited (LSR) is
engaged in the processing of paddy to produce basmati rice and
non-basmati rice at its manufacturing facility located at Samna
(Punjab). The company is operating with total installed capacity
of 25200 Metric tonnes of paddy per annum as on March 31, 2016.
The company is engaged in domestic sales only; selling to
wholesalers in and around the Punjab Region and other dealers,
hotels and restaurants in Maharashtra, Delhi, etc. The company is
also engaged in milling for various government entities. The
paddy for processing is procured from local grain markets through
dealers and agents based in and around Samna region. Other group
concerns of the company include Luxmi Foods, Nand Lal and Sons
and Bajrang Foods. Luxmi Foods and Bajrang Foods are engaged in
processing of paddy. Nand Lal and Sons is engaged in the buying
and selling of paddy and wheat.
In FY16, LSR has achieved a total operating income of INR47.65
crore with PAT of INR0.09 crore, as against the total operating
income of INR39.52 crore with PAT of INR0.09 crore in FY15. In
10MFY17 (Provisional), the company has achieved total operating
income of INR38.48 crore.
LICHCHHWI FOOD: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Lichchhwi Food
India Pvt. Ltd. (LFIPL) a Long-Term Issuer Rating of 'IND BB-'.
The Outlook is Stable. Instrument-wise rating actions are:
-- INR70 mil. Fund-based working capital limit assigned with
IND BB-/Stable rating; and
-- INR31.4 mil. Long-term loans assigned with IND BB-/Stable
rating
KEY RATING DRIVERS
The ratings reflect LFIPL's small scale of operations, moderate
credit metrics and tight liquidity position. During FY16,
revenue increased to INR121 million (FY15: INR100 million) due to
an increase in sale of potatoes. However, operating EBITDA
margins declined to 19.1% in FY16 (FY15: 24.2%) on account of
price fluctuations resulting from the trading of potatoes.
Interest coverage (operating EBITDA/gross interest expense) was
stable at 1.5x in FY16 (FY15: 1.5x), while net leverage (total
net debt/operating EBITDA) improved to 5.1x (6.9x) due to a
decrease in total debt.
The company's use of fund-based limits was 100% during the 12
months ended February 2017.
The ratings, however, are supported by the promoters' around two
decades of experience in the cold storage business.
RATING SENSITIVITIES
Positive: A substantial increase in the scale of operations,
along with a substantial improvement in the credit metrics will
be positive for the ratings.
Negative: Deterioration in the overall credit profile will be
negative for the ratings.
COMPANY PROFILE
Incorporated in 1998, LFIPL operates two multipurpose cold
storages with a total capacity of 13,000mt, a flour mill and a
frozen unit with 500mt capacity in Hajipur since 1999. The
company stores agricultural and horticultural products mainly
potato, maize, peas, spices apples, butter and other seasonal
fruits. It is also engaged in trading of potato.
Mr. Avinash Kumar, Mr. Arun Kumar Singh and Mr. Alok Kumar are
the promoters.
M.D. AGRO: ICRA Reaffirms B+ Rating on INR25cr LT Loan
------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ on the
INR25.00-crore bank facilities of M.D. Agro Foods. The outlook on
the long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term fund-
based limits 25.0 [ICRA]B+ (Stable); Reaffirmed
Detailed rationale
ICRA's rating continues to take into account the intensely
competitive nature of the rice milling industry, which restricts
MDAF's operating margins; and the agro-climatic risks to which
the company is exposed to, as the availability of paddy can be
affected by adverse weather conditions. The rating also takes
into account the company's modest scale of operations and its
modest financial profile characterised by high gearing and
subdued coverage indicators. The rating also factors in the high
working capital intensive nature of the rice business and the
risks inherent in the partnership firms such as limited ability
to raise capital and risk of dissolution.
However, the rating favourably factors in the long experience of
MDAF's promoters in the rice industry and their financial support
in the form of unsecured loans to meet the funding requirements;
the locational advantage enjoyed by the firm as its milling
facilities is based in Haryana, which is a major rice growing
state, facilitating easy availability of paddy and rice.
Going forward, the company's ability to improve its profitability
and scale while effectively managing its working capital cycle
would be the key rating sensitivity.
Key rating drivers
Credit Strengths
* Experienced management with established presence in rice
business
* Easy availability of paddy and semi processed rice in local
mandis of Haryana
Credit Weaknesses
* High working capital intensive nature of operations.
* High competitive intensity in the industry characterized by
few large players and a number of small players
* Weak profitability of the firms leading to weak debt coverage
indicators.
* Vulnerability of profitability to agro climatic risks
impacting the availability and pricing of raw material i.e.
paddy
* Risks associated with partnerships such as withdrawal of
capital, insolvency etc.
Detailed description of key rating drivers:
Established in 2009, MDAF mills and processes basmati rice in its
facility located at Nissing, Karnal (Haryana).
The firm also deals in non-basmati rice, however, its proportion
remains low (2-4% of sales). The promoters and their family
members are involved in the business of rice milling for more
than a decade, which helps the firm in managing the business
risks effectively. The rice industry is working capital intensive
in nature, given the need to store large quantities of paddy as
the harvesting season is during October-January. High working
capital borrowings to fund inventory resulted in weak gearing at
4.36 times as on March 31, 2016. The debt coverage indicators
remained weak with interest coverage indicator of 1.52 times,
NCA/TD of 4% and TD/OPBDITA of 22.45times in FY2016 due to
decreased operating profit. The revenue declined by 15% from
INR103.86 crore in FY2015 to INR87.95 crore as the market rates
were down for rice leading to decline in realisations by ~36% for
basmati rice and ~7% for non-basmati rice in FY2016. Rice
industry is a highly competitive industry characterised by low
entry barriers and a large number of unorganised players and a
few established players. This exerts pressure on the company's
margins.
MDAF was established in Nissing, Karnal (Haryana) in 2009 and
undertakes milling and processing of basmati rice. MDAF commenced
commercial operations in January 2010, and is owned and managed
by Mr. Ajay Kumar and Mr. Praveen Kumar.
MDAF reported a net profit of INR0.13 crore on an operating
income of INR87.95 crore in FY2016 as against a net profit of
INR0.12 crore on an operating income of INR103.86 crore in the
previous year.
MFAR REALTORS: CARE Assigns 'B' Issuer Not Cooperating Rating
-------------------------------------------------------------
CARE has been seeking information from Mfar Realtors Pvt. Limited
to monitor the rating(s) vide e-mail communications/ letters
dated 4/10/2016, 18/10/2016, 8/12/2016, 19/12/2016, 23/1/2017 and
23/2/2017 and numerous phone calls. However, despite our repeated
requests, the company has not provided the requisite information
for monitoring the ratings. In the absence of minimum information
required for the purpose of rating, CARE is unable to express
opinion on the rating. In line with the extant SEBI guidelines
CARE's rating on Mfar Realtors Pvt. Ltd.'s bank facilities will
now be denoted as CARE B/CARE A4; ISSUER NOT COOPERATING. Users
of this rating (including investors, lenders and the public at
large) are hence requested to exercise caution while using the
above rating(s).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 22 CARE B; ISSUER NOT
COOPERATING
Short-term Bank
Facilities 10 CARE A4; ISSUER NOT
COOPERATING
Detailed description of the key rating drivers
At the time of last rating in March 29, 2016 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Low Booking status: The company's project, Shimmering Heights,
which was launched in Apr'13, has seen booking of only 7.5% till
March 2015.
Project Implementation risk: High reliance on advances with poor
sales velocity has resulted in slower project progress and time
and cost overrun with revised completion date of December 2020
(as against May 2019) and revised cost of INR386 crore (as
against INR350 crore earlier). Furthermore, project execution
risk is significantly high with only 16% of total project cost
incurred till Mar'16 which appears to be slow considering the
expected completion date. Leveraged capital structure: The
overall gearing of the company deteriorated from 0.97x as on
March 31, 2014 to 1.92x as on March 31, 2015 on account of
increase in debt.
Key Rating Strengths
Experienced Promoters: Company is promoted by Mr. P Mohammed Ali,
having an experience of more than four decades in the real estate
industry. One of the group companies, Mfar Developers Private
Limited has developed Mfar Manyata Tech Park.
Advantageous Project Location: The current project is located at
Eroor, Cochin within city limits, around 7 km away from railway
stations, bus station and also nearer to reputed hospitals,
shopping complex and academic institutions. It is well connected
to other prime location of Cochin through road and bus
connectivity.
MRPL was established in the year 2007 as a private limited
company and is promoted by Mr. P Mohammed Ali. MRPL is executing
its first project under the name "MFAR Shimmering Heights" at
Eroor, Kochi in two phases. Phase-I of the project is expected to
be completed by December 2017 and Phase II by December 2020. MRPL
has assigned marketing activities to MFAR Holdings Private Ltd
(an associate company) and architect works to Khan Global
Engineering Consultants Private Ltd.
The company has not registered any income till FY15 (refers to
the period April 1 to March 31) owing to lower than required
booking status for income recognition.
OPTIFLEX INDUSTRIES: Ind-Ra Assigns 'B+' Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Optiflex
Industries a Long-Term Issuer Rating of 'IND B+'. The Outlook is
Stable. The agency has taken these rating actions on the firm's
fund-based limit:
-- INR55 mil. Fund-based limit assigned with IND B+/Stable
rating
KEY RATING DRIVERS
The ratings reflect Optiflex's small scale of operations along
with moderate credit metrics. The firm's revenue declined to
INR229 million during FY16 (FY15: INR273 million) due to a
decline in sale of winding wire. Gross interest coverage
(EBITDA/gross interest) stood at 1.5x in FY16 (FY15: 1.4x) and
net leverage (net debt/EBITDA) stood at 5.6x (4.8x). EBITDA
margins were volatile ranging between 6.2%-8.4% during FY14-FY16
on account of fluctuation in raw material prices.
The ratings are constrained by tight liquidity position of
Optiflex as reflected in 99% average utilization of its fund-
based limits during the 12 months ended January 2017.
The ratings, however, are supported by a decade of experience of
the firm's partners in the wire and cable manufacturing business.
RATING SENSITIVITIES
Positive: An improvement in the operating margins leading to
substantial improvement in the credit metrics could be positive
for the ratings.
Negative: Any deterioration in credit metrics could be negative
for ratings.
COMPANY PROFILE
Optiflex was established as a partnership firm in 2003, and
manufactures different kinds of wire and cables.
P.S. CONSTRUCTION: CRISIL Reaffirms B+ Rating on INR1MM Overdraft
-----------------------------------------------------------------
CRISIL has reaffirmed its ratings on the bank facilities of
P.S. Construction Private Limited at 'CRISIL B+/Stable/CRISIL
A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL A4 (Reaffirmed)
Overdraft 1 CRISIL B+/Stable (Reaffirmed)
The ratings continue to reflect modest scale of operations in a
fragmented industry, high customer and geographic concentration
in revenue and working capital intensive operations. These
weaknesses are partially offset by extensive experience of the
promoters in the civil construction industry and established
relationship with clients. The ratings also factor in healthy
capital structure of the company.
Key Rating Drivers & Detailed Description
Weaknesses
*Modest scale of operations in a fragmented industry: Revenue was
INR11.3 crore in fiscal 2016. Furthermore, tender-based
operations have resulted in volatile revenue in the past.
*High customer and geographic concentration: The company has been
bidding for projects of petroleum companies, largely in Tamil
Nadu. Moreover, most of its orders are from Indian Oil
Corporation Limited and its joint ventures, resulting in high
customer concentration risk, as sales and liquidity depend on a
single customer. Any delay in receivables will have an adverse
impact on liquidity.
*Working capital-intensive operations: Gross current assets were
240 days as on March 31, 2016. This was on account of high work-
in-progress and receivables days.
Strengths
*Extensive experience of the promoters in the civil construction
industry and established relationship with clients: The promoters
have been operating in the civil construction business for the
past two decades and have gained significant experience over the
years. The company has an established relationship with major oil
and gas companies and has been receiving repeated orders
resulting in revenue growth.
*Healthy capital structure: Capital structure is healthy as
reflected in gearing of 0.41 time as on March 31, 2016.
Outlook: Stable
CRISIL believes PSPL will continue to benefit from the extensive
industry experience of its promoters. The outlook may be revised
to 'Positive' in case of a substantial increase in revenue,
driven by better order flow, and efficient working capital
management. The outlook may be revised to 'Negative' in case of
lack of continued order flow, low profitability, and significant
pressure on working capital management due to delays in project
execution and realisation of receivables, resulting in a weak
financial risk profile.
PSPL was established by Mr. S Ramachandran in 1999 as a
proprietorship firm, which was reconstituted as a private limited
company in 2003. It undertakes civil, mechanical, and electrical
construction for oil and gas companies.
Net profit was INR0.42 crore on operating income of INR11.62
crore in fiscal 2016, vis-a-vis net profit of INR1.03 crore on
operating income of INR24.90 crore in fiscal 2015.
PRECISE SEAMLESS: Ind-Ra Assigns 'BB' Rating to INR60.19MM Loan
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Precise Seamless
Apparels Private Limited's additional term loan these rating:
-- INR60.19 mil. Term loan assigned with IND BB/Stable rating
RATING SENSITIVITIES
Negative: A further decline in operating EBITDA margin leading to
a sustained deterioration in credit metrics will be negative for
the ratings.
Positive: A significant improvement in revenue and a sustained
operating EBITDA margin leading to improved credit metrics will
lead to a positive rating action.
COMPANY PROFILE
Incorporated in 2005, PSAPL is a garment manufacturer that
entirely exports. Its clients include reputed brands such as
GAP, Kohls and Abercrombie & Fitch. Its manufacturing facility
is in Gurugram, Haryana. The plant has a manufacturing capacity
of 500,000 pieces per month.
RAMDEV COLD: CARE Assigns 'B' Rating to INR6cr LT Loan
------------------------------------------------------
The rating assigned to the bank facilities of Ramdev Cold Storage
is constrained on account of its short track record of
operations, implementation and stabilization risk associated with
the new project along with competition from other local players,
seasonality associated with cold storage business and RCS's
partnership nature of constitution.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 6 CARE B; Stable Assigned
The rating, however, derive benefits from experience of the
partners into the agriculture industry, location advantage and
RCS's eligibility for various fiscal benefits from the
government. RCS's ability to complete the project within
envisaged cost and time parameters along with achievement of
envisaged level of sales and profitability would remain the key
rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Short track record of operations coupled with partnership nature
of constitution
RCS commenced operations from February 2016 hence FY17 will be
the first full year of operations for the entity. During 9MFY17
(Prov.), RCS reported TOI of INR1.56 crore while its net worth
remained small at INR2.48 crore as on January 19, 2017 reflecting
small scale of operations. Furthermore, being partnership nature
of constitution, the firm is exposed to the risk of withdrawal of
capital by the partner due to personal exigencies, dissolution of
the firm due to death/insolvency of partner and restricted
financial flexibility due to inability to explore cheaper sources
of finance leading to limited growth potential.
Implementation and stabilization risk associated with new project
On successful completion of its green-field project of setting up
a potato cold storage having installed capacity of 5000
MT, RCS is now implementing another cold storage unit having same
capacity with the estimated cost of INR4.38 crore. The project
gearing stands high at 4.62 times.
Competition from other local players and seasonality of business
Despite being a capital intensive business, the entry barrier for
new cold storage is low backed by capital subsidy schemes of
government. As a result, the potato storage business in the
region has become highly competitive. Furthermore, RCS's
operations are seasonal in nature as potato is a winter season
crop.
Key Rating Strengths
Experienced partners in the agricultural industry albeit no
relevant experience in the storage service industry All the
partners are having agricultural background and are actively
involved in trading of potatoes as well as farming activities.
Mr. Dipak Patel will look after overall operations of the firm.
He has also worked in Uma Cold Storage Private Limited for three
years.
Proximity to the potato growing region of Gujarat The cold
storage facility of the firm is located in the potato growing
belt of Gujarat having large network of potato growers, thereby
making it suitable for the farmers and potato chip manufacturers
in terms of transportation and connectivity.
Fiscal benefits from the government
As per the revised policy of National Horticulture Mission (NHM),
proposed cold storage facility of RCS will be eligible for credit
linked back-ended subsidy at 35% of the capital cost of project.
RCS is also eligible for 15% additional capital investment
subsidy from the Government of Gujarat (GoG).
Sabarkantha-based (Gujarat) RCS was formed in January 2015 as a
partnership firm by six partners to provide cold storage
facilities to farmers for storing potatoes on a rental basis. The
cold storage have potato storage capacity of 5000 MT. RCS
commenced its operations from February 2016 and is now
establishing another cold storage unit with the same storage
capacity. Total project of INR4.38 crore will be funded through
term loan of INR3.10 crore and balance through unsecured
loans and capital infusion by partners.
During FY16 (A), RCS reported net loss of INR0.46 crore on a TOI
of INR0.06 crore. During 9MFY17 (Provisional), RCS has achieved a
turnover of INR1.56 crore.
RING FORGINGS: CRISIL Reaffirms B+ Rating on INR6MM Cash Loan
-------------------------------------------------------------
CRISIL's ratings on the bank facilities of Ring Forgings Private
Limited continue to reflect the company's modest scale and
working-capital intensive operations, and below-average financial
risk profile because of a modest net worth and high gearing.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 3 CRISIL A4 (Reaffirmed)
Term Loan 1 CRISIL B+/Stable (Reaffirmed)
These rating weaknesses are partially offset by the extensive
experience of its promoters in the steel-forging business and
established relationship with customers.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: Modest scale of operations with
sales of INR38.34 crores in 2015-16 (refers to financial year,
April 1 to March 31) limits RFPL's financial flexibility to
withstand business cycles. The Indian steel forging industry is
dominated by a few large players and numerous small pla yers. Out
of the 1200 odd forging units, the large players consist of 9-10
units and medium and small players consist of about 100 units,
while the rest falls under the micro sector. Highly competitive
and fragmented nature of the Indian forging industry constrains
the company's operations.
* Large working capital requirements: The company has large
working capital requirements, as reflected in high gross current
assets (GCAs) of around 293 days as on March 31, 2016 driven by
long receivables (90 days of sales) and high inventory (139 days
of cost of sales). Against these large inventory and debtors, the
company receives proportionate supplier credit of 120 days;
however, large working capital requirements and small cash
accrual have resulted in high reliance on short-term debt.
Operations will remain working capital-intensive, which in turn
constrains its liquidity as well as financial risk profile over
the medium term.
* Below-average financial risk profile: RFPL's financial risk
profile is below average. The firm had a moderate net worth of
INR4.47 crores as on March 31, 2016. Gearing was at 2.56 times
and total outside liabilities to tangible net worth ratio at 6.8
times, as on March 31, 2016; majority of debt comprised of short-
term debt contracted primarily to fund its high inventory
holding. RFPL's debt protection measures were below-average, with
interest coverage ratio of around 1.52 times and net cash accrual
to total debt (NCATD) ratio of 0.09 times in 2015-16.
Strength
* Promoters' extensive experience in the steel-forging business
and established relationship with customers: RFPL benefits from
the extensive experience of its promoters and their well-
established relationship with customers. The promoters Mr. Suresh
Bhandari and family has been in the forging business for over two
decades. The family ventured into the business by establishing
Bhandari Precision Forgings Pvt Ltd (BPFL) set up in 1980.
Subsequently they started RFPL in 2005 and another company, Twivi
Technologies Pvt Ltd (TTPL) in 2009. While BFPL specialises in
manufacture of open die forgings like plain shaft, hubs, piston
rods, RFPL focuses on jointless ring forgings like seat rings for
valves, ring gears, gasket rings among others. TTPL is engaged in
machining works and works as contract manufacturer to BFPL and
RFPL.
Outlook: Stable
CRISIL believes RFPL will continue to benefit over the medium
term from its promoters' extensive industry experience and their
established relationship with key customers. The outlook may be
revised to 'Positive' in case of higher cash accrual, most likely
driven by significant improvement in scale of operations while
profitability is maintained, leading to a better financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
the financial risk profile, especially liquidity, weakens, most
likely due to a decline in cash accrual, deterioration in working
capital management, or any large, debt-funded, capital
expenditure.
Incorporated in 2005, RFPL manufactures customised products of
open-die forgings and joint-less ring forgings using carbon steel
and alloy steel. Located in Bengaluru, the company primarily
supplies plain shaft and ring gears that go into heavy
engineering machinery such as valves used in gas pipelines.
Operations are managed by Mr. Suresh Bhandari.
RFPL generated net sales of INR38.34 crores in 2015-16 (Refers to
financial year from 1st April 2015 to 31st March 2016) with
Profit after Tax of INR0.36 crores during the same period as
compared to INR32.29 crores in 2014-15 with profit after tax of
INR0.1 crores during the same period.
SAI SPACECON: CRISIL Reaffirms 'D' Rating on INR30.75MM Loan
------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL D' rating on the long term bank
facilities of Sai Spacecon India Private Limited.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2.5 CRISIL D (Reaffirmed)
Proposed Long Term
Bank Loan Facility 26.75 CRISIL D (Reaffirmed)
Term Loan 30.75 CRISIL D (Reaffirmed)
The rating reflects continued delays by the company in repayment
of its debt obligations. Geographical concentration in revenue
Exposure to risks the company faces intense competition from
small the recent slowdown in the sector has delayed the execution
and sales of several projects and large players, which puts
pressure on saleability and cyclicality inherent in the real
estate industry, there is high demand risk for ongoing projects,
and high implementation, funding.
Key Rating Drivers & Detailed Description
Weaknesses
* Delay in servicing debt due to weak liquidity
SSIPL has been delaying in servicing of its term loan obligations
and Lease Rental Discounting obligations from SBI. The liquidity
has weakened due to sustained delays in receipt of lease rentals
from its clients.
* Geographical concentration in revenue
SSIPL undertakes real estate projects primarily in Pune,
Maharashtra. The company faces intense competition from small and
large players, which puts pressure on saleability.
* Exposure to risks and cyclicality inherent in the real estate
industry
The real estate sector in India is cyclical and has highly
fragmented market structure. The recent slowdown in the sector
has delayed the execution and sales of several projects.
* High demand risk for ongoing projects, and high implementation,
funding
SSIPL is engaged in real estate development and is exposed to
risks related to completion, funding, and selling of the
projects. With significant construction costs incurred and
sluggish sales SSIPL is faced with negative cash flows from these
projects and a stretched liquidity profile.
Strength
* Promoters' significant track record
The promoters have been in the real estate business since 1993.
They have, through the Sai group, executed four residential
projects in Pune and three commercial projects (two in Pune and
one in Goa).Their experience has helped, SSIPL execute government
construction of public facilities.
SSIPL was set up as a proprietorship firm, Sai Erectors, by Mr.
Subhash Nelge in 1993, and was reconstituted as a private-limited
company with the current name in May 2011. It is a part of the
Pune-based Sai group and develops residential and commercial real
estate, primarily in Pune. Mr. Subhash Nelge and Mr. Shivkumar
Nelge are its promoters.
For fiscal 2014-15, SSIPL profit after tax (PAT) was INR267 crore
on net sales of INR764 crore, against INR480 crore of INR1278
respectively crore for 2013-14.
SHIV CARRIERS: CRISIL Reaffirms B Rating on INR12.5MM Term Loan
---------------------------------------------------------------
CRISIL has reaffirmed its rating on the long-term bank facility
of Shiv Carriers Roadways Private Limited at 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 12.5 CRISIL B/Stable (Reaffirmed)
The rating continues to reflect the company's early stage, and
expected modest scale, of operations in the inland container
depot (ICD) segment, underlying sales risk, and large capital
expenditure (capex) for purchase of land and equipment. These
weaknesses are partially offset by the extensive experience of
its promoter through group concern and limited competition.
Analytical Approach
For arriving at the rating, unsecured loans extended by the
promoter to SCRPL have been treated as neither debt nor equity as
these are subordinate to bank debt, are interest-free, and will
remain in business.
Key Rating Drivers & Detailed Description
Weaknesses
* Start-up phase and modest scale of operations
Since operations are expected to commence from April 2017, start-
up phase and small capacity will limit scale of operations.
* Large capex requirement
The ICD segment requires huge capex to set up facility, leading
to higher reliance on debt.
Strengths
* Extensive experience of promoter: The promoter has been in the
transportation industry for over three decades through group
entity, which will help SCRPL stabilise operations and support
capacity utilisation.
* Limited competition: The company is the only player in this
segment in its area of operations, which will support business
risk profile over the medium term.
Outlook: Stable
CRISIL believes SCRPL will benefit over the medium term from the
extensive experience of its promoter. The outlook may be revised
to 'Positive' if timely stabilisation of operations leads to
substantial cash accrual. The outlook may be revised to
'Negative' in case of modest accrual because of fewer orders or
low profitability, or weakening of financial risk profile due to
substantial working capital requirement or debt-funded capex.
About the Company
Established in 1995 by Mr. Avdhesh Chaudhary, SCRPL is setting up
an ICD for railways at Sukhpur village in Gujarat. Operations are
likely to begin in April 2017.
SHIVA METTALICKS: Ind-Ra Assigns 'BB-' Rating to INR120MM Loan
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shiva Mettalicks
Private Limited (SMPL) a Long-Term Issuer Rating of 'IND BB-'.
The Outlook is Stable. The instrument-wise rating action is:
-- INR120 mil. Fund-based limits assigned with IND BB-/Stable
rating
KEY RATING DRIVERS
The ratings reflect SMPL's modest scale of operations and
moderate credit profile. In 10MFY17, revenue was INR345.7
million (FY16: INR329 million), gross leverage (Ind-Ra adjusted
debt/operating EBITDAR) was 4.07x (negative 71.3x), interest
coverage (operating EBITDA/gross interest expense) was 1.74x
(negative 0.1x) and EBITDA margin was 6.2% (negative 0.5%). The
rise in revenue was due to an increase in sales volume, while the
improvement in EBITDA margin was on account of a decline in cost
of materials sold.
The ratings also reflect SMPL's moderate liquidity profile,
indicated by a 95% use of working capital limits on average
during the 12 months ended January 2017.
The ratings, however, continue to benefit from the founders'
experience of over a decade in sponge iron manufacturing.
RATING SENSITIVITIES
Negative: A deterioration in the credit profile will be negative
for the ratings.
Positive: An increase in operating margin leading to an
improvement in credit metrics will be positive for the ratings.
COMPANY PROFILE
Incorporated in 2004, Rourkela (Odisha)-based SMPL manufactures
sponge iron. The company has an installed capacity of 60,000
metric tons per annum.
SMPL is managed by Mr. Mahesh Khaitan, Mr. Sanjay Kumar Agarwal
and Mr. Shyam Sundar Mittal.
SHREE RAJESHWAR: CARE Assigns 'D' Issuer Not Cooperating Rating
---------------------------------------------------------------
CARE has been seeking information from Shree Rajeshwar Weaving
Mills Private Limited to monitor the rating(s) vide email
communications/letters dated August 11, 2016, and numerous phone
calls. However, despite our repeated requests, the company has
not provided the requiste information for monitoring the ratings.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the publicly available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term/Short-
Term Bank
Facilities 15 CARE D/CARE D; ISSUER NOT
COOPERATING
The rating on Shree Rajeshwar Weaving Mills Private Limited's
bank facilities will now be denoted as CARE D/CARE D; ISSUER NOT
COOPERATING.
The ratings take into account the ongoing delays in servicing of
debt obligations by the company.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Shree Rajeshwar Weaving Mills Pvt. Ltd is in the business of
manufacturing of grey cloth. SRWMPL was formed in October 2011 by
merging two proprietor entities, viz, M/s. Pooja Textiles and
M/s. Shree Rajeshwar Textiles which were in the similar line of
business. As on March 31, 2015, the company has 475 in-house
looms with a capacity of 223.80 Lakh metres pa. The fabrics
manufactured include cotton fabric, blended fabric and viscose
fabric.
During FY15 (refers to the period April 1 to March 31), SRWMPL
reported a total income and PAT of INR115.58 crore and INR0.77
crore, respectively, vis-Ö-vis FY14, wherein it reported a total
income and PAT of INR104.65 crore and INR0.46 crore,
respectively.
SHRI AGRAWAL: Ind-Ra Affirms 'BB-' Rating on Bank Facilities
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed the ratings of
Shri Agrawal Technical & Education Society's (SATES) bank
facilities as:
-- INR111.75 mil. (increased from INR92.8) Term loan affirmed
with IND BB-/Stable rating;
-- INR 69.95 mil. (increased from INR56.42) Term loan affirmed
with IND BB-/Stable rating; and
-- INR149 mil. Fund-based working capital facility affirmed
with IND BB-/Stable rating
KEY RATING DRIVERS
The affirmation reflects SATES's continued tight liquidity
profile and high debt burden. Available funds (cash and
unrestricted investments) provides limited financial cushion to
operating expenditure (FY16: 7.85%) and debt (FY16: 6.96%).
Operating margin declined to 20.34% in FY16 from 23.85% in FY15
on the back of higher growth in operating expenditure and
subsequent fall in operating income due to decrease in the number
of students.
The ratings are constrained by the consistently low debt service
coverage ratio (DSCR) over FY11-FY16 due to higher debt service
commitments. DSCR stood at 0.74x in FY16. Despite the DSCR
being less than 1x over the years, the society has been able to
service its debt timely due to the persistent support from
trustees in the form of unsecured loans. Ind-Ra believes that
unsecured loans will keep on playing major role in debt servicing
in the coming years.
The ratings, however, draw comfort from decrease in debt level.
Debt/ current balance before interest and depreciation (CBBID)
fell to 4.6x in FY16 from 5.16x in FY15 mainly due to fall in
debt outstanding as on March 31, 2016. Also the fee collection
period decreased to 60 days in FY16 from 113 days in FY15 (year
end March) due to collection of fee reimbursements under the
state government's Tuition Fee Waiver Scheme meant for
economically weaker sections and reserved categories.
SATES total income grew at a CAGR of 11.10% over FY10-FY16. The
society's revenue mainly emanate from the tuition fee income,
like in case of any other private institution. Moreover, the
stability in the enrolment driven revenue partially offsets the
concentration risk. Tuition fee contributed on an average 83.73%
over FY10-FY16 to the society's revenue pool, and grew at a CAGR
of 11.21%. The other income with an average contribution of
16.27% over FY10-FY16 grew at a CAGR of 10.51%.
Staff costs (FY11-FY16 CAGR: 11.54%), which includes expenditure
on salaries and staff welfare schemes, on an average contributed
53.38% to the total expenditure. The second highest contributor
was other operating expenses (FY10-FY16 CAGR: 6.89%) with an
average of 29.59%, followed by interest payable (average: 10.52%)
and depreciation (average: 6.51%).
The ratings factor in the society's reasonable market standing.
The institutes under the society are among the first ISO 9001
certified institutes of Madhya Pradesh. The society is a part of
the well-known Sagar Group of Institutions which has been in the
field of education for almost a decade. They have tie-ups with
IBM, Oracle, BHEL etc for training and certification.
RATING SENSITIVITIES
Positive: Strong head count growth on the back of its rising
affiliation with various companies in conjunction with an
improvement in DSCR and liquidity profile could trigger a
positive rating action.
Negative: A downward rating momentum could stem from decline in
number of students, further deterioration in the financial
profile in conjunction with disproportionate increase in debt
resulting in weak coverage and leverage ratios.
SOCIETY PROFILE
Registered under the Madhya Pradesh Society Registration Act,
1973, SATES was set up by Mr. Sanjeev Agarwal in June 2002. It
manages four institutes namely Sagar Institute of Research and
Technology, Sagar Institute of Research and Technology-Pharmacy,
Sagar Institute of Research, Technolgy and Science, and Sagar
Institute of Research, Technology and Science-Pharmacy. The
institutes offer courses in engineering, management and pharmacy.
SNQS INTERNATIONAL: ICRA Reaffirms B+ Rating on INR8cr Loan
-----------------------------------------------------------
ICRA has reaffirmed the long term rating at [ICRA]B+ for the
INR8.00 crore fund based facilities of SNQS International Socks
Private Limited. The outlook on the long term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limits 8.00 [ICRA]B+ (Stable) Reaffirmed
Rationale
The rating reaffirmation is constrained by revenue contraction in
2016-17 coupled with drop in margins owing to absence of
commission income from sourcing services. Since the company has
decided to focus on its core manufacturing business, it has
stopped providing sourcing services. The rating also takes into
consideration the small scale of operations with earnings being
vulnerable to fluctuations in raw material prices and foreign
exchange. The rating is also constrained by the stretched
liquidity position owing to the working capital intensive nature
of operations with high inventory levels.
The rating reaffirmation, however, continues to factor in the
significant experience of the promoters in the textile industry
for over two decades and the company's strong ties with
established retail chains in Europe. The rating favorably
considers the growth in revenues of the company in the past two
years aided by the healthy growth in manufacturing volumes
supported by income from sourcing services, and the improvement
in profitability on the back of various cost control measure
undertaken by the management. The rating also factors in the
improvement in debt metrics owing to improvement in margins
coupled with reduction in debt levels on the back of constant
reduction in working capital borrowings.
Going forward, the ability of the company to scale up operations
of socks manufacturing while improving margins and its ability to
efficiently manage working capital requirements will remain the
key rating sensitivities
Key rating drivers
Credit Strengths
* Vast experience of the promoter in the textile industry
* Fund infusion from promoters in the form of equity and
unsecured loans lends stability to financial profile
* Long term relationship with reputed customer base entails
repeat orders
* Improvement in financial profile characterized by improved
profitability, capital structure and working capital intensity
Credit Weakness
* Small scale of operations restricting economies of scale
* Revenue contraction and drop in margins in FY2017 due to
absence of commission income received from sourcing services
* High customer concentration with the top three customers
accounting for ~86% of the revenues in FY2016
* High working capital intensive nature of operations owing
to high inventory and debtor levels
Description of key rating drivers highlighted:
The promoter of the company, Mr. Elangovan, has long standing
experience in the textile industry for over 25 years. He is a
member of the Executive Committee of Apparel Export Promotion
Council and a Board Member of SEDEX2, UK. He established "SNQS
Internationals", proprietary concern, in 1990 which acts as
sourcing agent for renowned retail stores in Europe in UK. SNQS
socks also entered into sourcing service in 2014-15 on the back
of support extended from its group entity, SNQS Internationals.
The commission income derived by the company from sourcing
services, INR9.29 crore in FY2015 and INR10.56 crore in FY2016,
provided a boost to the revenue growth and profitability in the
past two years. However, as the company has discontinued the same
in the current fiscal, the revenues are expected to contract and
profitability levels are likely to get impacted.
The company faces high customer concentration risk as it derived
~45% of the total export revenues from the top customer, Otto
GmbH which is a German multi-channel retail group. However, the
long standing relationship of the company with its key customer
for over two decades ensures repeated orders, thereby reducing
the customer concentration risk to a certain extent. The working
capital intensity of the company is high as it maintains high
levels of finished goods inventory to meet customer requirements
on a prompt basis. This raw material inventory is also high as
the company procures raw material in bulk in order to avail
volume based discounts. Going forward, the company plans to
efficiently manage its inventory and debtor levels in order to
bring down working capital requirements.
SNQS International Socks Private Limited was formed by the take-
over of a company called M/s Jeyalakshmi Associates, which was
started in 1993 and was part of Lakshmi Machine Works (LMW)
group. Post take-over in 2001, Mr. Elangovan, the Managing
Director converted the company into a 100% export oriented unit
to manufacture and export socks. The company has its production
unit in Coimbatore with an installed capacity of 15 lakh dozen
pairs of knitted socks per annum. The company exports mainly to
major brands/retailers in UK and Europe and also to some domestic
branded manufacturers. The company ventured into garment trading
in 2013-14. It also started providing sourcing services on
commission basis to foreign customers from 2014-15 onwards to
support revenue growth and to improve profitability. Garment
trading and sourcing services were discontinued in 2015-16 and
2016-17, respectively.
For FY2016, the company recorded a net profit of INR2.48 crore on
an operating income of INR32.67 crore.
SONI SOYA: CARE Assigns 'B+' Rating to INR2.34cr LT Loan
--------------------------------------------------------
The ratings assigned to the bank facilities of Soni Soya Products
Private Limited are primarily constrained on account of its
modest scale of operations and customer concentration risk along
with thin profitability margins in a highly fragmented and
competitive soyabean oil industry and vulnerability of margins to
fluctuation in the price of raw material and foreign exchange.
The ratings are, further, constrained on account of its moderate
solvency and liquidity position. The ratings, however, favourably
take into account experienced management with accreditation with
various authorities and location advantage being situated at the
soya bean growing region.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term bank
Facilities 2.34 CARE B+; Stable Outlook:
Stable)
Short-term bank
facilities 2.50 CARE A4
Ability of firm to increase its scale of operations while
improving profitability and efficient management of working
capital would be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weakness
Modest scale of operations with thin profitability in a highly
fragmented and competitive industry along with vulnerability of
profitability to volatility in prices of raw materials and
foreign exchange rate
Scale of operations of the company stood modest along with thin
profitability in FY16. Further, it has customer concentration
risk in a highly competitive and fragmented industry.
Furthermore, profitability is vulnerable to the movement in the
prices of soya based products, since soya oil is a price-
sensitive product The profitability is also exposed to foreign
exchange rate as it derives 100% income from export and does not
have any hedging policy.
Moderate solvency position and stressed liquidity position
The capital structure stood moderate mainly on account of
disbursement of term loan for project funding and infusion of
unsecured loans. Further, debt service coverage indicators stood
moderate. Futhermore, the liquidity position stood stressed due
to higher inventory holding and full utilization of working
capital bank borrowings.
Key Rating Strength
Experienced management and accreditation with various regulatory
authorities
The management of the company has vast experience in the
industry. Further, company is certified with various regulatory
authorities in India and overseas.
Favorable demand outlook for Soyabean oil and strategic location
of manufacturing units with close proximity to raw material
sources
Soya oil is largely consumed in food products and therefore per
capita consumption in soya oils is growing and hence the demand
for soya bean oil is estimated to move faster in the medium to
long term on account of the higher disposable income. The
transition phase of this growing demand is also triggered by rise
in the branded packaged organic soya bean oil.
SSPPL's manufacturing facility is strategically located in
Indore,one of the largest soya producing regions of India which
makes it easier for the company to access its primary raw
material with low transportation cost.
Indore based (Madhya Pradesh) SSPPL was incorporated in
September, 2014 as a private limited company by Mr. Dilip Soni.
SSPPL is engaged in the business of processing and export of
organic soya bean seeds. The plant of the firm has an installed
capacity of 30 Metric Tons Per Day (MTPD) as on March 31, 2016.
It has incurred total cost of INR2.15 crore towards the project
funded through term loan of INR0.38 crore and remaining through
promoter's funds in the form of share capital and unsecured
loans. It exports its products mainly to USA and Canada.
SRI RAM: ICRA Reaffirms 'D' Rating on INR9cr Cash Credit
--------------------------------------------------------
ICRA has reaffirmed the long term rating outstanding on the
INR6.21 crore (revised from INR8.20 crore) term loan, INR9.0
crore cash credit limits of Sri Ram Spinning Mills Limited at
[ICRA]D. ICRA has also reaffirmed the short term rating at
[ICRA]D outstanding on the INR0.27 crore bank guarantee of SRSM.
ICRA has also reaffirmed long term / short term rating of [ICRA]D
/ [ICRA]D to INR13.23 crore (revised from INR10.46 crore)
unallocated limits of SRSM.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 6.21 [ICRA]D reaffirmed
Cash Credit 9.00 [ICRA]D reaffirmed
Bank Guarantee 0.27 [ICRA]D reaffirmed
Long Term/Short
Term Unallocated 13.23 [ICRA]D/[ICRA]D reaffirmed
Rationale
The ratings factor in the delay in term loan repayments owing to
liquidity constraints with decline contribution margins leading
to significant decline in operating profitability. The ratings
consider weak financial profile of the company characterized by
low margins, high gearing, weak coverage indicators, and
constrained liquidity position. The ratings remain constrained by
the modest scale of operations of the company and the intense
competition prevalent in the highly fragmented textiles industry
apart from the susceptibility of earnings to the volatility in
the exchange rates and raw material prices. The ratings, however,
draw comfort from the significant experience of the promoters in
the Indian textile industry and the company's long standing
relationships with its clientele. Going forward, timely servicing
of financial obligations by improving its financial profile
remains crucial from credit perspective.
Key rating drivers
Credit Strengths
* Presence in traditional weaving markets and long standing
relationship with clientele supports volumes
* INR2.0 per unit discount on power costs from September 2016
expected to support margins in the near term
Credit Weakness
* Delays in repayment of term loans owing to liquidity
Constraints
* Modest scale of operations limits pricing flexibility and
economies of scale
* Stretched financial profile characterised by high gearing and
moderate coverage indicators owing to debt funded capital
expenditure
* Industry characterised by high level of competition and
earnings exposed to volatility in raw material prices
Description of key rating drivers highlighted:
Sri Ram Spinning Mills Limited, promoted by Sri Subhash Chand
Sancheti, was established in 1995 and currently operates with an
initial capacity of 23184 spindles. The company has been facing
liquidity constraints which resulted in delays in term loan
repayments. In FY2016, the company witnessed ~22.3% decline in
operating income on account of lower yarn realizations; decline
in the scale of operations coupled with lower operating margins
resulted in net loss for FY2016. The revenues and margins of the
company are exposed to fluctuations of cotton ad yarn prices.
Going forward, timely servicing of financial obligations by
improving its financial profile remains crucial from credit
perspective.
Sri Ram Spinning Mills Limited, promoted by Sri Subhash Chand
Sancheti, was established in 1995 with an initial capacity of
6048 spindles. The company is a part of a textile group
comprising three companies, with the others involved in cotton
trading and yarn trading. SSML manufactures cotton yarn in the
coarser and medium count range, with average count ranging from
30's to 40's. The company largely caters to the hosiery and warp
markets of North and West India, and also directly markets a
portion of its produce to corporates. SSML is currently operating
with a capacity of 23,184 spindles.
SRI VASAVI: Ind-Ra Assigns 'BB' Rating to INR32.09MM Term Loan
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Sri Vasavi
Educational Society's (SVIET) bank facilities this rating:
-- INR32.09 mil. Term loan assigned with IND BB/Stable rating;
-- INR25 mil. Fund-based working capital assigned with
IND BB/Stable rating
KEY RATING DRIVERS
The rating is constrained by the society's weak operational
effectiveness as it runs educational courses that are
concentrated in the engineering space. Due to lack of proper job
opportunities in the market, the demand for engineering courses
is deteriorating. Moreover, the society has only one engineering
college under its umbrella, which offers graduate (B. Tech),
postgraduate (M. Tech) and diploma courses. The approved intake
for the graduate course did not increase during FY12-FY16 and the
postgraduate course was started in FY13 with an approved intake
of 36. However, the increased intake the college witnessed
during FY14-FY16 came mainly from the commencement of a diploma
course in FY14 with an annual approved intake of 240.
The student strength for the postgraduate course declined to 13
in FY16 from 31 in FY15. However, the society's overall capacity
utilization increased marginally to 80.55% in FY16 from 79.98% in
FY15, mainly due to the increase in the undergraduate enrolment.
Ind-Ra believes the operating margins will fall further if there
is no increase in the student headcount in tandem with the
society's planned increase in approved intake. In FY16,
operating margin decreased marginally to 36.98% from 37.87% in
FY15 as operating expenditure increased 48%yoy whereas operating
income increased only 0.03% yoy. Operating margin peaked at
41.18% in FY12 and was reported lowest at 35.74% in FY14. In
FY16, net surplus was INR7.52 million with a margin of 8.16%
which increased from 7.94% in FY15.
SVIET's available funds (cash and unrestricted investments)
provide a below-moderate financial cushion to financial leverage
(FY16: 9.4%) and operating expenditure (FY16: 12.8%). The
society's collection period for FY16 was long at 144 days, mainly
due to the delays in fee reimbursement (46.07% of the total fee
income) by the state government. However, SVIET's monthly
utilization of working capital is low, which shows the trustees'
financial strength in meeting the society's financial obligations
timely.
The trust's revenue is dominated by tuition fee income,
constituting averagely 85.15% of the total revenue during FY12-
FY16. However, undiversified revenue sources aggravate the
concentration risk.
Debt service coverage ratio declined to 1.35x in FY16 from 1.75x
in FY15 due to an increase in debt service obligations. However,
interest service coverage at 3.31x for FY16 was comfortable.
Debt/current balance before interest and depreciation (CBBID) was
at moderate level throughout FY12-FY16. Debt/CBBID for FY16 fell
slightly 2.32x from 2.43x in FY15, mainly due to a 27.99%yoy fall
in debt whereas CBBID decreased 2.34% yoy. The society has
envisaged capex of INR69.70 million during FY17-FY21. This is
for the construction of additional blocks in line with increase
in approved intake once the institute is granted accreditation by
National Board of Accreditation.
RATING SENSITIVITIES
Positive: An increase in the student headcount commensurate with
the planned approved intake, improvement in operating performance
and liquidity could result in a positive rating action.
Negative: Deterioration in the operational effectiveness, a fall
in the operating margins and delay in the trustees' financial
assistance would trigger a negative rating action.
COMPANY PROFILE
SVIET was established in 2007 under Andhra Pradesh Societies
Registration Act of 2001. The society is running an engineering
college under the name of Sri Vasavi Institute of Engineering &
Technology. The society is situated in Nandamuru, Krishna
district, Andhra Pradesh which is 80km away from Vijayawada.
SUNDARAM MULTI: CRISIL Lowers Rating on INR15.75MM Loan to 'D'
--------------------------------------------------------------
CRISIL has downgraded its rating on the bank facilities of
Sundaram Multi Pap Limited (SMPL; part of the Sundaram group) to
'CRISIL D' from 'CRISIL C'. The ratings reflect SMPL's delays in
meeting debt obligation because of weak liquidity.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 20.2 CRISIL D (Downgraded from
'CRISIL C')
Corporate Loan 15.75 CRISIL D (Downgraded from
'CRISIL C')
Funded Interest 5.43 CRISIL D (Downgraded from
Term Loan 'CRISIL C')
Proposed Long Term 27.62 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL C')
The Sundaram group has a below-average financial risk profile,
with weak debt protection metrics and large working capital
requirement. The group, however, benefits from the extensive
experience of its promoters in the stationery segment and
moderate regional presence of Sundaram brand in Maharashtra,
Gujarat, and Goa.
Analytical Approach
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of SMPL with that of its 100% subsidiary
E-Class Education System Ltd (EESL) on account of significant
financial interlinkages between the companies. The two companies
are herein referred to as the Sundaram group.
Key Rating Drivers & Detailed Description
Weaknesses
*Delay in servicing term debt due to weak liquidity: The company
has delayed meeting its debt obligation because of weak
liquidity.
*Large working capital requirement: Operations are working
capital intensive on account of high inventory of 191 days and
high debtor of 110 days as on March 31, 2016.
*Below-average financial risk profile: The financial risk profile
is below average because of weak debt protection metrics, with
interest coverage ratio of 1 time and net cash accrual to total
debt of (0.05) time in fiscal 2016.
Strengths
*Extensive experience of promoters: The Sundaram group's
promoters have extensive experience, leading to established
relationships with customers and suppliers.
*Moderate regional presence of Sundaram brand: SMPL sells its
stationery under the Sundaram brand which has a moderate presence
in Western India in Maharashtra, Gujarat, and Goa.
SMPL, incorporated in 1985, manufactures stationery such as note
books, long books, diaries, notepads, and office stationery under
the Sundaram brand. Its manufacturing facility is in Palghar,
Maharashtra. The company is managed by the Shah family and is
promoted by Mr. Amrut Shah and his brother Mr. Shantilal Shah.
Incorporated in 2009, EESL provides digital education to students
in Maharashtra under the E-class brand.
The Sundaram group reported a profit after tax of INR(8.51) crore
on net sales of INR98.41 crore for fiscal 2016, vis-a-vis
INR(47.30) crore and INR100.7 crore, respectively, in fiscal
2015.
Status of non-cooperation with previous CRA: SMPL has not
cooperated with CARE Ltd which suspended its rating on the
company in March 31, 2016. The reason provided by CARE Ltd is
non-furnishing of information required for monitoring of ratings.
TIRUPATI STRUCTURES: Ind-Ra Affirms 'BB-' Long-Term Issuer Rating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Tirupati
Structures (India) Private Limited's (TSIPL, earlier known as
Mahamaya Mines Pvt. Ltd.) Long-Term Issuer Rating at 'IND BB-'.
The Outlook is Stable. The instrument-wise rating actions are:
-- INR120 mil. Fund-based limits affirmed with IND BB-/Stable
rating; and
-- INR5 mil. Non-fund-based limits affirmed with IND A4+
rating
KEY RATING DRIVERS
The affirmation reflects TSIPL's continued moderate scale of
trading operations and weak credit profile. In FY16, revenue
declined to INR429 million (FY15: INR631 million) on account of a
decline in steel prices and lower number of orders in hand.
However, the interest coverage (EBITDA/interest) and net
financial leverage (adjusted net debt/operating EBITDA) remained
stable at 1.2x in FY16 (FY15: 1.2x) and 5.3x (5.6x),
respectively, due to an improvement in the operating EBITDA
margins to 3.9% (3.4%), because of an increase in the gap between
the procurement cost and the selling price.
Liquidity remains moderate with the company's average utilization
of the working capital limits being around 94% in the 12 months
ended January 2017.
The ratings continue to be supported by TSIPL's founder's
experience of more than two decades in the iron and steel trading
business and the company being the authorized distributor of the
mild steel products manufactured by the top iron and steel
companies such as Steel Authority of India Limited
('IND AA'/Negative) and Jindal Steel and Power Limited.
RATING SENSITIVITIES
Positive: A positive rating action could result from a sustained
improvement in the scale of operations and margins, leading to an
overall improvement in the credit profile.
Negative: A negative rating action could result from a decline in
the scale of operations along with deterioration in margins,
leading to deterioration in the credit profile.
COMPANY PROFILE
Incorporated in 2000 by Mr. Anand Agrawal, TSIPL supplies a wide
range of ISI certified mild steel products that are used in
various types of construction works.
TRIVENI ENTERPRISES: ICRA Reaffirms B+ Rating on INR6cr Loan
------------------------------------------------------------
ICRA has reaffirmed the long term rating assigned to the INR6.00
crore1 fund based limits of Triveni Enterprises. The outlook on
the long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.00 [ICRA]B+ (Stable) Reaffirmed
The rating action is based on the best available information -
FY2015 provisional numbers and other information. As part of its
process and in accordance with its rating agreement with TE, ICRA
has been trying to seek information from the company so as to
undertake a surveillance of the ratings, but despite repeated
requests by ICRA, the company's management has remained non-
cooperative. In the absence of requisite information, ICRA's
Rating Committee has taken a rating view based on best available
information. In line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016, the company's
rating is now denoted as: "[ICRA]B+ (Stable) ISSUER NOT
COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
Triveni Enterprises was established by late Mr. O. P. Agarwal in
1968 to engage in the trading of iron and steel products.
Currently, the firm is owned and managed by his wife Mrs. Suchita
Agarwal and his son Mr. Ashirwad Agarwal. The firm buys and sells
products ranging from angles, beams, channels, squares, rounds,
flats, plates, sheets etc which are extensively used in
construction, automobile and engineering segment. The firm also
provides various services like slitting, cutting, de-coiling and
straightening at its warehousing facility located at Bangalore
(Karnataka). The firm is ISO 9001:2008 certified.
VATCO ELEC-POWER: CRISIL Reaffirms B+ Rating on INR7.5MM Loan
-------------------------------------------------------------
CRISIL has reaffirmed its ratings on the bank facilities of
Vatco Elec-Power Private Limited at 'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting
under Letter of
Credit 6 CRISIL A4 (Reaffirmed)
Cash Credit 7.5 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 4.5 CRISIL A4 (Reaffirmed)
The ratings continue to reflect the company's below-average
financial risk profile because of high gearing and subdued debt
protection metrics, and average scale of, and working capital-
intensive, operations. These weaknesses are partially offset by
the extensive experience of its promoters and established
relationship with key customers.
Analytical Approach
Unsecured loans of INR0.74 crore from promoters and their
relatives have been treated as neither debt nor equity as these
are expected to remain in business over the medium term and are
non-interest bearing in nature.
Key Rating Drivers & Detailed Description
Weaknesses
* Working capital-intensive operations: Working capital cycle is
stretched, reflected in gross current assets of 242 days as on
March 31, 2016, due to large receivables and moderate inventory.
* Below-average financial risk profile: Networth was small at
INR7 crore and gearing high at 3.23 times as on March 31, 2016.
Debt protection metrics were also subdued, with interest coverage
and net cash accrual to total debt ratios of 1 time and 0.01
time, respectively, for fiscal 2016.
Strength
* Extensive experience of promoters: Presence of around two
decades in the utility products segment has enabled the promoters
to establish technical knowledge and strong relationship with
customers such as Larsen & Toubro Ltd (rated 'CRISIL
AAA/Stable/CRISIL A1+').
Outlook: Stable
CRISIL believes VEPPL will continue to benefit over the medium
term from the extensive experience of its promoters and
established relationship with key customers. The outlook may be
revised to 'Positive' if significant and sustained improvement in
scale of operations and profitability leads to substantial cash
accrual and a strong financial risk profile. The outlook may be
revised to 'Negative' if sharp decline in revenue or
profitability and hence cash accrual, significant stretch in
working capital cycle, or large, debt-funded capital expenditure
further weakens financial risk profile, especially liquidity.
Incorporated in 1992 and promoted by Mr. Vijay Mody, Mr. Haresh
Mody, and Mr. Bipin Mody, Navi Mumbai-based VEPPL manufactures
infrastructure and utility products particularly for the power
industry.
For fiscal year 2016 VEPPL has registered profit after tax (PAT)
of INR0.22 crore on an operating income of INR49 crore vis a vis
profit after tax of INR0.26 crore on an operating income of INR54
crore for the previous year.
VIVEK REALTY: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Vivek Realty &
Resorts Private Limited a Long-Term Issuer Rating of 'IND BB-'.
The Outlook is Stable. The agency has taken this rating action
on the company's long-term loans:
-- INR155 mil. Long term loan assigned with IND BB-/Stable
rating
KEY RATING DRIVERS
The ratings reflect the construction stage of the VRRPL's ongoing
real estate project 'New Cosmocity' and the time and cost overrun
risk associated with it. The project is likely to be completed
by March 2018. The ratings factor in the company's total booked
advances of only INR45.76 million till January 2017 which is
12.61% of the total project cost. The ratings further factor in
the fact that this is the first residential project of the
promoters.
The ratings, however, derive support from the project's
locational advantage as it is located at NH-6, Kharagpur having
proximity to all the basic amenities such as school, market,
hospital etc.
RATING SENSITIVITIES
Positive: Timely execution of the project within the projected
cost outlay would be positive for the ratings.
Negative: Any delays or cost overruns in the project would lead
to a negative rating action.
COMPANY PROFILE
VRRPL was incorporated in July 2008 for development of a
residential project 'New Cosmocity' in Saha Chowk, NH-6, Mumbai
Road- Kharagpur, West Bengal. Mr. Narinder Kumar Batra, Mr. Vivek
Batra, Mr. Gurudev Singh and Mrs Harjinder Kaur are the directors
of the company. The company has its registered office in Forum
Mart, 89 Kharvel Nagar, Unit-III, Bhubaneshwar.
=========
J A P A N
=========
TOSHIBA CORP: US Nuclear Unit Brings in Bankruptcy Lawyers
----------------------------------------------------------
Jessica DiNapoli and Makiko Yamazaki at Reuters report that U.S.
nuclear firm Westinghouse Electric Co LLC has hired bankruptcy
attorneys, in a sign that owner Toshiba Corp is more seriously
weighing a Chapter 11 filing as an option to help it rein in a
multibillion dollar financial maelstrom.
Reuters relates that people familiar with the matter said the
nuclear engineering company had brought in law firm Weil Gotshal
& Manges LLP as an exploratory step, and had not yet taken a
decision on a bankruptcy filing.
The news comes as the Japanese conglomerate faces huge pressure
to meet a March 14 deadline to publish audited earnings,
postponed a month ago so that it could probe potential problems
at Westinghouse further, according to Reuters.
It is also pushing forward with the sale of most or even all of
its prized flash memory chip business, as it seeks to plug not
only an upcoming $6.3 billion writedown for Westinghouse but also
to create a buffer against future financial problems, Reuters
relays.
Toshiba said it was not aware of any intention for Westinghouse
to file for Chapter 11 bankruptcy.
According to Reuters, sources familiar with the company have
said, however, it is one of several options being considered as
it struggles to limit losses in the United States where it is
facing cost overruns at two projects. It has also hired a
Japanese law firm to help estimate the impact of a U.S.
bankruptcy for the broader group, those sources said.
Japanese Trade Minister Hiroshige Seko said on that a Chapter 11
filing would not necessarily be a negative step and that
Westinghouse was one topic that he may discuss with U.S.
officials when he visits in the near future, Reuters relates.
"If the U.S. side raises the issue, it will be necessary to
discuss it," he told a parliamentary committee, Reuters relays.
One complication may be financing guarantees given by the U.S.
government to help fund the construction of reactors at the
Vogtle plant in Georgia, one of the two projects at the core of
Westinghouse's problems, says Reuters.
According to a 2014 statement on the U.S. Department of Energy
Website, the loan guarantees totaled $8.3 billion, Reuters
discloses.
About Toshiba
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is
a Japan-based manufacturer involved in five business segments.
The Digital Products segment offers cellular phones, hard disc
devices, optical disc devices, liquid crystal televisions, camera
systems, digital versatile disc (DVD) players and recorders,
personal computers (PCs) and business phones, among others. The
Electronic Device segment provides general logic integrated
circuits (ICs), optical semiconductors, power devices, large-
scale integrated (LSI) circuits for image information systems and
liquid crystal displays (LCDs), among others. The Social
Infrastructure segment offers various generators, power
distribution systems, water and sewer systems, transportation
systems and station automation systems, among others. The Home
Appliance segment offers refrigerators, drying machines, washing
machines, cooking utensils, cleaners and lighting equipment. The
Others segment leases and sells real estate.
As reported in the Troubled Company Reporter-Asia Pacific on
Dec. 30, 2016, Moody's Japan K.K. downgraded Toshiba
Corporation's corporate family rating (CFR) and senior unsecured
rating to Caa1 from B3. Moody's has also downgraded Toshiba's
subordinated debt rating to Ca from Caa3, and affirmed its
commercial paper rating of Not Prime. At the same time, Moody's
has placed Toshiba's Caa1 CFR and long-term senior unsecured bond
rating, as well as its Ca subordinated debt rating under review
for further downgrade.
The TCR-AP reported on Jan. 26, 2017, that S&P Global Ratings
said it has lowered its long-term corporate credit rating on
Toshiba Corp. to 'CCC+' and its short-term corporate credit and
commercial paper program ratings on the company to 'C', all by
one notch. All of these ratings remain on CreditWatch with
negative implications. S&P also lowered its senior unsecured
debt rating on Toshiba two notches to 'B-' from 'B+' and kept the
rating on CreditWatch negative. On Dec. 28, 2016, S&P placed the
long- and short-term ratings on Toshiba on CreditWatch with
negative implications at the same time as lowering the long-term
ratings, in response to Toshiba's announcement that it might
recognize several JPY100 billion in impairment losses related to
goodwill arising from its acquisition of a nuclear power business
through U.S.-based Westinghouse Electric Co. LLC, because the
goodwill far exceeded the company's initial estimates.
====================
N E W Z E A L A N D
====================
M. WEBSTER: 10 NZ Marcs and David Lawrence Stores to Close
----------------------------------------------------------
Emma Koehn at SmartCompany reports that the New Zealand
operations of collapsed retail chains Marcs and David Lawrence
will close over the next two months.
SmartCompany relates that administrators Rodgers Reidy announced
on March 9 that 10 stores will close, affecting 44 jobs at stores
in Auckland and Wellington.
"Both brands have been operating in New Zealand for more than ten
years. As administrators, we have an obligation to restructure
the operations of the Australian and New Zealand businesses while
we attempt to sell the business as a going concern," SmartCompany
quotes administrator Andrew Barnden as saying in a statement.
"Whilst the stores are permanently closing, New Zealanders will
have a great opportunity to purchase quality apparel at
discounted prices. We hope loyal customers take advantage of this
final opportunity to buy great product from these iconic brands."
Stock from both brands will be discounted from March 9 in
New Zealand, with store credits and gift cards purchased before
March 31 will be honoured, SmartCompany relays.
SmartCompany says the brands' Australian stores will continue to
trade and administrators have said no final decision has been
made about the Australian arm of the business.
"Whilst the New Zealand stores of Marcs and David Lawrence are
closing permanently, we are dealing with interested parties with
respect to the sale of the Australian businesses and are
continuing to trade 177 Marcs and David Lawrence stores," Mr.
Barnden, as cited by SmartCompany, said.
Administrators said on February 16 nine David Lawrence and four
Marcs stores would shut as administrators worked to make the
businesses as attractive as possible to a potential buyer, the
report adds.
About Marcs and David Lawrence
On Feb. 1, 2017, Geoffrey Reidy and Andrew Barnden, Directors of
Rodgers Reidy, were appointed as Voluntary Administrators to M.
Webster Holdings Pty Limited and Webster Asset Pty Limited and
Andrew Barnden and Paul Vlasic, a Director at Rodgers Reidy's
Auckland office, were appointed as Voluntary Administrators to M.
Webster Holdings (NZ) Limited.
The Companies operate the recognized retail fashion labels Marcs
and David Lawrence across 52 stand alone stores, 11 outlets and
over 140 concession stores operating out of Australia and
New Zealand.
In Australia, the Companies employ approximately 1,130 staff. 640
staff are employed on a casual basis, approximately 260 staff are
employed on a full-time basis and 230 on a part-time basis. There
are 10 stores in New Zealand employing 42 staff.
The Companies' sole director, Mr. Malcolm Webster, has informed
the Administrators that the appointment of administrators was
necessary due to factors including deteriorating sales, general
market conditions and poor cash flow.
PUMPKIN PATCH: Put Into Liquidation After Failure to Find Buyer
---------------------------------------------------------------
Stuff.co.nz reports that after hundreds of job losses, and months
of trying to sell, troubled clothing store, Pumpkin Patch has
been placed into liquidation on March 9.
Companies Office records show that McGrathNicol has been
appointed liquidator for Pumpkin Patch Originals and Pumpkin
Patch Direct, according to Stuff.co.nz.
Stuff.co.nz says Pumpkin Patch was placed into receivership in
October last year after receiver KordaMentha could not find a
buyer for the business. Some stores across New Zealand and
Australia have since closed, and will continue to be shut, as
stock runs out.
Stuff.co.nz, citing a receivers' report, relates that the company
owed its bank almost NZ$60 million and its unsecured creditors
another NZ$13.2 million.
Seven stores had closed by the end of last year, and its head
office had also restructured, Stuff.co.nz recalls.
At the time, KordaMentha said difficult trading conditions, and a
highly competitive market, had combined with unfavorable
movements in the Australian dollar, leading to the company's
demise, says Stuff.co.nz.
The remaining 56 stores will be closed as, and when, stock was
sold, the report notes.
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.
Pumpkin Patch employed almost 600 people in New Zealand and
1,000 in Australia, according to Stuff.co.nz.
On Oct. 26, 2016, 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.
VILLAGE STEWARDS: Son of Financiers Buys Up Liquidated Land
-----------------------------------------------------------
Charles Anderson at Stuff.co.nz reports that the son of the
financiers of a controversial eco village project near Motueka
has swooped in to buy up land which was sold off as part of a
liquidation process.
Village Stewards Ltd, a company which controlled land at Atamai
Village, went into liquidation last year with a final report
showing it owed NZ$8.5 million, Stuff.co.nz relates. However, the
majority of that was for secured creditors.
According to the report, Canadian couple Jack and Joanna Santa
Barbara have been involved in the development for many years and
have helped finance the project. The Santa Barbara Family
Foundation is one of the secured creditors that will receive a
share of NZ$860,000 after a plot of Atamai land was sold off,
Stuff.co.nz discloses.
The buyer is one-time film director Jeff Santa Barbara, who is
Jack and Joanna's son, the report notes.
Initially valued at close to NZ$1.6 million by the liquidator,
the Mytton Heights lot was sold for NZ$860,000 to Hunu Hills Ltd.
Stuff.co.nz says the company is understood to be behind a private
"for profit" development that will be run separately to Atamai
Village. Jeff Santa Barbara, who lives on the same property as
his parents, is the sole director and shareholder.
The liquidation means the original vision of Atamai Village,
which was to be an eco village community made up of 50 sections,
will not be able to grow beyond the 10 households that currently
live there, the report notes.
Stuff.co.nz relates that the sale of the liquidated lot has also
raised eyebrows with neighbors who have watched the struggles of
the ambitious concept since Atamai was first announced in 2006.
Neighbour Nick Davidson said it was curious why the land did not
go out to public tender and was instead sold for half of what it
was supposedly worth, the report relays.
Among Village Stewards' unsecured creditors were the Tasman
District Council, several local companies, and a handful of the
village's own residents, some of whom have bankrolled the
development, Stuff.co.nz discloses.
Stuff.co.nz adds that Mr. Davidson said it was a shame that the
Santa Barbara family seemed to have enough money to buy up the
liquidated land but the process had left many local suppliers out
of pocket.
He said Jeff Santa Barbara would also not agree to meet with him
to discuss his plans for the land and did not respond to requests
for comment for this article, Stuff.co.nz reports.
====================
S O U T H K O R E A
====================
DAEWOO SHIPBUILDING: Former CEO Accused of Accounting Fraud
-----------------------------------------------------------
Yonhap News Agency reports that a former CEO of cash-strapped
Daewoo Shipbuilding & Marine Engineering Co. who is already
standing trial has additionally been charged with cooking the
shipyard's books for years 2008 and 2009, prosecutors said on
March 9.
Nam Sang-tae, who led the company from 2006 to 2012, is accused
of inflating the shipbuilder's management performance in order to
extend his term, according to the prosecutors, Yonhap relates.
He is currently standing trial in custody on charges of causing
some KRW26.3 billion (US$22.8 million) in losses to the company
by making business decisions based on his ties to certain people,
according to Yonhap. He is also suspected of receiving some
KRW2.4 billion of kickbacks.
Yonhap relates that the newly added allegations include inflating
Daewoo Shipbuilding's business profits from KRW828.6 billion to
KRW1.03 trillion for the 2008 fiscal year and exaggerating the
profits from KRW373.7 billion to KRW684.5 billion for the
following year.
Nam's alleged wrongdoings took place by exaggerating the scale of
surplus, whereas similar irregularities committed by his
successor Ko Jae-ho were done by turning massive deficits into
profits, the prosecutors, as cited by Yonhap, said.
Ko, who served as the CEO of the company from 2012 to 2015, was
found guilty of accounting fraud in January and sentenced to 10
years in prison by a district court, adds Yonhap.
Headquartered in Seoul, South Korea, Daewoo Shipbuilding &
Marine Engineering Co. -- http://www.dsme.co.kr/-- is engaged in
building ships and offshore structures. Its product portfolio
includes commercial ships, such as liquefied natural gas (LNG)
carriers, oil tankers, containerships, liquefied petroleum gas
(LPG) carriers, pure car carriers; offshore structures, such as
FPSO vessels, drilling rigs, drillships and fixed platforms, and
naval vessels, including submarines, destroyers, rescue ships and
patrol boats.
The shipyard, along with two other major South Korean
shipbuilders, are currently undergoing self-created debt-
restructuring plans in the face of a decrease in new orders
caused by the protracted global economic slump, according to
Yonhap News.
*********
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 2017. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
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*** End of Transmission ***