/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/170417.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Monday, April 17, 2017, Vol. 20, No. 75 Headlines A U S T R A L I A BARMINCO HOLDINGS: S&P Raises ICR to 'B' on Completed Refinancing RESIMAC TRIOMPHE 2017-1: S&P Assigns 'BB' Rating on Cl. D Notes C H I N A DR. PENG: S&P Assigns 'BB' CCR on Weaker Market Position CHINA SCE: S&P Revises Outlook to Positive & Affirms 'B' CCR HYDOO INTERNATIONAL: S&P Affirms 'B' CCR; Revises Outlook to Neg. MIE HOLDINGS: S&P Cuts CCR to CCC on Heightened Refinancing Risk SUNAC CHINA: S&P Affirms 'B+' CCR; Outlook Remains Negative I N D I A AGGARWAL AUTOMATIVE: Ind-Ra Assigns 'B-' Long-Term Issuer Rating ALCHEMIST HOSPITALS: Ind-Ra Affirms 'BB+' Long-Term Issuer Rating AVICHAL MULTITRADE: Ind-Ra Assigns 'B' Long-Term Issuer Rating BALLARPUR INDUSTRIES: Ind-Ra Lowers NCDs to 'D' BELLATRIX INFRASTRUCTURE: Ind-Ra Assigns 'B+' Issuer Rating BILT GRAPHIC: Ind-Ra Lowers NCDs and CP to 'D' BRAND ADVANCE: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating CHOWDHRY RUBBER: Ind-Ra Assigns 'B+' Long-Term Issuer Rating CONTINENTAL EARTHMOVERS: Ind-Ra Assigns 'BB' Issuer Rating GMR WARORA: Ind-Ra Affirms 'D' Rating on 12.15MM NCDs GS EXPRESS: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating - - - - - ================= A U S T R A L I A ================= BARMINCO HOLDINGS: S&P Raises ICR to 'B' on Completed Refinancing ----------------------------------------------------------------- S&P Global Ratings said that it had raised the issuer credit rating on Australian hard-rock contract mining company Barminco Holdings Pty Ltd. to 'B' from 'B-'. The outlook is stable. S&P has also removed all ratings from CreditWatch with positive implications, where they were initially placed on March 23, 2017. Barminco has completed its refinancing task with an issue comprising US$350 million of senior secured notes maturing in 2022, which removed the refinancing risk that previously constrained the ratings. At the same time, S&P assigned a 'B' rating to the company's new senior secured notes maturing in 2022 with a recovery rating of '4'. "We upgraded Barminco to reflect the company's successful issuance of US$350 million senior secured notes maturing in 2022, which removed any refinancing pressure over the next 12 months," said S&P Global Ratings credit analyst Sam Heffernan. "The upgrade also reflects our view of Barminco's relatively stable profitability even during the recent downturn in the mining industry and through a period of challenging conditions for mining services companies." S&P don't expect a significant rebound in trading conditions over the next 12 months, given that miners remain disciplined in committing significant capital expenditure for expansion. However, pressure on mining services companies has moderated over the past six to 12 months as commodity prices rebounded, and some pipeline opportunities could supplement Barminco's business. S&P expects Barminco's earnings to increase modestly over the next two to three years on the back of new and existing contracts. Barminco's order book continues to be stable as it rolls over expiring contracts and wins new contracts to replace lost ones (for example replacing the one lost contract over the past 12 months with two new ones). Indeed, the company's EBITDA has been relatively steady over the past few years. Its new contracts at Kundana mine, Western Australia and Rampura Agucha mine, India would ramp up and reach full earnings potential over the next two years, modestly lifting earnings. Barminco has offset the impact of the recent mining downturn through proactive cost management, in addition to maintaining a sufficient pipeline of contracts. As a result, the company has maintained relatively stable profitability, despite pressure on revenues and margins. Barminco's experience and track record in providing underground hard-rock mining services partly offset the company's relatively small scale and narrow business focus. Nonetheless, in S&P's view, the company's concentration in relatively short-term contracts of three to five years is an inherent risk in its business risk profile. Mr. Heffernan added: "The stable outlook reflects our expectation that the company will continue to manage its contract book and maintain its steady track record in providing underground hard- rock mining services." An upward rating action could occur if Barminco wins a number of additional contracts that improve its project diversity. In addition, further upward rating action could occur if the constraints of financial sponsor ownership diminished and S&P believes the company could maintain credit metrics, such as FFO to debt greater than 20%, even under a moderate stress scenario. Downward rating action could happen if commodity prices were to decline, resulting in mines being placed into care and maintenance and Barminco being unable to roll over or replace lost contracts. This scenario would result in the company's FFO to debt deteriorating to below 12%. RESIMAC TRIOMPHE 2017-1: S&P Assigns 'BB' Rating on Cl. D Notes --------------------------------------------------------------- S&P Global Ratings assigned its ratings to seven classes of prime residential mortgage-backed securities (RMBS) issued by Perpetual Trustee Co. Ltd. as trustee for RESIMAC Triomphe Trust - RESIMAC Premier Series 2017-1. RESIMAC Premier Series 2017-1 is a securitization of prime residential mortgages originated by RESIMAC Ltd. (RESIMAC). The ratings reflect: -- S&P's view of the credit risk of the underlying collateral portfolio, including that this is a closed portfolio, which means no further loans will be assigned to the trust after the closing date. -- S&P's view that the credit support is sufficient to withstand the stresses it applies. This credit support comprises lenders' mortgage insurance on 18.2% of the loans in the portfolio, which provides cover for 100% of the face value of the insured loans, accrued interest, and reasonable costs of enforcement, as well as note subordination for the rated notes. -- S&P's expectation that the various mechanisms to support liquidity within the transaction, including a liquidity facility equal to 1.0% of the outstanding balance of the notes, and principal draws, are sufficient under S&P's stress assumptions to ensure timely payment of interest. The exception is the class C and class D notes, where the rating does not address the likelihood of payment of the residual class C note interest and the residual class D note interest. -- The extraordinary expense reserve of A$250,000, funded by RESIMAC before closing, available to meet extraordinary expenses. The reserve will be topped up via excess spread if drawn. -- The benefit of a cross-currency swap to hedge the mismatch between the Australian dollar receipts from the underlying assets and the U.S. dollar payments on the class A1 notes. The management of interest-rate risk. Interest-rate risk between any fixed-rate mortgage loans and the floating-rate obligations on the notes are appropriately hedged via interest rate swaps to be provided by an appropriately rated interest-rate swap provider. A copy of S&P Global Ratings' complete report for RESIMAC Triomphe Trust - RESIMAC Premier Series 2017-1 can be found on RatingsDirect, S&P Global Ratings' Web-based credit analysis system, at: http://www.globalcreditportal.com RATINGS ASSIGNED Class Rating Amount (mil.) A1a AAA (sf) US$275.0 A1b AAA (sf) US$125.0 A2 AAA (sf) A$370.0 AB AAA (sf) A$45.0 B AA (sf) A$27.0 C A (sf) A$13.0 D BB (sf) A$10.0 E NR A$5.0 Note: The exchange rate applicable to the class A1a and A1b notes is US$0.75 per Australian dollar. NR--Not rated. ========= C H I N A ========= DR. PENG: S&P Assigns 'BB' CCR on Weaker Market Position -------------------------------------------------------- S&P Global Ratings said that it had assigned its 'BB' long-term corporate credit rating to China-based telecommunications services provider Dr. Peng Telecom & Media Group Co. Ltd. The outlook is stable. At the same time, S&P assigned its 'cnBBB-' long-term Greater China regional scale rating to Dr. Peng. "The rating on Dr. Peng reflects the company's weaker market position in China than state-owned operators', business concentration in broadband internet services, and the highly competitive telecommunications services industry in China," said S&P Global Ratings credit analyst Shalynn Teo. "In our view, Dr. Peng's continued high capital expenditure and potential debt- funded acquisitions will push up the company's financial leverage over the next 12 months. These risks are tempered by the company's stable operating cash flows, extensive network in China, and the industry's positive fundamentals." S&P expects Dr. Peng's market position and scale to remain significantly smaller than that of the three major state-owned telecommunication operators, together account for more than 90% of the broadband market in China. On the other hand, Dr. Peng is the largest private-sector player and we believe the company can maintain its market share of around 5%. Dr. Peng's competitive pricing and its more advanced, full-fiber network should continue to support subscriber growth over the next 12 months. S&P expects Dr. Peng's business concentration in broadband services to remain high in the next 12-24 months, limiting the company's ability to provide bundled offerings as compared with the large operators in China. Dr. Peng has been diversifying its operations into other businesses, including data center operations and media and mobile services. However, diversification is slow and S&P sees limited benefits at this stage. In S&P's view, intensifying competition in China may put pressure on Dr. Peng's profitability. S&P expects the state-owned players will continue to remain aggressive in pricing while providing bundled products to increase their customer base. S&P expects Dr. Peng's EBITDA margin to be 30.0%-35.0% in the next 12 months, compared with 38.5% in 2016, due to aggressive pricing and higher selling expenses, which all players are experiencing in their broadband segments. Nevertheless, S&P believes that fundamentals in China's telecommunications services industry remain positive. Broadband penetration is increasing from a relatively low level compared to more developed countries, and the consumption of online content is on the rise. In S&P's estimate, Dr. Peng is well positioned to further increase its customer base, given the company's national network which covers more than 100 million households in over 211 major cities. On the back of continued high capital expenditure and potential debt-funded acquisitions, S&P expects Dr. Peng's debt-to-EBITDA ratio to increase to 1.5x-2.0x in the next 12-24 months, from 0.4x in 2016. S&P anticipates the company will continue to seek growth through acquisitions as it expands into overseas markets and enhances product offerings. However, good operating cash flows from the prepayment nature of broadband services should partially offset the capital expenditure needs. S&P factors into the rating the risk of Dr. Peng adopting a more aggressive expansion strategy than S&P forecasts in its base case, either organically or through acquisitions. Such a strategy increases the risk of the company's financial metrics deteriorating beyond S&P's forecasts. S&P therefore views Dr. Peng's financial policy as negative, an assessment which lowers the final rating by one notch. "The stable outlook on Dr. Peng reflects our expectation that the company will maintain stable operating cash flows over the next 12 months despite the intense competition against its larger peers in the Chinese market," said Ms. Teo. "We expect Dr. Peng's financial leverage to increase due to continued high capital expenditure and debt-funded acquisitions, in addition to mildly weakening profitability, leading to a debt-to-EBITDA ratio of 1.5x-2.0x in the next 12 months." S&P could lower the rating if Dr. Peng's debt-to-EBITDA ratio exceeds 2.0x or the ratio of funds from operations (FFO) to debt drops below 45% without signs of improvement. This could happen if: (1) the company undertakes more aggressive acquisitions or capital expenditure than we expect; or (2) the company has difficulty executing its expansion strategy or faces more severe competition than S&P expects, resulting in a significant deterioration in its profitability or sales growth. S&P could raise the rating if Dr. Peng demonstrates a track record of disciplined financial policy on acquisitions or expansions, with the debt-to-EBITDA ratio staying comfortably below 2.0x and the FFO-to-debt ratio being above 45% on a sustained basis. CHINA SCE: S&P Revises Outlook to Positive & Affirms 'B' CCR ------------------------------------------------------------ S&P Global Ratings said it has revised its outlook on China SCE Property Holdings Ltd. (CSCE) to positive from stable. At the same time, S&P affirmed its 'B' long-term corporate credit rating and our 'cnBB-' long-term Greater China regional scale rating on the China-based property developer. S&P also affirmed its 'B-' long-term issue rating and 'cnB+' long- term Greater China regional scale rating on CSCE's outstanding senior unsecured notes. S&P revised the outlook to positive because it believes CSCE's financial leverage will improve significantly in 2017, due to recovery in CSCE's margins. At the same time, CSCE is likely to continue to expand its operating scale, with better geographical diversity and more exposure to higher tier cities. S&P anticipates a notable recovery in CSCE's margins in 2017, after a compression over the past two years. The company's gross margin declined to 25% in 2016, from 28% in 2015, as it recognized revenue from some low-margin (or loss-making) projects in smaller cities (such as Nanchang and Anshan) that were sold at discount before 2015. However, margins should improve over the next two years as these low-margin legacy projects wind down and more contribution comes from higher-tier cities. S&P estimates that CSCE's unrecognized revenue of around Chinese renminbi (RMB) 15 billion at the end of 2016 carries better margins of more than 30%. As a result, S&P forecasts gross margin will recover to over 29% in 2017. S&P affirmed the ratings because it believes the pace of CSCE's deleveraging plan still faces some uncertainty, given its fast expansion in top-tier cities. CSCE's capital expenditure (capex) will remain high as it expands in new cities (e.g., Suzhou and Hangzhou). S&P estimates its land acquisition spending will increase to RMB14 billion-RMB16 billion per year in the next two years, from RMB11.6 billion in 2016. S&P believes CSCE has improved its operating scale and geographical diversity over the last few years as it expanded outside its home market. The company's sales increased to RMB23.5 billion in 2016, from RMB14.5 billion in 2015 and RMB11.9 billion in 2014. Its sales contribution from Fujian decreased to 32.6% in 2016 from 73.6% in 2014. S&P anticipates that CSCE's sales will increase steadily to RMB26 billion-RMB28 billion in 2017. This is driven by its salable resources of RMB45 billion. The company will have new projects of around 0.7 million square meters gross floor area in 2017, mostly in Beijing, Shanghai, and Tianjin. CSCE's increased exposure to higher-tier cities with more stable demand enhances its asset quality, in S&P's view. First- and second-tier cities accounted for 80% total land bank by costs in 2016, up from around 68% in 2015 and 58% in 2014. CSCE still faces some execution risks in its newly expanded cities, including Nanjing, Hangzhou, and Suzhou, which it entered in 2016. Previously, certain projects in new markets initially operated with longer cycles. However, CSCE's past record demonstrates it has generally been able to adapt to new markets over time. The positive outlook reflects S&P's expectation that CSCE's leverage will improve significantly in 2017 due to material recovery in margins. S&P also expects the company to manage the pace of its expansion, while maintaining steady sales growth over the next 12 months. S&P could upgrade CSCE if the company can substantially improve its margins, such that the debt-to-EBITDA ratio improves to below 5x on a sustained basis. S&P could revise the outlook to stable if CSCE's debt-to-EBITDA ratio doesn't show clear visibility of declining to below 5x over the next 12 months. This could be due to a weaker recovery in margins than S&P expects, with gross margin lower than its base case of about 29%. S&P could also revise the outlook to stable if CSCE pursues a more aggressive debt-funded expansion, with significantly higher land acquisition than S&P's base-case forecast of RMB 14 billion. HYDOO INTERNATIONAL: S&P Affirms 'B' CCR; Revises Outlook to Neg. ----------------------------------------------------------------- S&P Global Ratings said that it had revised its outlook on Hydoo International Holding Ltd. to negative from stable. S&P also affirmed its 'B' long-term corporate credit rating on the China- based trade center developer and S&P's 'B-' long-term issue rating on its outstanding notes. At the same time, S&P lowered its long- term Greater China regional scale rating on Hydoo to 'cnB+' from 'cnBB-' and on its notes to 'cnB' from 'cnB+'. "We revised the outlook to negative because we expect Hydoo's financial leverage to remain high in the next 12-24 months, as sales performance and revenue may remain weak associated with the down cycle in the trade center industry," said S&P Global Ratings credit analyst Dennis Lee. "The company's key financials for 2016 were weaker than our previous forecast." Hydoo's debt-to-EBITDA ratio has increased to 5.4x in 2016, from 3.4x in 2015. S&P expects Hydoo's sales to remain weak in the next 12 months because there is no sign of recovery in the trade center industry in China. In addition, the company focuses on the sale of trade center units in lower-tier cities, servicing the surrounding areas. This makes Hydoo more vulnerable to the economic slowdown when compared with peers targeting provincial capitals, where economic activity has been stronger. In 2016, Hydoo achieved contracted sales of only Chinese renminbi RMB2.5 billion, declining for the third year in a row. S&P forecasts the company's sales performance will stabilize at RMB2.6 billion- RMB2.8 billion, mainly supported by a new project in Liuzhou that will be launched in 2017. "Hydoo's operating cash flow is likely to remain negative in 2017 as its sales cannot fully cover operating expenses," said Mr. Lee. "We believe the company has limited room to scale back its construction and land acquisitions to preserve cash. We project that Hydoo will have RMB300 million-RMB400 million in cash outflow during the period." S&P expects Hydoo's gross margin to decline to 46%-50% in the next two years, primarily due to increasing pressure in destocking and a change in product mix. In 2016, the average selling price of its contracted sales decreased 21.7% to RMB5,016 per square meter. Hydoo has also increased residential sales to supplement the suffering trade center business. The contribution from residential sales increased to 28.2% of the total in 2016, compared with only 2% in 2015. Given the lower margin of residential properties than that of trade centers, S&P believes Hydoo's overall margin is likely to decrease. S&P believes Hydoo's continuous weak sales performance will pressure its liquidity position. As of the end of 2016, Hydoo has a total cash balance of RMB2.1 billion, of which RMB966 million is unrestricted. This compares with short-term borrowings of RMB1.3 billion. Hydoo's current liquidity position is largely reliant on rolling over its debt. Nevertheless, S&P believes that near-term liquidity risk remains manageable since a significant part of its short-term borrowings are construction loans that are asset-pledged. The negative outlook on Hydoo reflects S&P's expectation that the company's sales will remain weak in the coming 12 months. However, S&P expects Hydoo to control its capex, such that its debt-to-EBITDA ratio will not further deteriorate from the 2016 level. S&P may lower the rating if Hydoo's sales performance is weaker than S&P's expectation or its margin declines materially, such that its debt-to-EBITDA ratio stays at above 5x on a consistent basis. This could happen if Hydoo's contracted sales are lower than S&P's projection of RMB2.7 billion in 2017. S&P could also downgrade the company if its cash balance significantly depletes or it encounters difficulty in refinancing. S&P may revise the outlook on Hydoo to stable if it achieves good sales execution and cash collection, and cautiously controls its expenditure, such that its debt-to-EBITDA ratio improves and stays below 5x. MIE HOLDINGS: S&P Cuts CCR to CCC on Heightened Refinancing Risk ---------------------------------------------------------------- S&P Global Ratings said that it had lowered its long-term corporate credit rating on MIE Holdings Corp. to 'CCC' from 'B-'. The outlook is negative. S&P also lowered its long-term issue rating on the company's senior unsecured notes to 'CCC' from 'B-'. At the same time, S&P lowered its long-term Greater China regional scale rating on MIE and its notes to 'cnCCC' from 'cnB-'. MIE is a China-based oil and gas exploration and production company. "We lowered the rating to reflect our view that MIE's liquidity is likely to remain weak and the company faces heightened refinancing risk on its outstanding U.S. dollar notes," said S&P Global Ratings credit analyst Danny Huang. "The downgrade also reflects our expectation of a heightened risk of debt restructuring, given MIE's unsustainable debt level." S&P believes MIE could face a material liquidity deficit over the next 12 months because the company's cash on hand is unlikely to cover debt due in the coming 12 months, including a US$200 million bond due in February 2018. S&P has revised its assessment of MIE's liquidity to weak from less than adequate. Despite S&P's expectation of a moderate recovery in oil prices and stabilization of MIE's production volume, S&P believes the improvement in the company's cash flows would not be sufficient to cover its large debt maturities. S&P do not expect a material improvement in liquidity in the next 12 months unless MIE can secure other funding sources, such as new bank loans, or sell assets. "We have low visibility on MIE's successfully refinancing of its debt," said Mr. Huang. "The company is yet to come up with a concrete refinancing plan even though the US$200 million notes are due in less than a year, and the US$476 million notes are due in April 2019. We believe this indicates challenges the company faces in refinancing its large debt maturities." S&P believes Boston Power Inc.'s timely repayment of a loan due June 2017 is uncertain. Therefore, S&P do not include the receipt of the US$30 million loan in its liquidity assessment. Nonetheless, MIE's liquidity is unlikely to materially improve even if the loan is repaid on time. In S&P's view, MIE's business remains vulnerable due to its small scale. S&P expects MIE's production volume in China to be flat in the next two to three years because the company's asset size has shrunk following asset disposals (Emir Oil and Asia Gas & Energy Ltd.) in 2016. Given that MIE's oilfields in China are aged, S&P expects the company's capital expenditure to maintain production to be Chinese renminbi (RMB) 110 million-RMB120 million each year in 2017-2018. S&P expects MIE to remain highly leveraged. S&P anticipates that the company will maintain a conservative approach to capital expenditure amid the current market conditions and refinancing pressure. S&P therefore expects debt to remain high but relatively flat. The negative outlook over the next 12 months reflects MIE's unsustainable debt leverage and the lack of a concrete refinancing plan. S&P expects the company's operating cash flow will not be sufficient to repay debt even after factoring in a moderate recovery in oil prices. The negative outlook also reflects S&P's view of an increased risk of debt restructuring, considering the current market price of MIE's outstanding notes and the company's unsustainable capital structure. S&P could lower its rating on MIE if the company cannot come up with a concrete refinancing plan within the next few months or S&P believes the likelihood of debt restructuring has increased. S&P could revise the rating outlook to stable if it has greater visibility on MIE's refinancing plan. SUNAC CHINA: S&P Affirms 'B+' CCR; Outlook Remains Negative ----------------------------------------------------------- S&P Global Ratings said that it had affirmed its 'B+' long-term corporate credit rating on Sunac China Holdings Ltd. The outlook remains negative. S&P also affirmed its 'B' long-term issue rating on the company's outstanding senior unsecured notes. At the same time, S&P affirmed its long-term Greater China regional scale rating on Sunac at 'cnBB-' and on the notes at 'cnB+'. Sunac is a China-based property developer. "The affirmed rating with negative outlook reflects our expectation that Sunac will slow down its land acquisitions and maintain strong sales performance in 2017, such that its financial leverage will improve from the high level in 2016," said S&P Global Ratings credit analyst Dennis Lee. In S&P's base case, it forecasts that Sunac's debt-to-EBITDA ratio, including the proportional consolidation of joint ventures (JVs) and associates, will improve to 8x?10x in 2017, from about 11x in 2016. This is driven by S&P's forecast that the company will achieve total contracted sales of Chinese renminbi RMB225 billion, supported by its increased saleable resources of RMB418 billion. Sunac's high leverage in 2016 was a result of its aggressive expansion during the year. At the same time, S&P expects Sunac will reduce its land acquisition budget to about RMB60 billion, from RMB73.7 billion in 2016. The company has slowed down its land acquisition activities since the start of 2017 due to high land prices and tightening liquidity conditions. As a result of aggressive land acquisitions in 2016, Sunac's attributable land reserves have increased significantly to about 50 million square meters (sqm), from 18.05 million sqm in 2015. In S&P's view, the company's enlarged land reserves provide it with a strong foundation for scale expansion in the next five years. As of end-2016, the company has committed but unpaid land premiums of RMB32.8 billion. "We believe the short-term liquidity pressure on Sunac is manageable, given the company's substantial cash position of RMB69.7 billion at the end of 2016," said Mr. Lee. "We expect the company's debt growth to moderate in 2017 and 2018 due to more controlled spending after a substantial increase from aggressive land acquisitions in 2016." S&P expects JVs and associates will continue to generate a significant portion of Sunac's sales in the next few years. In 2016, only one-third of the company's sales were from subsidiaries. The rest were from JVs and associates. S&P estimates that the overall financial leverage of the company's JVs and associates is lower than that at the consolidated parent level because the parent funds some of the land payments. S&P estimates the overall debt-to-EBITDA ratio of Sunac's unconsolidated JVs and associates is about 7.0x. S&P anticipates Sunac will continue to leverage on its experience and capabilities in mergers and acquisitions (M&A) as the key way to acquire land plots. In S&P's view, this method could lower land costs and reduce competition when compared with public auction. However, it also lowers Sunac's financial transparency, given the timing mismatch between financial gain recorded at the time of the transaction and the impact on cost of goods sold in the subsequent period. More than half of the land plots that the company acquired in 2016 were through M&A. Additionally, S&P expects Sunac to continue to invest in non- property development businesses. In the first quarter of 2017, the company spent RMB17.6 billion to invest in Homelink, a property transaction services provider, and Leshi, an internet company. Although these transactions did not have a material impact on cash flows, they show Sunac's intention to expand outside property development in the long run. These acquisitions were opportunistic in nature, and the strategy and synergy with Sunac's main property development business remains unclear. S&P therefore revised its financial policy score for Sunac to negative from neutral. Based on Sunac's ability to achieve its sales goals in 2016 and its satisfactory execution of its land acquisition strategy, S&P revised its management and governance score to fair from weak. However, S&P continues to believe that the company has high key man risk with its founder and chairman Mr. Sun Hongbin. The negative outlook reflects S&P's view that Sunac's financial leverage will remain high in the next 12 months. S&P expects the company to maintain strong sales growth and be disciplined in land acquisitions, thus marginally improving its leverage from the 2016 level. S&P forecasts that Sunac's debt-to-EBITDA ratio, including the proportional consolidated financials of its JVs and associates, will improve to 8x-10x 2017, from about 11x in 2016. S&P could downgrade Sunac if the company's financial leverage does not improve as S&P expects. This could happen if Sunac's aggressive debt-funded land acquisitions continue, the company's sales execution does not meet S&P's expectation of about RMB225 billion in 2017, or its margin declines substantially. S&P could revise the outlook to stable if Sunac's financial leverage, including the proportionally consolidated financials of JVs and associates, meets S&P's forecast of a debt-to-EBITDA ratio of below 10x in 2017 and continues to show an improving trend thereafter. ========= I N D I A ========= AGGARWAL AUTOMATIVE: Ind-Ra Assigns 'B-' Long-Term Issuer Rating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Aggarwal Automotive Private Limited (AAPL) a Long-Term Issuer Rating of 'IND B-'. The Outlook is Stable. The agency has taken this rating action on the company's fund-based limits: -- INR300 mil. Fund-based limit assigned with 'IND B-/Stable' rating KEY RATING DRIVERS The ratings reflect AAPL's moderate scale of trading operations and weak credit profile as reflected in its revenue of INR1,166.44 million in FY16 (FY15: INR88 million), EBITDA interest coverage (operating EBITDA/gross interest expense) of 0.7x (0.1x) and high net leverage (total adjusted net debt/operating EBITDAR) of 17x. Operating EBITDA margins were 0.96% in FY16 (FY15: 0.07%). The ratings are constrained by the tight liquidity profile of the company, as reflected in its average working capital utilization of 87% during the 12 months ended February 2017. The ratings however factor in the company's association, as a distributor, with Hyundai Motor Company. RATING SENSITIVITIES Positive: Substantial improvement in the operating margin leading to improvement in the overall credit metrics will be positive for the ratings COMPANY PROFILE AAPL was incorporated by Mr Harshvardhan Bansal and family, and started its operations in February 2015. AAPL is distributor of Hyundai cars in Delhi and has three showrooms. ALCHEMIST HOSPITALS: Ind-Ra Affirms 'BB+' Long-Term Issuer Rating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Alchemist Hospitals Limited's (AHL) Long-Term Issuer Rating at 'IND BB+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR70.2 mil. (decreased from INR70.9) Long-term loans affirmed with 'IND BB+/Stable' rating; -- INR100 mil. Fund-based working capital affirmed with 'IND BB+/Stable' rating; -- INR10 mil. Non-fund-based working capital affirmed with 'IND A4+' rating; and -- INR58.3 mil. *Proposed long-term loans assigned with provisional IND BB+/Stable rating * The rating is provisional and shall be confirmed upon the sanction and execution of loan documents for the above facilities by AHL to the satisfaction of Ind-Ra. KEY RATING DRIVERS The affirmation reflects continued improvement in AHL's financial profile post the hive-off of its loss making Gurgaon hospital into Alchemist Hospital Gurgaon Private Limited (AHGPL) as majority of the balance sheet debt was transferred to AHGPL. AHL's (Panchkula hospital?s) gross interest coverage ratio (operating EBITDAR/gross interest expense + rents) in 9MFY17 increased to 15.5x (FY16:13.4x; FY15: 7.6x) while the net leverage was strong at 0.5x (FY16: 1.2x; FY15: 1.0x). Improvement in coverage was due to reduced interest expenses on account of repayment of secured bank debt. Ind-Ra expects rationalization in AHL's coverage and leverage in the short to medium-term owing to planned debt-funded capex for the capacity expansion. AHL's revenue grew 4.2% yoy in FY16 to INR759 million. EBITDA remained nearly same at INR110 million in FY16 (FY15: INR107 million); this moderation was due to a decrease in bed occupancy rate (FY16: 60.7%, FY15: 64%) and increase in consultant payout and employee expenses. Accordingly, Panchkula hospital's FY16 EBITDA margin decreased to 14.5% (FY15: 14.8%). This decrease was absorbed to a certain extent by improvement in its average revenue per operating bed (ARPOB) to INR28,126 in FY16 (FY15: INR26,422) supported by its focus on high value cardiology, neurology and oncology services. The 9MFY17 EBITDA margin has improved to 20.3% primarily due to reduction in consumables cost and increase in ARPOB to INR30,065. Despite modest size of operations, the hospital has a high percentage of patients requiring surgery (150- 200 surgeries performed per month) resulting in high ARPOBs. Ind-Ra believes that in the short to medium-term, the revenue growth would be impacted to a certain extent by the recent cap on prices of stents for cardiology procedures. AHL has planned to expand the Panchkula hospital capacity to 200 beds (additional 82 beds) within the existing area. The construction is likely to begin in another few months and the entire project is likely to take around 1 to 1.5 years for completion. Increasing lifestyle disease will drive higher occupancy for the hospital in the short to medium term. AHL has an established market position in Panchkula despite the presence of other specialty hospital in the vicinity. Moreover, healthcare sector is relatively immune to seasonal and economic factors compared with other industries. The ratings continue to factor in AHL's small size of operations, as it operates a 118 bed multi-specialty hospital in Panchkula. Moreover, single operating location also exposes the company to geographical concentration risk. AHL is planning to increase its capacity to 200 beds in the next two years. RATING SENSITIVITIES Positive: A significant improvement in the occupancy rates resulting in a considerable improvement in the profitability will be positive for the ratings. Negative: Higher-than-expected debt-funded capex resulting in the weakening of credit metrics will be negative for the ratings. COMPANY PROFILE AHL is a company of the Alchemist Group. The company offers a wide range of specialty services such as cardiology, joint replacements, laparoscopic surgery, neurology and neuro surgery, paediatric surgery, endocrinology and nephrology. AVICHAL MULTITRADE: Ind-Ra Assigns 'B' Long-Term Issuer Rating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Avichal Multitrade Private Limited (AMPL) a Long-Term Issuer Rating of 'IND B'. The Outlook is Stable. Instrument-wise rating actions are: -- INR50 mil. Proposed fund-based working capital limit* assigned with 'Provisional IND B/Stable/Provisional IND A4' rating; and -- INR150 mil. Proposed non-fund-based limit* assigned with Provisional IND A4 rating * The ratings are provisional and shall be confirmed upon the sanction and execution of loan documents for the above facilities by AMPL to the satisfaction of Ind-Ra. KEY RATING DRIVERS The ratings reflect AMPL's short operational track record as FY15 was the first year of operations, weak EBITDA margins inherent to the trading business and moderate credit metrics. Revenue increased to INR970.2 million in FY16 (FY15: INR757.4 million) owing to the addition of new clients. EBITDA margin was 0.7% in FY16 (FY15: 0.1%). Interest coverage (operating EBITDA/gross interest expense) was 4.3x and net leverage (total adjusted net debt/operating EBITDAR) was 10.4x in FY16. As at March 31, 2016, the company's debt comprised of unsecured loan of INR72.5 million. However, the ratings are supported by the promoters' experience of two decades in the trading business, which has led to well- established relationships with customers and suppliers. RATING SENSITIVITIES Positive: A substantial growth in the top line, along with an improvement in the EBITDA margin could be positive for the ratings. Negative: Any decline in revenue and/or deterioration in the EBITDA margin could be negative for the ratings. COMPANY PROFILE Established in March 2014, AMPL is a Mumbai, Maharashtra-based trader of household electronic appliances. As per provisional financials, the company booked revenue of INR1.250 billion in 11MFY17. BALLARPUR INDUSTRIES: Ind-Ra Lowers NCDs to 'D' ----------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Ballarpur Industries Limited's (BILT) non-convertible debentures (NCDs) to 'IND D' from 'IND C' as: -- INR5.000 bil. NCDs* lowered to 'IND D' rating * Outstanding amount is INR1.5 billion KEY RATING DRIVERS The downgrade reflects the inability of the company to service its debt obligations in a timely manner owing to its stressed liquidity position due to BILT's poor operational cash flows as well as weak credit metrics as reflected in EBITDA losses at the consolidated level in 9MFY17. The company has already defaulted on timely servicing of its bank loans and CPs. BILT along with its subsidiary ? BILT Graphic Paper Products Limited (BGPPL; 'IND D') - continues to face delays in the necessary deleveraging, as efforts to monetize its assets have not fructified within planned timelines. The company has also been unable to refinance its debt or elongate the maturity profile of its near-term debt obligations fully. Cash flows inadequacy has reduced BILT's and BGPPL's ability to fund debt obligations through internal accruals, creating an immediate need for refinancing. In 9MFY17, BILT reported consolidated revenue of INR16.9 billion (down 44.8%yoy) and consolidated EBITDA losses of INR744 million (INR5.6 billion) with net loss of INR9,037 million (negative INR781 million). BILT reported EBIT margin of negative 12.1% in 9MFY17 in the key paper segment (9MFY16: 16.1%). According to the management, BILT raised working capital limits of INR500 million in January 2017 and around INR2,000 million and INR1,500 million in Ballarpur Paper holdings B.V. in March 2017, due to which capacity utilization is likely to improve at its existing facilities. However, it will require significant deleveraging through asset sales to improve the credit profile. At FYE16, BILT had a consolidated balance sheet debt of around INR72.3 billion (excluding perpetual bonds). According to the management, it is in the advanced stages of raising more working capital lines for operations as well as equity and debt infusion through asset sales. In FY16, BILT reported consolidated revenue of INR42.7 billion (FY15: INR32.4 billion; FY14: INR52.8 billion) and EBITDA margin of 16.6% (21%; 17.8%). The company has classified its subsidiary Sabah Forest Industries as discontinued operations for FY15 and FY16, which resulted in lower revenue and higher EBITDA margins for these years when compared with FY14 financials. Ind-Ra continues to take a consolidated view of BILT's business and financial profiles for the ratings. BGPPL has strong operational and strategic linkages with its ultimate parent, BILT, due to their similar business profiles, common treasury and management team. RATING SENSITIVITIES Timely debt servicing for at least three consecutive months could result in a positive rating action. COMPANY PROFILE BILT, on a consolidated basis, has one production facility in Malaysia and six production facilities across India, of which Ballarpur, Bhigwan, Sewa and Ashti units are under BILT Graphic Paper Products, while Kamplapuram and Shree Gopal units are under BILT. Overall, the company has a paper capacity of around 1 million MT and a pulp capacity of around 0.8 million MT (including rayon grade pulp capacity). BELLATRIX INFRASTRUCTURE: Ind-Ra Assigns 'B+' Issuer Rating ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned M/s Bellatrix Infrastructure Private Limited (BIPL) a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR25 mil. Term Loans assigned with 'IND B+/Stable' rating; -- INR35.5 mil. Fund-based facilities assigned with 'IND B+/Stable/ IND A4' rating KEY RATING DRIVERS The ratings reflect the inception stage of BIPL's commercial operations. The company was incorporated in August 2014 to set up a blue metals crushing unit. The total cost of the project was INR62.5 million (funded through INR27 million of promoter's contribution and INR35.5 million of term loan. The project was completed in November 2016 and the company started its commercial operation in December 2016. According to the management, the company has indicated revenue of INR10 million during the three months ended February 2017. As of April 2017, the company has order book of INR150 million to be executed in the next one year. The ratings, however, are supported by BIPL's comfortable liquidity position with its fund-based facilities being utilized at an average of 60% over the two months ended February 2017. The ratings are further supported by the promoters' experience of three decades in the civil construction line of business. RATING SENSITIVITIES Positive: Stabilization of operations leading to strong revenue generation and profitability will lead to positive rating action Negative: Failure to scale up operations leading to stress on liquidity position will be negative for the ratings COMPANY PROFILE BIPL is engaged in crushing of different sizes of blue metals. The company's total installed capacity of the machinery is likely to be 250 tonnes per hour (4,50,000 tonnes per annum) and 50% of total installed capacity is likely to be utilized during the first year. Sri M. Ramesh, Sri Ch. Satyanarayana, Sri M. Sri Harsha and Sri Ch. Rohith are the promoters of the company. BILT GRAPHIC: Ind-Ra Lowers NCDs and CP to 'D' ---------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded BILT Graphic Paper Products Limited's (BGPPL) non-convertible debentures (NCDs) and commercial paper (CP) to 'IND D' from 'IND C' and 'IND A4', respectively. The rating actions are: -- INR8.5 bil. NCDs* lowered to 'IND D' rating; and -- INR 3.88 bil. CP** lowered to 'IND D' rating * Outstanding is INR2.692 billion ** Outstanding is INR268 million KEY RATING DRIVERS The downgrade reflects BGPPL's delays in servicing of NCDs and CPs obligations. BGPPL along with its parent ? Ballarpur Industries Limited (BILT; 'IND D') ? continues to face delays in the necessary deleveraging, as efforts to monetize its assets have not fructified within planned timelines. The company has also been unable to refinance its debt or elongate the maturity profile of its near-term debt obligations fully. Cash flows inadequacy has reduced BGPPL's and its parent's ability to fund debt obligations through internal accruals, creating an immediate need for refinancing. In 9MFY17, BILT reported consolidated revenue of INR16.9 billion (down 44.8% yoy) and consolidated EBITDA losses of INR744 million (INR5.6 billion) with net loss of INR9,037 million (negative INR781 million). BILT reported EBIT margin of negative 12.1% in 9MFY17 in the key paper segment (9MFY16: 16.1%). According to the management, BILT raised working capital limits of INR500 million in January 2017 and around INR2 billion and INR1.5 billion in Ballarpur Paper holdings B.V. in March 2017, due to which capacity utilization is likely to improve at its existing facilities. However, it will require significant deleveraging through asset sales to improve the credit profile. At FYE16, BILT had a consolidated balance sheet debt of around INR72.3 billion (excluding perpetual bonds). According to the management, it is in the advanced stages of raising more working capital lines for operations as well as equity and debt infusion through asset sales. In FY16, BILT reported consolidated revenue of INR42.7 billion (FY15: INR32.4 billion; FY14: INR52.8 billion) and EBITDA margin of 16.6% (21%; 17.8%). The company has classified its subsidiary Sabah Forest Industries as discontinued operations for FY15 and FY16, which resulted in lower revenue and higher EBITDA margins for these years when compared with FY14 financials. Ind-Ra continues to take a consolidated view of BILT's business and financial profiles for the ratings. BGPPL has strong operational and strategic linkages with its ultimate parent, BILT, due to their similar business profiles, common treasury and management team. RATING SENSITIVITIES Timely debt servicing for at least three consecutive months could result in a positive rating action. COMPANY PROFILE BILT, on a consolidated basis, has one production facility in Malaysia and six production facilities across India, of which Ballarpur, Bhigwan, Sewa and Ashti units are under BGPPL, while Kamplapuram and Shree Gopal units are under BILT. Overall, the company has a paper capacity of around 1 million MT and a pulp capacity of around 0.8 million MT (including rayon grade pulp capacity). BRAND ADVANCE: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Brand Advance Machine Private Limited (BAMPL) a Long-Term Issuer Rating of 'IND BB+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR115 mil. Fund-based working capital limit assigned with 'IND BB+/Stable' rating; -- INR235 mil. Long-term loans assigned with 'IND BB+/ Stable' rating; and -- INR100 mil. Non-fund-based working capital limit assigned with 'IND A4+' rating KEY RATING DRIVERS The ratings reflect BAMPL's moderate scale of operations and credit profile. In FY16, revenue was INR556 million (FY15: INR391 million), EBITDA interest coverage was 3.3x (2.9x) and net financial leverage was 7.4x (8.1x). The increase in revenue was due to higher sales of railways bogies. The improvement in EBITDA interest coverage was due to an increase in operating EBITDA and a decrease in interest expense. On the other hand, the improvement in net leverage was due to a rise in operating EBITDA and a decline in short- and long-term debt. Ind-Ra expects credit metrics to further improve in FY17 and FY18, driven by the repayment of the long-term loan. The ratings also reflect the company's tight liquidity situation, indicated by a fund-based utilization of 97.92% over the 12 month ended January 2017. The ratings, however, are supported by a strong operating margin of 10.04% in FY16 (FY15: 13.41%) and the promoters' over two decades of experience in steel manufacturing. RATING SENSITIVITIES Negative: A decline in EBITDA margin leading to a deterioration in credit metrics will lead to a negative rating action. Positive: An improvement in the scale of operations, along with an improvement in its credit profile, will lead to a positive rating action. COMPANY PROFILE BAMPL was incorporated in June 1994 as Brand Alloys Private Limited. The company was renamed on Jan. 24, 2017. BAMPL manufactures steel billets, casnub bogies and related components, coupler components, thermomechanical treatment bars and stainless steel castings for Indian Railways. Its manufacturing facility is in Serampore District, Hoogly, West Bengal. The site has two induction furnaces of 5 metric tons (MT), one ARC furnace of 6MT, three heat treatment furnaces, one automatic sand plant, one fettling and machining shop, one modern design facility, one fabrication shop and rolling mills. Its production capacity of TMT bars is 60,000MT, billets is 20,000MT and cast materials is 10,000MT. It produces steel for sale in the open market and conversion for Tata Steel Limited ('IND AA'/RWE). According to provisional results for 9MFY17, revenue was INR378.60 million. CHOWDHRY RUBBER: Ind-Ra Assigns 'B+' Long-Term Issuer Rating ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has assigned Chowdhry Rubber and Chemicals Private Limited (CRCPL) a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable. The instrument rating actions is: -- INR175 mil. Fund-Based Limits assigned with 'IND B+/Stable/'IND A4' rating; and -- INR95 mil. Non-fund-based limits assigned with 'IND A4' rating KEY RATING DRIVERS The rating reflects CRCPL's tight liquidity position as reflected in overutilization of the fund-based limits during the 12 months ended February 2017. The ratings further reflect CRCPL's weak credit metrics in FY16 with interest coverage (operating EBITDAR/net interest expense) of 1.52x (FY15: 1.58x) and net leverage (total adjusted net debt/operating EBITDAR) of 4.35x (4.01x). The ratings also reflect CRCPL's unstable revenue (FY16: INR936 million, FY15: INR1,111 million; FY14: INR834 million) on account of volatility in chemical prices. The ratings, however, are supported by CRCPL's moderate yet stable operating margins in the range of 4%-5.5% during FY13-FY16 and more than four decades of experience of the company's promoters in the trading business. RATING SENSITIVITIES Negative: Further stretch on liquidity will lead to a negative rating action. Positive: Improvement in liquidity profile will be positive for the ratings. COMPANY PROFILE Established in 1952, CRCPL is engaged in trading of industrial chemicals which includes zinc oxide, titanium dioxide, synthetic rubber chemical, calcium carbonate etc. meeting the requirement of big industries. CONTINENTAL EARTHMOVERS: Ind-Ra Assigns 'BB' Issuer Rating ---------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Continental Earthmovers (CE) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR70 mil. Fund-based working capital limit assigned with 'IND BB/Stable/IND A4+' rating KEY RATING DRIVERS The ratings reflect CE's moderate credit metrics with net financial leverage (adjusted debt/operating EBITDA) of 2.62x (4.00x) and EBITDA net interest coverage (operating EBITDA/gross interest expense) of 2.79x (1.94x). The ratings factor in CE's thin operating margins, inherent in the trading business. Margins, however, improved to 2.66% in FY16 from 1.59% in FY15 due to a decline in the administrative cost. The ratings, however, derive strength from CE's growing scale of operations. Revenue improved to INR719 million in FY16 from INR454 million in FY15 due to high demand of earthmoving equipment in Uttrakhand. The ratings factor in over a decade of experience of CE's promoters in the automobile industry. The ratings are supported by the comfortable liquidity position of CE as evident from 90.23% of average utilization of the working capital facilities during the 12 months ended March 2017. RATING SENSITIVITIES Negative: A decline in operating profitability resulting in deterioration in the credit metrics shall be negative for the ratings. Positive: A substantial growth in the revenue along with improvement in the profitability shall lead to a positive rating action. COMPANY PROFILE CE is a partnership firm established in November 2011, and started its operations from January 2012. CE is an exclusive authoriszed dealer of JCB India limited. The firm is engaged in trading and servicing of earthmoving equipment such as backhoe loader and heavy lines (loaders, excavators & cranes). CE has six outlets in Uttrakhand . The firm is promoted by Mr. Sukhinder Singh and Mr. Harinder Singh. GMR WARORA: Ind-Ra Affirms 'D' Rating on 12.15MM NCDs ----------------------------------------------------- India Ratings and Research (Ind-Ra) has taken these rating actions on GMR Warora Energy Limited?s (GWEL, erstwhile EMCO Energy Limited) instruments: -- 12.15 mil. Non-convertible debentures (NCDs) affirmed with 'IND D' rating -- INR6.2 bil. Working capital facility affirmed with 'IND D' rating; -- INR27.02 bil. *Senior project term loan rating withdrawn; and -- INR2.6 bil. *Bank term loan rating withdrawn * The ratings on senior project term loan and bank term loan have been withdrawn as they were entirely replaced through refinancing. KEY RATING DRIVERS The affirmation for NCDs reflects the event of default under financing documents of NCDs because of cross default provision which takes cognizance of persisting delays in servicing of term loans, though GWEL has confirmed that there is no delay in servicing the NCDs. The rating on working capital facility has also been affirmed as event of default under financing documents of working capital facility includes cross default provision. Rating is also constrained by inadequacy of the cash flow of the company for servicing the entire senior debt. In 11MFY17, GWEL has recorded plant availability and plant load factor of 84.6% (FY16:94.8%) and 69% (FY16:75.9%) respectively. According to provisional financial statement for 9MFY17, GWEL has recorded revenue of INR11.506 billion (FY16: INR13,985 million) and EBIDTA of INR4,383 million (FY16: INR4,168 million). EBITDA interest cover (EBITDA/finance cost) was 1.22x in 9MFY17 (FY16:0.90). RATING SENSITIVITIES Timely debt servicing of entire senior debt for three consecutive months could be positive for the rating. COMPANY PROFILE GWEL is an SPV, incorporated to build, maintain and operate a 600MW (two units of 300 MW each) coal-fired subcritical technology-based thermal power plant in Warora, Maharashtra. GMR Energy Limited is the primary sponsor of the project with 100% equity investment. GMR Energy Limited is the holding company for GWEL and a subsidiary of GMR Infrastructure Limited. GWEL has PPAs with Dadra Nagar Haveli and Maharashtra State Electricity Distribution Company Limited for 200MW each and with Tamil Nadu Generation and Distribution Company Limited for 150MW GS EXPRESS: Ind-Ra Assigns 'BB-' Long-Term Issuer Rating -------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned G.S. Express Private Limited (GSEPL) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR400 mil. Fund-based limits assigned with 'IND BB-/Stable/IND A4+' rating; -- INR580 mil. Non-fund-based limits assigned with IND A4+ rating; -- INR100 mil. #Proposed fund-based working capital assigned with 'Provisional IND BB-/Stable/Provisional IND A4+' rating; and -- INR420 mil. #Proposed non-fund-based limits assigned with 'Provisional IND A4+' rating #the ratings are provisional as GSEPL plans to increase its working capital facility in order to support its working capital requirement on the back of growth in topline and the final rating will be assigned subject to execution of sanction letter for the above facilities. KEY RATING DRIVERS The ratings reflect GSEPL's tight liquidity as evident from its full utilization of working capital facilities during the 12 months ended February 2016. The working capital cycle remained unstable over FY14-FY16 (FY16: 59 days, FY15: 87 days, FY14: 66 days). GSEPL's credit metrics remained weak with net interest coverage (operating EBITDA/net interest expense) of 2.25x in FY16 (FY15: 2.15x, FY14: 2.37x) and net financial leverage (total Ind- Ra adjusted net debt/operating EBITDAR) of 2.67x (2.65x, 2.45x). The ratings also reflect GSEPL's nature of business highly susceptible to government regulations and availability of tenders/projects; any adverse change in the government policy could hamper the operations severely. The ratings are supported by GSEPL's robust order book of INR3.124 billion providing revenue visibility for FY17E (INR1.913 billion) and FY18E (INR1.210 billion). The ratings, however, are supported by strong revenue growth with a CAGR of 15% during FY14-FY16 (FY14: INR1.213 billion, FY15: INR1.493 million, FY16:INR1.780 billion) and moderate EBITDA margins of 11.22% in FY16 (FY14:13.88%, FY15:13.64%). The ratings are further supported by the firm's established operational track record of more than a decade in the civil construction work. RATING SENSITIVITIES Negative: Further stretch on liquidity and sustained dip in operating margins leading to deterioration in credit metrics will be negative for the ratings. Positive: Improvement in the liquidity profile and/or improvements in the credit metrics will be positive for the ratings. COMPANY PROFILE Incorporated in 2006 as a private limited company, GSEPL is primarily engaged in the contract-based construction and renovation of roads and highways, irrigation work etc. for government bodies. Situated at Lucknow, Uttar Pradesh the company is headed by Sandeep Anand and Govind Kaur Anand. ********* 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, Ivy B. Magdadaro 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, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-362-8552. *** End of Transmission ***