/raid1/www/Hosts/bankrupt/TCRAP_Public/170505.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, May 5, 2017, Vol. 20, No. 89
Headlines
A U S T R A L I A
ACE HOUSE: Second Creditors' Meeting Slated for May 11
CKP CONSTRUCTIONS: Second Creditors' Meeting Slated for May 10
LEDA DRILLING: First Creditors Meeting Set for May 12
LOVE THAT PET: First Creditors Meeting Set for May 10
PEET BEACHTON: Second Creditors' Meeting Slated for May 11
I N D I A
ESSAR AGROTECH: CARE Reaffirms 'B' Rating on INR21.65cr Loan
GLOBAL KNITFAB: CRISIL Reaffirms 'B' Rating on INR6.69MM Loan
GUPTA FOODS: CARE Issues B Issuer Not Cooperating Rating
HIMALAYA CONSTRUCTION: CRISIL Cuts Rating on INR4MM Loan to 'B'
IN-STYLE: Ind-Ra Migrates BB- Rating to Non-cooperating
KANDARP CONST: Ind-Ra Migrates D Rating to Non-Cooperating
KEDIA GUAR: CRISIL Reaffirms 'B' Rating on INR5MM Cash Loan
MAHANADI EDUCATION: Ind-Ra Assigns 'BB' Rating to INR74.5MM Loan
MEGHALAYA CAST: CRISIL Raises Rating on INR6.0MM Cash Loan to BB-
MISHRILAL ASSOC: Ind-Ra Migrates 'B' Rating to Non-cooperating
NIRBAN REALTORS: CRISIL Reaffirms B+ Rating on INR7.75MM Loan
NYSE INFRASTRUCTURE: CRISIL Reaffirms 'D' Rating on INR110MM Loan
OBERAI MOTORS: CRISIL Reaffirms B- Rating on INR5.0MM Loan
RANA OIL: CARE Issues B Issuer Not Cooperating Rating
REGAAL RESOURCES: CRISIL Assigns B+ Rating to INR40MM Term Loan
SHARMA CONSTRUCTION: Ind-Ra Migrates B+ Rating to Non-Cooperating
SHIMLA AUTO: CRISIL Assigns 'B' Rating to INR5.0MM Cash Loan
SHRI RANI: CRISIL Lowers Rating on INR8MM Cash Loan to 'B'
SHRI SAMARTH: CARE Issues B+ Issuer Not Cooperating Rating
SIS HOSPITAL: Ind-Ra Assigns 'B' Long-Term Issuer Rating
SRI LAXMI: CRISIL Cuts Rating on INR7.5MM Cash Loan to 'B'
STERLING TUBES: CRISIL Lowers Rating on INR6MM Cash Loan to 'B'
UTTARAKHAND ENGINEERING: Ind-Ra Puts BB- Long-Term Issuer Rating
VISWAKARMA ROOFINGS: CARE Issues B+ Issuer Not Cooperating Rating
I N D O N E S I A
SAKA ENERGI: Fitch Assigns BB+ Rating to US$625MM Sr. Notes
J A P A N
TOSHIBA CORP: MUFJ Cuts Rating to "requiring supervision"
N E W Z E A L A N D
HANSA LTD: Related Firm Likely Operated as One, Liquidator Says
REX BIONICS: Gets NZ$10.8 Million Lifeline
S I N G A P O R E
MARCO POLO: Time is Running Out to Restructure Debt
S O U T H K O R E A
DOOSAN BOBCAT: Moody's Assigns B1 Rating to Proposed Senior Loan
DOOSAN BOBCAT: S&P Assigns 'BB-' Rating to $1.345BB Term Loan
- - - - -
=================
A U S T R A L I A
=================
ACE HOUSE: Second Creditors' Meeting Slated for May 11
------------------------------------------------------
A second meeting of creditors in the proceedings of Ace House
Transportables Pty. Ltd has been set for May 11, 2017, at
3:00 p.m. at Hotel Grand Chancellor Townsville, 334 Flinders
Street, in Townsville, Queensland.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by May 10, 2017, at 4:00 p.m.
Gavin Moss and Trent McMillen of Chifley Advisory Pty Ltd were
appointed as administrators of Ace House on March 25, 2017.
CKP CONSTRUCTIONS: Second Creditors' Meeting Slated for May 10
--------------------------------------------------------------
A second meeting of creditors in the proceedings of CKP
Constructions Pty Ltd has been set for May 10, 2017, at
10:30 a.m. at Worrells Meeting Room, Level 8, 102 Adelaide Street
in Brisbane, Queensland.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by May 9, 2017, at 5:00 p.m.
Lee Crosthwaite and Chris Cook of Worrells Solvency & Forensic
Accountants were appointed as administrators of Ace House on
May 2, 2017.
LEDA DRILLING: First Creditors Meeting Set for May 12
-----------------------------------------------------
A first meeting of the creditors in the proceedings of Leda
Drilling Pty Ltd will be held on May 12, at 10:00 a.m. at the
offices of McLeod & Partners, Hermes Building, Level 1, 215
Elizabeth Street, in Brisbane, Queensland.
Jonathan Paul McLeod, Jonathan Paul McLeod & Bill Karageozis of
McLeod & Partners were appointed as administrators of McLeod &
Partners on May 1, 2017.
LOVE THAT PET: First Creditors Meeting Set for May 10
-----------------------------------------------------
A first meeting of the creditors in the proceedings of:
- Love That Pet Group Pty Ltd
- Love That Pet Pty Ltd
- Love That Pet Campuses Pty Ltd
- Love That Pet Campuses (QLD) Pty Ltd
- LTPMBA Pty Ltd
- Love That Pet North Ryde Pty Ltd
- Love That Pet Darlinghurst Pty Ltd
will be held on May 10, at 10:00 a.m. at the offices of PPB
Advisory - Level 7, 8-12 Chifley Square, in Sydney, NSW.
Daniel Austin Walley and Andrew John of PPB Advisory were
appointed as administrators of Love That Pet Group on May 2,
2017.
PEET BEACHTON: Second Creditors' Meeting Slated for May 11
----------------------------------------------------------
A second meeting of creditors in the proceedings of Peet Beachton
Syndicate Limited has been set for May 11, 2017, at 12:00 p.m. at
Level 3, 46 Ord Street, in West Perth, WA.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by May 10, 2017, at 4:00 p.m.
Alan Edson Ledger of Ledger Corporate was appointed as
administrator of Peet Beachton on Jan. 31, 2017.
=========
I N D I A
=========
ESSAR AGROTECH: CARE Reaffirms 'B' Rating on INR21.65cr Loan
------------------------------------------------------------
The rating assigned to the bank facilities of Essar Agrotech
Limited (EATL) continues to remain constrained by modest
scale of operation with net loss over the last 3 years ending
FY16 (refers to the period April 1 to March 31), weak debt
coverage indicators, working capital intensive nature of
operations and agri-commodity nature of business making EATL
performance susceptible to the vagaries of climatic conditions.
However, the rating derives strength from experience and
resourcefulness of the promoters and the management team
in the agri products business, diversified product portfolio,
geographical presence and moderate capital structure.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 21.65 CARE B; Stable Reaffirmed
The ability of EATL to increase its scale of operations,
improvement in profitability and liquidity position with
effective management of working capital requirement are the key
rating sensitivities.
Detailed description of the key rating drivers
Key Rating Strengths
Experienced promoter: The directors have an experience of more
than two and half decades and are ably supported by a team of
qualified and experienced professionals.
Diversified product portfolio: EATL is engaged in sale of
flowers, plants and vegetable and milk in domestic and export
markets. Furthermore, the sales in the domestic market have been
to reputed players in processing food and fast food
chains segment.
Moderate capital structure: Capital structure of the company is
comfortable and has been below unity for the past three years
ending March 31, 2016, led by comfortable net worth of the
company.
Key Rating Weaknesses
Net loss and weak debt coverage indicators: Although the PBILDT
margin of the company has remained moderate, the company has been
suffering from net loss led by high fixed capital expenses.
Furthermore, low cash accruals and high amount of total debt has
resulted in weak debt coverage indicators
Working capital intensive nature of operations: EATL operates in
the business which depends heavily on working capital
borrowings with funds mainly blocked in an inventory and
receivables as marked by high gross current asset days of more
than 160 days during last three years ending FY16 leading to high
working capital limit utilization to support the
operations.
Dependence on environmental factors: EATL is engaged in sale of
flowers, plants and vegetable and milk in domestic and export
markets therefore the sale of agri-commodity thereby making its
performance susceptible to the vagaries of the climatic condition
due to seasonal availability and perishable nature of agri-
commodity. Moreover, the production of agricommodity is dependent
on area under cultivation, monsoon. However, the comfort can be
drawn on account of long presence in the business therefore
mitigating the risk to a certain extent.
Essar Agrotech Limited (EATL) was incorporated in April 1993 and
is engaged in farming of flowers, plants and vegetable and
trading of milk. EATL has established the brand name of 'Indus
Fresh Brand' for Dutch roses (13 different types of roses) and
exotic vegetables. Currently EATL is producing roses, vegetables,
mango, plants and plugs in five sites which include Lonavala,
Kamshet, Ooty, Jategaon and Jamnagar. EATL primarily sells
flowers, plants and vegetables in international markets includes
-Europe, Australia, New Zealand and Middle East while in domestic
market EATL sells vegetable in Maharashtra regions which caters
to McDonalds, Dominos YUM and KFC brands.
EATL has also setup a dairy farm in Lonavala. Currently, EATL has
more than 120 cows which produce more than 500 litres per days
and it supplies milk in and around Lonavala. Moreover, EATL also
provides the management and maintenance services where in EATL
develops and maintains the plantation of mango trees (currently
EATL maintains the plantation of more than 1 lakh mango trees in
Jamnagar and Bhuj).
Essar Group
Essar is a multinational corporation with annual revenues of
US$35 billion and investments in Steel, Energy, Infrastructure
and Services. Operations are spread over more than 29 countries
and it employs over 60,000 people during FY16. Essar Group began
as a construction company in 1969 and has diversified into
manufacturing, services and retail over the years since then.
Over the last decade, it has grown through strategic global
acquisitions and partnerships, or through greenfield and
brownfield development projects, capturing new markets and
discovering new raw material sources.
GLOBAL KNITFAB: CRISIL Reaffirms 'B' Rating on INR6.69MM Loan
-------------------------------------------------------------
CRISIL has reaffirmed its rating on the long-term bank facilities
of Global Knitfab (GKF) at 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3 CRISIL B/Stable (Reaffirmed)
Term Loan 6.69 CRISIL B/Stable (Reaffirmed)
The rating reflects GKF's modest scale of operations in intensely
competitive industry and large working capital requirement. These
weaknesses are partially offset by an above-average financial
risk profile because of moderate debt protection metrics, and
partners' extensive experience in the textile industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Large working capital requirement: Operations, though expected
to improve, are working capital intensive, with gross current
assets of 367 days as on March 31, 2016, primarily on account of
high debtors coupled with moderate inventory.
* Modest scale of operations in an intensely competitive
industry: Revenue was modest at INR3.3 crore in fiscal 2016, and
is estimated at INR12.5 crore in fiscal 2017, the first full year
of operations. Textile industry is intensely competitive, with
many small companies. High regional concentration, along with
competition, will likely constrain topline and margins.
Strengths
* Above-average financial risk profile because of moderate debt
protection metrics: Interest coverage and net cash accrual to
total debt ratios were moderate at 2.7 times and 0.08 time,
respectively, in fiscal 2016.
* Promoters extensive experience in the steel industry: The
partners have over a decade's experience in the Surat textile
market. Their experience is expected to help register topline
growth.
Outlook: Stable
CRISIL believes GKF will benefit over the medium term from
partners' extensive experience and moderate financial risk
profile. The outlook may be revised to 'Positive' in case of
better-than-expected scale of operations and profitability, along
with efficient working capital management. Conversely, the
outlook may be revised to 'Negative' in case of decline in
revenue and profitability, or deterioration in working capital
management, or large, debt-funded capital expenditure, weakening
the financial risk profile, particularly liquidity.
Set up in 2014 in Surat, Gujarat, as a partnership between Mr.
Prabin Khakholia, Mr. Ankit Agarwal, and their families, GKF
knits fabrics. Currently, it has six knitting machines.
Profit after tax was INR0.02 crore on net sales of INR3.37 crore
in fiscal 2016.
GUPTA FOODS: CARE Issues B Issuer Not Cooperating Rating
--------------------------------------------------------
CARE has been seeking information from Gupta Foods (GF) to
monitor the rating(s) vide e-mail communications/letters dated
March 27, 2017 and numerous phone calls. However, despite CARE's
repeated requests, the firm 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 an opinion on the rating. In line with the extant SEBI
guidelines CARE's rating on Gupta Foods bank facilities will now
be denoted as CARE B; ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 9.50 CARE B; 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).
Detailed description of the key rating drivers:
At the time of last rating in November 2015 the following were
the rating strengths and weaknesses:
Key Rating Strength
Experienced and resourceful promoters and established track
record of the company: GF (established in 2008), is currently
being managed by Mr. Naveen Gupta, Mr. Avinash Gupta, Mrs Anita
Gupta and Mrs Shruti Gupta. Mr. Naveen Gupta and Mr. Avinash
Gupta have gained work experience of two and a half decades and
two decades, respectively, through their association with JKS
(Punjab based commission agents, established since 1980) and
through GF. Mrs Shruti Gupta and Mrs Anita Gupta have gained
experience of one decade and two decades, respectively, through
their association with JKS and GF.
Favorable processing location: GF is mainly engaged in milling
and processing of rice. The main raw material (Paddy) is procured
from local grain markets, located in Punjab. The Firm's
processing facility is situated in Tarn Taran, Punjab which is
one of the highest producers of paddy in India. Its presence in
the region gives additional advantage over the competitors in
terms of easy availability of the raw material as well as
favorable pricing terms.
Key Rating Weakness
Modest scale of operations: Although the total operating income
(TOI) of GF had increased from INR17.10 crore in FY13 (refers to
the period April 1 to March 31) to INR20.01 crore in FY15, the
same continues to remain modest and fluctuating in nature.
Weak financial profile of the firm: The profitability margin of
the firm stood low marked by PBILDT and PAT margin of 4.61% and
0.60%, respectively, in FY15. The same is due to low value
addition and intense market competition given the highly
fragmented nature of the industry. Additionally, PAT margin has
remained low owing to high depreciation and interest costs.
GF has a leveraged capital structure, marked by long term debt-
equity ratio and overall gearing ratio of 0.84x and 5.84x
respectively as on March 31, 2015, mainly on account of reliance
upon external working capital borrowings to support the business
operations.
Weak debt coverage indicators: Debt coverage indicators of GF
remained weak marked by interest coverage ratio of 1.58x for FY15
and total debt to GCA of 37.15xas on March 31, 2015 on account of
high dependence upon external working capital borrowings coupled
with low gross cash accruals Working capital intensive nature of
operations: Working capital cycle of entity remained moderately
high at 133days as on March 31, 2015 largely due to higher
inventory days. The working capital requirements were met largely
through bank borrowings which remained about 90% utilized of its
sanctioned limits for the last 12 months period ended October,
2015.
Susceptibility to fluctuation in raw material prices and monsoon
dependent operations: Agro-based industry is characterized by its
seasonality, as it is dependent on the availability of raw
materials, which further varies with different harvesting
periods. The price of rice moves in tandem with the prices of
paddy.
Availability and prices of agro commodities are highly dependent
on the climatic conditions. Adverse climatic conditions can
affect their availability and leads to volatility in raw material
prices.
Fragmented nature of industry coupled with high level of
government regulation: The commodity nature of the product makes
the industry highly fragmented with numerous players operating in
the unorganized sector with very less product differentiation.
There are several small scale operators which are not into end-
to-end processing of rice from paddy, instead they merely
complete a small fraction of processing and dispose-off semi-
processed rice to other big rice millers for further processing.
The raw material (paddy) prices are regulated by the government
to safeguard the interest of farmers, which in turn limits the
bargaining power of the rice millers.
Gupta Foods (GF) is a Punjab-based, partnership firm established
in 2008 by Mr. Naveen Gupta, Mr. Avinash Gupta, Mrs Anita Gupta
and Mrs Shruti Gupta sharing profit and loss in equal proportion.
The firm is engaged in processing of paddy at its manufacturing
facility located in Tarn Taran, Punjab having an installed
capacity of processing 20,000 metric tonnes per annum (MTPA) of
paddy to rice, as on March 31, 2015.
GF procures paddy directly from local grain markets through
commission agents located in Punjab. The firm sells its products
i.e. Basmati and Non-Basmati rice in Punjab and Delhi through a
network of commission agents under brand name "Radhika GF".
Punjab based partnership firm, Jugal Kishore & Sons (JGS) is an
associate concern of GF which is engaged as commission agents
(since 1980) and being looked after by Mr. Naveen Gupta, Mr.
Avinash Gupta and Mrs Uma Gupta. The partners of the firm share
profit and loss in equal proportion.
HIMALAYA CONSTRUCTION: CRISIL Cuts Rating on INR4MM Loan to 'B'
---------------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility
of Himalaya Construction Co.Pvt Limited (HCCPL) to 'CRISIL
B/Stable' from 'CRISIL B+/Stable', and reaffirmed the short-term
rating at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 20 CRISIL A4 (Reaffirmed)
Cash Credit 4 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
The downgrade reflects weak business risk profile due to lower
orders from government agencies resulting in revenues of INR35
croresin fiscal 2016 as compared to INR61 crores the previous
fiscal, although the sales have improved to an estimated INR38
crore in fiscal 2017. Working capital cycle remained stretched,
reflected in gross current assets (GCAs) of 305 days as on March
31, 2016, due to stretched receivables, and payables of 613 days.
Debtors increased significantly as on March 31, 2016 on account
of delayed payments from customers and are estimated to remain
high. Hence, bank limit has been fully utilised. The downgrade
also reflects the expectation that the business will remain muted
over the medium term with large working capital requirements.
The ratings reflect HCCPL's large working capital requirement and
small scale of operations in the competitive civil construction
industry. These weaknesses are partially offset by the extensive
experience of its promoter and above average financial risk
profile.
Key Rating Drivers & Detailed Description
Weaknesses
* Large working capital requirement: The GCAs were high due to
the large debtors and the need to provide security deposit (5%)
for projects. Also, customers retain earnest money deposit, which
is released six months after project completion.
* Small scale of operations: With turnover estimated at INR38
crore for fiscal 2017, scale remains modest. Also, revenue has
been volatile in the past three years, with sales of INR32.18
crore in fiscal 2014 increasing to INR61.15 crore in fiscal 2015,
and then dipping to INR35 crore in fiscal 2016.
Strengths
* Extensive experience of promoter: Presence of around three
decades in the civil construction segment has enabled the
promoter to develop the required technical and project management
capabilities to execute small and medium-sized projects.
* Above-average financial risk profile: Gearing is estimated to
be comfortable at 1.15 times as on March 31, 2017, and interest
coverage ratio is also expected to be comfortable at 2.37 times
for fiscal 2017.
Outlook: Stable
CRISIL believes HCCPL will continue to benefit over the medium
term from the extensive experience of its promoter. The outlook
may be revised to 'Positive' in case of significant improvement
in scale of operations and diversification of revenue, sustenance
of profitability, or improvement in working capital management.
The outlook may be revised to 'Negative' if substantially low
cash accrual, further large, debt-funded capital expenditure, or
increase in working capital requirement weakens liquidity.
Incorporated in 1979 in Delhi and promoted by Mr. Manjit Singh,
HCCPL is a 'Class A' civil contractor that constructs tunnels for
hydroelectric projects for irrigation purposes, power houses,
dams, roads, and railways. It also undertakes other types of
heavy construction work.
Profit was INR0.39 crore on net sales of INR35.27 crore for
fiscal 2016, against a profit of INR2.36 crores on net sales of
INR61.15 crore for fiscal 2015.
IN-STYLE: Ind-Ra Migrates BB- Rating to Non-cooperating
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated In-Style
Embroideries Private Limited's (ISEPL) Long-Term Issuer Rating to
the non-cooperating category. The issuer did not participate in
the rating exercise despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will now appear as 'IND BB-(ISSUER NOT COOPERATING)' on the
agency's website. The instrument-wise rating actions are:
-- INR12.50 mil. Fund-based working capital limit migrated to
Non-Cooperating Category;
-- INR52.50 mil. Term loan migrated to Non-Cooperating
Category;
-- INR5.00 mil. Proposed fund-based working capital limit
migrated to Non-Cooperating Category;
-- INR15.00 mil. Proposed term loan migrated to Non-
Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Jan. 27, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
ISEPL was incorporated in 1997 and is engaged into embroideries
job work.
KANDARP CONST: Ind-Ra Migrates D Rating to Non-Cooperating
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Kandarp
Constructions (India) Private Limited's (KCIPL) Long-Term Issuer
Rating to the non-cooperating category. The issuer did not
participate in the surveillance exercise, despite continuous
requests and follow-ups by the agency. Therefore, investors and
other users are advised to take appropriate caution while using
these ratings. The rating will now appear as
'IND D(ISSUER NOT COOPERATING)' on the agency's website. The
instrument-wise rating actions are:
-- INR60 mil. Fund-based working capital limit (long-term)
migrated to Non-Cooperating Category; and
-- INR100 mil. Term loan (long-term) migrated to Non-
Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Jan. 11, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2001, KCIPL is a Lucknow-based firm engaged in
the business of civil and road construction works.
KEDIA GUAR: CRISIL Reaffirms 'B' Rating on INR5MM Cash Loan
-----------------------------------------------------------
CRISIL has been consistently following up with Kedia Guar Gum
Private Limited (KGGPL) for obtaining information through letters
and emails dated January 25, 2017 and February 14, 2017 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Long Term Loan 1.5 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Kedia Guar Gum Private
Limited. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for Kedia Guar Gum Private Limited
is consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL B rating
category or lower.' Based on the last available information,
CRISIL has reaffirmed the rating at CRISIL B/Stable.
KGGPL, incorporated in 2012 as a private limited company is based
in Rajgarh (Rajasthan) and promoted by Mr. Naresh Kumar Kedia.
The company processes guar seeds into guar splits (daal) and by-
products, churi and korma.
MAHANADI EDUCATION: Ind-Ra Assigns 'BB' Rating to INR74.5MM Loan
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Mahanadi
Education Society's (MES) bank loans these ratings:
-- INR74.5 mil. Term loan facility assigned with
'IND BB/Stable' rating;
-- INR100 mil. Working capital facility assigned with
'IND BB/Stable' rating
KEY RATING DRIVERS
The ratings are constrained by MES'S increasing debt burden since
FY12. In FY16, debt to current balance before interest and
depreciation (CBBID) ratio was 3.51x (FY15: 3.55x; FY14: 3.32x).
The society's debt service coverage ratio improved to 1.20x in
FY16 from 0.56x in FY15. Ind-Ra believes that timely debt
servicing depend mainly on financial support from the trustees in
the form of unsecured loans.
The ratings are also constrained by MES's tight liquidity profile
and weak operational effectiveness. Its available funds (cash
and unrestricted investments) provide a weak financial cushion to
both financial leverage (FY16: 6.86%) and operating expenditure
(6.96%). The society's collection period increased to 80 days in
FY16 from 70 days in FY15. College headcount has been stagnant
since FY13 (at about 1,800) and approved intake declined to 905
in FY16 from 1,056 in FY15.
The ratings, however, are supported by MES's stable operating
margin and tuition fee. Its operating margin was comfortable at
an average of 27.46% over FY12-FY16. Operating margin improved
to 28.07% in FY16 from 25.93% in FY15. Tuition fee income, which
accounted for an average 94.40% of revenue during FY12-FY16,
expanded at a CAGR of 2.17% during the period. Revenue was
INR211.08 million in FY16 (FY15: INR208.63 million).
RATING SENSITIVITIES
Negative: Any unexpected fall in student demand, along with an
increase in the debt proportion of future capex, resulting in
strained liquidity position and debt burden could trigger a
negative rating action.
Positive: An increase in enrolments leading to revenue growth
resulting in an enhanced liquidity position and reduced debt
burden could trigger a positive rating action.
COMPANY PROFILE
Founded in 1994, MES is registered with the Registrar of Firms
and Societies, Madhya Pradesh. The society manages and operates
these institutes.
-- Raipur Institute of Technology (1995);
-- Kaanger Valley Academy (2005);
-- RIT College of Nursing (2008);
-- RIT College of Management (2009);
-- RIT College of Hotel Management (2016); and
-- RIT College of Education (2013)
These institutes provide undergraduate and postgraduate courses
in engineering, education, commerce and hotel management.
Moreover, MES operates a senior secondary school, Kaanger Valley
Academy.
MEGHALAYA CAST: CRISIL Raises Rating on INR6.0MM Cash Loan to BB-
-----------------------------------------------------------------
CRISIL has upgraded its ratings on the bank loan facilities of
Meghalaya Cast and Alloys Private Limited (MCAPL; part of the
Pawan group) to 'CRISIL BB-/Stable/CRISIL A4+' from 'CRISIL
B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2.14 CRISIL A4+ (Upgraded from
'CRISIL A4')
Cash Credit 6.00 CRISIL BB-/Stable (Upgraded
from 'CRISIL B+/Stable')
Term Loan 1.91 CRISIL BB-/Stable (Upgraded
from 'CRISIL B+/Stable')
The upgrade reflects the group's improved liquidity on account of
considerable reduction in debt repayment obligation. Accordingly
the surplus cash accruals generated by the group going forward is
expected to augment the overall liquidity profile in the absence
of any debt funded capex plan.
The ratings reflect a healthy financial risk profile because of a
substantial networth and low gearing, and the extensive
experience of the promoters in the iron and steel industry. These
rating strengths are partially offset by the working capital-
intensive nature, and small scale, of operations in a fragmented
industry.
Analytical Approach
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of MCAPL and Pawan Castings (Meghalaya)
Pvt Ltd (PCMPL). That's because the two companies, together
referred to as the Pawan group, are in the same line of business,
have significant operational synergies, and are under a common
management. They are likely to support each other in case of
exigencies.
Key Rating Drivers & Detailed Description
Strengths
* Extensive industry experience of the promoters: The promoters
have been in the steel industry since the past one decade. This
has enabled them to develop a comfortable relationship with
customers and suppliers, and led to repeat orders from customers.
* Above Average financial risk profile: The networth and gearing
are estimated to remain healthy as on March 2017 at INR27.33
crores and 0.88times respectively. Further the debt protection
metrics will continue to remain adequate with estimated interest
coverage ratio and NCATD of 1.59 times and 0.07 times
respectively for fiscal 2017.
Weakness
* Working capital-intensive operations
Gross current assets are estimated to remain high over the medium
term with estimated GCA of 175 days for year ended March 31,
2017. This trend is likely to continue over the medium term.
* Small scale of operations: The group is a small player in the
domestic secondary steel industry, with a limited market share.
It primarily produces thermo-mechanically treated bars, the
market for which is highly fragmented, exposing the group to
intense competition. Individual players have limited pricing
power due to the commodity-like nature of their products.
Outlook: Stable
CRISIL believes the Pawan group will continue to benefit from the
industry experience of its promoters. The outlook may be revised
to 'Positive' in case of significant improvement in revenue and
profitability while the capital structure is maintained. The
outlook may be revised to 'Negative' in case of a decline in
profitability, or large, debt-funded capital expenditure,
weakening the financial risk profile.
The Pawan group was set up by Mr. Madan Lal Mittal and Mr. Rajesh
Kumar Mittal. The group manufactures structural steel. PCMPL
commenced commercial production in 2007 at its plant in Byrnihat,
Meghalaya. MCAPL, incorporated in 2002, manufactures mild steel
ingots at its facilities in Meghalaya.
Profit after tax (PAT) was INR97 lakh on revenue of INR116 crore
in fiscal 2016, against PAT of INR94 lakh on revenue of INR120
crore in fiscal 2015.
MISHRILAL ASSOC: Ind-Ra Migrates 'B' Rating to Non-cooperating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Mishrilal
Associates Private Limited's (MLAPL) Long-Term Issuer Rating to
the non-cooperating category. The issuer did not participate in
the rating exercise despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will now appear as 'IND B(ISSUER NOT COOPERATING)' on the
agency's website. The instrument-wise rating actions are:
-- INR15 mil. Fund-based working capital limit migrated to
Non-Cooperating Category; and
-- INR50.25 mil. Non-fund-based working capital limit migrated
to Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Feb. 19, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2011, MLAPL is engaged in the erection and
commissioning of electrical installations such as sub-stations
and overhead lines. The company also supplies electrical
equipment.
NIRBAN REALTORS: CRISIL Reaffirms B+ Rating on INR7.75MM Loan
-------------------------------------------------------------
CRISIL has reaffirmed its rating on the long-term bank facilities
of Nirban Realtors and Developers (NRD) at 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long
Term Bank Loan
Facility 4.75 CRISIL B+/Stable (Reaffirmed)
Term Loan 7.75 CRISIL B+/Stable (Reaffirmed)
The rating reflects NRD's exposure to demand risk on its ongoing
project. This weakness is partially offset by the prime location
of NRD's project and the funding support the firm receives from
its promoter.
Key Rating Drivers & Detailed Description
Weaknesses
* Demand risk on the ongoing project: Phase 1, comprising a 36-
storey building, is complete, and customer advances for all units
have been received. However, Phase 2 is still at an early stage
of construction, and offtake is low. Any delays in receipt of
advances can severely impact cash flows and liquidity.
Strengths
* Prime location of project: Benefits from the prime location of
the project'near JJ Hospital, Byculla, Mumbai where demand for
residential property is high, should however support offtake on
Phase 2 as well.
* Funding support from promoter: The management is committed to
extending unsecured loans in the event of cashflow mismatches as
in the past.
Outlook: Stable
CRISIL believes NRD will continue to benefit from the prime
location of its ongoing project. The outlook may be revised to
'Positive' if timely completion of ongoing projects leads to
better-than-expected unit bookings, customer advances, and cash
inflows. Conversely, the outlook may be revised to 'Negative' in
case of significant decline in liquidity due to delays in project
completion or receipt of customer advances.
Established in 2008, NRD is a proprietorship firm of Mr. Mohammed
Husain Jalaluddin Nirban. The firm undertakes residential real
estate development and is implementing a redevelopment project at
Byculla, Mumbai.
Profit after tax was INR0.19 crore on net sales of INR14.93 crore
in fiscal 2016 as against profit after tax of INR0.17 crore on
net sales of INR19.88 crore in fiscal 2015.
NYSE INFRASTRUCTURE: CRISIL Reaffirms 'D' Rating on INR110MM Loan
-----------------------------------------------------------------
CRISIL has been consistently following up with NYSE
Infrastructure Private Limited (NYSE) for obtaining information
through letters and emails dated January 25, 2017 and
February 14, 2017 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 110 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of NYSE Infrastructure Private
Limited. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for NYSE Infrastructure Private
Limited is consistent with 'Scenario 1' outlined in the
'Framework for Assessing Consistency of Information with CRISIL B
rating category or lower.' Based on the last available
information, CRISIL has reaffirmed the rating at CRISIL D.
NYSE was set up in 2001 as a special-purpose vehicle by Navayuga
Engineering Company Ltd and Soma Enterprises Ltd. The company
constructed a four-lane highway of around 17 kilometres on
National Highway 5, the Chennai-Kolkata section of the Golden
Quadrilateral project. It was a build, operate, and transfer
project on an annuity basis awarded by NHAI.
OBERAI MOTORS: CRISIL Reaffirms B- Rating on INR5.0MM Loan
----------------------------------------------------------
CRISIL has reaffirmed its rating on the long-term bank facilities
of Oberai Motors Limited (OML) at 'CRISIL B-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Drop Line
Overdraft
Facility 5 CRISIL B-/Stable (Reaffirmed)
Term Loan 0.9 CRISIL B-/Stable (Reaffirmed)
The rating continues to reflect OML's weak financial risk
profile, marked by a high total outside liabilities to tangible
net worth ratio and weak debt protection metrics, and geographic
concentration in its revenue profile. These rating weaknesses are
partially offset by the long track record of OML's promoters in
the automobile dealership segment.
Key Rating Drivers & Detailed Description
Weakness
* Weak financial risk profile: OML had small networth and high
total outside liabilities to tangible networth (TOLTNW) ratio of
INR2.7 crore and 5.05 times, respectively, as on March 31, 2016.
* Geographical concentration in revenue profile and exposure to
intense competition: As all OML's showrooms and workshops are in
Uttarakhand, any change in the CV segment there can significantly
impact the company's business. Also, dealership of only one
principal exposes growth in revenue and margin to TML's
performance.
Strengths
* Established position in the automobile (auto) dealership
segment in Uttarakhand: OML's promoter has more than two decades
of experience in the auto dealership business. Mr. Rakesh Oberai
began operations in 1993 with dealership of Ashok Leyland Ltd and
has been dealing in TML's CVs since 2002. Longstanding presence
along with post-sales service and well-entrenched set-up has made
OML a preferred dealer, especially of schools, in Uttarakhand.
This is reflected in revenue of INR63.5 Crore in 2015-16.
Outlook: Stable
CRISIL believes that OML will maintain its business risk profile
over the medium term, supported by its established relationship
with its principal, Tata Motors Ltd (TML; rated 'CRISIL
AA/Positive/CRISIL A1+'). However, the company's financial risk
profile is expected to remain weak over this period because of
its large working capital requirements. The outlook may be
revised to 'Positive' if OML's financial risk profile improves,
most likely driven by fresh infusion of equity capital or
sustained improvement in its operating margin. Conversely, the
outlook maybe revised to 'Negative' if the company's financial
risk profile weakens further, most likely because of large debt-
funded capital expenditure or low cash accruals.
OML was incorporated in 2002 and promoted by Mr. Rakesh Oberai.
The company deals in light commercial vehicles of TML. OML has
showrooms in Dehradun and Garhwal (both in Uttarakhand). It has
set up a showroom in Roorkee (Uttrakhand) which is expected to be
operational by the end of September 2013. The company also has
sales offices in Vikasnagar and Haridwar (also in Uttarakhand).
For fiscal 2016, OML reported a profit after tax (PAT) of INR28
lakhs on an operating income of INR63.5 crore against a PAT of
INR3 lakhs on an operating income of INR55.9 crore in fiscal
2015.
RANA OIL: CARE Issues B Issuer Not Cooperating Rating
-----------------------------------------------------
CARE has been seeking information from Rana Oil Industries (ROI),
to monitor the rating through email dated September 7, 2016,
September 13, 2016, October 10, 2016, November 21, 2016, and
February 18, 2017 along with numerous phone calls. However,
despite CARE's repeated requests, the firm has not provided the
requisite information for monitoring the rating. 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 Rana Oil Industries long
term bank facilities will now be denoted as CARE B; ISSUER NOT
COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 15.00 CARE B; ISSUER NOT
COOPERATING
The rating takes into account volatility in raw material prices
influenced by government policies, nature of constitution of
entity being partnership and presence of entity in fragmented
industry with low entry barriers. The rating, draws support
from the experience of the promoters and favorable industry
scenario.
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 April 4, 2016, following were the
rating strengths and weaknesses:
Key Rating Strengths
Experienced and resourceful promoters
ROI is promoted by four partners Mr. Hasamali Karani, Mr. Naushad
Karani, Mr. Husainali Karani and Ms. Mallika Karani. The partners
have an average experience of more than three and a half decade
in cotton ginning & pressing along with oil extraction. Mr.
Naushad Karani and Ms. Mallika Karani looks after the overall
operations of the firm. Being in the industry for more than a
decade has helped the promoter to gain adequate acumen about the
business which will aid in smooth operations of ROI.
Location Advantage
The manufacturing facility of ROI is located at Yavatmal in the
Vidarbha region of Maharashtra. Maharashtra produces around 21%
of total cotton production of India. Out of the total production
of Maharashtra, 65% is contributed by Vidarbha region. Hence, raw
material is available in adequate quantity. Furthermore, the
presence of ROI in cotton producing region also fetches a
location advantage of lower logistics expenditure. Moreover,
there is robust demand of cotton bales and cotton seeds in the
region due to presence of spinning mills (more than 35 cotton
textiles) in Yavatmal. Integration into cotton seed oil resulting
in zero discharge plant Apart from ginning and pressing of
cotton, ROI is also engaged in cotton seed oil extraction with an
installed capacity of extracting 30000liters oil per annum. The
cotton seeds available after the ginning and pressing process are
processed in oil mill to procure cotton oil and the cotton oil
cake is recovered as by product, which is also sold by the firm.
Hence, ROI can be categorized as zero discharge plant as there is
no residue or scrap left after the manufacturing process.
Key rating weaknesses
Risk associated with seasonality and fragmented nature of
industry Operation of cotton business is highly seasonal in
nature, as the sowing season is from March to July and the
harvesting season is spread from November to February. Hence, the
working capital utilization is high approx 95-98% in the peak
season i.e. November to May, while in rest of the months it is
below 70%. This results in moderately low financial flexibility
to shield against any adverse situation during peak period
(November-May). Further, the cotton industry is highly fragmented
with large number (approx 80%) of players operating in the
unorganized sector. As ROI faces stiff competition from other
players operating in the same industry in the Yavatmal area, it
results in low bargaining power of ROI against its customers.
Susceptibility to government policies related to price and export
of cotton
The price of raw cotton in India is regulated through function of
MSP by the government. Further, the price of raw cotton is highly
volatile in nature and depends upon factors like area under
production, yield for the year, international demandsupply
scenario, export quota decided by government and inventory carry
forward from previous year. As and when cotton prices touches the
MSP, Cotton Corporation of India, as a Nodal Agency of Government
of India, resorts to immediate market intervention and makes
purchase of cotton at MSP without any quantitative limits to
check price stabilization and prevent distress sales by the
farmers. Moreover, exports of cotton are also regulated by
government through quota systems to suffice domestic demand for
cotton. Hence, any adverse change in government policy i.e.
higher quota for any particular year, ban on the cotton or cotton
yarn export may negatively impact the prices of raw cotton in
domestic market and could result in lower realizations and profit
for ROI.
Partnership nature of constitution
Being partnership nature of constitution, the firm is exposed to
the risk of withdrawal of capital by partners due to personal
exigencies, dissolution of firm due to retirement or death of any
partner and restricted financial flexibility due to inability to
explore cheaper sources of finance leading to limited growth
potential.
Rana Oil Industries (ROI) was established as a partnership
concern in the year 1996. The firm is engaged in ginning and
pressing of cotton and extraction of oil from cotton seed. The
ginning and pressing unit and oil extraction unit is located at
Yavatmal, Maharashtra. The plant operates for ten months in a
year (from October to July). It procures the raw material i.e.
raw cotton from the local market and sell its final product i.e.
cotton bales to the customers located in and around Yavatmal. The
firm has an installed capacity to gin and press 13200 tons of
bales per annum and to extract 30000 liters of oil per annum.
REGAAL RESOURCES: CRISIL Assigns B+ Rating to INR40MM Term Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facility of Regaal Resources Private Limited (RRPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 40 CRISIL B+/Stable
The rating reflects the company's exposure to risks related to
start-up nature of operations, implementation of its project and
stabilisation of operations. These weaknesses are partially
offset by its promoters' extensive entrepreneurial experience.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to risks related to start-up nature of operations,
implementation of its project and stabilisation of operations:
The company is setting up a starch extraction plant at a cost of
INR73.76 crore, and is exposed to risks related to timely
completion of the project. CRISIL believes there is moderate
implementation risk as any delay in commissioning of project can
have a negative impact on the financial risk profile of the
company.
Strength
* Extensive entrepreneurial experience of the promoters: RRPL is
promoted by the Kolkata based Kishorepuria family, who have
diversified businesses through various verticals of business such
as manufacturing and trading, publishing, real estates, and
hospitality. The promoters have diversified and established a
strong position for itself in various markets, hence CRISIL
believes RRPL will benefit from the extensive experience of the
promoters.
Outlook: Stable
CRISIL believes RRPL will continue to benefit from the extensive
entrepreneurial experience of its promoters. The outlook may be
revised to 'Positive' if the project is implemented and
operations are stabilised as scheduled. The outlook may be
revised to 'Negative' if time and cost overruns in the project
lead to significant pressure on liquidity.
RRPL, incorporated in 2012, is promoted by Mr. Bijay Kumar
Kishorepuria, Mr. Raj Kumar Kishorepuria, Mr. Anil Kishorepuria
and Mr. Manoj Panwar. The company is setting up a starch
extraction plant in Thakurganj, Bihar.
SHARMA CONSTRUCTION: Ind-Ra Migrates B+ Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sharma
Construction Company's (SCC) Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND B+(ISSUER NOT COOPERATING)' on the agency's
website. Instrument-wise rating actions are:
-- INR62 mil. Fund-based working capital limit migrated to
Non-Cooperating Category; and
-- INR30 mil. Non-fund-based working capital limit migrated to
Non-Cooperating Category
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Jan. 6, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
SCC, a proprietorship concern, was established in 1992 by
Rajinder Attri in Sangrur district (Punjab). The firm is engaged
in the business of civil construction works, mainly construction
of roads. SCC, registered as a class I contractor, generally
undertakes contracts for government organizations by bidding
through tenders. The company has a head office in Sangrur
(Punjab).
SHIMLA AUTO: CRISIL Assigns 'B' Rating to INR5.0MM Cash Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to
the bank facilities of Shimla Auto (SA).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan .63 CRISIL B/Stable (Assigned)
Bank Guarantee .2 CRISIL A4 (Assigned)
Cash Credit 5.0 CRISIL B/Stable (Assigned)
The rating reflects SA's modest scale of operations, large
working capital requirement and weak financial risk profile.
These weaknesses are partially offset by the extensive experience
of partners in the automobile parts distribution market.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: Scale of operations is modest as
reflected in estimated turnover of INR5.84 crore in fiscal 2017.
* Working capital-intensive operations: Operations are working
capital intensive, with gross current assets of 219 days as on
March 31, 2017. Large working capital was mainly due to high
inventory levels of 145 days and moderate debtor days of 72 days.
* Weak financial risk profile: Financial risk profile is weak,
with high TOL/TNW of 5.04 times as on March 31, 2017 and moderate
debt protection metrics, with expected interest coverage ratio at
1.55 times and net cash accrual to total debt ratio at 0.04 time
for fiscal 2017.
Strength
* Extensive experience of partners: SA is promoted by Mr. Satish
Bhardwaj and Mr. Sandeep Bhardwaj. Due to extensive experience of
the promoter, the firm has established market position for its
operations in Mandi, Himachal Pradesh.
Outlook: Stable
CRISIL believes that SA will maintain its business risk profile
backed by its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if the company achieves
substantial growth in revenue and profitability, resulting in
improvement in its business financial risk profile. Conversely,
the outlook may be revised to 'Negative' in case of low growth or
slowdown in the end user industry, leading to weakening in its
business or large debt-funded capital expenditure, leading to
weakening in financial risk profile.
Set up in 2005 as a partnership firm by Mr. Satish Bhardwaj and
Mr. Sandeep Bhardwaj, SA is an authorised distributor of
lubricants of Castrol India in Mandi; and also trades in spare
parts of Meritor and Fleetguard Filters Pvt Ltd.
SA, reported a profit after tax (PAT) of INR0.07 crore on net
sales of INR3.25 crore for 2015-16 (refers to financial year,
April 1 to March 31), against a PAT of INR0.01 crore on net sales
of INR2.89 crore for 2014-15. The firm is expected to report a
turnover of INR5.84 crores in fiscal 2017.
SHRI RANI: CRISIL Lowers Rating on INR8MM Cash Loan to 'B'
----------------------------------------------------------
CRISIL has been consistently following up with Shri Rani Sati
Foods and Grains Private Limited (SRFGPL) for obtaining
information through letters and emails dated January 20, 2017 and
February 10, 2017 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 8 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from 'CRISIL BB-/Stable')
Proposed Long Term 2 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating; Downgraded from
'CRISIL BB-/Stable')
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Shri Rani Sati Foods and
Grains Private Limited. This restricts CRISIL's ability to take a
forward looking view on the credit quality of the entity. CRISIL
believes that the information available for Shri Rani Sati Foods
and Grains Private Limited is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL B rating category or lower.' Based on the
last available information, CRISIL has downgraded the rating to
CRISIL B/Stable.
Incorporated in 2009, SRFGPL is engaged in milling of non-basmati
parboiled rice. Its manufacturing facility is in Ranchi. Its
operations are managed by promoters-directors Mr. Susil Poddar
and Mr. Anup Gupta.
SHRI SAMARTH: CARE Issues B+ Issuer Not Cooperating Rating
----------------------------------------------------------
CARE has been seeking information from Shri Samarth Oil Refinery
LLP (SSOR), to monitor the rating through email dated
March 15, 2017, February 15, 2017, February 1, 2017, October 7,
2016, September 7, 2016 and numerous phone calls. However,
despite CARE's repeated requests, the firm has not provided the
requisite information for monitoring the rating. 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 Shri Samarth Oil Refinery
LLP long term bank facilities will now be denoted as
CARE B+; ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 7.25 CARE B+; ISSUER NOT
COOPERATING
The rating takes into account presence of entity in highly
fragmented industry with limited value addition along with
working capital intensive nature of operations, vulnerability of
profitability margins due to presence in the highly volatile
agro-commodity business and nature of constitution of entity
being partnership. The rating however, draws support from
experienced partners alongwith support to entity from group
concerns.
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 February 04, 2016, following were
the rating strengths and weaknesses:
Key Rating Strengths
Experienced promoters: SSOR is managed by Tapdiya family of Beed,
Maharashtra. The partners have an average experience of more than
two decades in oil milling and trading through group concerns
engaged in the business of extraction of edible oil. Apart from
SSOR, the partners are also associated with other firms of
Tapdiya group in the capacity of proprietor. Being in the
industry for so long has helped the partners in gaining adequate
acumen about the industry.
Synergistic advantage from association with group entites SSOR
gains support from the group concerns in the form of easy and
timely availability of raw material as and when required.
Furthermore, the firm also gets benefit from the established
network of the group regarding marketing and customers. This aids
the firm in smooth operations despite being a new entrant in the
oil processing business. Being in the industry for so long has
helped the promoters in gaining adequate acumen about the
business.
Key Rating Weaknesss
Presence in highly fragmented industry
The specific food habits of different regions in India have led
to preferences of different types of edible oil. Coconut oil is
used widely in the south, mustard and palm in the north, and
groundnut in the west. The urban centres have witnessed greater
demand for sunflower, soya and rice-bran oils. Thus, localization
of product offerings has fragmented the industry and lowered
capacity utilization due to large number of players and limited
availability of raw material. The capacity utilization rate for
the industry is lower than 35%. SSOR being a new entrant in the
business of refining edible oil faces intense competition from
existing players.
Vulnerability of profitability margins due to presence in the
highly volatile agro-commodity business
The profitability is greatly influenced by the movement in prices
of soya/cotton/mustard seed, De-oiled Cake (DOC). Prices of
soya/cotton/mustard-based products are governed by the demand-
supply dynamics prevalent in major soya/cotton/mustard growing
nations, weather conditions and prices of substitute edible oils.
Domestic production of soya/cotton/mustard seed, in turn, is
dependent on area under cultivation, vagaries of monsoon, prices
of other crops, Minimum Support Price (MSP) and incentives
offered by Government of India (GoI). Furthermore, any increase
in the seed prices without a corresponding increase in DOC and
edible wash oil prices will adversely impact already low
profitability margins of the entities in the business of oil
refining.
Partnership nature of constitution
Being a partnership firm, SSOR is exposed to the risk of
withdrawal of capital by partners due to personal exigencies,
dissolution of firm due to retirement or death of any partner and
restricted financial flexibility due to inability to explore
cheaper sources of finance leading to limited growth potential.
Established in August 2012, Shri Samarth Oil Refinery LLP (SSOR)
belongs to the Tapdiya Group (TPG: since 1990) of Beed,
Maharashtra. In addition to SSOR, the group is managing three
firms viz. Shri Samarth Oil Industries (SSOI-proprietor:
Renuka Santosh Tapadiya), Shri Samarth Agro Industries (SSAI -
proprietor: Mangal Balkisan Tapadiya) and Balkisan Trading
Company (BTC-proprietor: Balkisan Tapadiya). SSOI and SSAI are
engaged in the business of oil expelling from cotton seed and
ground nut while BTC is engaged in trading of cotton seed oil.
SSOR is primarily engaged in the business of processing of three
types of edible oils viz. soya oil, cotton oil and palm oil. The
processing facility of the firm is located at Beed.The major raw
material for the firm is wash oil which is procured from its
group concerns and other players located in and around Beed. The
final product i.e. refined edible oil is sold to the wholesalers
and retailers under the brand name 'Samarth'.
SIS HOSPITAL: Ind-Ra Assigns 'B' Long-Term Issuer Rating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned SIS Hospital &
Research Centre (SISHRC) a Long-Term Issuer Rating of 'IND B'.
The Outlook is Stable. The instrument-wise rating action is:
-- INR62.38 mil. Term loans assigned with 'IND B/Stable'
rating
KEY RATING DRIVERS
The ratings reflect the cost and time overrun risk stemming from
the construction stage of the company's multi-specialty hospital.
The project completion and commercial production are likely to
start in November 2017. The total cost of the project is
INR89.37 million, which is being funded by promoter's
contribution (share capital and unsecured loan) of INR26.99
million and term loan of INR62.38 million. The ratings are
constrained by the fragmented nature of the industry.
However, the ratings are supported by the locational advantage as
the hospital is being constructed in Kanpur which is densely
populated and is the industrial hub of Uttar Pradesh. Also, the
hospital is located in proximity to CSJM University and many
other schools and colleges. The ratings are further supported by
the management's experience of more than a decade in the
healthcare industry.
RATING SENSITIVITIES
Negative: The firm's inability to execute the project and ramp-up
the operations/production in a timely fashion and/or any
additional debt-led capex impacting its debt servicing capability
would be negative for the ratings.
Positive: The firm's ability to execute the project and ramp up
the operations/production in a timely manner along with achieving
stable business operations will be positive for the ratings.
COMPANY PROFILE
SISHRC was originally incorporated on Jan. 28, 2016, and is
managed by Mr. Harinandan Singh, Mr. Sunil Singh and Dr. Aditya
Tripathi. SISHRC is setting up a 100-bed multi-specialty
hospital in Kanpur, Uttar Pradesh.
SRI LAXMI: CRISIL Cuts Rating on INR7.5MM Cash Loan to 'B'
--------------------------------------------------------------
CRISIL has been consistently following up with Sri Laxmi Balaji
Food Processing Industries (SLB) for obtaining information
through letters and emails dated January 20, 2017 and
February 10, 2017 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 7.5 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from CRISIL BB-/Stable)
Long Term Loan 2.5 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded
from CRISIL BB-/Stable)
Proposed Long Term 5.0 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating; Downgraded
from CRISIL BB-/Stable)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Sri Laxmi Balaji Food
Processing Industries. This restricts CRISIL's ability to take a
forward looking view on the credit quality of the entity. CRISIL
believes that the information available for Sri Laxmi Balaji Food
Processing Industries is consistent with 'Scenario 1' outlined in
the 'Framework for Assessing Consistency of Information with
CRISIL B rating category or lower.' Based on the last available
information, CRISIL has downgraded the rating to CRISIL B/Stable.
SLB was set up in 2010 as a partnership firm by Mr. C Ashok Kumar
and his family members. It mills and processes paddy into rice,
and generates by-products such as broken rice, bran, and husk.
The firm's rice milling unit is in Mahabubnagar (Andhra Pradesh).
STERLING TUBES: CRISIL Lowers Rating on INR6MM Cash Loan to 'B'
---------------------------------------------------------------
CRISIL has been consistently following up with Sterling Tubes
(ST) for obtaining information through letters and emails dated
January 20, 2017 and February 10, 2017 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Open Cash Credit 6 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
CRISIL B+/Stable)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Sterling Tubes. This restricts
CRISIL's ability to take a forward looking view on the credit
quality of the entity. CRISIL believes that the information
available for Sterling Tubes is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL B rating category or lower.' Based on the
last available information, CRISIL has downgraded the rating to
CRISIL B/Stable.
Sterling Tubes (ST), incorporated in 2014, is engaged in
manufacturing of mild steel (M.S) tubes. It has its manufacturing
facility located in Hyderabad, Telangana. The firm is promoted by
Mr. Giridhar Babu, Mr. Narasimha Rao and Mr. Saibaba.
UTTARAKHAND ENGINEERING: Ind-Ra Puts BB- Long-Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Uttarakhand
Engineering Products Private Limited (UEPPL) a Long-Term Issuer
Rating of 'IND BB-'. The Outlook is Stable. Instrument-wise
rating actions are:
-- INR40.0 mil. Fund-based limit assigned with
'IND BB-/Stable/IND A4+' rating; and
-- INR57.5 mil. Non-fund-based limit assigned with 'IND A4+'
rating
KEY RATING DRIVERS
The ratings reflect UEPPL's low EBITDA margin and weak credit
metrics resulting from the company's presence in a highly
fragmented and intensely competitive industry. The EBITDA margin
was 1.21% in FY16 (FY15: 1.32%), net financial leverage (total
adjusted debt/operating EBITDAR) was 1.08x and gross interest
coverage (operating EBITDA/gross interest expense) was 1.14x
(0.99x).
However, the ratings are supported by UEPPL's moderate scale of
operations and comfortable liquidity position. Revenue grew to
INR977 million in FY16 (FY15: INR628 million) on account of
increased orders from existing and new customers. The company is
estimated to have achieved revenue of INR800 million in FY17
(INR680 million until February 2017). UEPPL's average use of
working capital facilities was around 84.95% during the 12 months
ended February 2017.
The ratings also derive strength from the promoter's five-decade-
long experience in the iron and steel trading business as well as
the company's one decade of operational history.
RATING SENSITIVITIES
Positive: An improvement in operating profitability leading to a
sustained improvement in the gross interest coverage will lead to
a positive rating action.
Negative: A decline in operating profitability resulting in
deterioration in the interest coverage will lead to a negative
rating action.
COMPANY PROFILE
Incorporated in 2006, UEPPL is engaged in the trading of iron and
steel and their alloys, and other allied products. The company's
head office is located in Muzaffarnagar, Uttar Pradesh and is
promoted by Mr. Raghunandan Swarup.
VISWAKARMA ROOFINGS: CARE Issues B+ Issuer Not Cooperating Rating
-----------------------------------------------------------------
CARE has been seeking information from Viswakarma Roofings
(India) Private Limited (VRIPL), to monitor the rating through
email dated February 21, 2017, January 6, 2017, January 2, 2017
and numerous phone calls, and reminder mails (with latest mail
dated March 8, 2017). However, despite CARE's 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 Viswakarma Roofings(India) Private Limited
(VRIPL) long term bank facilities will now be denoted as CARE B+;
ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 15.00 CARE B+; ISSUER NOT
Facilities COOPERATING
The rating takes into account nascent stage of operations of
company, threats of restriction on usage of asbestos on account
of its hazardous nature and vulnerability of profitability
margins to fluctuation in raw material price and foreign exchange
fluctuation risk. The rating however, draws support from
experienced and qualified promoters along with key management
team, rising demand of asbestos cement sheets in rural sector and
strategic location of plant.
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 April 04, 2016, following were the
rating strengths and weaknesses:
Key Rating Strengths
Experienced promoters with strong key management team:
Established in 2009, VRIPL is promoted by Mr. Rahul Tupe and Mr.
V Laxminarayan Rao, who have an experience of more than two
decades in the similar industry. Another director of company, Mr.
V Laxminarayan Rao carries 25 years of experience in companies
engaged in asbestos cement sheet division. VRIPL has a defined
organisation structure which involves individual head (having
minimum of 15 years of experience) looking after each department
like Production Manager, Works Manager, Marketing Manager,
Quality Controller, Excise Manager etc. The long experience of
the management within the industry along with established dealer
network is expected to aid VRIPL in catering various markets.
Rising demand for Asbestos cement sheets from rural markets The
Indian cement roofing sheet industry has a capacity of 4 million
MT and the industry is growing at a steady rate of 8- 10%
annually on the back of strong demand from the rural markets. ACC
sheets are primarily used as roofing material in the rural areas.
Asbestos fibre cement sheets are preferred over other roofing
options mainly because of its characteristics like weather-proof,
non-corrosive, strong and durability.
Strategic Location of plant
The manufacturing unit of the company is located around Bhojpur
Industrial Estate, Bihar. The company has a location advantage as
its manufacturing facilities are strategically located in terms
of close proximity to key raw materials such as fly ash and
cement as well as its customers within the geographical area of
bihar, Orissa, Eastern Uttar Pradesh. The company shall have easy
accessibility in terms of supplying the finished products to its
customers with lower logistics expenditure.
Key Rating Weaknesses
Nascent stage of operations
VRIPL was incorporated in the year 2009; while the commercial
operations of the company started from February, 2016. The
manufacturing facility is taken on lease from Nibhi Industries
Private Limited at a monthly rent of INR21 lakh.
The same has an installed capacity of 1,20,000 MT per annum. The
operations have recently commenced and therefore uncertainties
surrounding operational stability shall continue to remain.
Threats of restrictions on the usage of asbestos on account of
its hazardous nature
Asbestos fibre is an important raw material required for AC sheet
manufacturing. Mining of asbestos and use of asbestos related
products have been banned, due to its hazardous effects on
health. While mining of asbestos and trade in asbestos waste
(dust and fibre) is banned in India, the use of asbestos is
permitted in related products (AC sheets), although it has been a
matter of litigation. Thus regulatory issues pertaining to
asbestos use and the activities of "Ban asbestos lobby"
instigated by the manufacturers of substitute products continue
to remain a matter of concern.
Vulnerability of margins to fluctuations in raw material prices
and foreign exchange fluctuations
Major raw material required to manufacture AC sheets are asbestos
fibre, cement and fly ash. Due to ban on mining of asbestos in
India, Indian players are dependent on the asbestos exporting
nations like Russia, Brazil, Canada, China and others. The
continuous increase in the price of inputs is a cause of concern.
As asbestos mining is totally banned in India, 100% of the
asbestos fibre is imported. Imported raw material makes the
industry vulnerable to forex fluctuation risks.
Bihar based, Viswakarma Roofings (India) Private Limited (VRIPL),
was incorporated in November, 2009. The company is involved in
the manufacturing of asbestos cement sheets and operates under a
rented facility taken on lease by VRIPL from Nibhi Industries
Private Limited and has an installed capacity of 1,20,000 MTPA
and production of 75.18 running meter of standard width AC sheet.
The operations of the entity have commenced since February, 2016.
The asbestos cement sheets manufactured are used for roofing of
factory building, warehouses, godowns, railway platforms,
garages, low cost housing, poultry farms etc. The company has
taken the plant on lease as it is registered under the sales tax
exemption scheme.
The company intends to import the basic raw material i.e. raw
asbestos fibre from Canada, Russia, Zimbabwe, Brazil, ordinary
portland cement, fly ash, cotton rag pulp etc. from local
suppliers which are available on 10 kms of radius, while the
finished products is intended to be sold to various industries
though a network of dealers primarily focusing on Bihar region.
The group also has recently acquired Aashirwad Industries Pvt.
Ltd (at Nagpur) which is also engaged in the manufacturing of
asbestos cement sheets.
=================
I N D O N E S I A
=================
SAKA ENERGI: Fitch Assigns BB+ Rating to US$625MM Sr. Notes
-----------------------------------------------------------
Fitch Ratings has assigned PT Saka Energi Indonesia's (Saka,
'BB+/ Postive') US$625 million 4.45% senior notes due 2024 a
final rating of 'BB+'.
The assignment of the final rating follows a review of the final
documentation, which conforms to the draft documentation
previously received. The final rating is the same as the expected
rating assigned on April 17, 2017.
Saka's ratings are linked to its parent, PT Perusahaan Gas Negara
Tbk (PGN, BBB-/Positive), due to its strong operating and
strategic linkages with PGN, in line with Fitch's Parent and
Subsidiary Rating Linkage criteria. The strong linkage arises
largely from Saka's mandate to improve the vertical integration
of PGN, together with the substantial financial assistance
provided to Saka by PGN to expand its scale since its inception
in 2011. Saka's ratings are, however, notched down by one notch
from PGN's ratings to reflect its small size of operations,
particularly its still-limited contribution to PGN's revenues and
minor share of PGN's gas volume requirement.
The government plans to transfer PGN's shareholding to PT
Pertamina (Presero) (BBB-/Positive) to consolidate government
state-owned enterprise holdings; Pertamina has been identified as
the holding company for the oil and gas sector. We do not
anticipate any immediate change to the rating linkages between
PGN and Saka from the proposed ownership change. However, any
further restructuring involving PGN and Saka, which could weaken
linkages between the two entities, will be treated as an event
risk.
KEY RATING DRIVERS
Strong Linkages with Parent: Fitch assesses Saka's linkages with
is parent PGN to be strong, driven by strategic and operational
linkages. We consequently use a top-down approach in line with
Fitch's Parent Subsidiary Linkage Criteria, and notch SAKA down
by one notch from PGN's rating. Saka is PGN's largest subsidiary
and the only one engaged in the upstream oil and gas (exploration
and production) business. We believe Saka plays a key role in
PGN's vertical integration strategy. Saka has also tried to
acquire and develop oil and gas fields closer to PGN's
infrastructure to improve operational integration. Fitch expects
increasing integration between Saka and PGN to boost Saka's
contribution to PGN's profit over the medium term.
Small-but-Diversified Operations: Saka's small operating scale
reflects its short existence. The company's proven reserves of 59
million barrels of oil equivalent (mmboe) and proven and probable
reserves of 112.1 mmboe as of end-2016, as well as production of
13.9 mmboe in 2016 (2015: 10.9 mmboe) are small; similar to the
production levels of most 'B' category oil and gas peers.
However, the operations are diversified across Indonesia with 10
concessions and one asset in the US. The company has expanded its
reserves and production largely through acquisitions in the past
three years. We expect the company to continue expanding
organically and inorganically, although its reserves and
production size is likely to remain small and in line with other
'B' rated upstream peers over the medium term.
Improving Cost Structure: Saka's cost of operations have
significantly decreased over the previous three years. The
company's production cost fell to around USD8.7 per barrel (bbl)
in 2016, from around USD16.4/bbl in 2013, supported by higher oil
and gas production volume, better operational efficiencies and
cost optimisation. We expect Saka's production costs to remain
competitive and to benefit from greater scale in the near- to
medium-term.
Less Price Volatility: Saka's domestic gas output, barring one
field, is subject to fixed prices under the concession terms,
which include certain escalation terms over the contract's life.
Overall, broadly 45% of Saka's 2016 oil and gas output on a boe
basis was subject to fixed pricing, significantly cutting margin
volatility from global oil and gas price changes against many
peers.
Improving Financial Profile: We expect Saka's financial profile
to improve over the medium term, driven by higher operating
profits. Fitch expects increasing production, a gradual oil and
gas price recovery and competitive production costs expand Saka's
EBITDA and operational cash flow. This is likely to improve
Saka's FFO net leverage to around 2.5x by 2019 (2016: 10.0x) and
help its FCF turn positive by 2020, based on its planned organic
growth profile. However, Fitch believes Saka may continue to look
for M&A opportunities that will slow its deleveraging profile. We
expect Saka to increase its financial independence from PGN as it
has achieved scale but continue to believe that PGN will still
provide financial assistance for any large M&A in the medium
term.
'B+' Standalone Profile: Saka's small scale, when balanced
against its diversification, lower price volatility and strong
liquidity, places its standalone profile at 'B+'. Any positive
movement in this standalone assessment will be predicated on Saka
substantially increasing its scale while maintaining a financial
profile appropriate for the 'BB' category.
DERIVATION SUMMARY
Saka's ratings are notched down from the ratings of its parent,
PGN. The ratings are driven by Saka's strong operating and
strategic linkages with PGN and result in a top-down approach, in
line with Fitch's rating criteria. Saka's strategic objective is
to improve its parent's vertical integration by increasing supply
of gas for its transmission and distribution operations. PGN has
extensively supported Saka since its creation in 2011, including
providing most of its funding requirements. The notch down
reflects Saka's small size of operations, which result in a
limited portion of PGN's gas volume requirement being addressed
by Saka. This is set to improve with its organic and probable
inorganic expansion, but we do not expect the status quo to
change much over the medium-term.
Fitch expects Saka will be required to finance its operations
more independently, although PGN is still likely to provide
financial support for larger mergers and acquisitions. There are
some legal linkages arising from cross-default language in PGN's
debt that involve Saka, but there are no guarantees from PGN.
Saka's standalone rating of 'B+' reflects its stable gas prices,
competitive cost position, increasing scale, strong liquidity and
improving financial profile compared with peers such as Kuwait
Energy (B-/Rating Watch Negative) and Kosmos Energy Ltd.
(B/Stable).
KEY ASSUMPTIONS
Fitch's key assumptions within CARE's rating case for the issuer
include:
- Oil price of USD52.5/bbl, USD55/bbl and USD60/ bbl for 2017,
2018 and 2019 respectively, and USD65/bbl thereafter. Natural gas
prices of USD2.8 million British thermal units (mmbtu) in 2017,
USD3.0/mmbtu in 2018 and 2019 and a long-term price of
USD3.3/mmbtu, in line with Fitch's oil price deck.
- Expansion in oil and gas production by nearly 30% in 2017,
supported by under-developed fields - Muara Bakau, Bangkanai and
gas production in Saka's Ketapang field - coming on stream and
new production from its Sanga-Sanga acquisition.
- Oil and gas production marginally falling in 2018 and
increasing by over 10% in 2019.
- Extension of production sharing contracts for Sanga-Sanga in
2018, although at a lower share.
- No major acquisitions in the medium term.
- Capex of USD300 million per annum over the next three years.
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- Further strengthening of linkages with PGN, particularly legal
linkages that are sustainable in the long term.
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- Any significant weakening of strategic or operational linkages
with PGN.
For PGN's rating, the following sensitivities were outlined by
Fitch in its rating action commentary of 17 April 2017:
Developments that May, Individually or Collectively, Lead to
Positive Rating Action:
- Positive rating action on the sovereign, provided PGN's
linkages with the state remain intact
We do not anticipate positive rating action on PGN's standalone
rating - given CARE's expectation of continued pressure on the
company's gas distribution margin.
Developments that May, Individually or Collectively, Lead to
Negative Rating Action:
- Revision of CARE's Outlook on the sovereign's IDRs to Stable
from Positive
PGN's standalone rating could be negatively affected by major
negative regulatory developments
- Further weakening of business profile
- Financial leverage (net adjusted debt/FFO) increasing to over
4.0x for a sustained period (2016: 2.0x). If PGN's standalone
rating falls below that of Indonesia's IDR, a rating uplift of
one notch would be provided on account of its moderate linkages
with the state as per Fitch's Parent and Subsidiary Rating
Linkage criteria.
LIQUIDITY
Comfortable Liquidity: We expect Saka's liquidity to be
comfortable with the issuance of the US dollar notes that will be
used to refinance its existing bank debt. The company has a
policy of maintaining cash of USD100 million at all times and has
strong access to domestic banks driven by its linkages with its
parent. The refinancing of the bank debt will further improve
Saka's liquidity over the next medium term in the absence of any
significant debt maturities.
=========
J A P A N
=========
TOSHIBA CORP: MUFJ Cuts Rating to "requiring supervision"
---------------------------------------------------------
Nikkei Asian Review reports that Toshiba Corp.'s prospects of
securing additional credit look a little dimmer after Mitsubishi
UFJ Financial Group downgraded the troubled company on a borrower
risk scale, putting itself out of step with other big lenders.
According to Nikkei, the Tokyo-based megabank cut the Japanese
conglomerate's rating to "requiring supervision," becoming the
first of its major lenders to take such a step. Nikkei says
Japan's Financial Services Agency considers debt at or beyond
this point to be nonperforming, although on the banks' scale, it
is only half a step down from "requiring attention," which still
falls within the range of performing loans.
Nikkei notes that accounting rules require lenders to set aside
substantial reserves against losses on any new financing to
companies rated as "requiring supervision," though existing loans
need not be called. MUFG may decline to contribute to the roughly
CNY300 billion ($2.67 billion) in additional credit lines being
sought by Toshiba.
The report says Toshiba's "main banks" -- Mizuho Bank, Sumitomo
Mitsui Banking Corp. and Sumitomo Mitsui Trust Bank -- still
classify the company as a borrower "requiring attention." The
three lenders belong to Mizuho Financial Group, Sumitomo Mitsui
Financial Group and Sumitomo Mitsui Trust Holdings, respectively.
In conjunction with the downgrade, MUFG is expected to book a
roughly JPY70 billion charge for the year ended March 31 as a
loan-loss provision, says Nikkei. This is seen as having a
limited impact on annual earnings, as it amounts to less than 10%
of projected net profit. Though not one of Toshiba's main banks,
its outstanding loans to the conglomerate from units Bank of
Tokyo-Mitsubishi UFJ and Mitsubishi UFJ Trust and Banking added
up to about 160 billion yen at the end of March -- more than the
roughly 120 billion yen outstanding from Sumitomo Mitsui Trust
Bank, says the report.
In Japan, main banks customarily take special responsibility for
aiding clients that land in dire financial straits, Nikkei notes.
This makes it difficult for them simply to downgrade a borrower's
status, since even the appearance of a loss of ready access to
new credit would send a ominous message about an already-troubled
business. MUFG, being a major but not main lender to Toshiba, is
free to make a more conservative assessment.
That said, Toshiba's main banks have apparently deemed it
necessary to take similar measures. Sumitomo Mitsui Trust
Holdings on April 28 cut its group net profit estimate for the
just-ended fiscal year by about JPY50 billion owing to provisions
made with respect to a specific borrower -- i.e., Toshiba, the
report says.
The other two main lenders each had nearly JPY180 billion in
outstanding loans to Toshiba as of the end of March. Both have
compromised by keeping Toshiba classified as a normal borrower
while making loan-loss provisions as if it were a troubled one,
says the report.
Nikkei notes that a major reason why most Toshiba creditors have
not downgraded the company is the planned sale of its memory chip
business. If the unit fetches JPY2 trillion or so, Toshiba can
lift its net worth back into the black. But a failed sale could
deepen banks' concerns about collecting on loans to the company.
Toshiba's continuing dispute with its auditor is another issue.
If the company releases fiscal 2016 earnings without its
auditor's stamp of approval, it will face a real risk of
delisting, adds Nikkei.
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 March 21, 2017, that S&P Global Ratings
has lowered its long-term corporate credit rating on Japan-based
capital goods and diversified electronics company Toshiba Corp.
two notches to 'CCC-' from 'CCC+' and lowered the senior
unsecured debt rating three notches to 'CCC-' from 'B-'.
Both ratings remain on CreditWatch with negative implications.
Also, S&P is keeping its 'C' short-term corporate credit and
commercial paper program ratings on the company on CreditWatch
negative. The long- and short-term ratings on Toshiba have
remained on CreditWatch with negative implications since December
2016, when S&P also lowered the long-term ratings because of the
likelihood that the company might recognize massive losses in its
U.S. nuclear power business; S&P kept them on CreditWatch
negative when it lowered the long- and short-term ratings in
January 2017.
====================
N E W Z E A L A N D
====================
HANSA LTD: Related Firm Likely Operated as One, Liquidator Says
---------------------------------------------------------------
Hamish McNicol at Stuff.co.nz reports that a company suspected of
being involved in what is thought to be a significant ponzi
scheme has gone into liquidation.
In July, the Serious Fraud Office (SFO) and Financial Markets
Authority (FMA) said they were investigating Christchurch-based
Paul Clifford Hibbs and his company, Hansa, Stuff says.
While regulators would not comment further, investor John
Docherty said in September he and his wife had been left stranded
after allegedly being swindled out of NZ$650,000.
According to the report, Mr. Docherty wanted to share his story
after a meeting was held with investors at which they were told
the investigation had found the hallmarks of a ponzi scheme.
The SFO and FMA have both declined to respond to Mr. Docherty's
claims, but multiple sources have since said investors were told
at least NZ$20 million was missing, the report says.
Hansa was tipped into liquidation on application by Mr. Docherty
and his wife in November last year, the report discloses.
Stuff relates that Waterstone Insolvency liquidator Damien Grant
said in December they had so far identified payments of at least
NZ$9 million into the company.
Liquidators obtained freezing orders over all of Hibbs' assets,
and the first liquidators' report said investigations showed
Hansa had failed to invest and manage funds in accordance with
agreements signed with investors, the report recalls.
"Instead, the company appears to have been run as a ponzi scheme
under which investors' funds appear to have been
misappropriated," liquidators said, Stuff relays. "It appears
that a number of related entities, in particular Cameron
Gladstone Investments, are similarly involved in the fraud."
That related entity was on April 27 put into liquidation on
application by Waterstone Insolvency, Stuff discloses.
According to the report, Mr. Grant said while there were two
different companies, the liquidators believed it was really just
one scheme.
"We believe that there was one business, or potentially a ponzi
scheme, but there were two companies involved. Now that we've
got access to both we'll be able to see the full extent of what
has happened."
Mr. Grant said it would probably take a couple of months to get
clarity but they should be able to provide creditors with much
better information soon, Stuff relates.
Mr. Hibbs' house had also been sold by consent, but this would
only recoup about NZ$79,000 once all was said and done, the
report discloses.
Another business owned by Hibbs, Boutique Hair & Beauty, has also
gone into receivership owing more than NZ$1.4 million, according
to Stuff.
The international hair and beauty product brand supplier went
into receivership in February on Mr. Hibbs' request, the report
states.
"It's pretty self-evident in terms of Mr Hibbs' current
situation," Stuff quotes PWC partner Malcolm Hollis as saying.
"He's got wider issues to deal with."
The business had had 16 staff but only three were kept on after
supplier agreements were terminated and receivers opted to wind
down the company, adds Stuff.
REX BIONICS: Gets NZ$10.8 Million Lifeline
------------------------------------------
BusinessDesk reports that Rex Bionics has been thrown a
AUD10 million (NZ$10.8 million) lifeline by Australian fund
manager BioScience Managers in exchange for control of the
New Zealand robotics firm listed on the London Stock Exchange's
AIM market.
Shareholders will vote later this month on whether to approve a
deal that would pour the company's business and assets into its
Australian subsidiary, which would then sell AUD7.5 million of
shares to BioScience, lifting the fund manager's stake to 64 per
cent, Rex said in a notice to the London Stock Exchange,
BusinessDesk relates. BioScience would also commit to a further
investment of AUD2.5 million if certain targets were met, in a
rights issue that the existing Rex investors could participate
in.
According to BusinessDesk, the second part of the transaction
would see Rex sign a two-year development agreement with McLaren
Applied Technologies, a unit of the luxury car maker McLaren
Group, to design the next phase of the Rex product in an effort
to reduce the cost of making the exoskeletons which help
wheelchair-bound people walk. McLaren would be issued warrants
to help pay for its services, which could dilute existing Rex
shareholders down to 29.2 per cent, the report says.
In March, Rex said it would probably need external funding to
keep operating after struggling to raise capital to pay for a
prototype of the new product, according to BusinessDesk. The
directors on May 3 said if the transaction isn't approved the
company won't be able to pay its debts and will have to stop
operating or kick off an insolvency procedure immediately, which
would wipe out shareholders' entire equity investment.
"We are pleased to have signed these agreements which will enable
the continued development of the Rex technology," the report
quotes chairman David Macfarlane as saying. "Rex has made a lot
of progress in respect of product quality, clinical data and user
satisfaction across a range of neurological conditions, and I
warmly thank our shareholders, how have made this possible."
The directors indicated they will vote their shares, representing
3.9 per cent of the company, in favor of the transactions at the
meeting to be held on May 22, the report discloses.
The New Zealand Venture Investment Fund, a shareholder in Rex,
declined to comment on whether it would support the deal.
BusinessDesk notes that Rex has been a beneficiary of Callaghan
Innovation funding, receiving research and development grants
totalling NZ$2.9 million before it listed in 2014 with a
condition that production stayed in New Zealand until 2017.
According to the report, Callaghan chief financial officer
Richard Perry said the restructure means the Crown entity will
look at whether Rex is still eligible for a grant.
"In general, in these situations, if the company continues to
undertake New Zealand-based R&D, and retains benefits to New
Zealand, the grant payments can be resumed," the report quotes
Mr. Perry as saying.
=================
S I N G A P O R E
=================
MARCO POLO: Time is Running Out to Restructure Debt
---------------------------------------------------
Jacqueline Woo at The Strait Times reports that Marco Polo Marine
could be the next firm in the troubled offshore marine sector
heading for the rocks, caught between the devil and the deep blue
sea.
According to the report, analysts believe the marine logistics
company, which has been struggling to work out a debt revamp
plan, is fast running out of room and time to fend off creditors.
ST relates that Marco Polo said on May 1 that various banks and
financial institutions have been discussing a preliminary
proposal since April 23. But this proposal, which includes fresh
funding from a few strategic investors who have signed non-
binding term sheets as part of the proposed refinancing and debt
restructuring plan, has been met with "resistance" from some
lenders.
Marco Polo added that although it does not believe the proposed
refinancing and debt restructuring plan is about to fail, it is
also "not confident at this juncture that it would be able to
eventually bridge the gap between the expectations of the lenders
and the conditions set by the strategic investors as part of the
proposed refinancing and debt restructuring," relates ST.
Trading in the stock has been suspended for two days, with the
share price last seen at an all-time low of 5.9 cents, the report
says. According to the report, CIMB Research analyst Cezzane See
said that whatever happens to Marco Polo following the suspension
will depend on whether it is able to strike a deal with a larger
group of stakeholders, including trade creditors and bond
holders.
"If negotiations are unsuccessful, it could lead to a judicial
management exercise," the report quotes Ms. See as saying.
Last October, Marco Polo won bond holder approval to defer a
SGD50 million payment for a further three years although it
defaulted on a recent interest payment on the notes due April 18,
the report recalls.
According to the report, KGI Securities analyst Joel Ng noted
that it could receive a lifeline if its founding Lee family has
enough cash to support a rights issue. "But if they can't raise
capital and get support from the banks, then the inevitable will
happen, and it will likely be judicial management," said Mr. Ng,
calling it a "high possibility".
He cited Marco Polo's weak balance sheet - the company, which has
a net gearing of 1.5 times, has recorded negative cashflow over
the last 10 quarters, while about 70 per cent of its total assets
have already been pledged as collateral, the report says.
"It remains to be seen what will happen, but investors just have
to be prepared for the possibility of taking a haircut on their
investments," Mr. Ng, as cited by ST, said.
Singapore-based Marco Polo Marine Ltd (SGX:5LY) --
http://www.marcopolomarine.com.sg/-- engages in marine logistics
services. The Company's segments include Ship chartering
services, which relates to charter hire activities, and Ship
building and repair services, which relates to ship building and
ship repair activities. Its shipping business consists of
offshore support and marine logistics services, and relates to
the chartering of offshore supply vessels (OSVs), which include
anchor handling tug supply vessels (AHTS) for deployment in the
regional waters, including the Gulf of Thailand, Malaysia,
Indonesia and Australia, as well as the chartering of tugboats
and barges to customers, which are engaged in the mining,
commodities, construction, infrastructure and land reclamation
industries. Its shipyard business relates to ship building, as
well as the provision of ship maintenance, repair, outfitting and
conversion services that are carried out through its shipyard in
Batam, Indonesia.
====================
S O U T H K O R E A
====================
DOOSAN BOBCAT: Moody's Assigns B1 Rating to Proposed Senior Loan
----------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to the
proposed senior secured term loan borrowed by Clark Equipment
Company (CEC) and guaranteed by Doosan Bobcat Inc. (DBI).
At the same time, Moody's has affirmed DBI's B1 corporate family
rating (CFR).
The outlook on the ratings is positive.
The expected proceeds from the term loan of $1,345 million will
be used to refinance the existing $944 million senior secured
term loan co-borrowed by CEC and Doosan Holdings Europe Limited
(DHEL, unrated), as well as the $400 million subordinated term
loan borrowed by DHEL.
RATINGS RATIONALE
"The B1 rating primarily reflects DBI's dominant position in the
compact farm and construction equipment market in North America,
as well as its good ability to generate positive free cash flow,
and adequate liquidity," says Wan Hee Yoo, a Moody's Vice
President and Senior Credit Officer.
"These strengths are counterbalanced by the company's high
product concentration, moderate market position in Europe, the
highly cyclical nature of its key industry, and the weaker credit
profile of its parent, Doosan Infracore Co., Ltd.," adds Yoo.
The proposed term loan will be secured by a first lien - except
for those assets secured by the first lien for the revolver - on
substantially all of the assets of the borrower. It will also be
guaranteed by DBI and all present and future wholly owned
domestic subsidiaries of CEC.
Nonetheless, there is no ratings gap between the secured debt and
the CFR of DBI, because this debt would constitute effectively
the only debt for DBI, which implies limited junior cushions in
its capital structure.
The implications on DBI of a weaker parent is partly mitigated
by: (1) the covenant package in the term loan facilities, which
limits the risk of potential cash leakage to the parent; (2)
DBI's modest dependence on its parent for its operations; and (3)
DBI's listed status.
The positive ratings outlook reflects Moody's expectation that
DBI's financial profile will gradually improve and remain strong
for its current rating over the next 1-2 years.
DBI's rating could be upgraded if its financial profile improves
through enhanced earnings and/or debt reductions, such that
adjusted debt/EBITDA stays below 3.5x, and adjusted
EBITA/interest expense exceeds 3.5x on a sustained basis. An
improvement in Doosan group's liquidity and financial profile
would also be positive for the rating.
On the other hand, the outlook could return to stable if DBI's
profitability and cash flow weaken, such that adjusted
debt/EBITDA exceeds 3.5x and/or adjusted EBITA/interest expense
stays below 3.5x on a sustained basis. The rating could also be
pressured if its immediate parent, Doosan Infracore Co., Ltd.
(DI, unrated), extracts large amounts of cash from DBI, or if
DI's own credit quality deteriorates significantly.
The principal methodology used in these ratings was Global
Manufacturing Companies published in July 2014.
Doosan Bobcat Inc. is the leading manufacturer of compact farm
and construction equipment in North America and EMEA. It engages
in the design, manufacture, sale and service of compact farm and
construction equipment under the Bobcat brand, and portable power
products. It also distributes heavy construction equipment
produced by its parent, Doosan Infracore Co., Ltd.
DOOSAN BOBCAT: S&P Assigns 'BB-' Rating to $1.345BB Term Loan
-------------------------------------------------------------
S&P Global Ratings said it has assigned its 'BB-' issue level
rating and '3' recovery rating to the proposed $1.345 billion
senior secured term loan B due 2024 belonging to Clark Equipment
Co. (CEC), a subsidiary of Doosan Bobcat Inc. (DBI; BB-/Stable
/--). CEC will be the borrower of the term loan and DBI will
guarantee the loan. The '3' recovery rating indicates S&P's
expectation for meaningful recovery (50%-70%; rounded estimate:
55%) for secured lenders in the event of a payment default.
The company plans to use the proceeds from the proposed debt
issuance to refinance its existing $945 million senior secured
term loan B and the existing $400 million subordinated term loan.
The 'BB-' issue level rating and '3' recovery rating on the
proposed term loan is lower than the 'BB' issue rating and '2'
recovery rating on the existing term loan belonging to CEC and
Doosan Holdings Europe Ltd. due in 2021, and guaranteed by DBI.
This is mainly due to the proposed change in the company's
capital structure with substantial upsize of its senior secured
term loan B to $1.345 billion from $945 million, which will
result in lower recovery expectations for the proposed term loan.
All of S&P's other ratings on the company, including the
corporate credit rating, remain unchanged.
RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario contemplates a payment
default occurring in 2021 against a backdrop of a prolonged
global economic downturn. A combination of business
activity declines in key end markets and increased
competition pressures from major competitors in the
construction equipment segment would cause substantial
deterioration in cash flow for the company. S&P believes
that the company would reorganize rather than liquidate
under S&P's default scenario, given its position in the
construction equipment industry and its diverse customer
base.
-- S&P has valued the company on a going-concern basis using a
5x multiple of S&P's projected emergence EBITDA.
-- After satisfying the asset-based lending (ABL) revolver
lenders' priority claims, the collateral value together
with residual foreign subsidiaries unpledged enterprise
value is sufficient to provide the senior secured term loan
lenders with recovery expectation of a meaningful recovery
(50%-70%; rounded estimate: 55%) in the event of a default.
Simulated default assumptions
-- Simulated year of default: 2021
-- Emergence EBITDA: $179 million
-- Multiple: 5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs):
$851 million
-- Obligor/non obligor valuation split: 80%/20%
-- Estimated priority claims (assumed 60% usage of ABL):
$92 million
-- Remaining recovery value: $699 million
-- Estimated first lien claim: $1325 million
-- Value available for first lien claim: $699 million
-- Recovery range: 50-70% (rounded estimate: 55%)
*Note: All debt amounts include six months of prepetition
interest.
*********
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. CARE's
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 CARE's 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
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