/raid1/www/Hosts/bankrupt/TCRAP_Public/170707.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, July 7, 2017, Vol. 20, No. 134
Headlines
A U S T R A L I A
CALEDON COAL: Second Creditors' Meeting Set for July 17
CAMPERDOWN DAIRY: First Creditors' Meeting Set for July 17
KERNAGHAN AND ASSOCIATES: Liquidators Issue Demand Letter
NEOLINK PTY: First Creditors' Meeting Set for July 14
ROSECAGE PTY: First Creditors' Meeting Set for July 14
SA ANDERSON: First Creditors' Meeting Slated for July 14
WOLLUMBIN HORIZONS: First Creditors' Meeting Set for July 14
C H I N A
CAR INC: Fitch Lowers Long-Term IDR to BB-; Outlook Stable
HILONG HOLDING: Fitch Assigns BB- Rating to USD250MM Bonds
LEECO: Founder Seeks More Time, Pledges to Pay Back Debts
WEST CHINA CEMENT: 1H2017 Profit No Impact on Moody's B1 CFR
I N D I A
AKASH COTEX: CRISIL Reaffirms 'B' Rating on INR11MM Cash Loan
ANNAPORANAA FOODS: CRISIL Assigns B Rating to INR8MM Cash Loan
BHAGABAN MOHAPATRA: Ind-Ra Assigns BB+ Issuer Rating
DATTAKALA SHIKSHAN: CRISIL Hikes INR17.50MM Loan Rating to B-
DC EXPORTS: CRISIL Reaffirms B+ Rating on INR4MM Cash Loan
DECCAN CHRONICLE: NCLT to Initiate Insolvency Process
DHRUV GLOBALS: CRISIL Lowers Rating on INR46.5MM Loan to B+
FASTBUILD BLOCKS: Ind-Ra Gives B+ Issuer Rating, Outlook Stable
K K POLYCOLOR: CRISIL Reaffirms B- Rating on INR9.0cr Cash Loan
LEMOREX GRANITO: CRISIL Reaffirms B+ Rating on INR26.85MM Loan
MAA CHINNAMASTA: Ind-Ra Assigns BB- Issuer Rating; Outlook Stable
MADHAV GINNING: CRISIL Reaffirms B- Rating on INR3MM LT Loan
MALBROS INT'L: Ind-Ra Withdraws BB+ LT Issuer Rating
ORCHID CURE: CRISIL Reaffirms B+ Rating on INR5.7MM Term Loan
P.K. LAXMI: CRISIL Cuts Rating on INR12MM Cash Loan to 'B'
PVS AUTOMOTIVE: CRISIL Cuts Rating on INR8.14MM Loan to B+
PULKIT VENEER: CRISIL Reaffirms B+ Rating on INR3.4MM Cash Loan
R.S. CHAUHAN: CRISIL Assigns B+ Rating to INR2MM Loan
RELIANCE FABRICATIONS: CRISIL Reaffirms B+ Rating on INR3MM Loan
RISING HOTEL: Ind-Ra Assigns BB- Issuer Rating, Outlook Stable
ROHIT COLONISERS: CRISIL Assigns B Rating to INR19.29MM Loan
SAHASTRAA EXPORTS: CRISIL Cuts Rating on INR7.5MM Loan to B
SAMKEET ELECTRONICS: CRISIL Cuts Rating on INR4MM Loan to B
SB LIFESPACES: CRISIL Reaffirms B+ Rating on INR12MM Cash Loan
SCOTLANE CERAMICS: CRISIL Assigns 'B' Rating to INR4.95MM Loan
SENATOR MOTORS: CRISIL Reaffirms 'D' Rating on INR22MM Loan
SHREE GAJKESHRI: CRISIL Hikes INR7.5MM Loan Rating to B+
SIGMA GALVANIZING: CRISIL Reaffirms B- Rating on INR11.76MM Loan
STARCARE HOSPITAL: CRISIL Reaffirms B+ Rating on INR22MM Loan
SUPER GEO: CRISIL Reaffirms 'B' Rating on INR10MM Loan
TARUNIKAA JEWELS: CRISIL Raises Rating on INR8.5MM Loan to B+
UDAY AUTOLINK: CRISIL Reaffirms 'C' Rating on INR24.8MM Loan
UMESH EDUCATION: CRISIL Cuts Rating on INR12MM LT Loan to B
VEEJAY TERRY: CRISIL Reaffirms B+ Rating on INR5MM Cash Loan
I N D O N E S I A
PAKUWON JATI: Moody's Hikes CFR to Ba2; Outlook Stable
J A P A N
TOSHIBA: Consortium May Move Deal Until After U.S. Court Hearing
N E W Z E A L A N D
FP IGNITION 2017-B: Fitch Assigns Final B+ Rating to Cl. G Notes
HARDY'S: Five Outlets Placed in Receivership
S O U T H K O R E A
STX ENGINE: Creditor Puts Firm Up for Sale
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A U S T R A L I A
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CALEDON COAL: Second Creditors' Meeting Set for July 17
-------------------------------------------------------
A second meeting of creditors in the proceedings of Caledon Coal
Pty Ltd, et al., has been set for July 17, 2017, at 11:00 a.m., at
the primary location of Stamford Plaza, Corner Edward and Margaret
Streets, in Brisbane, Queensland.
The meeting is also for the proceedings of:
-- CC Pty Ltd,
-- Blackwater Coal Pty Ltd,
-- Bowen Basin Pastrol Company Pty Ltd, and
-- Guangdong Rising (Australia) Pty Ltd.
A secondary location for the meeting has been identified as
Empire Apartment Hotel, 5 East Street, in Rockhampton, Queensland.
The purpose of the meeting are (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 July 15, 2017, at 11:00 a.m.
CAMPERDOWN DAIRY: First Creditors' Meeting Set for July 17
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Camperdown
Dairy International Pty Ltd will be held at the offices of
KordaMentha, Level 24, 333 Collins Street, in Melbourne, Victoria,
on July 17, 2017, at 3:00 p.m.
Craig Shepard and Jarrod Villani of KordaMentha were appointed as
administrators of Camperdown Dairy on July 5, 2017.
KERNAGHAN AND ASSOCIATES: Liquidators Issue Demand Letter
---------------------------------------------------------
The Illawarra Mercury reports that liquidators for troubled
Wollongong law firm Kernaghan and Associates Pty Ltd have issued a
letter of demand to former company director Aaron Kernaghan amid
allegations he was operating the business while it was insolvent.
In its second report to creditors since it was appointed 15 months
ago, accounting and advisory firm RSM said its investigation into
the company's financial statements had identified an insolvent
trading claim totaling $531,987, the Mercury relates.
An insolvent company is one that is unable to pay all its debts
when they fall due for payment, according to the Australian
Securities and Investments Commission.
Directors have a duty under the Corporations Act to ensure a
company does not trade whilst insolvent.
The Mercury notes that Kernaghan and Associates was placed into
liquidation in March 2016 by the NSW Supreme Court for failing to
pay a tax bill of almost AUD450,000.
Subsequent investigations by RSM revealed the company was
AUD525,972 in debt at the time, including AUD45,000 owed to
employees and AUD32,000 to trade creditors, the Mercury says.
Mr. Kernaghan, who remains a practising solicitor, has since
bought the business' name and intellectual property rights from
RSM.
According to The Mercury, the report to creditors dated June 1,
2017 related that RSM is considering taking legal action against
Mr. Kernaghan personally over the insolvent trading allegations
and has already had multiple internal meetings to discuss the
"commerciality" of such action.
The report confirms that as of June 1, RSM had already started a
preliminary case against Mr Kernaghan in the Supreme Court for
allegedly failing to help them recover outstanding fees owed to
the company, including AUD61,000 for Mr. Kernaghan's work at the
Child Abuse Royal Commission, the Mercury states.
According to the Mercury, RSM appointee David Kerr said under laws
governing legal practices in Australia, his firm was "dependent"
on Mr. Kernaghan in his capacity as a licensed lawyer to issue tax
invoices and bills. However, Mr. Kerr claimed that Mr. Kernaghan
had provided "limited assistance" so far, prompting the firm to
launch legal action against him.
The Mercury's attempt to reach Mr Kernaghan via phone on July 2 as
unsuccessful. A series of questions put to Mr. Kernaghan via email
pertaining to the creditor's report also went unanswered.
The Mercury was instead contacted by Mr. Kernaghan's lawyer,
Patrick Kaluski on July 2. He confirmed that he had recently
spoken to RSM, which had resulted in an agreement to have the
pending legal action against Mr. Kernaghan over the assistance
matter dismissed by consent.
"The allegations in those proceedings are disputed by my client
and the proceedings will be dismissed without any findings of the
court," The Mercury quotes Mr. Kaluski as saying.
NEOLINK PTY: First Creditors' Meeting Set for July 14
-----------------------------------------------------
A first meeting of the creditors in the proceedings of Neolink Pty
Ltd will be held at the offices of Worrells Solvency & Forensic
Accountants, Suite 1 Level 15, 9 Castlereagh Street, in Sydney,
NSW, on July 14, 2017, at 11:00 a.m.
Nicholas Craig Malanos of Worrells Solvency was appointed as
administrator of Neolink Pty on July 5, 2017.
ROSECAGE PTY: First Creditors' Meeting Set for July 14
------------------------------------------------------
A first meeting of the creditors in the proceedings of Rosecage
Pty Ltd, trading as Low & Behold Nowra, will be held at the
offices of Nicols + Brien, Suite 9, Level 2, 70 Market Street, in
Wollongong, NSW, on July 14, 2017, at 11:00 a.m.
Steven Nicols of Nicols + Brien was appointed as administrator of
Rosecage Pty on July 4, 2017.
SA ANDERSON: First Creditors' Meeting Slated for July 14
--------------------------------------------------------
A first meeting of the creditors in the proceedings of SA Anderson
Pty Ltd, trading as Bulahdelah Tilt Tray & Trailer Hire/Bulahdelah
Tyre And Mechanical, will be held at the offices Jirsch
Sutherland, Level 1 14 Watt Street, in Newcastle, NSW, on July 14,
2017, at 10:00 a.m.
Bradd William Morelli and Stewart William Free of Jirsch
Sutherland were appointed as administrators of SA Anderson on July
5, 2017.
WOLLUMBIN HORIZONS: First Creditors' Meeting Set for July 14
------------------------------------------------------------
A first meeting of the creditors in the proceedings of Wollumbin
Horizons Pty Ltd will be held at the offices of Vincents, Level
34, 32 Turbot Street, in Brisbane, Queensland, on July 14, 2017,
at 11:00 a.m.
Steven Staatz of Vincents was appointed as administrator of
Wollumbin Horizons on July 4, 2017.
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C H I N A
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CAR INC: Fitch Lowers Long-Term IDR to BB-; Outlook Stable
----------------------------------------------------------
Fitch Ratings has downgraded China-based auto rental group CAR
Inc.'s Long-Term Issuer Default Rating (IDR), senior unsecured
rating and the rating on CAR Inc.'s outstanding bonds to 'BB-'
from 'BB'. The Outlook is Stable.
The downgrade reflects weaker prospects for margin due to the
company's aggressive pricing strategy as well as declining fleet
rental revenue from UCAR, CAR Inc.'s largest shareholder and
biggest customer. Fitch believes Car Inc's ongoing and substantial
related-party transactions with UCAR are a credit weakness. While
the agency expects UCAR's revenue contribution in the rental
business to decline, related-party transactions are likely to
remain high, as UCAR's Shenzhou Maimaiche business has become CAR
Inc's main channel for used-car sales.
KEY RATING DRIVERS
Significant Related-Party Transactions: UCAR, a leading Chinese
business-to-consumer ride sharing company, is both the largest
shareholder and largest customer of CAR Inc. UCAR accounts for
around 30%-40% of CAR Inc.'s rental revenue and 60% of its used-
car sales. Fitch expects UCAR's fleet rentals from CAR Inc. to
decrease in 2017 due to regulatory changes, but UCAR's used-car
purchases from CAR Inc. have increased significantly following its
2016 acquisition of Shenzhou Maimaiche, a used-car sales platform.
Fitch believes CAR Inc's ongoing related-party transactions with
UCAR are a credit weakness. UCAR operates in China's rapidly
evolving and hyper-competitive ride-sharing industry and has yet
to break even on an EBITDA level. UCAR's losses narrowed in 2016
and the company has ample liquidity following several rounds of
fundraising over the past year, but its credit profile remains
substantially weaker than that of CAR Inc.
Short-Term Margin Pressure: Fitch expects CAR Inc.'s operating
margins to weaken slightly in 2017 from the previous year and the
agency's previous expectations. Revenue from the fleet rental
business to UCAR is likely to shrink in 2017 and this segment has
historically incurred lower operating expenses. In addition, CAR
Inc. cut its car rentals business pricing by more than 20% in 1Q17
to raise utilisation rates and squeeze competitors. So far the
company has successfully raised utilisation rates to offset the
revenue impact of lower prices, but Fitch think this strategy may
eat into margins over time. Finally, CAR Inc. plans to speed up
the fleet renewal process to improve user experience, which may
translate into higher capex and depreciation expenses.
Strong Market Position, Healthy Financials: CAR Inc.'s ratings are
supported by its top market position in China's fast-expanding car
rental market, with roughly double the fleet size and revenue of
its next-largest competitor, eHi Car Services Limited (BB-
/Negative). Fitch expects CAR Inc.'s leverage and coverage ratios
to remain strong, with FFO-adjusted net leverage staying at around
2.0x-2.5x; a comfortable level for its 'BB-' rating.
DERIVATION SUMMARY
CAR Inc.'s ratings are supported by its leading market position
and healthy credit metrics, but constrained by its large exposure
to UCAR, which is both its largest customer and shareholder, and
has a weaker credit profile.
Compared with Localiza Rent a Car S.A. (BB+/Negative), Brazil's
leading car rental operator, CAR Inc. has similar operating scale
and margins, but higher financial leverage. Compared with eHi, CAR
Inc. has a better market position and stronger credit metrics, but
has higher revenue concentration risk from its exposure to one
large customer, UCAR.
KEY ASSUMPTIONS
Fitch's key assumptions within its ratings case for the issuer
include:
- 42,500 cars added and 27,500 vehicles disposed in the car
rentals segment in 2017
- Stable average daily rental revenue per car rental vehicle
from 1Q17 of CNY165
- Fleet rental fleet to shrink to 18,000 by end-2017, from
21,761 at end-1Q17 and 24,330 at end-2016
- 58%-59% EBITDA margin for the rental business, excluding used-
car disposals, for 2017. (2015-2016 average: 57%-60%)
- No further gain or loss on disposal (aside from actual
reported in 1Q17)
- No further share buybacks (aside from actual buybacks as of
June 2017)
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- UCAR generates sustained positive EBITDA, or contributes less
than 20% of CAR's revenues
- Sustained positive free cash flow
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- FFO adjusted net leverage sustained above 3.0x
- FFO fixed charge coverage sustained below 3.0x
- Rentals EBITDA margin (excluding used car sales) sustained
below 40%
LIQUIDITY
Comfortable Liquidity: CAR Inc. had CNY5.7 billion in cash and
cash equivalents at end-2016 and CNY2.7 billion in available
undrawn facilities. This is more than sufficient to cover its
short-term debt of CNY2.4 billion.
FULL LIST OF RATING ACTIONS
CAR Inc.
- Long-Term Foreign-Currency IDR downgraded to 'BB-' from 'BB';
Outlook Stable
- Senior unsecured rating downgraded to 'BB-' from 'BB'
- USD500 million 6.125% senior notes due 2020 downgraded to
'BB-' from 'BB'
- USD300 million 6.000% senior notes due 2021 downgraded to
'BB-' from 'BB'
HILONG HOLDING: Fitch Assigns BB- Rating to USD250MM Bonds
----------------------------------------------------------
Fitch Ratings has assigned China-based Hilong Holding Limited's
USD250 million 7.25% guaranteed bonds due 2020 a final rating of
'BB-'
The notes are rated at the same level as Hilong's senior unsecured
debt rating, as they represent its direct, unconditional,
unsecured and unsubordinated obligations.
The final rating follows the receipt of documents conforming to
information already received and is in line with the expected
rating assigned on June 7, 2017.
Hilong's ratings are supported by its leading market position in
its core businesses of drill pipes and coating products, its
geographical diversification that includes international markets,
the diversity of its end-products, and enhanced vertical
integration between its products and services. The Negative
Outlook reflects the company's increased working-capital
requirements during the current sector downturn that are likely to
delay deleveraging. Evidence of substantial working-capital
reduction and sustained increase in its revenue and order book may
lead to its Outlook being revised to Stable.
KEY RATING DRIVERS
Stabilising Operating Environment: Fitch expects crude oil prices
to remain around USD50-60 per barrel in 2017-2019 and operating
conditions in global oil and gas markets to stabilise in the near
term. Major global oil producers remain cautious about exploration
and production activities, but total capex in the sector in 2017
is likely to increase from 2015 and 2016 levels. Fitch expects
increased spending by upstream producers to drive demand for
Hilong's products and services in both international and domestic
markets.
Leverage to Decrease: Hilong's FFO net leverage increased to 4.8x
in 2016, from 3.8x in 2015, because its weak order book resulted
in a sharp decrease in revenue. However, Fitch expects Hilong's
FFO net leverage to decrease to 3.6x in 2017 due to the growth in
new orders from overseas markets and limited capex in the near
term due to modest utilisation rates in both its manufacturing
facilities and drill rigs.
Increased Working Capital: Hilong's working capital expanded
significantly in 2016 because collection of accounts receivable,
mostly from domestic customers, took a longer time. Fitch believes
Hilong's accounts receivable collection and general working-
capital needs will improve in 2017 as the proportion of sales to
domestic customers decreases. However, the improvement in working
capital improvement may not be sufficient or rapid enough to allow
Hilong to deleverage substantially.
Market Leading Position Intact: Hilong is the largest drill pipe
manufacturer and provider of coating services for oil country
tubular goods (OCTG) in China by sales, with around 45%-50% market
share. Drill pipe and OCTG coating are Hilong's core business
segments and accounted for 40% of total sales and 38% of total
gross profit in 2016. Hilong's dominance in its core businesses
provides the company with a stable source of cash flow and
supports the company's expansion into new business segments, such
as oilfield services in 2012 and offshore engineering in 2014.
Increased Global Presence: Hilong has successfully expanded its
products and services to international markets amid weak domestic
demand. Hilong has also established overseas production facilities
and service centres to better serve its overseas clients.
Expansion into other geographic regions has increased Hilong's
overall scale of operation. In 2016, Hilong's China sales were
down 43% yoy to CNY717 million, while sales in Russia and the
surrounding regions increased by 177% to CNY479 million and sales
from south-east Asia rose by 80% to CNY239 million.
DERIVATION SUMMARY
Hilong maintains higher leverage than other manufacturing peers,
such as China Oriental Group Company Limited (BB-/Positive) and
China XD Plastics Co Ltd (B+/Stable), and its size of operations
is smaller. However, Hilong has a strong business profile, which
is reflected in its strong market share in key product segments,
higher profitability, less volatile margins and greater level of
geographical and end-user diversification, which makes it more
resilient in market downturns.
KEY ASSUMPTIONS
Fitch's key assumptions within its ratings case for the issuer
include:
- Oil prices to stabilise in the near term, sector operating
conditions to improve and drilling activity and producer capex
to increase from 2016 levels.
- Capex of CNY240 million in 2017 and CNY270 million in 2018 and
2019.
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action:
- Consistent improvement in the company's order book and revenue
- Significant reduction in accounts receivable and working
capital, such that FFO net leverage remains below 3.5x on a
sustained basis.
Developments that May, Individually or Collectively, Lead to
Negative Rating Action:
- EBITDA margin below 20% for a sustained period (2016: 25%).
- Significant deterioration in market share.
- FFO net leverage above 3.5x for a sustained period.
LIQUIDITY
Hilong has around CNY1.4 billion of short-term debt due in 2017;
this will be covered by CNY657 million in cash and more than
CNY800 million in undrawn facilities.
LEECO: Founder Seeks More Time, Pledges to Pay Back Debts
---------------------------------------------------------
Reuters reports that the founder of China's struggling tech group
LeEco, Jia Yueting, on July 6 pledged to take full responsibility
for the company's debt troubles amid a deepening financial crisis
and after some of the company's assets were frozen.
Jia, writing in a post on his public WeChat account, apologised
for causing worry, pledged to pay back LeEco's debts and to stick
to its ambitious electric vehicle project, Reuters relates.
"Please give LeEco some time, please give LeEco car some time, we
will pay back creditors, suppliers and any other debts," Jia
wrote, Reuters relays.
According to Reuters, concerns about Jia's position at LeEco were
raised after Chinese newspapers reported this week that he was no
longer LeEco's legal representative. Additionally, earlier this
week, US$182 million (SGD251.3 million) of assets owned by Jia or
the firm were frozen by a court in Shanghai, the report recalls.
Reuters says the online record of China's national enterprise
credit information publicity system does show that in June LeEco
Holdings's legal representative changed from Jia to another
company executive Wu Meng.
Jia pointed out in the WeChat post that he still has an important
role at LeEco, Reuters discloses.
"I am still LeEco's executive director and largest shareholder,
resigning from listed company CEO job and many other important
roles is all aimed at making FF91 go to production and hit the
market as soon as possible," Jia, as cited by Reuters, said,
referring to LeEco's luxury electric car concept under Faraday
Future in the US.
While many analysts said LeEco's expensive ambition in electric
vehicles caused the biggest financial problem for the Netflix-to-
Telsa-like conglomerate, Jia was emphatic in the post that LeEco
remains committed to its car strategy, with its"dream to
revolutionise the auto industry" remaining "undefeatable," adds
Reuters.
China-based LeEco makes smartphones, entertainment platforms,
set-top boxes, and smart TVs.
WEST CHINA CEMENT: 1H2017 Profit No Impact on Moody's B1 CFR
------------------------------------------------------------
Moody's Investors Service says that West China Cement Limited's
(WCC) positive alert for its consolidated net profit in 1H2017 is
a positive development, but will have no immediate impact on its
B1 corporate family and senior unsecured ratings or on the stable
outlook.
"WCC's positive profit alert for 1H2017 will continue to position
the company's credit profile within its B1 corporate family
rating," says Gerwin Ho, a Moody's Vice President and Senior
Analyst.
On June 30, 2017, WCC announced that it expects to record a net
profit for the six months ended June 30, 2017, compared to a net
loss for the corresponding period of 2016.
The positive development was driven by a year-on-year increase in
cement average selling prices in the first half of 2017 and by
foreign exchange translational gains related to its USD senior
notes. By comparison, the company recorded foreign exchange losses
in 2016.
The improved average selling prices were in turn driven by a
consolidation of suppliers to the market in Western China. Moody's
expects that the improvement in WCC's sales volume will be
retained, and for average cement prices to rise about 7%-10% year-
on-year in 2017. The company's B1 corporate family rating already
factors in this expectation.
As a result, Moody's forecasts that WCC's debt/EBITDA will improve
to about 2.6x by end-2017 from 3.0x at end-2016. This level of
leverage supports the company's B1 corporate family rating.
Furthermore, Moody's expects that WCC will remain free cash flow
positive over the next 12-18 months, which in turn will support
the maintenance of a healthy cash position.
The principal methodology used in these ratings was Building
Materials Industry published in January 2017.
West China Cement Limited is one of the leading cement producers
by capacity in Shaanxi Province. At end-2016, the company's annual
cement production capacity measured 29.2 million tons. Its
revenues totaled RMB3.7 billion in 2016.
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AKASH COTEX: CRISIL Reaffirms 'B' Rating on INR11MM Cash Loan
-------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B/Stable' rating on long-term
bank facilities of Akash Cotex.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 11 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility .06 CRISIL B/Stable (Reaffirmed)
Term Loan 2.94 CRISIL B/Stable (Reaffirmed)
The rating continues to reflect the firm's weak financial risk
profile, because of high gearing and modest networth, its exposure
to intense competition in the fragmented cotton ginning industry,
and vulnerability to changes in government policies. These
weaknesses are partially offset by its presence in the cotton
growing belt in Gujarat.
Key Rating Drivers & Detailed Description
Weaknesses
-- Modest financial risk profile: The financial risk profile
remains constrained by high gearing and modest networth.
-- Exposure to intense competition in a fragmented industry: The
cotton ginning industry has a large number of unorganised
players, which limits the bargaining power of the firm.
Strengths
-- Proximity of production facility to the cotton growing region
of Gujarat: The firm's manufacturing facilities are in
Gujrat, and have easy access to raw materials and customers.
Outlook: Stable
CRISIL believes Akash will continue to benefit from its proximity
to the cotton growing belt of Gujarat. However, the firm's
financial risk profile will remain constrained because of low cash
accrual and weak capital structure. The outlook may be revised to
'Positive' if increase in revenue and cash accrual, or substantial
equity infusion, leads to a better financial risk profile. The
outlook may be revised to 'Negative' if there is a significant
decline in cash accrual, or large, debt-funded capital
expenditure, weakening the financial risk profile, particularly
liquidity.
Akash is a partnership firm based at Gondal in Rajkot, Gujarat.
The firm's partners have experience of over five years in the
cotton industry.
Net profit was INR0.45 crore on net sales of INR84.19 crore for
fiscal 2016, against INR0.40 crore and INR119.29 crore,
respectively, for fiscal 2015.
ANNAPORANAA FOODS: CRISIL Assigns B Rating to INR8MM Cash Loan
--------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
bank facility of Annaporanaa Foods (APF).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 8 CRISIL B/Stable
The rating reflects intensive working capital operations, low
operating profitability and modest scale of operations. These
weaknesses are partially offset by the extensive experience of
promoter in the agriculture industry.
Key Rating Drivers & Detailed Description
Weakness
-- Intensive working capital operations: APF's operations are
working capital intensive reflected in its gross current
assets (GCA) days of around 192 days as on March 31, 2017. GCA
days are primarily on account of debtor of around 129 days as
on March 31, 2017. Firm maintains inventory of around 40-50
days over the year (47 days as on March 31, 2017).
-- Modest scale of operations and low operating profitability:
AFI's scale of operations has remained modest with operating
income of INR 24.8 crore in fiscal 2017. Also, operating
margin was low, in the range of 1-2 per cent over the past
three years ended fiscal 2017 (2.1 per cent in fiscal 2017).
Strengths
-- Extensive experience of the promoters: APF's proprietor has
extensive experience of more than two decades in the agro
products industry. The promoter's extensive experience has
enabled the firm to establish strong relationship with its
customers and suppliers.
Outlook: Stable
CRISIL believes APF will continue to benefit from the extensive
experience of its promoters. The outlook may be revised to
'Positive' in case of a significant and sustained improvement in
revenue and profitability or improved working capital management
leading to improved cash accruals while maintaining its capital
structure. The outlook may be revised to 'Negative' in case of a
significant decline in revenue or profitability or further stretch
in working capital cycle, or higher-than-expected, debt-funded
capital expenditure, weakening the financial risk profile.
Based out of Madurai, APF was established in 2007 by Mr. Raj
Prabhu as proprietorship firm and is engaged in manufacturing of
fried gram.
The firm had a net profit of INR0.1 crore on net sales of INR24.55
crore in fiscal 2017, against a net profit of INR0.1 crore on net
sales of INR17.97 crore in fiscal 2016.
BHAGABAN MOHAPATRA: Ind-Ra Assigns BB+ Issuer Rating
----------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Bhagaban
Mohapatra Constructions and Engineers Private Limited (BMCEPL) a
Long-Term Issuer Rating of 'IND BB+'. The Outlook is Stable. The
instrument-wise rating actions are:
-- INR30 mil. Fund-based limits assigned with IND BB+/Stable
rating; and
-- INR360 mil. Non-fund- based limits assigned with IND A4+
rating.
KEY RATING DRIVERS
The ratings reflect BMCEPL's low revenue visibility and high
customer concentration risk. As per provisional financials for
FY17, revenue grew to INR601 million (FY16: INR442 million) on the
back of healthy execution of work order. As of May 2017, the
company had an order book of INR744.36 million (1.2x of FY17
revenue) to be executed by June 2018. BMCEPL's single customer,
Orrisa Industrial Development Corporation Limited accounted 73% of
the total order book. EBITDA margin declined to 11.5% in FY17P
(FY16: 12.3%) on account of increase in raw material prices.
The ratings also factor in BMCEPL's moderate liquidity position
with around 87% of average use of working capital limits during
the 12 months ended May 2017.
However, the ratings are supported by the company's strong credit
metrics with interest coverage of 4.8x in FY17P (FY16: 4.4x) and
net leverage of 0.6x (0.8x).
The ratings also benefit from the directors' more than three
decades of experience in the execution of civil work contracts.
RATING SENSITIVITIES
Positive: A substantial improvement in the scale of operations and
overall credit metrics will be positive for the ratings.
Negative: Deterioration in operating profitability leading to a
stress on the overall credit metrics will be negative for the
ratings.
COMPANY PROFILE
Incorporated in 2001, BMCEPL (formerly known as M/s. Bhagaban
Mohapatra) undertakes execution of civil and mechanical
construction projects, with a primary focus on piling activities.
The company is promoted by Mr. Bhagaban Mohapatra based out of
Paradeep, Odisha.
DATTAKALA SHIKSHAN: CRISIL Hikes INR17.50MM Loan Rating to B-
-------------------------------------------------------------
CRISIL Ratings has upgraded its rating on the long-term bank
facilities of Dattakala Shikshan Sanstha (DSS) to 'CRISIL B-
/Stable' from 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit .5 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Funded Interest 2.26 CRISIL B-/Stable (Upgraded
Term Loan from 'CRISIL D')
Proposed Long Term 3.74 CRISIL B-/Stable (Upgraded
Bank Loan Facility from 'CRISIL D')
Term Loan 17.50 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
The rating upgrade reflects timely servicing of debt by the trust
over the three months through May 2017, aided by sufficient cash
accrual and restructuring of term loans. Liquidity will continue
to be supported by higher cash accrual in the medium term.
DSS has a modest scale of operations due to intense competition in
the education sector, below-average financial risk profile because
of moderately high gearing and below average debt protection
metrics. However, it benefits from its promoter's extensive
industry experience and its diversified revenue streams.
Key Rating Drivers & Detailed Description
Weaknesses
-- Modest scale of operations amidst intense industry
competition: Revenue remained modest at an estimated INR27.35
crore during fiscal 2017, due to limited capacity and intense
competition. Institutions run by the trust also face
competition from several small and niche colleges, and
universities offering a wide choice of professional courses in
Maharashtra.
-- Below-average financial risk profile: Financial risk profile
is likely to remain constrained by the moderately high gearing
(2.2 times estimated as on March 31, 2017), and weak interest
coverage ratio (1.45 times estimated for fiscal 2017).
Strengths
-- Extensive experience of the promoters, and diversified revenue
streams: Benefits from the extensive experience of the
promoters in the education sector, and diversified offerings
across streams such as engineering, management and pharmacy,
have helped attract students, and will continue to support
it's the business risk profile.
Outlook: Stable
CRISIL believes DSS will continue to benefit from its established
market position. The outlook may be revised to 'Positive' if
diversification of courses or geographic presence helps improve
the scale of operations and cash accrual. The outlook may be
revised to 'Negative' if a large, debt-funded capital expenditure
or drop in cash accrual, due to reduced student intake, weakens
the financial risk profile.
Established in 2009 by Mr. RM Zol, DSS provides engineering,
management, pharmacy, and computer science courses. The trust also
manages schools offering education from standards I to XII. It has
two campuses, one at Bhigwan near Pune and the other at Karmala
near Solapur.
Net loss was INR1.00 crore on revenue of INR25.20 crore in fiscal
2016, against profit after tax of INR0.02 crore on revenue of
INR24.35 crore, in fiscal 2015.
DC EXPORTS: CRISIL Reaffirms B+ Rating on INR4MM Cash Loan
----------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable/CRISIL A4'
ratings on the bank facilities of DC Exports (DCE).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 25 CRISIL A4 (Reaffirmed)
Cash Credit 4 CRISIL B+/Stable (Reaffirmed)
Proposed Working
Capital Facility 1 CRISIL B+/Stable (Reaffirmed)
The ratings reflect the moderate scale of operations in a highly
fragmented industry, modest operating margin, and exposure to
volatility in the gold prices and fluctuation in foreign exchange
rates. These weaknesses are partially offset by extensive
experience of the proprietor in the gold jewellery segment and
healthy relationship with customers and moderate financial risk
profile.
Key Rating Drivers & Detailed Description
Weaknesses:
-- Moderate scale of operations in a highly fragmented industry:
The industry is highly competitive as low entry barriers and
easy availability of raw material (gold) have led to a large
number of small as well as established players. The moderate
scale of operations and exposure to intense competition also
limits the bargaining power with customers and suppliers,
leading to modest operating margins.
-- Modest operating margin, and exposure to volatility in gold
prices and fluctuation in foreign exchange rates: The
operating margin has remained low at 1.5-2.3% over the three
years through fiscal 2017. The margin remains susceptible to
volatility in gold prices and fluctuations in the foreign
exchange rates. Low bargaining power in a highly competitive
industry also constrains the margin. Hence, the operating
margin is likely to remain modest over the medium.
Strengths:
-- Extensive experience of the proprietor in the gold jewellery
segment and a healthy relationship with customers:
The firm is owned and managed by Mr Denny Joseph, who has an
experience of two decades in the gold jewellery manufacturing
business. This has enabled the firm establish its presence in
the export market. Also, the firm has established a strong
relationship with customers and suppliers. The experience of
the proprietor is likely to lead to healthy growth in sales
over the medium term.
-- Moderate financial risk profile: Financial risk profile is
moderate, supported by comfortable gearing of 0.54 time and
networth of INR 8.05 crores, partially offset by weak total
outside liabilities to tangible networth of 3.22 times as on
March 31, 2017, and average debt protection metrics as
reflected in interest coverage ratio of 1.49 time and net cash
accruals to adjusted debt ratio of 0.16 time in fiscal 2017.
Outlook: Stable
CRISIL believes DCE will continue to benefit from the extensive
industry experience of its proprietor. The outlook may be revised
to 'Positive' in case of a significant increase in sales and
profitability leading to a better financial risk profile, or
considerable improvement in working capital management. The
outlook may be revised to 'Negative' if revenue declines, the
working capital cycle is stretched, or there is large, debt-funded
capital expenditure, leading to weakening of the financial risk
profile.
DCE was established in 1997 as a proprietorship firm by Mr Denny
Joseph, who manages operations. The firm manufactures and exports
gold jewellery. Its manufacturing facility is in Thrissur, Kerala.
The firm has reported profit before tax (PBT) of INR 0.94 crores
on revenue of INR 120.29 crores in fiscal 2017, vis-a-vis PBT of
INR 0.88 crores on revenue of INR 119.13 crores in fiscal 2016.
DECCAN CHRONICLE: NCLT to Initiate Insolvency Process
-----------------------------------------------------
The Economic Times reports that in a fresh round of trouble for
the beleaguered media group Deccan Chronicle Holdings Limited, the
Hyderabad bench of National Company Law Tribunal (NCLT) on July 5
accepted a plea by the Canara Bank, seeking initiation of
insolvency resolution process and has asked the bank to appoint an
interim resolution professional (IRP).
Sources in the bank said that they are in talks with the big four
accounting firms -- Pricewaterhouse Coopers, Ernst & Young,
Deloitte and KPMG -- to be appointed as an IRP, ET relates.
Furthermore, the tribunal assigned July 11 as the hearing date for
deciding the moratorium period.
ET relates that Dishit Bhattacharjee, standing counsel for Canara
Bank said, "The tribunal admitted our application under Section 7
of the Insolvency and Bankruptcy Code 2016 as we were able to
establish that the company has substantial debt on its books and
has defaulted on the payments." The bank had filed an application
before the tribunal in February this year.
Deccan Chronicle, which publishes dailies namely Deccan Chronicle,
Financial Chronicle, Andhra Bhoomi, has defaulted on a loan of
nearly Rs 700 crore, ET discloses. Other lenders like ICICI Bank,
Seri Infrastructure etc., among others are also likely to make a
claim for resolution, the report says.
"Once the IRP is appointed, it will call for a creditors meeting
to pass a resolution on whether to revive the company or look for
other options including insolvency. It can then dissolve its
assets proportionately among the lenders. The company directors,
meanwhile, will have no say in the operations," ET quotes a
company law expert as saying, adding that the promoters can file
appeal before the National Company Law Appellate Tribunal (NCLAT)
in New Delhi against the NCLT's order.
The move could spoil the company's plans, which was planning to
raise funds from Manoj Mohanka, former chairman of Network 18
Media and Investments, as reported by ET earlier.
India-based Deccan Chronicle Holdings Limited engages in the
printing and publishing of newspapers and periodicals. The
company publishes Deccan Chronicle, an English daily; Financial
Chronicle, a financial daily; and Andhra Bhoomi, a regional
daily. It also owns franchise rights for the Hyderabad team of
the Indian Premier League.
As reported in the Troubled Company Reporter-Asia Pacific on
Oct. 17, 2013, The Times of India said Deccan Chronicle has
become the second biggest defaulter in the latest credit crunch,
after Kingfisher Airlines went down owing lenders more than
INR7,000 crore. The company declared itself sick in
September 2013 and checked into the Board for Industrial and
Financial Reconstruction, TOI said.
DHRUV GLOBALS: CRISIL Lowers Rating on INR46.5MM Loan to B+
-----------------------------------------------------------
CRISIL Ratings has been consistently following up with Dhruv
Globals Limited (DGL) for obtaining information through letters
and emails dated November 11, 2016 and December 14, 2016 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
CRISIL gave these ratings:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3 CRISIL A4 (Issuer Not
Cooperating; Downgraded from
'CRISIL A4+')
Export Packing Credit 46.5 CRISIL B+/Stable (Issuer Not
Cooperating; Downgraded from
'CRISIL BB/Stable')
Foreign Exchange 14.75 CRISIL A4 (Issuer Not
Forward Cooperating; Downgraded from
'CRISIL A4+')
Letter of Credit 2 CRISIL A4 (Issuer Not
Cooperating; Downgraded from
'CRISIL A4+')
Proposed Long Term .41 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating; Downgraded from
'CRISIL BB/Stable')
Term Loan 14.84 CRISIL B+/Stable (Issuer Not
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 Dhruv Globals 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 Dhruv Globals Limited is consistent with 'Scenario
1' outlined in the 'Framework for Assessing Consistency of
Information with CRISIL B Rating category.' Therefore, on account
of inadequate information and lack of management co-operation,
CRISIL is downgrading the rating at CRISIL B+/Stable/CRISIL A4.
Set up in 2001 by the New Delhi-based Mittal and Goyal families,
DGL manufactures ready-made garments, specialising in Tshirts for
all age groups. Its plant in Faridabad (Haryana) has capacity to
manufacture 4 million pieces per annum. The company exports its
products to the US, Canada and Europe.
FASTBUILD BLOCKS: Ind-Ra Gives B+ Issuer Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Fastbuild Blocks
Private Limited (FBBPL) a Long-Term Issuer Rating of 'IND B+'. The
Outlook is Stable. The instrument-wise rating actions are:
-- INR50 mil. Fund-based limits assigned with IND B+/Stable
rating; and
-- Proposed fund-based limits* assigned with INR30 mil. assigned
with Provisional IND B+/Stable
-- INR130 mil. Long-term loan due on March 2023 assigned with
IND B+/Stable
* The rating is provisional and shall be confirmed upon the
sanction and execution of the loan documents for the above
facilities by FBBPL to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The ratings reflect FBBPL's small scale of operations and moderate
credit profile due to its short operational track record as it had
started its commercial operations in FY15. According to FY17
audited financials, revenue increased to INR176 million (FY16:
INR121 million), driven by an increase in capacity utilisation. In
FY17, interest coverage (operating EBITDA/gross interest expense)
was 1.49x (FY16: 0.7x) and financial leverage (total adjusted net
debt/operating EBITDAR) was 6.1x (11.6x). The overall improvement
in credit profile was on account of an improvement in EBITDA
margins to 23.2% from 17.8%.
The ratings factor in the company's long net working capital
cycle, due to high inventory days, and a tight liquidity position,
indicated by an almost 100% utilisation of the working capital
limits during the 12 months ended May 2017.
The ratings, however, are supported by FBBPL's business monopoly
in Orissa, Bihar and Jharkhand region and strong clientele base.
RATING SENSITIVITIES
Negative: A decline in the operating profitability, resulting in
deterioration in credit metrics, will be negative for the ratings.
Positive: An increase in the revenue and operating profit, along
with an improvement in credit metrics, will be positive for the
ratings.
COMPANY PROFILE
FBBPL was incorporated in 2012 by Mr. Ashish Rungta and two other
directors in the state of Orissa. It manufactures AAC (autoclaved
aerated concrete) blocks at its capacity of 150,000 cubic meters
per annum.
K K POLYCOLOR: CRISIL Reaffirms B- Rating on INR9.0cr Cash Loan
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with K K
Polycolor Asia Limited (KKPA) 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.
CRISIL gave these ratings:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee .75 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 9.00 CRISIL B-/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Letter of Credit 4.50 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term 3.75 CRISIL B-/Stable (Issuer Not
Bank Loan Facility Cooperating; Rating
Reaffirmed)
Term Loan 3.00 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 K K Polycolor Asia 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 K K Polycolor Asia Limited is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL B' category or lower. Based
on the last available information, CRISIL has reaffirmed the
rating at 'CRISIL B-/Stable/CRISIL A4'.
LEMOREX GRANITO: CRISIL Reaffirms B+ Rating on INR26.85MM Loan
--------------------------------------------------------------
CRISIL Ratings has reaffirmed its rating on the long term bank
facilities of Lemorex Granito LLP (LGL) at 'CRISIL B+/Stable'
while reassigning its rating on short term bank facilities at
'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3 CRISIL A4 (Reassigned)
Cash Credit 10 CRISIL B+/Stable (Reaffirmed)
Long Term Loan 26.85 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 5.15 CRISIL B+/Stable (Reaffirmed)
The ratings continue to reflect modest scale, susceptibility to
volatility in raw material and fuel (gas) prices and its presence
in the fragmented and competitive vitrified tile manufacturing
industry. The rating also reflects moderate financial risk profile
as indicated by low expected cushion in net cash accruals vis a
vis term loan repayments. These weaknesses are partly offset by
the extensive experience of partners, strategic location of its
plant.
Analytical Approach
For arriving at the ratings, CRISIL has treated as neither debt
nor equity, unsecured loans of INR4 crore received from directors,
family members, and friends as on March 31, 2016. That is because
the loans bear a nominal interest rate and are expected to remain
in the business over the medium term.
Key Rating Drivers & Detailed Description
Weakness
-- Improved yet modest scale in the fragmented and competitive
vitrified tile manufacturing industry: Scale although
improved, remained modest. Moreover, the ceramic tiles
industry is intensely competitive and has many small and large
players.
-- Susceptibility to volatility in raw material and fuel (gas)
prices: Operations are susceptible to fluctuation in raw
material and fuel prices as competition limits ability to pass
on input price increases.
-- Moderate financial risk profile: Financial risk profile
remains moderate majorly due to slightly stretched liquidity
as indicated in lower expected cushion in net cash accruals
vis a vis repayments.
Strengths
-- Partners' extensive experience in the ceramic industry:
Partners possesses nearly two decades of experience in
manufacturing and trading in ceramic tiles.
-- Strategic location of plant: Its manufacturing facility at
Morbi (Gujarat), which is a tile manufacturing hub, benefits
from easy availability of raw materials and labour, resulting
in moderate operating efficiency.
Outlook: Stable
CRISIL believes LGL will benefit over the medium term from its
partners' extensive experience and strategic location of its
plant. The outlook may be revised to 'Positive' if company is able
to ramp up the scale of operations earlier than while maintaining
its profitability, leading to higher-than-expected cash accrual.
Conversely, the outlook may be revised to 'Negative' in case of
lower-than-expected revenue and cash accrual or stretch in working
capital cycle, or any large, debt-funded capital expenditure,
weakening the financial risk profile and liquidity.
LGL is a Morbi, Gujarat based firm which was formed in the year
2016. The company is promoted by Mr. Pravinbhai Mundadiya, Mr.
Anil Surani and family members. It is engaged into manufacturing
of vitrified tiles and has the installed capacity of 93000 MTPA.
MAA CHINNAMASTA: Ind-Ra Assigns BB- Issuer Rating; Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Maa Chinnamasta
Food Processor Private Limited (MCFPPL) a Long Term issuer Rating
of 'IND BB-'. The Outlook is Stable. The instrument-wise rating
actions are:
-- INR130 mil. Fund-based limits assigned with IND BB-/Stable
rating; and
-- INR20 mil. Long-term loan due on March 2021 assigned with IND
BB-/Stable rating.
KEY RATING DRIVERS
The ratings reflect MCFPPL's small scale of operations and
moderate credit profile. According to FY17 provisional financials,
revenue was INR458 million (FY16: INR227 million). The increase in
revenue was driven by an increase in capacity utilisation as well
as addition of a new flour mill. In FY17, interest coverage
(operating EBITDA/gross interest expense) was 3.8x (FY16: 6.5x),
financial leverage (total adjusted net debt/operating EBITDAR) was
4.7x (4.1x) and operating margin was 7.3% (7.9%). The
deterioration in coverage was on account of an increase in
interest cost due to increase in total debt during the year.
Meanwhile, the marginal deterioration in leverage was driven by
the increase in short-term borrowing. Ind-Ra expects credit
metrics to improve in FY18 on account of an increase in EBITDA.
The ratings factor in short operational track record of the entity
as it started its commercial operations in FY15 and high net
working capital cycle due to the seasonal nature of raw material
availability.
The ratings, however, benefit from MCFPPL's moderate liquidity
positon indicated by around 83% average utilisation of working
capital limits during the 12 months ended May 2017. The ratings
are supported by the locational advantage of MCFPPL's plant in
terms of easy availability of raw material.
RATING SENSITIVITIES
Negative: Any decline in operating profitability, resulting in
deterioration in credit metrics, will be negative for the ratings.
Positive: An improvement in the revenue along with improvement of
its credit metrics will lead to a positive rating action.
COMPANY PROFILE
MCFPPL was incorporated in July, 2013 as a rice milling unit with
a production capacity of 3,2659MTPA by Mr. Rahul Kumar and Mr.
Raju Kumar Singh in Rohtas district of Bihar. The company had
started its commercial operation in May, 2015 and further setup a
new unit in 2016 for wheat flour production with a capacity of
34,200MTPA.
MADHAV GINNING: CRISIL Reaffirms B- Rating on INR3MM LT Loan
------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B-/Stable' rating on the
long-term bank facilities of Madhav Ginning (MG). The rating
continues to reflect the firm's modest scale of operations in the
highly fragmented cotton ginning industry, and vulnerability to
changes in cotton prices. These weaknesses are partially offset by
its partners' extensive industry experience.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3 CRISIL B-/Stable (Reaffirmed)
Long Term Loan 3 CRISIL B-/Stable (Reaffirmed)
Analytical Approach
For arriving at the rating, CRISIL has treated unsecured loans
extended to MG by its partners, as debt, as the loans carryan
interest rate equal to the market rate, and do not have a track
record of over three years.
Key Rating Drivers & Detailed Description
Weakness
-- Modest scale of operations in highly fragmented industry:
Intense competition in the cotton ginning industry, and
limited product differentiation,constrain the firm's pricing
and bargaining power with customers and suppliers, and have
led to a low operating margin, expected to be at 5.5% in
fiscal 2018.
-- Vulnerability to changes in cotton prices: Availability of
cotton depends on monsoon, and prices are further affected by
government interventions and fluctuations in global output.
Hence, the firm's ability to manage volatility in cotton
prices and maintain profitability, will be a key rating
sensitivity factor.
Strengths
-- Extensive experience of the partners in the cotton ginning
industry: Benefits from the three decade-long experience of
partners, their understanding of local market dynamics, and
established relationships with customers and suppliers, will
continue.
Outlook: Stable
CRISIL believes MG will continue to benefit from the extensive
experience of its partners. The outlook may be revised to
'Positive' in case of substantial growth in revenue and
profitability, leading to healthy accrual. The outlook may be
revised to 'Negative' in case of low cash accrual, or if a stretch
in working capital cycle, any large debt-funded capital
expenditure, or disruption in operations due to regulatory
changes, weakens the financial risk profile.
MG is a partnership firm, incorporated in 2013, by members of the
Bariya family, which has been engaged in the cotton ginning
business for over three decades. The firm is located in Jetpur,
Junagadh (Gujarat).
MG reported net loss of INR0.18 crore onoperating income of INR8.6
crore in fiscal 2017, vis-a-vis net loss of INR0.14 crore on
operating income of INR6.8 crore, in fiscal 2016.
MALBROS INT'L: Ind-Ra Withdraws BB+ LT Issuer Rating
----------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Malbros
International (P) Ltd's (MIPL) Long-Term Issuer Rating of 'IND
BB+'. The Outlook was Stable. The instrument-wise rating actions
are:
-- INR270 mil. Fund-based limits withdrawn with WD rating;
-- INR19.3 mil. Non-fund based limits withdrawn with WD rating;
and
-- INR102.8 mil. Term loan due on March 2020withdrawn with WD
rating.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the bank loan ratings,
based on the receipt of a no-objection certificate from the
lender. This is consistent with the Securities and Exchange Board
of India's circular dated 31 March 2017 for credit rating
agencies. Ind-Ra will no longer provide analytical and rating
coverage for MIPL.
COMPANY PROFILE
MIPL was incorporated in 1988 by late Mr Om Prakash Malhotra. The
company manufactures country liquor, Indian-made foreign liquor
and extra neutral alcohol (ENA). It has an integrated grain-based
distillery in the Zira district in Ferozepur, Punjab, with
facilities producing 90,000 litres/day of ENA and 2.4 million
cases of bottled liquor annually.
ORCHID CURE: CRISIL Reaffirms B+ Rating on INR5.7MM Term Loan
-------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on the
bank facilities of Orchid Cure and Care Private Limited (OCCPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 4.8 CRISIL B+/Stable (Reaffirmed)
Term Loan 5.7 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect the company's small scale of
operation in intensely competitive health care industry. These
weaknesses are partially offset by its promoters' established
presence and extensive experience in the healthcare segment at
Vishrantwadi in Pune.
Key Rating Drivers & Detailed Description
Weakness
-- Small scale of operations amidst intense competition: Intense
competition in the healthcare industry, has constrained the
occupancy rate at the hospital and kept the scale of
operations small, as reflected in estimated turnover of INR4.3
crore for fiscal 2017
Strengths
-- Established presence and extensive experience of promoters:
The decade-long experience of the promoters in the healthcare
business, their established track record of running the
hospital at Vishrantwadi, and the trust's strong regional
presence will continue to support the business risk profile.
Outlook: Stable
CRISIL believes OCCPL will continue to benefit from its
established regional presence, and extensive experience of its
promoters. The outlook may be revised to 'Positive' in case of
significant revenue growth and stable profitability, leading to
higher cash accrual, and an improvement in the financial risk
profile, especially liquidity. The outlook may be revised to
'Negative' if the financial risk profile weakens because of a
sharp decline in revenue or profitability, or any large debt-
funded capex.
OCCPL, incorporated in September 2012, has a multi-specialty
hospital with 60 beds in Pune. The hospital commenced commercial
operations in February 2016.
P.K. LAXMI: CRISIL Cuts Rating on INR12MM Cash Loan to 'B'
----------------------------------------------------------
CRISIL Ratings has been consistently following up with P.K. Laxmi
Mill India Private Limited (PKPN) for obtaining information
through letters and emails dated January 23, 2017 and February 13,
2017 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
CRISIL gave these ratings:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 12 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
'CRISIL BB+/Stable')
Foreign Discounting 7 CRISIL A4 (Issuer Not
Bill Purchase Cooperating; Downgraded from
'CRISIL A4+')
Letter of Credit 5 CRISIL A4 (Issuer Not
Cooperating; Downgraded from
'CRISIL A4+')
Long Term Loan 4.63 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
'CRISIL BB+/Stable')
Proposed Long Term 3.23 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 P.K.Laxmi Mill India 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 P.K.Laxmi Mill India Private Limited is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL B' category or
lower. Based on the last available information, CRISIL has
downgraded the rating at 'CRISIL B/Stable/CRISIL A4'.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of PKLM and its associate concern PKPN
Spinning Mills Pvt Ltd (PKPN). This is because the two companies,
together referred to as the PKPN group, are in the same line of
business, have a common management, and have significant business
synergies, including fungible cash flows.
Set up in 1981, PKPN is the flagship entity of the PKPN group,
which is owned and managed by Mr. P K Jayagopal and his family
members. Based in Erode (Tamil Nadu), PKPN manufactures viscose
yarn, blended yarn, and speciality yarn such as lycra and acrylic
yarn. Based in Erode, PKLM manufactures viscose yarn, blended
yarn, and speciality yarn such as lycra and acrylic yarn
PVS AUTOMOTIVE: CRISIL Cuts Rating on INR8.14MM Loan to B+
----------------------------------------------------------
CRISIL Ratings has downgraded its rating on the long-term bank
facilities of PVS Automotive Company Private Limited (PVS) to
'CRISIL B+/Stable' from 'CRISIL BB-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Inventory Funding 8.14 CRISIL B+/Stable (Downgraded
Facility from 'CRISIL BB-/Stable')
The downgrade reflects deterioration in financial risk profile,
particularly capital structure and liquidity. Total outside
liabilities to tangible networth ratio weakened around 5.6 times
as of March 2017 from 4 times in fiscal 2015 due to continued
losses resulting in erosion of networth. Dependence on external
debt also increased, as reflected in bank limit utilisaiton of
around 95 per cent over the last 6 months ending May 2017. Cash
accruals of INR0.8-1.0 Cr will remain tightly matched against
repayment obligations of INR0.7 Cr over the medium term.
The rating reflects PVS's weak financial risk profile geographical
concentration in revenue profile, and exposure to intense
competition. These weaknesses are partially offset by established
position in the automobile dealership market in Kerala, backed by
promoters' extensive experience.
Analytical Approach
Unsecured loans from promoters of INR5 Cr estimated as on March
2017 has been treated as 75% equity and 25% debt as the loans will
remain in the business and interest payment if any, will be
ploughed back into the business.
Key Rating Drivers & Detailed Description
Weakness
-- Weak financial risk profile: Networth is estimated to be
small at INR3 crore due to negative accretion to reserves in
the three years through fiscal 2017. Low operating
profitability and high dependence on external debt resulted in
below-average debt protection metrics, reflected in weak
interest coverage ratio of 1.29 times for fiscal 2017
-- Geographical concentration in revenue and exposure to intense
competition: Entire revenue comes from Kerala, which exposes
the company to any adverse change in business environment in
that region. Furthermore, it has to compete with other car
manufacturers.
Strengths
-- Established market position and extensive experience of
promoters: Presence of over a decade in the automobile
dealership market in Kerala and longstanding presence of
promoters have led to the company grow at moderate rate as
reflected in revenue of INR89 crore in fiscal 2017.
Outlook: Stable
CRISIL believes PVS will benefit over the medium term from its
established market position in Kerala, backed by promoter's
experience. The outlook may be revised to 'Positive' if capital
structure improves because of higher cash accrual or equity
infusion, and if geographical diversity helps sustain ramp-up in
operations. The outlook may be revised to 'Negative' if revenue or
profitability declines sharply, resulting in lower cash accrual;
or if large, debt-funded capital expenditure further weakens
financial risk profile.
PVS commenced operations in 2005 as an authorised dealer of
passenger vehicles and spare parts of Ford India Pvt Ltd. The
company has four workshop-cum-showrooms in Kerala (one each in
Kozhikode, Mallapuram, Kannur, and Palghat).
Net loss was INR0.7 crore on net revenue of INR80.8 crore in
fiscal 2016, against a net loss of INR-1.0 crore on net revenue of
INR72.4 crore in fiscal 2015.
PULKIT VENEER: CRISIL Reaffirms B+ Rating on INR3.4MM Cash Loan
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Pulkit
Veneer Mills Private Limited (PVMPL) 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.
CRISIL gave these ratings:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.2 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 3.4 CRISIL B+/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Foreign Exchange 1.45 CRISIL A4 (Issuer Not
Forward Cooperating; Rating
Reaffirmed)
Letter of Credit 29.00 CRISIL A4 (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 Pulkit Veneer Mills 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 Pulkit Veneer Mills Private Limited is
consistent with 'Scenario 2' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower. Based on the last available information, CRISIL has
reaffirmed the rating at 'CRISIL B+/Stable/CRISIL A4'.
PVMPL was established in 1986 by Mr. G R Patodia in Kolkata. The
company manufactures and trades in plywood and veneer. Its product
portfolio includes board plywood, door plywood, window plywood,
and commercial plywood. Its manufacturing unit is at Amdanga, 24
Paraganas (North), West Bengal. The promoter has experience of
over 25 years in the plywood and laminates industry.
R.S. CHAUHAN: CRISIL Assigns B+ Rating to INR2MM Loan
-----------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings on
the bank loan facilities of R. S. Chauhan (RSC). The rating
reflects modest scale of operations in highly fragmented industry
with presence in single location and working capital intensive
nature of operations. These rating weaknesses are partially offset
by the extensive experience of the promoters in the civil
construction industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 4 CRISIL A4
Working Capital
Facility 2 CRISIL B+/Stable
Key Rating Drivers & Detailed Description
Weaknesses
-- Modest scale of operations in a highly fragmented industry:
RSC's scale of operations is modest, as reflected in its
revenues of INR7.5 crore in FY 17. This is due to tender-based
nature of operations. This also results in volatility in
revenue profile and also makes the firm susceptible to
volatility in operating margins as the same vary across
various tenders. Furthermore, the firm undertakes all of its
projects in Raisen near Bhopal, limiting the scale of
operations to new projects in this district only. CRISIL
believes that tender-based process of obtaining projects from
government departments and intense competition will
significantly affects the firm's business and financial risk
profiles.
-- Working capital intensive nature of operations: The
construction industry is inherently working capital intensive.
RSC's operations are working capital intensive as seen in GCA
days of 98 for fiscal 2017. This is on account of various
deposits the firm has to maintain with the government agencies
and blockage of funds as retention money and margin money for
bank guarantee. CRISIL believes that RSC's operations will
become more working capital intensive over the medium term.
Strengths
-- Promoter's long standing experience in the civil construction
industry: Mr. Atul Chauhan has over a 10 years of experience
in the civil construction industry. The promoter's extensive
industry experience has helped RSC to bag projects frequently
from government authorities. RSC currently has a healthy order
book of around INR25 crore to be executed over the next 18
months. The healthy order book provides the firm with healthy
revenue visibility over the medium term. CRISIL believes that
RSC will continue to benefit over the medium term from its
promoter's extensive industry experience and its strong
revenue visibility.
Outlook: Stable
CRISIL expects RSC to maintain a stable business risk profile on
the back of its established presence in the civil construction
industry. The outlook may be revised to 'Positive' if the firm
reports substantial growth in its scale of operations and
profitability while improving its working capital cycle and timely
execution of projects. The outlook may be revised to 'Negative' if
the firm's financial risk profile deteriorates due to lengthening
of its operating cycle or if the firm suffers a decline in its
revenues or profitability.
R. S. Chauhan (RSC), established in 2007, by Mr. Atul Chauhan in
Raisen near Bhopal, Madhya Pradesh. The firm is engaged in
executing external electrification, transformation installation
and internal electrification contracts awarded by different state
government, semi government agencies and private companies in
Raisen (MP). The firm has mainly executed contracts for PWD
(Bhopal), however it has executed some contracts for Bharti
Infratel, Vodafone and other private agencies.
Estimated profit after tax was INR30.1 lakh on net sales of
INR7.52 crore for fiscal 2017 against INR23.55 lakh and INR5.76
crore, respectively, for fiscal 2016.
RELIANCE FABRICATIONS: CRISIL Reaffirms B+ Rating on INR3MM Loan
----------------------------------------------------------------
CRISIL Ratings has reaffirmed its ratings on the bank facilities
of Reliance Fabrications Private Limited (RFPL) at 'CRISIL
B+/Stable/CRISIL A4'. The ratings continue to reflect RFPL's
working capital-intensive operations, and the company's small
networth and modest scale. These weaknesses are partially offset
by the extensive industry experience of its promoters and a strong
customer base.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1 CRISIL A4 (Reaffirmed)
Cash Credit 3 CRISIL B+/Stable (Reaffirmed)
Letter of Credit 1 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 2.68 CRISIL B+/Stable (Reaffirmed)
Standby Line of Credit 0.45 CRISIL B+/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weaknesses
-- Working capital-intensive operations: Operations entail large
working capital requirement, particularly on account of large
inventory of 270 days as on March 31, 2016 and 278 days as on
March 31, 2017, leading to gross current assets of 306 days
and 335 days, respectively. Wide variety of products requires
considerable raw material and consumables, which result in
sizeable inventory.
-- Modest scale: Scale of operations remains small, with a
turnover of INR7.67 crore in fiscal 2016 and INR8.85 crore in
fiscal 2017. RFPL manufactures process plant equipment such as
pressure vessels, heat exchangers, and cooling towers, and has
a negligible market share in this line of business.
Fragmentation and small scale limit bargaining power with
customers; modest scale also restricts the ability to bid for
bigger projects.
-- Small networth: Small networth of INR5.4 crore as on March
31, 2016, and INR5.7 crore as on March 31, 2017, adversely
affects the flexibility to raise additional funds, and renders
the financial risk profile vulnerable to small changes in
profitability or even a marginal increase in debt.
Strengths
-- Promoters extensive experience and strong customer base: RFPL
benefits from its promoters' four decades of experience which
has helped forge strong relations with suppliers, lenders, and
clients (a registered vendor with Engineers India Ltd). It is
registered as Class A supplier with Tata Steel Ltd and
receives about 60% of its order from them. Moreover, strong
execution capabilities have yielded operating margin of over
15% over the four fiscals through 2017.
Outlook: Stable
CRISIL believes RFPL will continue to benefit over the medium term
from its established client relationships and promoters' extensive
experience. The outlook may be revised to 'Positive' in case of
significant improvement in revenue and profitability, while
maintaining its capital structure. Conversely, the outlook may be
revised to 'Negative' in case of a decline in operating margin or
large, debt-funded capital expenditure, resulting in deterioration
in the financial risk profile.
Established as a closely held company in 1966, RFPL promoted by
the Jamshedpur-based Gutgutia family manufactures process-plant
equipment and maintenance spares for several industries, including
petroleum, refining, chemical, fertiliser, steel, cement, and
power.
For fiscal 2016, the firm reported losses of INR6 lakh on net
sales of INR7.67 crore, against profit after tax of INR16 lakh on
net sales of INR9.77 crore for fiscal 2015.
RISING HOTEL: Ind-Ra Assigns BB- Issuer Rating, Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Rising Hotel
Limited (RHL) a Long-Term Issuer Rating of 'IND BB-'. The Outlook
is Stable. The instrument-wise rating actions are as follows:
-- INR261.4 mil. Term loan due on July 2021 assigned with
IND BB-/Stable rating; and
-- INR40 mil. Proposed fund-based working capital limits*
assigned with Provisional IND BB-/Stable/Provisional IND A4+
rating.
* The ratings are provisional and shall be confirmed upon the
sanction and execution of the loan documents for the above
facilities by RHL to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The ratings reflect RHL's moderate credit profile. As per FY17
provisional financials, revenue grew to INR333 million (FY16:
INR302 million) on account of an increase in the occupancy level
to 73% (69%) driven by Eight Vibrant Gujarat Global Summit and
doctors' conference organised by government of Gujarat.
Consequently, EBITDA margin expanded to 32% in FY17P (FY16:
16.1%).
EBITDA interest coverage (operating EBITDA/gross interest expense)
improved to 3.2x in FY17P (FY16: 0.9x) and net financial leverage
(total Ind-Ra adjusted net debt/operating EBITDAR) to 7.1x (16.9x)
owing to the improvement in the EBITDA margin. Management expects
the credit metrics to improve further on account of scheduled
repayment of term loan and absence of debt-funded capex plan in
the near term.
The ratings also factor in the company's moderate liquidity
position. Cash flow from operations remained positive in the range
of INR8 million-59 million over FY14-FY17 (FY17P: INR59 million,
FY16: INR22 million) on account of a sustained improvement in the
top line and EBITDA. RHL had a net cash conversion cycle of
negative 11 days over FY16-FY17.
However, the ratings are supported by the company's promoters'
more than two decades of experience in the hotel industry.
RATING SENSITIVITIES
Negative: A significant decline in the revenue and operating
profitability leading to a sustained deterioration in the credit
metrics would be negative for the ratings.
Positive: A substantial increase in the revenue and operating
profitability leading to a sustained improvement in the credit
metrics would be positive for the ratings.
COMPANY PROFILE
RHL, erstwhile Akash Hotel Limited, was incorporated in 1991. The
company was taken over by the Galani and the Somani families in
2006 and the name was changed to RHL. It owns two hotels in
Ahmedabad: Radisson Blu and Country Inn & Suites, and two
windmills one in Kutch, Gujarat with 1.5MW power capacity and
other in Sangli, Maharashtra with 1.25MW capacity.
Radisson Blu is a five star hotel having 115 rooms, including 78
deluxe rooms, 22 superior rooms, eight executive suite rooms, six
studio suites (long staying guests) and one presidential suite.
The company has two banquets halls, two multi-cuisine restaurants,
board meeting hall, and gym and spa.
RHL has partnered with Carlson group for operations and management
of Country Inns & Suites. The hotel, which became operational in
March 2009, has 68 rooms, including 31 deluxe rooms, 28 superior
rooms and nine executive rooms. It has a restaurant and a banquet
hall with a capacity of around 60 and 75 people, respectively.
ROHIT COLONISERS: CRISIL Assigns B Rating to INR19.29MM Loan
------------------------------------------------------------
CRISIL Ratings has assigned 'CRISIL B/Stable' rating on the long-
term bank facility of Rohit Colonisers Private Limited (RCPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Rupee Term Loan 19.29 CRISIL B/Stable
RCPL is running one project 'Rohit Grand'. The project, still in
initial stages, is estimated to cost INR38.37 crore; which will be
funded through promoters' contribution of INR12.79 crore, bank
finance of INR19.29 crore and the remaining INR6.29 crore through
advances and deposits from customer.
Further, the company has established track record in the real
estate industry and healthy bookings and customer advances
received for its earlier projects Rohit Residency, Rohit Paradise
and Rohit Tower project.
Key Rating Drivers & Detailed Description
Weaknesses
-- High demand and revenue risk: With sizeable construction
activity yet to be commenced on Rohit Grand, bookings and
advances received will remain a rating sensitivity factor over
the medium term. Thus, CRISIL believes that the company might
face demand risk.
-- Project implementation risk: The project has statutory
clearances including clear and marketable title for land, land
use conversion, and master plan approval, but only 11% of the
construction was complete as of March 2017. CRISIL believes
there is a high risk associated with the implementation and
completion of the project taking in to account timely funding
support, time and cost overrun.
-- Risks and cyclicality inherent in Indian real estate industry:
The real estate sector in India is cyclical, and marked by
volatile prices, opaque transactions, and a highly-fragmented
market structure because of the presence of a large number of
regional players. Significant time overruns in earlier
projects has led the company to apply for rescheduling and
restructuring of term loans in the past, owing to slow inflow
of customer advances. The rising interest rates and
increasing costs of land, along with expected correction in
prices, will hurt players' profitability over the medium term.
Strengths
-- Established track record of promoters: RCPL belongs to the
Rohit Group of Companies. The project undertaken by RCPL is
handled by experienced management who have extensive domain
experience. The group, in the past, has successfully executed
two residential projects in Lucknow; one is under Preet
Realtors Pvt Ltd (named Rohit Residency), another under India
Infraheight Pvt Ltd (Rohit Paradise). Another project, Rohit
Heights, is being executed in Lucknow. CRISIL believes that
the group's established track record will help the company to
market its project well.
Outlook: Stable
CRISIL believes Rohit Grand will remain sensitive to the inflow of
customer advances, and sales of residential units. The outlook may
be revised to 'Positive' if sizeable sales lead to high cash
generation. The outlook may be revised to 'Negative' if delays in
obtaining customer advances, results in time overrun.
RCPL was incorporated in March 2006 and has undertaken a group
housing project 'Rohit Tower' at Lucknow. Further, the promoters
have a history of successfully completing all projects some of
them such as Rohit Paradise and Residency before the targeted
schedule.
SAHASTRAA EXPORTS: CRISIL Cuts Rating on INR7.5MM Loan to B
-----------------------------------------------------------
CRISIL Ratings has been consistently following up with Sahastraa
Exports Private Limited (Sahastraa) for obtaining information
through letters and emails dated April 1, 2016, and February 28,
2017, among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
CRISIL gave these ratings:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 7.5 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
'CRISIL BB+/Stable')
Letter of Credit 11.5 CRISIL A4 (Issuer Not
Cooperating; Downgraded from
'CRISIL A4+')
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 Sahastraa Exports 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 Sahastraa Exports Private Limited is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL B' category or
lower. Based on the last available information, CRISIL has
downgraded the rating at 'CRISIL B/Stable/CRISIL A4'.
Promoted by Mr. Suhhail Agarwaal, Sahastraa trades in chemicals.
Its product portfolio includes petrochemicals, solvents,
ethanolamines, and ketones. Its head office is in Mumbai and its
branch offices are in New Delhi, Hyderabad, Haryana, Punjab,
Kandla (Gujarat), Ghaziabad (Uttar Pradesh), and Rajasthan. It has
a warehouse in Navi Mumbai (Maharashtra).
SAMKEET ELECTRONICS: CRISIL Cuts Rating on INR4MM Loan to B
-----------------------------------------------------------
CRISIL Ratings has been consistently following up with Samkeet
Electronics (SE) 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.
CRISIL gave these ratings:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Adhoc Limit 1 CRISIL A4 (Issuer Not
Cooperating; Downgraded from
'CRISIL A4+')
Channel Financing 4 CRISIL B/Stable (Issuer Not
Cooperating; Downgraded from
'CRISIL BB-/Stable')
Drop Line Overdraft 1 CRISIL B/Stable (Issuer Not
Facility Cooperating; Downgraded from
'CRISIL BB-/Stable')
Proposed Long Term 1 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 Samkeet Electronics. 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 Samkeet Electronics is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL B' category or lower. Based on the last
available information, CRISIL has downgraded the rating at 'CRISIL
B/Stable/CRISIL A4'.
Established in 2000, SE is based in Ahmedabad (Gujarat) and is
promoted by Mr. Vikram Jain. The firm is the sole authorized
distributor in Ahmedabad for LG's refrigerators, air conditioners,
and washing machines.
SB LIFESPACES: CRISIL Reaffirms B+ Rating on INR12MM Cash Loan
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with SB
Lifespaces Private Limited (SBLPL) for obtaining information
through letters and emails dated November 21, 2016, and December
22, 2016, among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
CRISIL gave these ratings:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 12 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 SB Lifespaces 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 SB Lifespaces Private Limited is
consistent with 'Scenario 3' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BBB' category or
lower. Based on the last available information, CRISIL has
reaffirmed the rating at 'CRISIL B+/Stable'.
SBLPL, incorporated in August 2011 by Mumbai-based Mr. Kirit
Wadhwana and his family, is developing a residential-cumcommercial
real estate project, Sandeep Heights, at Nallasopara in Thane
(Maharashtra).
SCOTLANE CERAMICS: CRISIL Assigns 'B' Rating to INR4.95MM Loan
--------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable/CRISIL A4'
ratings to the bank facilities of Scotlane Ceramics (SC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 4.95 CRISIL B/Stable
Bank Guarantee 0.33 CRISIL A4
Cash Credit 1.25 CRISIL B/Stable
The ratings reflect exposure to risks related to timely
stabilisation of operations and commensurate ramp-up in sales
during the early stages, and large working capital requirement.
The ratings also factor in expectation of an average financial
risk profile because of the large, debt-funded project cost. These
weaknesses are partly offset by the extensive experience of the
partners in the ceramics industry.
Key Rating Drivers & Detailed Description
Weakness
-- Exposure to risks related to timely project stabilization:
Commercial operations started from April 2017. Timely
implementation of the proposed project, stabilisation of
operations, and commensurate ramp-up of sales will remain
critical to achieve growth in revenue and profitability, and
will hence be monitored closely.
-- Average financial risk profile: Capital expenditure is mainly
funded through a term loan of INR4.95 crore, along with equity
infusion of INR4.0 crore and an unsecured loan of INR1.72
crore from the partners. The project gearing is likely remain
below 2.0 times.
Strengths
-- Extensive industry experience of the partners: The partners
have an experience of over 15 years in the sanitary ware
manufacturing business through their firm, Neo Ceramics. This
has led to an established relationship with many
distributors/retailers and merchant exporters, leading to
hassle-free selling.
Outlook: Stable
CRISIL believes SC will continue to benefit from the extensive
industry experience of its partners and their funding support. The
outlook may be revised to 'Positive' if revenue and profitability
improve, leading to higher-than-expected cash accrual. The outlook
may be revised to 'Negative' in case of lower-than-expected
accrual or deterioration in working capital management, leading to
weakening of the financial risk profile, particularly liquidity.
SC, established in 2014 by Mr.Hiren Raval, Mr.Jaydeep Patel and 13
other members as a partnership firm, is based in Morbi, Gujarat.
It manufactures sanitary ware such as wash basins, one-piece
closets, and urinals. The firm commenced commercial operations
from mid-April 2017.
SENATOR MOTORS: CRISIL Reaffirms 'D' Rating on INR22MM Loan
-----------------------------------------------------------
CRISIL Ratings has been consistently following up with Senator
Motors Private Limited (SMPL) for obtaining information through
letters and emails dated January 24, 2017 and February 14, 2017
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
CRISIL gave these ratings:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.25 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 22.00 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Term Loan 9.24 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 Senator Motors 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 Senator Motors Private Limited is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL B' category or
lower. Based on the last available information, CRISIL has
reaffirmed the rating at 'CRISIL D/CRISIL D'.
SMPL, based in Mumbai and incorporated in October 2011, is
promoted by Mr. Puneet Lalit Kumar. The company started operations
in November 2011 as an authorised dealer of Skoda's entire range
of cars, spare parts, and accessories at Goregaon in Mumbai.
SHREE GAJKESHRI: CRISIL Hikes INR7.5MM Loan Rating to B+
--------------------------------------------------------
CRISIL Ratings has upgraded its rating on the long-term bank
facilities of Shree Gajkeshri Fabrics (SGF) to 'CRISIL B+/Stable'
from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Long Term Loan 7.5 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Proposed Long Term 0.5 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B/Stable')
The upgrade reflects healthy ramp-up in operations in fiscal 2017
(the first year of operations) leading to better-than-expected
cash accrual and healthy estimated operating profitability of
10.9%. The firm started operations sooner than expected and had
better-than-expected capacity utilisation. CRISIL believes it will
sustain its business risk profile, backed by expected robust
revenue growth in fiscal 2018, its first full year of commercial
operations, and sustained operating margin of 11%. Consequently,
cash accrual should remain sufficient to meet debt obligation, in
the absence of significant capital expenditure (capex), over the
medium term. Despite working capital-intensive operations,
reflected in estimated gross current assets (GCAs) of 174 days as
on March 31, 2017, bank limit utilisation was moderate, averaging
88% over the 12 months through May 2017. Liquidity is supported by
unsecured loans from the proprietor, estimated at INR2.46 crore as
on March 31, 2017.
Key Rating Drivers & Detailed Description
Weaknesses
-- Modest scale of operations and limited track record:
Operations began only in May 2016, and scale of operations is
modest, reflected in estimated net sales of INR21.47 crore for
fiscal 2017. Small scale and exposure to intense competition
in the garments industry limit bargaining power with suppliers
and customers, leading to pressure on the operating margin.
Although the scale of operations may increase gradually over
the medium term, it will remain modest due to intense
competition.
-- Working capital-intensive operations: GCAs are estimated at
174 days, with inventory and receivables at 128 and 58 days,
respectively, as on March 31, 2017. Working capital management
is supported by creditors of 157 days. Operations are likely
to remain working capital intensive over the medium term, with
GCAs expected at 150-160 days.
-- Average financial risk profile: Total outside liabilities to
tangible networth ratio was high, estimated at 2.85 times as
on March 31, 2017, mainly because of term debt to fund capex.
The ratio is expected to remain high, at 2.80-3.30 times, over
the medium term, due to working capital debt. Debt protection
metrics are above average, with interest coverage and net cash
accrual to total debt ratios estimated at 4.02 times and 0.16
time, respectively, for fiscal 2017.
Strengths
-- Proprietor's extensive industry experience and funding
support: Though SGF started commercial operations in fiscal
2017, its proprietor has been in the textile business for 30
years, and has deep knowledge of local market dynamics, which
will help the firm establish a strong clientele. He has
supported the firm through unsecured loans.
Outlook: Stable
CRISIL believes SGF will continue to benefit from its proprietor's
extensive industry experience and funding support. The outlook may
be revised to 'Positive' in case of more-than-expected increase in
operating income, leading to better-than-expected cash accrual.
The outlook may be revised to 'Negative' if lower-than-anticipated
capacity utilisation or pressure on profitability affects cash
accrual, or if more-than-expected working capital debt weakens the
financial risk profile.
Established in August 2015 by Mr. Keshri Chhajer, SGF manufactures
and supplies ready-to-stich dress material for sarees, suits, and
other garments. Its manufacturing facility is in Pali, Rajasthan,
and has installed capacity of 3 lakh metres per day.
The firm's profit after tax (PAT) and net sales were INR0.15 crore
and INR21.47 crore, respectively, for fiscal 2017, its first year
of operations.
SIGMA GALVANIZING: CRISIL Reaffirms B- Rating on INR11.76MM Loan
----------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B-/Stable/CRISIL A4'
ratings on the bank facilities of Sigma Galvanizing Pvt Ltd
(SGPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee .5 CRISIL A4 (Reaffirmed)
Cash Credit 7.5 CRISIL B-/Stable (Reaffirmed)
Letter of Credit 2 CRISIL A4 (Reaffirmed)
Long Term Loan 11.76 CRISIL B-/Stable (Reaffirmed)
The ratings continue to reflect SGPL's modest scale of operations
along with large working capital requirements. The ratings also
reflects weak financial risk profile marked by modest net worth,
high total outside liabilities to adjusted networth (TOLANW) ratio
and below-average debt protection metrics. These weaknesses are
partially offset by the extensive experience of the promoters in
the galvanisation industry.
Analytical Approach
CRISIL has treated unsecured loan (outstanding at INR14.13 crore
as on March 2017) extended to SGPL by promoters as neither debt
nor equity because this loan has interest rate lower than marker
rate and is expected to remain in the business over the medium
term.
Key Rating Drivers & Detailed Description
Weakness
-- Modest scale of operations and intense competition: Revenue
of INR22.64 crore in fiscal 2017 reflects modest scale of
operations in the intensely competitive industry.
-- Working capital-intensive operations: Gross current assets
were 312 days as on March 31, 2017, due to high inventory of
262 days.
-- Weak financial risk profile: The financial risk profile has
been weak due to high total outside liabilities to tangible
networth ratio (17.6 times as on March 31, 2017), average debt
protection metrics (interest coverage of 1.2 times in fiscal
2017) and small networth (Rs 1.42 crore).
Strengths
-- Experience of promoters: The promoters' experience (of about
four decades), their market understanding and ability to adapt
the product portfolio to tap new customers and source raw
materials at competitive prices should continue to benefit the
business risk profile.
Outlook: Stable
CRISIL believes SGPL will continue to benefit from the promoters'
experience. The outlook may be revised to 'Positive' if
substantial and sustained improvement in revenue and operating
margin, leading to higher-than-expected cash accrual, substantial
equity infusion or efficient working capital management
strengthens capital structure. Conversely, the outlook may be
revised to 'Negative' if lower-than-expected cash accrual, larger-
than-expected working capital requirement, or sizeable, debt-
funded capital expenditure weakens financial risk profile,
particularly liquidity.
Incorporated in 1989, SGPL is a Navi Mumbai-based company that
executes galvanisation of iron and steel products, roll forming,
and manufacturing electro forged gratings. Promoted by a group of
technocrats its facilities have galvanisation capacity of 2,400
tonne per month.
Net loss was INR1.17 crore on operating income of INR22.64 crore
for fiscal 2017, against INR0.42 crore and INR19.40 crore,
respectively, for fiscal 2016.
STARCARE HOSPITAL: CRISIL Reaffirms B+ Rating on INR22MM Loan
-------------------------------------------------------------
CRISIL Ratings on the Starcare Hospital Kozhikode Private Limited
(SHKPL) bank facilities continue to reflect modest scale and
nascent stage of operations. The ratings also reflect below-
average financial risk profile marked by weak debt protection
metrics. These rating weaknesses are partially offset by extensive
experience of promoters in healthcare industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1 CRISIL A4 (Reaffirmed)
Overdraft 3 CRISIL A4 (Reaffirmed)
Proposed Bank
Guarantee 0.5 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 8 CRISIL B+/Stable (Reaffirmed)
Term Loan 22 CRISIL B+/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weaknesses
-- Modest scale and nascent stage of operations: Scale of
operations remains small with estimated revenue of INR15 crore
in fiscal 2017, the first full year of operations. The revenue
is expected to improve over the medium term. The timely ramp
up of scale of operations will remain key rating sensitivity
factor over the medium term.
-- Below-average financial risk profile: The below-average
financial risk profile is marked by weak debt protection
metrics as indicated by negative interest coverage in fiscal
2017.
Strengths
-- Extensive experience of promoters in healthcare industry:
SHKPL is promoted by Dr. Sadik Kodakat who belongs to Starcare
Group, which is a well-known healthcare group in Oman. The
company benefits from the extensive experience of promoters
and their technical expertise in healthcare industry.
Outlook: Stable
CRISIL believes SHKPL will continue to benefit over the medium
term from the considerable experience of its promoters in the
healthcare industry. The outlook may be revised to 'Positive' if
the company's scale of operations and profitability improves
thereby improving its financial risk profile. Conversely, the
outlook may be revised to 'Negative' if delays in ramp up in scale
of operations resulting in lower than expected cash accruals or
higher-than-expected debt-funded capex, weakens the financial risk
profile.
Incorporated in January 2015, SHKPL is the first hospital in
southern India of the Starcare UK group. It runs a 272 bedded
multispecialty hospital in Kozhikode, Kerala. The hospital started
its full-fledged operations in November, 2016. The group is
chaired by Dr. Sadik Kodakat.
SUPER GEO: CRISIL Reaffirms 'B' Rating on INR10MM Loan
------------------------------------------------------
CRISIL Ratings has been consistently following up with Super Geo
Drillers (J.V) (SGD) for obtaining information through letters and
emails dated November 21, 2016, and December 22, 2016, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
CRISIL gave these ratings:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 28 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Overdraft 10 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 Super Geo Drillers (J.V). 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 Super Geo Drillers (J.V) is consistent with
'Scenario 1' outlined in the 'Framework for Assessing Consistency
of Information with CRISIL B' category or lower. Based on the last
available information, CRISIL has reaffirmed the rating at 'CRISIL
B/Stable/CRISIL A4'.
SGD was setup in 2014 as a partnership firm by the Ambala
(Haryana)-based Singh family. It has received a contract from the
government of Niger for installation of tube wells and hand pumps
in the country.
TARUNIKAA JEWELS: CRISIL Raises Rating on INR8.5MM Loan to B+
-------------------------------------------------------------
CRISIL Ratings has upgraded its rating on the bank facilities of
Tarunikaa Jewels (TJ) to 'CRISIL B+/Stable' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 8.5 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Long Term Loan 1.5 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The rating upgrade reflects earlier-than-expected stabilisation of
operations with ramp-up in scale of operations in the very first
year of commercialisation. This also resulted in sufficient
liquidity, as indicated by sufficient net cash accrual against
term loan repayments.
The rating continues to reflect an average financial risk profile
because of large working capital requirement, moderate scale of
operations, and geographical concentration in revenue. These
weaknesses are partially offset by the extensive experience of
partners.
Key Rating Drivers & Detailed Description
Weakness
-- Large working capital requirement: Working capital
requirement remains high as indicated by high inventory days
due to the intrinsic nature of jewellery industry.
-- Moderate scale of operations and geographical concentration in
revenue: Scale of operations remains moderate due to intense
competition in the jewellery industry.
Strength
* Extensive experience of partners: The partners extensive
experience in the jewellery industry has helped forge strong
relationships with customers.
Outlook: Stable
CRISIL believes TJ will continue to benefit over the medium term
from the extensive experience of partners. The outlook may be
revised to 'Positive' if significant improvement in scale of
operations and profitability leads to sizeable cash accrual.
Conversely, the outlook may be revised to 'Negative' if revenue or
profitability declines, capital structure or debt protection
metrics weaken, or working capital cycle gets stretched.
Established in 2016 as a partnership between, TJ has set up retail
showroom for gold and diamond jewellery in Gaya, Bihar.
UDAY AUTOLINK: CRISIL Reaffirms 'C' Rating on INR24.8MM Loan
------------------------------------------------------------
CRISIL Ratings has been consistently following up with Uday
Autolink Private Limited (UAPL) for obtaining information through
letters and emails dated January 19, 2017, and February 9, 2017,
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
CRISIL gave these ratings:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Drop Line Overdraft 8 CRISIL C (Issuer Not
Facility Cooperating; Rating
Reaffirmed)
Electronic Dealer 6 CRISIL C (Issuer Not
Financing Scheme Cooperating; Rating
(e-DFS) Reaffirmed)
Term Loan 24.8 CRISIL C (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 Uday Autolink 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 Uday Autolink 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 C'.
UAPL, set up in 2012, is an authorised dealer for Maruti Suzuki
India Ltd (MSIL). UAPL operates a 50,000-square-foot sales,
services and spares (3S) showroom in eastern Ahmedabad. The
operations are managed by the promoters, Mr. Uday Bhatt, his
brother, Mr. Nilesh Bhatt, and son, Mr. Hemant Bhatt.
UMESH EDUCATION: CRISIL Cuts Rating on INR12MM LT Loan to B
-----------------------------------------------------------
CRISIL Ratings has been consistently following up with Umesh
Education Trust (UET) for obtaining information through letters
and emails dated January 19, 2017, and February 9, 2017, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
CRISIL gave this rating:
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 12 CRISIL B/Stable (Issuer Not
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 Umesh Education Trust. 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 Umesh Education Trust 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 at
'CRISIL B/Stable'.
UET was founded in 1964, and was later taken over by Mr. D K Mohan
(current chairman and managing trustee) in 1997. The trust offers
graduate and postgraduate courses in engineering, technology and
management, and also operates a school. Currently, the trust runs
two institutions: Cambridge Institute of Technology and Cambridge
School.
VEEJAY TERRY: CRISIL Reaffirms B+ Rating on INR5MM Cash Loan
------------------------------------------------------------
CRISIL Ratings has reaffirmed its ratings on the bank facilities
of Veejay Terry Products Limited (VTPL) at 'CRISIL
B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL B+/Stable (Reaffirmed)
EPCG Guarantee (ST) 0.5 CRISIL A4 (Reaffirmed)
Letter of Credit 2 CRISIL A4 (Reaffirmed)
Proposed Cash
Credit Limit 2.5 CRISIL B+/Stable (Reaffirmed)
Rupee Term Loan 2.5 CRISIL B+/Stable (Reaffirmed)
The rating also reflects VTPL's modest scale of operations and
susceptibility of VTPL's operating profitability to volatility in
raw material prices. These weaknesses are partially offset by the
promoter's extensive experience in the cotton yarn spinning
industry and its moderate financial risk profile marked by a
moderate capital structure.
Key Rating Drivers & Detailed Description
Weaknesses
-- Modest scale of operations: VTPL's scale of operations is
modest as reflected in its operating income estimated at
around INR30 crore for fiscal 2017. This is despite the fact
that the company has been in the industry for over two
decades. There are a large number of cotton yarn manufacturers
situated in this region, with many entities operating with
small capacities, exposing the entity to risks related to
intense competition.
-- Susceptibility of operating margin to volatility in raw
material prices: VTPL's operating profitability has been
volatile in the range of around 5.5 to 10 percent in the past
4 years through March 2017 due to volatility in the prices of
cotton. Cotton is the major raw material, and accounts for
the bulk of production costs. Cotton prices have been volatile
in the past and are expected to remain so, exposing the group
to price risk. The volatility in cotton prices is because of
dependence on the monsoons on international demand.
Strengths
-- Promoter's experience in the yarn spinning industry: The
promoters of VTPL have experience of close to two decades in
the textile industry having commenced operations in 1995,
under its present name. The company was founded by Mr. J
Vijaya Kumar and the production activities are currently
managed by his son Mr. J Vinay Kumar. The extensive experience
of the management has helped the company establish healthy
relationships with customers and suppliers
-- Moderate financial risk profile: VTPL's financial risk
profile is moderate marked by a moderate capital structure and
debt protection metrics. The net worth and gearing are
estimated at around INR6.3 crore and 1.6 times respectively as
on March 31, 2017. The capital structure is expected to
improve gradually over the medium term with moderate accretion
to reserves. The interest coverage and net cash accruals to
total debt ratio are estimated at around 2.18 times and 14
percent respectively for fiscal 2017
Outlook: Stable
CRISIL believes VTPL will continue to benefit over the medium term
from promoter's extensive experience. The outlook may be revised
to 'Positive' in case of higher than expected revenues or
operating profitability, resulting in higher than expected cash
accruals. Conversely, the outlook may be revised to 'Negative' in
case of decline in revenues or operating profitability or in case
of higher than expected debt funded capital expenditure resulting
in deterioration of the financial risk profile.
Set up in 1987 by Mr. J Vijaya Kumar as VKL Textiles Pvt Ltd and
renamed VTPL in 1995, the Coimbatore-based company manufactures
cotton yarn and polyester cotton blended yarn. Operations are
managed by Mr. J Vinay Kumar.
VTPL reported a net loss of around INR0.99 crore on an operating
income of INR27.04 crore for fiscal 2016 against a profit after
tax of around INR13.50 on an operating income of INR20.85 crore
for fiscal 2015.
=================
I N D O N E S I A
=================
PAKUWON JATI: Moody's Hikes CFR to Ba2; Outlook Stable
------------------------------------------------------
Moody's Investors Service has upgraded Pakuwon Jati Tbk. (P.T.)'s
corporate family rating to Ba2 from Ba3.
At the same time, Moody's has upgraded Pakuwon Prima Pte. Ltd.'s
(Pakuwon Prima) backed senior unsecured rating to Ba2 from Ba3.
Pakuwon Prima is a wholly owned and guaranteed subsidiary of
Pakuwon Jati.
The outlook on the ratings is stable.
RATINGS RATIONALE
"The upgrade reflects Pakuwon Jati's continued growth in scale and
maintenance of a strong financial and liquidity profile, supported
by a well-balanced income stream from its portfolio of development
and investment properties," says Jacintha Poh, a Moody's Vice
President and Senior Analyst.
"Its high-quality investment properties portfolio comprising
mostly retail malls provides a stable and recurring income,
mitigating the volatility in cash flow from its cyclical property
development business," adds Poh, who is also Moody's Lead Analyst
for Pakuwon Jati.
Despite the challenging macro-environment -- which has led to
lackluster demand for property -- Pakuwon Jati's revenue for the
12 months ended March 31, 2017 increased by 6% year-on-year to
IDR5 trillion, driven by a 9% growth in recurring revenue and a
marginal 2% increase in development revenue.
Over the next 12-18 months, Moody's expects the company's revenue
to grow around 10%, of which 50% will be from recurring sources.
Hence, Moody's expects leverage - as measured by adjusted
debt/homebuilding EBITDA - and homebuilding EBIT/interest expense
to remain broadly stable at around 2.0x and around 5.0x over the
next 12-18 months.
Moody's also expects that the company's recurring EBITDA will
cover around 2.5x of adjusted interest expenses over the same
period.
For the 12 months ended March 31, 2017, Pakuwon Jati had a
leverage ratio of 2.1x and homebuilding EBIT/interest expense of
5.2x. Its recurring EBITDA/adjusted interest expense was 2.5x over
the same period.
Pakuwon Jati's total marketing sales of IDR650 billion for 1Q 2017
are on track to meet its full-year target of IDR2.7 trillion and
would be well within Moody's base case expectation of around
IDR2.5 trillion.
Pakuwon Jati maintains a strong liquidity profile. As of March 31,
2017, the company had a cash position of IDR2.9 trillion, and
Moody's expects it to generate approximately IDR750 billion of
operating cash flow in the next 12 months.
Such an amount will be more than sufficient to repay its debt
maturing over the next 12 months of around IDR650 billion,
dividend payment of IDR216 billion, and projected expansionary
capex of approximately IDR250 billion.
The stable ratings outlook reflects Moody's expectation that
Pakuwon Jati will be well-supported by the recurring income from
its investment properties, as well as its ongoing financial
discipline, while continuing to pursue growth.
Upward ratings pressure is limited, given Pakuwon Jati's small
revenue base and geographic concentration. However, growth in
revenue over time, while maintaining a strong financial profile --
adjusted debt/homebuilding EBITDA of less than 1.5x and recurring
EBITDA/interest expense of more than 4.0x -- in conjunction with a
solid liquidity position in the form of cash balances and
committed facilities will be positive for the rating.
Pakuwon Jati's ratings could face downward pressure if: (1) the
company fails to implement its business plans; (2) the company
embarks on an aggressive development growth strategy; and/or (2)
the property market deteriorates, leading to protracted weakness
in its operations and credit profile.
Moody's consider adjusted debt/homebuilding EBITDA of more than
2.5x and recurring EBITDA/interest expense of less than 2.0x on a
sustained basis, as indications that a rating downgrade may be
necessary.
The principal methodology used in these rating was Homebuilding
and Property Development Industry published in April 2015.
Pakuwon Jati, Tbk. (P.T.), listed on the Indonesia Stock Exchange
and controlled by the Tedja family, is engaged in the development,
management and operation of retail malls, office buildings,
hotels, condominium towers and residential townships in Surabaya
and Jakarta.
=========
J A P A N
=========
TOSHIBA: Consortium May Move Deal Until After U.S. Court Hearing
----------------------------------------------------------------
Kyodo News reports that a consortium seeking to buy Toshiba
Corp.'s prized memory chip unit may delay closing the deal in
order to wait for a court decision on whether the sale should be
blocked, sources said on July 4.
Western Digital Corp., Toshiba's chip production partner, opposes
the sale and is seeking a preliminary injunction against it in a
California court, Kyodo says. The U.S. hearing is scheduled to
take place July 14, where a decision could be handed down.
Kyodo notes that cash-strapped Toshiba is rushing to sell the
unit, Toshiba Memory Corp., to raise funds to eliminate its
negative net worth and avoid being delisted from the Tokyo stock
market.
According to the report, Toshiba has chosen as its preferred
bidder a consortium consisting of the Innovation Network Corp. of
Japan and the Development Bank of Japan - both backed by the
government - as well as U.S. fund Bain Capital and South Korean
chipmaker SK Hynix Inc.
Kyodo relates that the consortium had been willing to sign a deal
as soon as it was drawn up, with a clause saying the sale would be
renegotiated if Western Digital's injunction were to be granted.
But as the date of the hearing approaches, involved parties now
want to await the result, the sources, as cited by Kyodo, said.
Western Digital argues in its court filing that any sale of the
unit without its consent violates the terms of a joint venture
contract with Toshiba, Kyodo says.
Toshiba filed a counterargument saying the court has no
jurisdiction over the matter because the Japanese firm has no
major operations in California, the report notes.
It also claimed Western Digital's filing "is motivated solely by
(its) desire to drive away Japanese bankers who are providing a
financial lifeline to Toshiba and bidders interested in purchasing
Toshiba Memory Corp," according to Kyodo.
Kyodo meanwhile reports that the consortium itself could face a
reshuffle as the manner of SK Hynix's participation has emerged as
a further sticking point.
Kyodo says the previous plan was to have SK Hynix provide loans to
Bain but not make a direct investment in the chip unit to avoid
antitrust issues and concerns of a tech drain to foreign
companies. Toshiba President Satoshi Tsunakawa told a press
conference last month the Incheon-based company will "have no
voting rights."
Sources familiar with the matter, however, say SK Hynix has
demanded bonds that can later be converted to shares with voting
rights. Parties within the consortium are considering a compromise
with SK Hynix being allocated less than 20 percent of votes, Kyodo
adds.
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
June 19, 2017, S&P Global Ratings said it has kept its 'CCC-'
long-term and 'C' short-term ratings on Japan-based capital goods
and diversified electronics company Toshiba Corp. on CreditWatch
with negative implications. 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 a 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 and when S&P lowered the long-term
ratings in March 2017.
The ratings remain on CreditWatch, reflecting S&P's view that
creditor banks' support for Toshiba together with the company's
liquidity levels warrant continued close monitoring because its
plan to sell its memory business has yet to materialize and
additional losses or financial burdens might still arise in
connection with its U.S. nuclear power business. S&P continues
to hold the view that without unanticipated, significantly
favorable changes in Toshiba's circumstances, the company might
become unable to fulfill its financial obligations in a timely
manner or might undertake a debt restructuring S&P classifies as
distressed in the next six months.
====================
N E W Z E A L A N D
====================
FP IGNITION 2017-B: Fitch Assigns Final B+ Rating to Cl. G Notes
----------------------------------------------------------------
Fitch Ratings has assigned final ratings to FP Ignition 2017 - B
Trust's automotive lease-backed floating-rate notes. The issuance
consists of notes ultimately backed by New Zealand finance and
operating vehicle leases originated by Fleet Holding (NZ) Limited
(FleetPartners NZ), a subsidiary of FleetPartners Pty Limited
(FleetPartners) and a part of Eclipx Group Limited (ECX:ASX), an
ASX-listed entity. The ratings are as follows:
NZD146.3 million Class A notes: 'AAAsf'; Outlook Stable
NZD11.4 million Class B notes: 'AAsf'; Outlook Stable
NZD19.5 million Class C notes: 'Asf'; Outlook Stable
NZD13.5 million Class D notes: 'BBBsf'; Outlook Stable
NZD15.7 million Class E notes: 'BBsf'; Outlook Stable
NZD4.5 million Class F notes: 'B+sf'; Outlook Stable
NZD2.2 million Class G notes: 'NRsf'
NZD11.2 million Originator notes: 'NRsf'
The notes were issued by NZGT (FP) Trustee Limited in its capacity
as trustee of FP Ignition 2017 - B Trust.
The total underlying collateral pool consisted of 7,802 leases
totalling NZD220.1 million at the June 30, 2017 cut-off date. The
portfolio consists of operating and finances leases to obligors
across a wide range of industries, with the largest industry
exposure being manufacturing (23.2%) and wholesale trade (10.6%).
The concentration of vehicle manufacturer in the portfolio is
dominated by Ford Motor Company (27.2%), General Motors Holden
(14.8%) and Toyota Motor Corporation (10.7%), with the remainder
including several established Japanese and European car
manufacturers.
KEY RATING DRIVERS
Residual Value Risk Present: This is the third term
securitisation, and the first in New Zealand, by FleetPartners
that includes operating leases within the lease portfolio. The
lessees are a broad mix of small-to-medium entities (SMEs) through
to large corporations and government entities. Residual value (RV)
and vehicle-servicing risk are present within the transaction due
to the inclusion of operating leases, along with credit risk.
Fitch assumes 'AAAsf' RV losses of 15.6%.
Large Lessee Concentration: The pool's 20-largest obligors account
for about 26.6% of the asset balance. Fitch deems this
concentration higher than usually observed in consumer ABS
transactions and has therefore derived default assumptions while
considering lessee concentrations and correlation risks, in line
with its SME criteria.
Sufficient Enhancement: The transaction incorporates a sequential
pay/pro rata pay structure, consistent with other ABS
transactions. Pro rata paydown will commence when hard credit
enhancement (CE) reaches 45.0% for the class A notes, subject to
transaction performance. Overall CE is sufficient to cover the
Fitch-stressed cumulative net loss assumptions in all Fitch
scenarios. The transaction also comprises a vehicle-servicing
account to enable the issuer to fund operating lease vehicle-
servicing obligations.
Mixed Collateral Included: The collateral backing the transaction
comprises of lease receivables backed by a mix of passenger
vehicles as well as light and heavy commercial vehicles, with a
weighted-average seasoning of 18.1 months and an average
receivable size of NZD28,205. Operating leases comprise 94% of the
portfolio and finance leases 6%. Historically, FleetPartners' 30+
day delinquencies for their New Zealand and Australian assets have
generally tracked below Fitch's Dinkum ABS Index.
RATING SENSITIVITIES
Unexpected decreases in the frequency of defaults and loss
severity on defaulted receivables could produce loss levels higher
than Fitch's base case, possibly resulting in negative rating
action on the notes. Fitch has evaluated the sensitivity of the
ratings to increased defaults and reduced recovery rates over the
life of the transaction.
Expected impact on note ratings from increased defaults:
Final rating AAAsf/AAsf/Asf/BBBsf/BBsf/B+sf
Increase defaults by 10%: AAAsf/AA-sf/BBB+sf/BBB-sf/BB-sf/B+sf
Increase defaults by 25%: AA+sf/A+sf/BBB+sf/BBB-sf/BB-sf/B+sf
Increase defaults by 50%: AA-sf/BBBsf/BBBsf/BB+sf/B+sf/Bsf
Expected impact on note ratings from decreased recovery rates and
RV sale proceeds:
Final rating AAAsf/AAsf/Asf/BBBsf/BBsf/B+sf
Reduce recoveries and RV sale proceeds by 10%: AAAsf/AAsf/A-
sf/BBB-sf/BB-sf/B+sf
Reduce recoveries and RV sale proceeds by 25%: AAAsf/AAsf/A-
sf/BBB-sf/BB-sf/B+sf
Reduce recoveries and RV sale proceeds by 50%:
AA+sf/A+sf/BBB+sf/BB+sf/B+sf/Bsf
Expected impact on note ratings from multiple factors:
Final rating AAAsf/AAsf/Asf/BBBsf/BBsf/B+sf
Increase defaults by 10%; reduce recoveries and RV sale proceeds
by 10%: AAAsf/AA-sf/A-sf/BBB-sf/BB-sf/B+sf
Increase defaults by 25%; reduce recoveries and RV sale proceeds
by 25%: AAsf/A+sf/A-sf/BB+sf/B+sf/B+sf
Increase defaults by 50%; reduce recoveries and RV sale proceeds
by 50%: A+sf/BBB+sf/BBB-sf/BBsf/Bsf/CCCsf
HARDY'S: Five Outlets Placed in Receivership
--------------------------------------------
Hamish Fletcher at NZ Herald reports that five Hardy's outlets and
the health store chain's master franchisor have been placed into
receivership.
Six other stores which are independently-owned by franchisees are
trading as usual and remain unaffected by the move, the Herald
relates.
According to the Herald, Companies Office records show that Andrew
Grenfell and Kare Johnstone were appointed as receivers of Hardy's
earlier this week.
Mr. Grenfell told The Herald that the five company-run stores
affected by the receivership include those in Auckland's Sylvia
Park, St Lukes, and Northwest as well as two in Bethlehem and
Taupo.
The Herald says the receivers are planning on running these stores
while they look for a buyer for both them and the master
franchisor.
The Herald relates that Mr. Grenfell said he was not in a position
to give details on the events leading up to the receivership. He
said that the company-run stores and the master franchisor
employed around 20 staff.
Hardy's was established in 1986 and sells supplements and other
health products.
Vince Burgess owns four independent Hardy's stores in Kerikeri,
Whangaparaoa, Whangarei and Glenfield. It was business as usual
for his stores, which he said are financially independent, the
report notes.
====================
S O U T H K O R E A
====================
STX ENGINE: Creditor Puts Firm Up for Sale
------------------------------------------
Yonhap News Agency reports that the state-run creditor Korea
Development Bank said July 6 it has put STX Engine Co., which
produces various large diesel engines, up for sale.
About 24.07 million shares of STX Engine, or a 87.04 percent stake
of the engine maker, will be sold, Yonhap relates.
Yonhap relates that the state-run creditor said potential buyers
are asked to submit their letters of intent to buy the stake by
Aug. 2.
STX Engine has been under a debt rescheduling program by creditors
since 2013 after its parent STX Group was hit by a global slump in
the shipbuilding and shipping industries.
*********
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
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*********
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,
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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.
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