/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/170824.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 Thursday, August 24, 2017, Vol. 20, No. 168 Headlines A U S T R A L I A ADVANT PTY: First Creditors' Meeting Set for September 1 BREAD AND ROSES: First Creditors' Meeting Set for August 31 BROOKER MARINE: First Creditors' Meeting Set for August 31 FORTESCUE METALS: FY2017 Results in Line w/ Moody's Expectations JENNARDS PORT: Second Creditors' Meeting Set for August 31 LOCK FORWARD: Second Creditors' Meeting Set for August 31 RICH RIVER: Second Creditors' Meeting Set for September 7 C H I N A BANK OF COMMUNICATIONS: Moody's Reviewing Ratings for Downgrade BEIJING CAPITAL: Improved 1H 2017 Results Back Moody's Ba3 CFR WEST CHINA CEMENT: Fitch Raises IDR & Sr. Unsecured Rating to BB- I N D I A ANIL CORNER: CRISIL Reaffirms B+ Rating on INR6.5MM Cash Loan ATHENA FINANCIAL: Delisted from Bombay Stock Exchange AVADH INFRA: ICRA Withdraws B+ Rating on INR50cr Term Loan AZIZ ENTERPRISES: ICRA Moves B Rating to 'Issuer Not Cooperating' BEARDSELL LIMITED: CRISIL Reaffirms FB+ Fixed Deposits Rating BHOOMI COLD: ICRA Withdraws 'B' Rating on INR4cr Term Loan COCHIN MINERALS: ICRA Moves D Rating to 'Issuer Not Cooperating' DELTA SUGARS: CRISIL Reaffirms B- Rating on INR60MM Cash Loan EASTMAN METTCAST: ICRA Moves C+ Rating to Not Cooperating GOLHAR GINNING: ICRA Lowers Rating on INR4.75cr Loan to 'D' INDIAN PRODUCTS: ICRA Cuts Rating on INR165cr Loan to D JAYPEE INFRATECH: Apex Court to Hear Plea of Home Buyers Today JR AGROTECH: Ind-Ra Migrates 'D' Issuer Rating to Not Cooperating KAKINADA SEZ: ICRA Assigns 'D' Rating to INR212.50cr LT Loan KURUNJI AGRO: CRISIL Reaffirms 'D' Rating on INR5.5MM LT Loan LAGAN ENGINEERING: CRISIL Reaffirms 'D' Rating on INR7.5MM Loan LAHERI COTTON: CRISIL Assigns B+ Rating to INR15MM Cash Loan LAKME VITRIFIED: CRISIL Raises Rating on INR21MM Term Loan to B+ LEAP GREEN: CRISIL Upgrades Rating on INR31MM Term Loan to BB- LEAPFROG ENGINEERING: ICRA Moves C Rating to Not Cooperating LOVE KUSH: CRISIL Reaffirms 'B' Rating on INR20MM Loan MAGNOLIA LTD: Ind-Ra Moves 'BB+' Issuer Rating to Not Cooperating MAHADEV IRON: CRISIL Reaffirms B- Rating on INR5MM Cash Loan MAHAKALI ISPAT: Ind-Ra Assigns 'B+' Issuer Rating, Outlook Stable MAPLE RENEWABLE: CRISIL Ups Rating on INR178.82MM Loan to BB- MLC PROPERTIES: CRISIL Lowers Rating on INR40MM LT Loan to 'B' NIMRA EDUCATIONAL: ICRA Moves D Rating to Issuer Not Cooperating NINA REALTORS: CRISIL Lowers Rating on INR10MM Term Loan to D OM TRADING: ICRA Assigns B+ Rating to INR5.0cr Loan ORCHID RENEWABLE: CRISIL Ups Rating on INR164MM Term Loan to BB- PASOLITE ELECTRICALS: ICRA Moves B+ Rating to Not Cooperating PIK STUDIOS: ICRA Assigns C+ Rating to INR12cr Cash Loan PRAKASH AUTO: CRISIL Lowers Rating on INR11.7MM Loan to 'B+' REAL GROWTH: ICRA Lowers Rating on INR21cr Fund Based Loan to D RELISYS MEDICAL: CRISIL Reaffirms B- Rating on INR31MM Loan ROSENTIQUES FINE: CRISIL Lowers Rating on INR4.30MM Loan to B RUDHRAYAN POLYESTERS: CRISIL Reaffirms B Rating on INR4.90MM Loan SHIV SHAKTI: CRISIL Reaffirms B+ Rating on INR6MM Cash Loan SHREE RADHA: Ind-Ra Moves 'B' Issuer Rating to Not Cooperating SHREE RENUKA: ICRA Reaffirms D Rating on INR3679.30cr Loan SHRIMATI POORNA: CRISIL Lowers Rating on INR9MM LT Loan to 'D' SOL CABLES: ICRA Assigns B+ Rating to INR0.40cr Fund Based Loan SOLAPUR BIO-ENERGY: ICRA Reaffirms D Rating on INR27.63cr Loan SP SUPERFINE: ICRA Lowers Rating on INR66.94cr Term Loan to 'D' SRI LAKSHMI: CRISIL Lowers Rating on INR10MM Loan to 'D' SRINIVASA EDUCATIONAL: ICRA Moves B Rating to Not Cooperating SUSEE POLYMERS: CRISIL Reaffirms B+ Rating on INR6.5MM LT Loan TNR ESTATES: ICRA Withdraws 'D' Rating on INR15cr Term Loan TRIVEDI CORP: CRISIL Assigns 'D' Rating to INR15MM Cash Loan VAMA WOVEN: Ind-Ra Migrates 'D' Issuer Rating to Not Cooperating VREP CONSTRUCTION: CRISIL Cuts Rating on INR0.5MM Loan to 'C' WINDSON CERAMIC: ICRA Withdraws B Rating on INR3.0cr Cash Loan * Forced Insolvency Taking India Deals to $80BB, Moelis Says J A P A N TOSHIBA CORP: Enter Talks With Western Digital on Memory Sale TOSHIBA CORP: Treading on Thin Ice, Leiko Tells Clients N E W Z E A L A N D CAVALIAR CORP: Warns of Breaching Bank Covenants S I N G A P O R E NAM CHEONG: To Default on Bond Coupon, Principal Payments - - - - - ================= A U S T R A L I A ================= ADVANT PTY: First Creditors' Meeting Set for September 1 -------------------------------------------------------- A first meeting of the creditors in the proceedings of Advant Pty Ltd and Pilmora Pty Ltd will be held at the offices of Grant Thornton, The Rialto, Level 30, 525 Collins Street, in Melbourne, Victoria, on Sept. 1, 2017, at 10:00 a.m. Andrew Stewart Reed Hewitt and Matthew James Byrnes of Grant Thornton were appointed as administrators of Advant Pty on Aug. 22, 2017. BREAD AND ROSES: First Creditors' Meeting Set for August 31 ----------------------------------------------------------- A first meeting of the creditors in the proceedings of Bread and Roses Pty Limited will be held at Level 27, 259 George Street, in Sydney, NSW, on Aug. 31, 2017, at 11:00 a.m. Trent Andrew Devine and Henry Peter McKenna of Jirsch Sutherland were appointed as administrators of Bread and Roses on Aug. 21, 2017. BROOKER MARINE: First Creditors' Meeting Set for August 31 ---------------------------------------------------------- A first meeting of the creditors in the proceedings of Brooker Marine Pty Ltd will be held at the offices of Mackay Goodwin, Level 2, 10 Bridge Street, in Sydney, NSW, on Aug. 31, 2017, at 10:00 a.m. Domenico Alessandro Calabretta and Grahame Robert Ward of Mackay Goodwin were appointed as administrators of Brooker Marine on Aug. 21, 2017. FORTESCUE METALS: FY2017 Results in Line w/ Moody's Expectations ---------------------------------------------------------------- Moody's Investors Service says that Fortescue Metals Group Ltd's (Ba1 stable) results for the fiscal year ended June 30, 2017 (FY2017) were in line with Moody's expectations from an operational as well as financial perspective. "Stronger iron ore prices, combined with Fortescue's material debt reduction and the continued low cost levels it achieved during FY2017 have led to significant growth in the company's earnings and the maintenance of strong credit metrics," says Matthew Moore, a Moody's Vice President and Senior Credit Officer. "The improved cost position and lower debt levels support the company's ability to generate solid earnings and credit metrics in an environment where realised prices for iron ore are lower," adds Moore. In FY2017, Fortescue's revenue increased by around 19% to USD8.4 billion, which led to a material improvement in underlying EBITDA to around USD4.7 billion. As a result, the company's underlying EBITDA margin grew to around 56% compared to around 45% in FY2016. The largest contributor to revenue and EBITDA growth was improved pricing, which contributed around USD1.3 billion to EBITDA improvement. Fortescue also continued to reduce its unit costs throughout FY2017. It exited the fiscal year with C1 unit costs of USD12.16 per wet metric tonne (wmt) for the April to June 2017 quarter, while the average C1 unit cost for FY2017 came in at USD12.82/wmt, which was down around 17% on the previous year. Fortescue has now delivered around USD3.9 billion of cost reduction since FY2014. While higher foreign exchange rates and increasing energy costs will have a negative impact on unit costs, Moody's expects that Fortescue will achieve net unit cost reductions in fiscal 2018. Fortescue is aiming for a C1 cost of USD11-12/wmt for FY2018. Fortescue continued to apply its free cash flow to reduce debt, paying down USD2.7 billion of debt in FY2017. Higher earnings and substantial debt repayments have led to Fortescue's leverage - as measured by adjusted debt/EBITDA - improving to around 1.0x versus 2.2x for FY2016. At the mid-point of Moody's current price sensitivity ranges for iron, the agency expects that Fortescue's adjusted debt/EBITDA will be around 1.3x-1.6x over the next 12-18 months, which is a strong level for the company's Ba1 rating. Moody's says that the significant debt reduction achieved by Fortescue has created significant headroom in the company's credit metrics versus its current rating tolerance levels. Moody's expects the company's credit metrics to remain strong for its current rating level even if iron ore prices fall towards the lower end of the rating agency's medium term price range of USD45-USD65 per tonne. Notwithstanding the debt repayments during FY2017, liquidity remained solid during the year, with a cash balance of around USD1.8 billion at June 30, 2017. The company also recently entered into a USD525 million revolving credit facility, which Moody's expects will remain undrawn. Moody's expects that Fortescue will generate strong operating cash flow, allowing the company to maintain solid liquidity over the next 12-18 months. However, cash outflow should increase over the next 12-24 months, reflecting the company's revised dividend policy, higher capital expenditures, a fiscal 2016 true-up tax payment, and assumed amortisation of iron ore prepayments. Fortescue's new dividend policy will call for the company to payout 50-80% of its net profit after tax (NPAT) in dividends subject to market conditions. The final dividend for fiscal 2017 increased materially and represented around 70% of second half NPAT, while dividends for the full year represented around 52% of FY2017 NPAT. Capital expenditures increased in FY2017 to around USD716 million from around USD304 million in FY2016. Moody's expects that Fortescue will increase capital spending over the next 2-3 years; largely reflecting the need to replace its Firetail mine at its Solomon operations, as well as an increase in sustaining capital expenditures for fiscal 2018. Fortescue has indicated that its capital expenditures should total around USD908 million for fiscal 2018. Fortescue Metals Group Ltd, based in Perth, is an iron ore producer engaged in the exploration and mining of iron ore for export, mainly to China. Fortescue produces around 170mt of iron ore annually, making it the fourth largest seaborne producer globally. In the fiscal year ended June 30, 2017 (FY2017) it generated USD8.4 billion of revenue and USD4.7 billion of underlying EBITDA. Moody's expects that Fortescue will maintain production at around 170mt in FY2018 and for unit cost to be maintained at around USD12/wmt. JENNARDS PORT: Second Creditors' Meeting Set for August 31 ---------------------------------------------------------- A second meeting of creditors in the proceedings of Jennards Port Macquarie Pty Ltd, trading as "Clark Rubber Port Macquarie" and "Port Macquarie Clark Rubber", has been set for Aug. 31, 2017, at 10:00 a.m., at the offices of Deloitte Financial Advisory Pty Ltd, Eclipse Tower, Level 19, 60 Station Street, in Parramatta, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Aug. 30, 2017, at 4:00 p.m. Michael Billingsley and Neil Cussen of Deloitte Financial were appointed as administrators of Jennards Port on June 21, 2017. LOCK FORWARD: Second Creditors' Meeting Set for August 31 --------------------------------------------------------- A second meeting of creditors in the proceedings of Lock Forward Investments Pty Ltd has been set for Aug. 31, 2017, at 11:00 a.m., at the offices of SV House, 138 Mary Street, in Brisbane, Queensland. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Aug. 30, 2017, at 4:00 p.m. Terrence John Rose & David Michael Stimpson of SV Partners were appointed as administrators of Lock Forward on May 26, 2017. RICH RIVER: Second Creditors' Meeting Set for September 7 --------------------------------------------------------- A second meeting of creditors in the proceedings of Rich River Developments Pty Ltd has been set for Sept. 7, 2017, at 11:00 a.m., at the offices of Romanis Cant, Level 2, 106 Hardware Street, in Melbourne, Victoria. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Sept. 6, 2017, at 5:00 p.m. Anthony Robert Cant and Renee Sarah Di Carlo of Romanis Cant were appointed as administrators of Rich River on June 1, 2017. ========= C H I N A ========= BANK OF COMMUNICATIONS: Moody's Reviewing Ratings for Downgrade --------------------------------------------------------------- Moody's Investors Service says that it is continuing to review for downgrade, the ratings for Bank of Communications Co., Ltd. (BoCom), Bank of Communications Financial Leasing (BoCom Leasing) and Bocom Leasing Development HK Co. Ltd. (BLDHK). RATINGS RATIONALE Moody's expects to conclude the review in September 2017, after incorporating the detailed results of BoCom's performance in the first half of 2017, which will be available in late August 2017. Moody's placed the long-term ratings of BoCom, BoCom Leasing and BLDHK on review for downgrade on May 24, 2017. Moody's review of BoCom's ratings focuses on assessing the impact of the rise in its reliance on wholesale funds in recent years and decline in profitability. The review for downgrade for BoCom Leasing's A2 long-term issuer rating and BLDHK's A3 long-term issuer rating follows the similar rating action that Moody's took on BoCom. The followings are on review for downgrade: BoCom: baa3 BCA, baa3 adjusted BCA, A2 long-term deposit rating, P-1 short-term deposit rating, A2(cr)/ P-1(cr) counterparty risk assessment, Ba3(hyb) pref. stock non-cumulative Bank of Communications Co., Ltd. HK Branch: A2 long-term senior unsecured debt rating, (P)A2 senior unsecured MTN rating, (P)P-1 other short-term rating, A2(cr)/ P-1(cr) counterparty risk assessment Azure Orbit International Finance Limited: A2 backed senior unsecured debt rating Azure Orbit III International Finance Limited: A2 backed senior unsecured debt rating BoCom Leasing: A2 long-term issuer rating, P-1 short-term issuer rating BLDHK: A3 long-term issuer rating Azure Nova International Finance Limited: (P)A2 backed senior unsecured MTN rating, A2 backed senior unsecured debt rating The principal methodology used in rating Bank of Communications Co., Ltd., Bank of Communications Co., Ltd. HK Branch, Azure Orbit International Finance Limited and Azure Orbit III International Finance Limited was Banks published in January 2016. The principal methodology used in rating Bank of Communications Financial Leasing, Bocom Leasing Development HK Co. Ltd. and Azure Nova International Finance Limited was Finance Companies published in December 2016. Bank of Communications Co., Ltd. is a Chinese bank headquartered in Shanghai, with assets totaling RMB8.73 trillion at end-March 2017. Bank of Communications Co., Ltd. HK Branch is operating in Hong Kong. Azure Orbit International Finance Limited is incorporated in the Cayman Islands, and is indirectly wholly owned by BoCom. It was set up for the purpose of issuing bonds. Azure Orbit III International Finance Limited is incorporated in the Cayman Islands, and is indirectly wholly owned by BoCom. It was set up for the purpose of issuing bonds. Bank of Communications Financial Leasing is headquartered in Shanghai. It reported assets of RMB172 billion at end-2016. Bocom Leasing Development HK Co. Ltd., established in Hong Kong, is Bank of Communications Financial Leasing's offshore treasury center. Azure Nova International Finance Limited is incorporated in the Cayman Islands and indirectly wholly owned by Bank of Communications Financial Leasing. It was set up for the purpose of issuing bonds. BEIJING CAPITAL: Improved 1H 2017 Results Back Moody's Ba3 CFR -------------------------------------------------------------- Moody's Investors Service says that Beijing Capital Land Limited's (BJCL, Ba3 negative) improved results for 1H 2017 support the company's recovering credit metrics and are in line with Moody's expectations. Moody's points out that BJCL's Ba3 corporate family rating reflects its standalone credit profile and incorporates a two- notch uplift because of Moody's assessment that the company will receive financial and operating support from its parent, Beijing Capital Group Co., Ltd. (Capital Group, Baa3 negative), in times of need. "BJCL's credit metrics are recovering, supported by its growing revenue recognition and increasing profit margins; factors which are in line with Moody's expectations," says Kaven Tsang, a Moody's Vice President and Senior Credit Officer, and also the International Lead Analyst for BJCL. Moody's expects that the company will register revenue growth of around 10%-20% year-on-year over the next 1-2 years, supported by its strong contracted sales during the past 12-18 months. At end- June 2017, the company indicated that it had locked in future revenue of around RMB27 billion. BJCL achieved RMB26.6 billion of contracted sales in the seven months between January and July 2017, representing a 32.6% year- on-year increase, and is on track to meet its full-year target for contracted sales of RMB50 billion. The company's overall gross profit margin increased significantly to 33.4% in 1H 2017 from 10.9% in 1H 2016. The improvement was mainly attributable to the delivery of high-margin primary land development projects, which accounted for 20% of revenue in 1H 2017. The gross profit margin of its property development projects also increased to 22% in 1H 2017 from 13% in 1H 2016, with such gross profit calculated only after considering the costs related to property sales. Moody's expects that BJCL will maintain a gross profit margin of around 20%-25% over the next 12-18 months, with more revenue contribution from property development, supported by the company's focus on first-tier and major second-tier cities. Moody's further expects that BJCL's borrowing costs will remain low, due to its relationship with the Beijing municipal government. The company has a track record of reducing borrowing costs, which fell to around 5.1% in 1H 2017 from 5.25% in 2016 and 6.4% in 2015. Consequently, its EBIT interest coverage will likely trend up towards 2.1x over the next 12-18 months from around 1.9x in the 12 months to June 30, 2017. BJCL's adjusted debt fell slightly by 3% to RMB65.8 billion at end-June 2017. Moody's expects that its debt level will rise modestly by 5%-10% in 2H 2017, because of the company's need to continually replenish its land bank. As a result, Moody's estimates that its debt leverage - as measured by revenue/adjusted debt - will stay at around 35% over the next 12-18 months. BJCL's estimated EBIT/interest coverage and debt leverage over the next 12-18 months will support the company's standalone credit strength. The negative outlook on BJCL's rating mainly reflects the weakened ability of its parent, Capital Group, to provide financial and operating support; a situation which Moody's will closely monitor in the near term. The principal methodology used in this rating was Homebuilding and Property Development Industry published in April 2015. Incorporated in China, Beijing Capital Land Limited (BJCL) is a mid-sized developer in China's residential property sector. At end-June 2017, the company's land bank totaled 11.2 million square meters in gross floor area, which will support the company's developments over the next three years. BJCL was founded in 2002 as the major property arm of its parent, Beijing Capital Group Co., Ltd. BJCL listed on the Hong Kong Stock Exchange in 2003. WEST CHINA CEMENT: Fitch Raises IDR & Sr. Unsecured Rating to BB- ----------------------------------------------------------------- Fitch Ratings has upgraded West China Cement Limited's (WCC) Long-Term Issuer Default Rating (IDR) and senior unsecured rating to 'BB-' from 'B+'. The Outlook on the IDR is Stable. The upgrade is driven by significant improvement in WCC's financial profile, as evident in a substantial decrease in net leverage and return to positive free cash flow (FCF) generation. Net leverage dropped to 2.1x in 2016 from 3.6x in 2015, and Fitch expects this to further drop to 1.8x in 2017 and 1.5x in 2018, well below Fitch positive trigger of 3.5x. The Stable Outlook reflects Fitch's expectation that WCC's leverage will remain low over the rating horizon. KEY RATING DRIVERS Improving Profitability: WCC's gross profit per ton of its cement products increased to CNY53 per ton (t) in 1H17, up from CNY38/t in 2016. The increased profitability was due largely to a rise in the average selling price (ASP) in WCC's core market of southern and central Shaanxi where prices increased by 12.5% yoy to CNY242/t and 42.5% yoy to CNY232/t, respectively. WCC's EBITDA margin widened to 38.2% in 1H17 from 35.4% in 2016 as result of the higher profitability. Fitch expects WCC to maintain current levels of profitability throughout 2017, however Fitch expects gross profit per ton to contract slightly from 2018 - reflecting slowing domestic economic growth and fixed-asset investment (FAI) investment. Despite this, WCC's core western markets should be relatively resilient due to China's focus on developing the western areas, and FAI growth in western China has generally outpaced the rest of the country. Limited Capex, Lower Leverage: Fitch expects WCC's capex spending will be limited in the near term due to a halt in capacity expansion. WCC's cement utilisation rate was around 61% at end- 2016, which provides plenty of headroom to ramp up production before additional capacity is needed. The lower capex is likely to boost FCF generation and decrease net debt. Fitch expects capex of CNY300 million each year between 2017 and 2019. WCC's FFO-adjusted net leverage decreased to 2.1x in 2016 from 3.6x in 2015, as a result of resilient profitability and lower capex. Fitch expects this trend to continue in the next 12-24 months, and net leverage should decrease to 1.8x in 2017 and 1.5x in 2018. Expansion into Aggregate Production: WCC is in the process of constructing an aggregate production facility with annual production capacity of around 16 million tons. Aggregates are high-margin products, and Fitch expects WCC to sell around 8 million tons in 2018 when production commences. At current prices, Fitch expects WCC's new aggregate business to add about CNY640 million in sales and CNY320 million in gross profit in 2018. Conch Shareholding Beneficial: Fitch expects continued collaboration between WCC and Anhui Conch Cement Company Limited (Conch, A-/Stable) might help WCC further improve its operating efficiency and strengthen its market position in Shaanxi. Conch's involvement with WCC has helped the company to reduce raw material prices and boost profitability, as well as collaborating on creating more stable market supply and higher pricing discipline in Shaanxi and nearby regions. Conch is WCC's second- largest shareholder, with a 21.16% stake, and also has two non- executive directors on WCC's eight-member board. DERIVATION SUMMARY WCC is smaller in scale than China Oriental Group Company Limited (COG, BB-/Positive), but maintains significantly wider margins due to the nature of the cement industry versus steel. Both COG and WCC dominate their home markets in their core businesses, which allows them to defend profitability during industry down- cycles. Both are likely to maintain less than 2.0x net leverage in 2017 and 2018, while COG exhibits a greater level of financial flexibility as it was able to deleverage while the market was still down through liquidating working capital. WCC, by contrast, was only able to deleverage when market fundamentals improved and profitability increased. KEY ASSUMPTIONS - Capex of CNY300 million each year in 2017, 2018 and 2019. - Fitch has taken a conservative approach when forecasting WCC's cash flows; Fitch expects the company to either increase dividend payments or boost M&A activity in the near term. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action - Significant increase in operating scale and geographic diversification - Sustained net cash position Future Developments That May, Individually or Collectively, Lead to Negative Rating Action - FFO net leverage above 3.5x on a sustained basis - Failure to generate positive FCF on a sustained basis - Significant increase in shareholder friendly activities such as share repurchases and dividends. LIQUIDITY Adequate Liquidity: WCC had about CNY1.5 billion in cash against CNY973 million in short-term loans at end-1H17. WCC also maintains close to CNY1 billion of unused banking facilities. FULL LIST OF RATING ACTIONS West China Cement Limited - Upgraded Long-Term Foreign-Currency IDR to 'BB-'from 'B+' - Upgraded senior unsecured rating to 'BB-' from 'B+' - Upgraded USD400 million 6.5% senior notes due 2019 to 'BB-' from 'B+' ========= I N D I A ========= ANIL CORNER: CRISIL Reaffirms B+ Rating on INR6.5MM Cash Loan ------------------------------------------------------------- CRISIL's rating on the long-term bank facility of Anil Corner (AC) continues to reflect AC's modest scale of operations, large working capital requirement, and average financial risk profile. These weaknesses are partially offset by the proprietor's extensive experience and healthy relationships with customers and suppliers. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 6.5 CRISIL B+/Stable (Reaffirmed) Analytical Approach Unsecured loans of INR1.49 crore received from the proprietor have been treated as neither debt nor equity, as these are expected to remain in the business over the medium term. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations: Intense competition in the hardware, bathroom, and modular kitchen fittings trading business restricts scalability and bargaining power. The firm's revenue was modest at INR26 crore in fiscal 2017. * Large working capital requirements: Working capital intensity persists, with sizeable gross current assets, inventory and debtors of around 190, 135 and 50 days, respectively, as on March 31, 2017. * Average financial risk profile The financial risk profile is constrained by modest networth of INR2.2 crore, and high gearing of 3.01 times as of March 2017. The debt protection metrics are average: interest coverage and net cash accrual to total debt ratios are estimated at 1.4 times and 0.03 time, respectively, for fiscal 2017. Strength * Proprietor's extensive experience and healthy relationships with customers and suppliers Proprietor, Mr. Dinesh Bhojwani, has experience of more than 27 years in trading in hardware and bathroom fittings. He has also helped maintain healthy relationships with customers such as Ozone Overseas Pvt Ltd (rated CRISIL A-/Stable/CRISIL A2+), Dorma India, Jaguar & Company Pvt Ltd, Tanishq Bath Fittings, and Hettich India Pvt Ltd. Outlook: Stable CRISIL believes AC will continue to benefit over the medium term from the extensive experience of the proprietor. The outlook may be revised to 'Positive' if a substantial increase in cash accrual, or fund infusion, leads to a stronger financial risk profile. Conversely, the outlook may be revised to 'Negative' if a decline in revenue and profitability, or stretch in working capital cycle, weakens financial risk profile. AC, set up in 1990, is a sole proprietorship firm of Mr. Dinesh G Bhojwani. The firm trades in hardware fittings, bathroom fittings, and modular kitchen fittings, and has three showrooms in Nagpur, Maharashtra. Profit after tax and operating income were INR0.2 crore and INR25.4 crore, respectively, for fiscal 2017 (Rs 0.3 crore and INR29.5 crore, respectively, for the previous fiscal). ATHENA FINANCIAL: Delisted from Bombay Stock Exchange ----------------------------------------------------- The Economic Times reports that the Bombay Stock Exchange (BSE) on August 21 said that it will compulsorily delist 200 companies with effect from August 23 and will bar promoters of these companies from accessing the securities market for ten years. These companies belong to various sectors ranging from chemicals and fertilizers, pharmaceuticals, finance and textile companies, the report says. According to the report, the exchange announced this in three different circulars. The first circular pertained to 117 companies that have remained suspended for more than ten years. According to this circular, as per the Securities and Exchange Board of India's delisting regulations, promoters of these delisted companies will be required to buy the shares from the public shareholders as per the fair value determined by the independent valuer appointed by the BSE, ET relates. ET relates that the second circular mentioned 28 companies that have remained suspended for more than a decade and are under liquidation. The third circular mentioned 55 companies that will be delisted from BSE following their compulsory delisting from the National Stock Exchange of India, the report notes. According to ET, BSE said in these circulars that whole-time directors, promoters and group companies of these delisted firms will be debarred from accessing the securities market for ten years from the date of compulsory delisting. Further, these companies will be moved to the dissemination board of the exchange for five years as advised by the SEBI, the BSE said. Some of these companies include Athena Financial Services, Arihant Industries, Credential Finance, Dolphin Investments, Eupharma Laboratories, Ventron Polymers, Rajasthan Polyesters, and Nagarjuna Finance, ET relays. This move by BSE amid heightened scrutiny by regulators on shell companies recently, the report notes. Earlier this month, SEBI had directed exchanges to initiate action against 331 suspected shell companies and keep them under graded surveillance measures with immediate effect. Some of the companies have got relief from the Securities Appellate Tribunal since then, adds ET. AVADH INFRA: ICRA Withdraws B+ Rating on INR50cr Term Loan ---------------------------------------------------------- ICRA has withdrawn the long term rating of [ICRA]B+ assigned to the INR50.00 crores long term fund based term loan of Avadh Infra. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term fund Based-Term Loan 50.00 [ICRA]B+; Withdrawn The ratings are withdrawn at the request of AI as the term loan has been fully repaid. Avadh Infra (AI) is a partnership firm incorporated in 2013, as a Special PurposeVehicle (SPV) for construction of the residential project named 'Avadh Kimberly' at Palsana, near Surat (Gujarat). The firm is promoted by four partners, who have extensive experience of nearly a decade in the field of real estate construction in Surat and adjoining areas. Under different partnership concerns, they have successfully executed several residential and commercial projects in the past in Gujarat. The projects are marketed under the brand of the 'Avadh' group. The project, Avadh Kimberly entails the construction of 443 row houses, classified into three categories, viz. A, B and C, with a total saleable area of 8,95,311 square feet. AZIZ ENTERPRISES: ICRA Moves B Rating to 'Issuer Not Cooperating' ----------------------------------------------------------------- ICRA has moved the ratings for the INR8.0 crore bank facilities of Aziz Enterprises to the 'Issuer Not Cooperating' category. The rating is now denoted as: "[ICRA] B (Stable); ISSUER NOT COOPERATING" Amount Facilities (INR crore) Ratings ---------- ----------- ------- LT-Fund-based Limits 8.0 [ICRA]B (Stable) ISSUER NOT COOPERATING; Rating moved to the 'Issuer not Cooperating' category Rationale The rating is based on the extensive experience of the promoters in the gems and jewellery industry. The ratings remain constrained on the modest scale of operations, working capital intensive nature of operations and exposure to forex risk. As part of its process and in accordance with its rating agreement with Aziz, ICRA has been trying to seek information from the company so as to undertake a surveillance of the ratings, but despite repeated requests by ICRA, the company's management has remained non-cooperative. ICRA's Rating Committee has taken a rating view based on best available information. In line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, the company's rating is now denoted as: "[ICRA] B(Stable) ISSUER NOT COOPERATING". The lenders, investors and other market participants may exercise appropriate caution while using this rating, given that it is based on limited or no updated information on the company's performance since the time it was last rated. Credit Strengths * The promoters have a significant experience in the gems and jewellery industry Credit Challenges * Modest scale of operations * High working capital intensive nature of operations * Higher exposures to foreign exchange risk * Exposure to risks related to partnership concern Incorporated in 1972 as a partnership firm, Aziz Enterprises is engaged in the trading of precious gems, with product profile including emerald and tanzanite stones with a focus on trading of rough emerald stones. The firm has been managed by Mr. Ikramullah and Mr. Salimullah, who have been engaged in this line of business since 1975. However, in October 2014 Mr. Aminulla, Ms. Sugra Begum, Ms. Yasmeen and Ms. Ghosiya Begum joined as the partners of the firm. The firm is also a member of Gems & Jewellery Export Promotion Corporation. BEARDSELL LIMITED: CRISIL Reaffirms FB+ Fixed Deposits Rating ------------------------------------------------------------- CRISIL's rating on the fixed deposit of Beardsell Limited continues to reflect its moderate financial risk profile and susceptibility of operating margin to volatility in raw material prices and intense competition. These weaknesses are partially offset by the extensive experience of its promoters and longstanding customer relationship. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Fixed Deposits 5 FB+/Stable (Reaffirmed) Key Rating Drivers & Detailed Description Strengths * Extensive experience of promoters: The promoters have been in this business since 1936 and have established strong relationship with customers and suppliers. Weakness * Susceptibility of operating margin to volatility in raw material prices: Raw material prices are susceptible to volatility in crude oil prices, thereby affecting operating margin. Outlook: Stable CRISIL believes Beardsell will continue to benefit over the medium term from the extensive experience of its promoters. The outlook may be revised to 'Positive' if the company diversifies and scales up operations and sustainably improves profitability, while maintaining capital structure. The outlook may be revised to 'Negative' if financial risk profile, especially liquidity, weakens because of a sharp decline in operating margin and revenue, large, debt-funded capital expenditure, or stretch in working capital cycle. Incorporated in 1936 in Chennai and currently promoted by the Anumolu family, Beardsell manufactures polystyrene sheets and prefabricated panels. Operations are managed by Mr. Bharat Anumolu. The company is listed on the National Stock Exchange. Profit after tax was INR6.59 crore on net sales of INR167 crore for fiscal 2017, against a net loss of INR3.28 crore on sales of INR149.43 crore in fiscal 2016. BHOOMI COLD: ICRA Withdraws 'B' Rating on INR4cr Term Loan ---------------------------------------------------------- ICRA has withdrawn the long-term rating of [ICRA]B outstanding on the INR2.54 crore cash credit facilities and the INR4.00 crore term loan facility of Bhoomi Cold Storage. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based Cash Credit Pledge 2.29 [ICRA]B; Withdrawn Fund-based Cash Credit Clean 0.25 [ICRA]B; Withdrawn Fund-based Term Loan 4.00 [ICRA]B; Withdrawn Rationale The long-term rating assigned to BCS has been withdrawn at its request based on the no objection certificate provided by its banker. Bhoomi Cold Storage (BCS) was established in April 2015 as a partnership firm. BCS is engaged in providing cold storage facilities to potato farmers and traders on a rental basis. The firm started commercial operations in February 2016. The cold storage facility is located in Deesa, Gujarat, with a storage capacity of 156,000 bags of 50 kilogram each. The firm is owned by seven partners, of whom three partners - Mr. Nathabhai Lodha, Mr. Narsinhbhai Lodha and Mr. Pravinbhai Lodha - manage the operations of the firm. COCHIN MINERALS: ICRA Moves D Rating to 'Issuer Not Cooperating' ---------------------------------------------------------------- ICRA has moved the long term rating for the INR28.97-crore term loans and INR36.50-crore fund based limits of Cochin Minerals and Rutile Limited (CMRL) to 'Issuer not cooperating' category. ICRA has also moved the short-term rating for the INR41.40 crore non- fund based facilities of the company to 'Issuer not cooperating' category. The rating is now denoted as '[ICRA]D/ [ICRA]D ISSUER NOT COOPERATING'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 28.97 [ICRA]D; Rating moved to the 'Issuer Not Cooperating' category Long-term-Fund- 36.50 [ICRA]D; Rating moved to based Limits the 'Issuer Not Cooperating' category Short-term-Non- 41.40 [ICRA]D; Rating moved to fund Based the 'Issuer Not Cooperating' Facilities category Rationale The rating is based on limited cooperation from the entity since the time it was last rated in July 2016. As part of its process and in accordance with its rating agreement with Cochin Minerals and Rutile Limited, ICRA has been sending repeated reminders to the entity for payment of surveillance fee that became due. However, despite multiple requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite cooperation and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, the company's rating has been moved to the "Issuer Not Cooperating" category. Key rating drivers Credit Strengths * Long experience of promoters: Incorporate in 1989, the company has its manufacturing facility is in Aluva, Kerala, and the promoters have over two decades of experience in the business. Credit Weaknesses * Liquidity position impacted by operating loss: The liquidity of the company has been impacted by the operating losses incurred by the company, owing to subdued demand and weak realizations for synthetic rutile. Incorporated in 1989, CMRL is engaged in the manufacture of synthetic rutile at its facility located in Aluva, Cochin. The company has a capacity to produce 45,000 tons per annum of synthetic rutile. The Company sells the synthetic rutile and the by-products produced during the manufacturing process (ferric chloride, ferrous chloride and iron hydroxide) to customers in Japan, Middle East, and India. The company's equity shares are listed on the Bombay Stock Exchange. In FY2017, the company reported a net loss of INR5.52 crore on an operating income of INR145.39 crore, as compared to a net loss of INR14.04 crore on an operating income of INR154.96 crore in the previous year. DELTA SUGARS: CRISIL Reaffirms B- Rating on INR60MM Cash Loan ------------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B-/Stable' rating on the long- term bank facilities of Delta Sugars Limited (DSL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 60 CRISIL B-/Stable (Reaffirmed) Term Loan 3 CRISIL B-/Stable (Reaffirmed) The rating continues to reflect the company's large working capital requirement, weak financial risk profile, and exposure to risks related to the regulated nature of the sugar industry. These weaknesses are partially offset by the extensive experience of its promoter. Analytical Approach For arriving at the rating, unsecured loans from promoter have been treated as neither debt nor equity as these carry an interest rate lower than the market rate, and will be maintained in business over the medium term. Key Rating Drivers & Detailed Description Weakness * Large working capital requirement Gross current assets were 326 days as on March 31, 2017, due to sizeable inventory of 269 days. * Weak financial risk profile Networth has eroded significantly over the past few years due to continued losses, despite steady funding support (equity and unsecured loans) from promoter. Strengths * Extensive experience of promoter The promoter, Mr. G Ganga Raju, has entrepreneurial experience of more than three decades in the pharmaceuticals, biological, and food processing sectors. He manages and controls various companies engaged in herbal extracts and has also been in the sugar industry for more than 10 years. Outlook: Stable CRISIL believes DSL will continue to benefit over the medium term from the extensive experience of its promoters. The outlook may be revised to 'Positive' if a substantial and sustained increase in revenue with significant profitability margins or sizeable equity infusion improves capital structure. The outlook may be revised to 'Negative' if continuing losses, large, debt-funded capital expenditure, or stretched working capital cycle further weakens financial risk profile. DSL is a part of the Laila group of companies and is promoted by Mr. G Ganga Raju. Based in Vijayawada, Andhra Pradesh, the company manufactures sugar and also generates by-products such as bagasse and molasses. Net loss was INR1.90 crore on an operating income of INR80.33 crore in fiscal 2017, vis-a-vis net loss of INR11.14 crore on an operating income of INR80.44 crore, in fiscal 2016. EASTMAN METTCAST: ICRA Moves C+ Rating to Not Cooperating --------------------------------------------------------- ICRA has moved the long-term rating for the INR17.00-crore bank facilities of Eastman Mettcast Limited (EML) to the 'Issuer Not Cooperating' category. The long-term rating is now denoted as: "[ICRA]C+; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based Limits 17.00 [ICRA]C+ ISSUER NOT COOPERATING; Rating moved to the 'Issuer Not Cooperating' category Rationale The rating is based on no updated information on the entity's performance since the time it was last rated in February 2016, which was based on detailed information. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating does not adequately reflect the credit risk profile of the entity. The entity's credit profile may have changed since the time it was last reviewed by ICRA; however, in the absence of requisite information, ICRA is unable to take a definitive rating action. As part of its process and in accordance with its rating agreement with EML, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non- cooperative. In the absence of requisite information, and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. Key rating drivers Credit strengths * Experienced promoters with long track record of operations. * In house dies development facility helps in keeping costs and quality under control. * Proximity to raw material (steel) suppliers in Ludhiana Credit weaknesses * Moderate scale of operations; increases the vulnerability to business cycles * Stretched financial profile characterised by high gearing, low profitability and weak debt coverage indicators * Vulnerability to fluctuations in steel price movement for both procurement and sales. * Fragmented and unorganized nature of industry poses stiff competition. * Promoter run business; high dependence on promoters for the operations of the company. EML, initially promoted by Mr. Jagdeep Singal and his family, was incorporated in June 2006, as Swift Mettcast Limited. It manufactures casting parts for the automotive ancillary industry. EML manufactures aluminum high pressure die cast and precision machined sand cast parts for auto ancillaries at its facility in Hambran, Ludhiana, Punjab. In December 2013, the company was taken over by Mr. Subhash Goel and his family and currently both the families are jointly managing the company's operations. GOLHAR GINNING: ICRA Lowers Rating on INR4.75cr Loan to 'D' ----------------------------------------------------------- ICRA has revised the long term rating to [ICRA]D from [ICRA]B assigned to the INR4.75-crore fund-based cash credit facility, INR4.10-crore fund-based term loans facility and INR1.15-crore unallocated limits of Golhar Ginning & Oils Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based-Cash 4.75 Revised to [ICRA]D Credit from [ICRA]B Fund-based-Term 4.10 Revised to [ICRA]D Loans from [ICRA]B Unallocated Limits 1.15 Revised to [ICRA]D from [ICRA]B Rationale The rating revision factors in the delays in debt servicing by GGOPL on account of stretched liquidity position. The rating is further constrained by the weak financial profile of the company arising out of loss incurred in FY2016 both at the operating as well as net level. Furthermore, the rating remains constrained by vulnerability of the company's profitability to agro-climatic risks and its exposure to stiff competition. The rating, however, positively factors in the diversification achieved through crushing facilities providing additional revenues. Going forward, debt servicing ability and hence the credit profile will remain sensitive to its ability to report adequate revenue along with delivering healthy profitability margins will continue to be a dominant of its credit profile. Key rating drivers Credit strengths * Diversified product portfolio: The company derives revenue from ginning as well as crushing operations hence its product profile includes cotton bales, cotton seeds, cotton oil and cotton oil cake giving it a wider scope of increasing revenue of the business. Credit weaknesses * Delays in debt servicing: There have been delays in debt serving in the recent past on bank obligations. * Weak financial profile characterised by loss in FY2016 - FY2016, being the first full year of operations the company incurred losses at operating level on account of increased raw material consumption cost as a percentage of output. Consequently, the company also incurred loss at net level. * Pressurised capital structure because of negative net worth- Losses in two consecutive years i.e. in FY2015 and FY2016 turned net worth of the company negative. Hence, capital structure of the company remained under pressure because of high debt level. * Limited value addition and highly competitive & fragmented industry structure leads to low operating and net margins - Cotton ginning has a limited value additive nature of business as well it is highly competitive industry because of low entry barriers. Hence, the company has limited bargaining power with the customers. * Operations exposed price fluctuation - Cotton being is a commoditised product; it is prone to price fluctuation risk. It is also exposed to the regulatory risk as prices are decided through minimum support price by the government. Golhar Ginning & Oils Private Limited was incorporated in November 2012 and commenced business operations since December 2014. It is in the business of ginning, pressing of cotton and crushing of cotton seed oil. The factory is located in Hingaghat, Dist. Wardha (Maharashtra). GGOPL is equipped with 24 ginning machines and 1 pressing machine to carry out operations. It is presently managed by Mr. Damodar Golhar and Mr. Dhanraj Golhar. In FY2016, the company reported a net loss of INR3.20 crore on an operating income of INR33.45 crore, as compared to a net loss of INR0.62 crore on an operating income of INR24.47 crore in 4M FY2015. INDIAN PRODUCTS: ICRA Cuts Rating on INR165cr Loan to D ------------------------------------------------------- ICRA has revised the rating outstanding on the INR45.00 crore long term fund based facilities (sub limit) of Indian Products Private Limited to [ICRA]D from [ICRA]BBB-. ICRA has also revised the rating outstanding on the INR165.00 crore short term fund based facilities and the INR28.00 crore short term non fund based facilities of the company to [ICRA]D from [ICRA]A3. Amount Facilities (INR crore) Ratings ---------- ----------- ------- LT-Fund based- Sublimit (45.00) Rating revised from [ICRA]BBB- (Stable) to [ICRA]D ST-Fund based 165.00 Rating revised from [ICRA]A3 to [ICRA]D ST-Non fund based 28.00 Rating revised from [ICRA]A3 to [ICRA]D Rationale The revision in ratings factors in IPPL's delays in servicing its export packing credit repayments in the last 1-2 months. The company witnessed operational bottlenecks in June 2017 due to billing related constraints as it was implementing software changes; and delays in raw material arrivals. As a result, IPPL was unable to honor its EPC repayments within the stipulated 180 day timeline. Key rating drivers Credit strengths * Established track record of the Group and promoters in the spice business - The company is part of the Jayanti Group, which is one of the largest spice exporters from India. The promoters have been in the business for over six decades. * Wide customer base / geographical reach - The company enjoys an established presence in Europe and North America, aided by its strategic alliances with leading regional players in the respective markets. Credit weaknesses * Volumes exposed to agro-climatic risks and price competitiveness of Indian pepper - The company is engaged in processing and exporting of spices such as ginger, pepper, turmeric, and chillies. By virtue of these being agro commodities, the supply would depend on agro-climatic conditions. Given the limited value additions, price plays an important role in determining volumes. Higher supply and better price competitiveness would result in favourable volumes and revenues for the company. * Limited value addition results in restricted pricing flexibility and thin margins- IPPL's processing involves limited value addition. As a result, the company has low product differentiation and witnesses intense competition. The low value addition and high competition results in restricted pricing flexibility and thin margins. * Earnings remain vulnerable to commodity price fluctuations, although order-backed procurement mitigates the threat to an extent- The company's revenues depend on volumes and realizations, while its earnings/profits depend on price differentials between sold goods and procurement prices. Order backed procurement mitigates fluctuations between goods sold and purchase prices to a large extent. * Financial profile characterised by relatively high gearing and modest coverage indicators, owing to the working capital intensive nature of operations - The company's operations are working capital intensive due to high inventory levels. These have resulted in relatively high debt levels. However, the profits are relatively thin. As a result, IPPL's capital structure and coverage metrics are stretched. Indian Products Private Limited (IPPL) was incorporated in 1980 at Kolkata, with its registered office in Bangalore. IPPL operates two manufacturing units in the Coimbatore district (Kinathukadavu and Trade Centre) of Tamil Nadu and one at Walayar, Kerala. IPPL was initially involved in processing and selling of tea and black pepper for over two decades, and has now extended its product profile to other tropical spices such as ginger, pepper, turmeric, and chillies in the recent past. Spices are exported in whole, crushed and powdered form in bulk as well as in consumer packs as per customer specifications. The company is also involved in the exports of de-caffeinated tea. IPPL is part of the Jayanti Group, founded by Mr. Jayantilal Shah in 1940. It is a closely-held Group with a presence in spices, tea and coffee processing and exports. The Group enjoys an established presence in Europe and North America, aided by its strategic alliances with leading regional players in the respective markets. The Group's manufacturing facilities are at Coimbatore (Tamil Nadu), Walayar (Kerala) and Ahmedabad for processing spices and tea. The Group has also entered into the branded spices and herbs business with its own brand, "ON1Y", which uses a range of innovative, ready-to-use blends and packaging styles. In addition, the Group has entities operating out of North America and the EU for marketing products sourced from its two Indian companies. JAYPEE INFRATECH: Apex Court to Hear Plea of Home Buyers Today -------------------------------------------------------------- The Hindu BusinessLine reports that the Supreme Court has agreed to hear today, August 24, a plea of several aggrieved flat-buyers who had booked their dream home in several projects of Jaypee Infratech, against whom insolvency proceedings have started. BusinessLine relates that a bench comprising Chief Justice JS Khehar and Justice DY Chandrachud said it will hear the plea of flat-buyers who alleged that they will neither get a home nor a refund of their hard earned money on account of being "unsecured creditors". "Around 32,000 buyers have booked their homes in 27 different housing projects of Jaypee Infratech and they are left in the lurch as the insolvency proceedings have been started against it," senior advocate Ajit Sinha, appearing for 24flat-buyers, said, BusinessLine relays. He said the financial interest of secured creditors will be safeguarded first in the insolvency proceedings and flat buyers, being unsecured creditors, would virtually get nothing, according to BusinessLine. BusinessLine relates that referring to the provisions of the new Insolvency and Bankruptcy Code (new insolvency law), Sinha said the decrees and orders passed by the consumer courts and civil courts in favour of home buyers cannot be executed due to pendency of insolvency proceedings. He urged that rights of the home buyers needed to be protected, the report says. BusinessLine notes that the plea was filed by a flat buyer Chitra Sharma and 23 others seeking protection of their rights as flat buyer. The report says hundreds of home buyers have been left in the lurch after the National Company Law Tribunal (NCLT), on August 10, admitted the IDBI Bank's plea for initiating insolvency proceedings against the debt-ridden realty company for defaulting on a INR526 crore loan. As reported in the Troubled Company Reporter-Asia Pacific on Aug. 15, 2017, Moneycontrol said the Allahabad bench of the National Company Law Tribunal on Aug. 9 accepted lender IDBI Bank's plea and classified Jaypee Infratech as an insolvent company. With this, the board of directors of the company remains suspended. According to the report, the Tribunal will now appoint an insolvency resolution professional -- an official from one of the seven accounting firms selected for this purpose. The professional will sit with Jaypee's creditors to see if a resolution of the company's debt is possible. The appointed official will get 270 days to turn around the company's finances. In case the turnaround doesn't happen, the company's assets will be liquidated. Jaypee Infratech Limited (JIL) is engaged in the real estate development. The Company's business segments include Yamuna Expressway Project and Healthcare. The Company's Yamuna Expressway Project is an integrated project, which inter alia includes construction of 165 kilometers long six lane access controlled expressway from Noida to Agra with provision for expansion to eight lane with service roads and associated structures on build, own, operate and transfer basis. The Company provides operation and maintenance of Yamuna Expressway for over 36 years, collection of toll and the rights for development of approximately 25 million square meters of land for residential, commercial, institutional, amusement and industrial purposes at over five land parcels along the expressway. The Healthcare business segment includes hospitals. The Company has commenced development of its Land Parcel-1 at Noida, Land Parcel-3 at Mirzapur and Land Parcel-5 at Agra. JR AGROTECH: Ind-Ra Migrates 'D' Issuer Rating to Not Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded J.R. Agrotech Pvt. Ltd.'s (JR Agro) Long-Term Issuer Rating to 'IND D' from 'IND BBB-'. The ratings have also been migrated to the non- cooperating category. The issuer did not participate in the surveillance exercise despite continuous requests and follow-ups by the agency. Thus, the rating is based on the best available information and feedback from the banker that the company's account has been classified as SMA-2. The rating will now appear as 'IND D(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR2,800 mil. Fund-based limit (Long- and short-term) downgraded and migrated to non-cooperating category with IND D(ISSUER NOT COOPERATING) rating; -- INR150 mil. Term loan (long-term) downgraded and migrated to non-cooperating category with IND D(ISSUER NOT COOPERATING) rating; and -- INR400 mil. Proposed fund-based and non-fund-based limit withdrawn (as the company did not proceed with the instrument as envisaged) with WD rating. Note: ISSUER NOT COOPERATING: Issuer did not cooperate; Based on best available information KEY RATING DRIVERS The downgrade reflects defaults on debt obligations by JR Agro during the 12 months ended July 2017. RATING SENSITIVITIES Positive: Timely debt servicing for at least three consecutive months could result in an upgrade. COMPANY PROFILE JR Agro is a rice milling company, established in 1998. The company has plants in Dinanagar, Gurdaspur for the purpose of drying, parboiling, sorting, milling and grading paddy. The company sells basmati and non-basmati rice varieties under the brand names of Mother Cook, Sacha Sauda and Adaab. JR Agro also has an established distribution network, mainly in northern India. KAKINADA SEZ: ICRA Assigns 'D' Rating to INR212.50cr LT Loan ------------------------------------------------------------ ICRA has assigned a long-term rating of [ICRA]D to the INR212.50 crore enhanced term-loan facilities (enhanced from INR62.50 crore earlier) of Kakinada SEZ Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term: Fund Based facilities 212.50 [ICRA]D; assigned/outstanding Rationale The rating takes into account the continued delays in debt- servicing by KSL towards the rated facilities. The development work on Phase-I of the project, which accounts for ~20% of the SEZ notified area, is still in a nascent stage and sizeable portion of the cost remains to be incurred. Further, despite being in advanced stages of discussion with some potential tenants and executing some MOUs (Memorandum of Understanding), the occupancy at the SEZ is low as of now (with two tenants occupying ~1.2% of the Phase-I area) resulting in negligible rental inflows. In light of inadequate fund flow from operations and sizeable funding requirement for debt obligations and SEZ development, the company continues to remain dependent on funding support from group companies, mainly GMR Infrastructure Limited (GMR Infra). Though the company has been getting regular funding from GMR Infra, such support has not been timely, resulting in delays in debt-servicing by KSL. Going forward, regularisation of debt-servicing by the company would be the key rating sensitivity. In this context, the company's ability to improve occupancy at the SEZ, refinance its debt obligations with a longer-tenor debt to align with the expected cash flows as well as get timely funding support from GMR Infra towards meeting debt obligations and funding project cost will be crucial. Key rating drivers Credit strengths * Established track record of the group in implementing large infrastructure projects - KSL is a 51% subsidiary of GMR Infra which is undertaking development of a port based Special Economic Zone in an area of 10,400 acres in the Kakinada region of Andhra Pradesh. The group has a track record of executing large-scale infrastructure projects which mitigates the execution risk to some extent. Credit weaknesses * Continued delays in debt-servicing: Because of stretched financial profile, the company continues to delay in servicing of its debt obligations. * Limited occupancy and resultant modest revenue base, which together with sizeable debt obligations is resulting in funding shortfalls: Till date, the company has leased out less than 1% of the total leasable area in the SEZ. As a result, revenue base of the company continues to be marginal. Given the insignificant revenue base, ongoing expenditure on the project and sizeable debt obligations, the company continues to be reliant on funding support from promoter group for meeting its funding shortfalls. Though the company has been getting regular funding from GMR Infra in the form of interest-bearing unsecured loans, such support has not been timely, resulting in continued delays in debt-servicing by KSL. Kakinada SEZ Limited (KSL, erstwhile Kakinada SEZ Private Limited), 51% held by GMR Infrastructure Limited (GMR Infra) through its wholly-owned subsidiary GMR SEZ and Port Holdings Private Limited, is in the process of developing a multi-product Special Economic Zone (SEZ) at Kakinada (Andhra Pradesh) along with a deep water port in an area of ~10,400 acres. Land acquisition for the project is under progress and various approvals/clearances are also being obtained. Further, the title for approximately 8,300 acres of land has already been transferred to Kakinada SEZ Limited, while the title transfer of the balance land, which is required for development of the port, is in progress. SEZ notification is in place for approx 5,000 acres at present. The company is undertaking phase-wise development of the area available for SEZ development. As a part of the phase-1 of the SEZ development, the company has commenced infrastructural development work in ~916 acres. Further, the company has leased out about 5 acres of land to Pals Plush, its first tenant, for a period of 20 years, which commenced commercial operations in January 2016 and has also recently signed term sheet with Delicate Frozen Seafoods for setting up sea food processing facility in 7 acres of land. KURUNJI AGRO: CRISIL Reaffirms 'D' Rating on INR5.5MM LT Loan ------------------------------------------------------------- CRISIL has been consistently following up with Kurunji Agro Product (KAP) for obtaining information through letters and emails dated May 24, 2017 and June 9, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 3 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Long Term Loan 5.5 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Proposed Term Loan 1.5 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 Kurunji Agro Product. 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 Kurunji Agro Product 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'. KAP was set up in 2009 and commenced operations in 2013. Based in Dindigul, Tamil Nadu, the firm manufactures mango pulp. It was set up by Mr. S Palanisamy, Mr. S A Kadar. and Mr. A Muruganandham. LAGAN ENGINEERING: CRISIL Reaffirms 'D' Rating on INR7.5MM Loan --------------------------------------------------------------- CRISIL has been consistently following up with Lagan Engineering Company Limited (LECL) for obtaining information through letters and emails dated April 12, 2017 and May 04, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 3 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Cash Credit 5.5 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Letter of Credit 0.5 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Proposed Long Term 4.58 CRISIL D (Issuer Not Bank Loan Facility Cooperating; Rating Reaffirmed) Term Loan 7.50 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 Lagan Engineering Company 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 Lagan Engineering Company 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'. LECL (formerly, The Lagan Jute Machinery Company Ltd) was acquired by the Kajaria family in 2000 following divestment by the Government of India. LECL is among a handful of jute mill machine manufacturers in the organised sector. Its product profile includes spreaders, carding and drawing machines, and spinning and twisting frames. Its manufacturing facilities are in Hooghly and it supplies largely to jute mills in West Bengal and Bangladesh. LAHERI COTTON: CRISIL Assigns B+ Rating to INR15MM Cash Loan ------------------------------------------------------------ CRISIL has assigned the 'CRISIL B+/Stable' rating on the long- term bank facility of Laheri Cotton Industries (LCI). The rating reflects the modest scale of operations, amidst intense competition, large working capital requirement, and below-average financial risk profile. These rating weaknesses are partially offset by the extensive experience of the promoters in the cotton industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 15 CRISIL B+/Stable Key Rating Drivers & Detailed Description Weakness * Modest scale of operations, amidst intense competition: Limited capacities and intense competition in the textile industry have kept the scale of operations modest, as reflected in revenue of INR42.78 crore in fiscal 2017, and limit the pricing flexibility, thus constraining profitability. * Working capital intensive operations: Operations are working capital intensive, as reflected in gross current assets of 170 days as on March 31, 2017, led by sizeable inventory of 105 days, to meet off-season demand. * Below-average financial risk profile: Financial risk profile was marked by the small networth of INR6.82 crore and high total outside liabilities to tangible networth ratio of 2.15 times, both as on March 31, 2017. With continued large working capital debt, gearing may remain at similar levels over the medium term. Debt protection metrics are weak, as reflected in interest coverage and net cash accrual to total debt ratios of 1.86 times and 0.04 time, respectively, for fiscal 2017. Strength * Extensive experience of the promoters in the cotton industry: The 2 decade-long experience of the promoters, their keen grasp over local market dynamics, and established relationships with customers and suppliers, will continue to support the business risk profile. Outlook: Stable CRISIL believes LCI will continue to benefit from the extensive experience of its promoters. The outlook may be revised to 'Positive' if substantial and sustained revenue growth, along with improvement in profitability, strengthens the capital structure. The outlook may be revised to 'Negative' if decline in revenue and profitability, stretch in the working capital cycle, or any major capital expenditure, weakens the financial risk profile. LCI, set up in 1997, is engaged in ginning and pressing of cotton, and extracts oil from cotton seeds. The manufacturing units are located in Palej, Bharuch (Gujarat). The firm is a partnership concern of Mr. Ismail Laheri, Mrs Zarina Ismali Laheri, Mr. Yusuf Umerji Laheri, Mrs Mehmuda Yusuf Laheri, Mr. Mahmed Ismali Laheri and Mr. Sufiyan Gulam Laheri. Profit after tax was INR1.97 crore on net sales of INR42.78 crore in fiscal 2017, against INR1.22 crore and INR36.17 crore, respectively, in fiscal 2016. LAKME VITRIFIED: CRISIL Raises Rating on INR21MM Term Loan to B+ ---------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facilities of Lakme Vitrified LLP to 'CRISIL B+/Stable' from 'CRISIL B/Stable', and reaffirmed the short-term facilities at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 3.52 CRISIL A4 (Reaffirmed) Cash Credit 11 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') Term Loan 21 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') The upgrade reflects earlier-than-expected commencement of commercial operations resulting in a quick ramp-up in revenue and expected moderate operating efficiency. The financial risk profile is also better than expected because of higher funding contribution from the promoters that resulted in a better capital structure. During fiscal 2017, revenue was INR14 crore with a healthy operating profitability margin of 18%; the margin is expected to remain moderate at 13-15% over the medium term. The partners infused higher-than-expected equity of INR16.67 crore, thus improving the capital structure. The networth and gearing were at INR16.34 crore and 1.56 times, respectively, as on March 31, 2017. Liquidity remains moderate because of comfortable cash accrual and support from the partners through unsecured loans. This resulted in moderate bank limit utilisation at an average of 52% over the six months through June 2017. An increase in the bank limit to INR11 crore from INR5.50 crore will also cushion liquidity. The ratings continue to reflect a modest, though improving, scale of operations in the fragmented and competitive vitrified tile manufacturing industry. The ratings also factor in susceptibility of the operating margin to fluctuation in raw material and fuel (gas) prices. These weaknesses are partly offset by the extensive industry experience of the partners, favourable location of the plant, and a moderate financial risk profile. Analytical Approach For arriving at the ratings, CRISIL has treated unsecured loans from the partners and their family members as neither debt nor equity. That's because the loans are expected to remain in the business over the medium term. Key Rating Drivers & Detailed Description Weakness * Modest, though improving, scale of operations in a fragmented and competitive industry As fiscal 2018 will be the first full year of operations, revenue is likely to increase thereafter. However, it will remain modest due to a presence in the ceramic tile manufacturing industry which is intensely competitive and has many small and large players. * Working capital-intensive operations: Gross current assets were high at 231 days, driven by receivables and inventory of 92 days and 90 days, respectively, as on March 31, 2017. Operations are expected to remain working capital intensive over the medium term. * Susceptibility of the operating margin to fluctuation in raw material and fuel (gas) prices That's because competition limits the ability to pass on input price increases. Strengths * Extensive industry experience of the partners The partners have an experience of over a decade in manufacturing and trading in ceramic tiles; this will continue to support the business risk profile. * Moderate financial risk profile The networth and gearing stood at INR16.34 crore and 1.56 times, respectively, as on March 31, 2017. Debt protection metrics were adequate: interest coverage and net cash accrual to total debt ratios were 2.28 times and 0.15 time, respectively for fiscal 2017. With expected moderate operating profitability, the metrics are likely to remain adequate over the medium term. * Favorable location of the plant The 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 LVL will benefit over the medium term from the extensive industry experience of its partners, their funding support, and the favorable location of its plant. The outlook may be revised to 'Positive' if revenue and profitability improve, leading to higher-than-expected cash accrual, while working capital is efficiently managed. The outlook may be revised to 'Negative' in case of lower-than-expected cash accrual, a stretched working capital cycle, or any large, debt-funded capital expenditure, weakening the financial risk profile, particularly liquidity. LVL was established in 2016 as a limited liability partnership (LLP) firm by Mr. Shaileshkumar Rojmala and Mr. Bhavesh Kundaria. The firm manufactures double-charge vitrified tiles in Morbi; the plant, with an installed capacity of 7,000 boxes per day, commenced commercial operations from November 2016. Revenue is INR14.05 crore and net loss is INR0.33 crore for fiscal 2017. There were no commercial operations during fiscal 2016. LEAP GREEN: CRISIL Upgrades Rating on INR31MM Term Loan to BB- --------------------------------------------------------------- CRISIL has downgraded its rating on the bank loan facilities of Leap Green Energy Pvt Ltd and companies under Leap Green group from 'CRISIL BBB-/Watch Negative' to 'CRISIL D'. Also, the rating has been simultaneously upgraded to 'CRISIL BB-/Watch Developing'. The Leap Green group comprises Leap Green Energy Pvt Ltd (Leap Green), Maple Renewable Power Pvt Ltd (Maple), Olive Ecopower Pvt Ltd (Olive), Clover Energy Pvt Ltd (Clover), Lotus Clean Power Venture Pvt Ltd (Lotus), Tulip Renewable Powertech Pvt Ltd (Tulip), Violet Green Power Pvt Ltd (Violet), Iris Ecopower Venture Pvt Ltd (Iris), and Orchid Renewable Powertech Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 31 CRISIL BB- (Revised from 'CRISIL BBB-/Watch Negative' to 'CRISIL D' and simultaneously upgraded to 'CRISIL BB-'; Placed on 'Rating Watch with Developing Implications') The rating revision to 'CRISIL D' reflects delay in debt servicing reported in annual accounts of fiscal 2016 of Leap Green group of companies during the period January 2016 - May 2016. The rating upgrade to 'CRISIL BB-' considers the timely debt servicing track record for more than 6 months. Further, rating reflects the improvement in operational performance of the existing assets (447.8 megawatts [MW]) due to resolution of evacuation issues and better wind season, resulting in better generation leading to an expected average consolidated Debt Service Coverage Ratio (DSCR) of more than unity over the medium term. The rating also takes into account the diversification benefit of assets along with fungibility of funds between various Leap Green group of companies. The rating, however, continues to be constrained by weaker than expected liquidity. The rating watch is revised to 'Watch with Developing Implications' from 'Watch with Negative implications'. Earlier in April 2017, the rating was kept on a 'Watch with negative implication' following Leap Green's announcement of acquisition of wind energy assets with capacity of around 240 megawatts (MW) from Inox Renewables Ltd (IRL, rated 'CRISIL A-/Watch Developing') and Inox Renewables (Jaisalmer) Ltd (IRJL) on slump sale basis. The Inox wind asset acquisition entails incremental debt of INR1000 crore (Rs 750 crore of project debt plus INR250 crore short term debt). CRISIL will continue to monitor the development, and is in discussion with management of Leap Green group to better understand implications of the transaction on the company's business and financial risk profiles. CRISIL will remove the rating from watch and take a final rating action once it has more clarity on the transaction, including information on the operating performance of acquired assets, and potential synergies. Analytical Approach For arriving at its ratings, CRISIL has combined the business and financial risk profiles of Leap Green (capacity of 19.50 megawatt [MW]) and its eight subsidiaries: Maple (61.50 MW), Olive (51.55 MW), Clover (71.50 MW), Lotus (46.20 MW), Tulip (55.50 MW), Iris (42.05 MW), Violet (33.00 MW), Orchid (66.90 MW) and Citron Ecopower Pvt Ltd (75 MW). All these companies operate in the wind energy and related space, have significant operational linkages, and are under a common management. Furthermore, Leap Green has extended guarantees for the debt of the subsidiaries. Key Rating Drivers & Detailed Description Weakness * Delay in debt servicing in fiscal 2016: During fiscal 2016, there was substantial decline in PLFs and evacuation issues leading to inadequate cash accruals vis-a-vis debt repayment leading to stretched liquidity. The cash accruals were significantly lower than debt repayment for large part of fiscal 2016 which resulted in consumption of the liquidity available in the group. Moreover, the company was not able to tie-up working capital limits/overdraft limits resulting in delays in debt servicing during this period. * Weaker than expected liquidity position: Although the group's operating performance improved during first three months of current fiscal as compared performance in similar period in previous fiscal, the group's liquidity (including debt service reserve account) is less than 3 months of peak debt servicing as at June 30, 2017. Further, the group also contracted debt of around INR300 crore for acquisition of 75 MW asset in December 2016 which adversely impacted its liquidity. * Increase in counterparty risk and liquidity requirement: Leap Green, along with its special purpose vehicles (SPVs), had installed wind energy capacity of 523 MW as on March 31, 2017 which shall increase to around 760 MW post completion of acquisition. Earlier, nearly 75% of the capacity was in Tamil Nadu under a group captive model and balance was established under a preferential tariff model with long-term power purchase agreements (PPAs) with power distribution companies (discoms) in Rajasthan and Madhya Pradesh. As a result, the overall counterparty risk was moderate. However, post-acquisition, the capacity under group captive shall come down to 50% and concentration of capacity in Rajasthan shall increase to around 25% which is likely to increase the overall counterparty risk and hence liquidity requirement. Nonetheless, further clarity is awaited on the operating performance of acquired assets, and potential synergies. Strengths * Enhanced revenue visibility, diversification benefit and fungibility of funds: In fiscal 2017, improvement in grid evacuation in Tamil Nadu and better wind season resulted in improvement in weighted average PLFs at around 21% and are expected to remain around 20-21% over the medium term. Given the improvement in the operational performance and established track record of the existing assets, CRISIL expects the group to maintain average consolidated DSCR of more than unity over the medium term. As on July 31, 2017, the group has banked units around 10 crore units which can be dipped into during the lean season to cater to demand of its contracted customers. The banked units provide visibility on revenue and also aid the cash flows during the lean season. Besides, the rating also benefits from diversification because of fungibility of funds among the Leap Green group companies. CRISIL expects the holding company (Leap Green) and SPVs will continue to support each other in case of a cash flow mismatch in any particular SPV. The companies have extended inter-corporate deposits to each other in the past. Any significant deviation from the above expectation will be a rating sensitivity factor. Leap Green, incorporated in October 2006, is a wind-power generation company with capacity of 523 MW (including SPVs) as on March 31, 2017. In December 2016, the group acquired 75 MW capacity in Tamil Nadu which is under group captive model and overall capacity increased to 523 MW. JP Morgan's Asian Infrastructure & Related Resources Opportunity Fund (AIRRO) held 84% equity stake in Leap Green as on March 31, 2017, and the remaining was held by founding directors Mr. Rajeev Akshay, Mr. Dev Anand V, Mr. Srihari Balakrishnan, and Mr. Narain Karthikeyan, directly or through their companies. Leap Green is managed by Mr. Rajeev Akshay (managing director) and Mr. Dev Anand V (executive director). In fiscal 2017, the group's net profit was INR36 crore on operating income of INR405 crore as against a net profit of INR0.3 crore on operating income of INR325 crore in previous fiscal. In first three months of fiscal 2018, the group's operating income was INR105 crore as against operating income of INR66 crore in similar period during previous fiscal. LEAPFROG ENGINEERING: ICRA Moves C Rating to Not Cooperating ------------------------------------------------------------ ICRA has moved the ratings for the INR10.00 crore bank facilities of Leapfrog Engineering Services Private Limited to the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]C ISSUER NOT COOPERATING" Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term-Fund-based 6.00 [ICRA]C ISSUER NOT COOPERATING; Rating moved to the 'Issuer Not Cooperating' category Rationale The rating is based on no updated information on the entity's performance since the time it was last rated in February, 2016. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating does not adequately reflect the credit risk profile of the entity. The entity's credit profile may have changed since the time it was last reviewed by ICRA; however, in the absence of requisite information, ICRA is unable to take a definitive rating action. As part of its process and in accordance with its rating agreement with Leapfrog Engineering Services Private Limited, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information, and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. Key rating drivers Credit strengths * Significant experience of the promoters in the industry - The company has a track record of over 10 years in project execution in the domestic and overseas markets. The management has technical and domain expertise in executing industrial projects requiring higher design and execution capabilities. * Diversified services profile and association with reputed clients - The company has expertise in electrical and instrumentation, fire protection and detection, IT infrastructure, and electronic security systems. These diversified services are offered to reputed clients across different industries like oil & gas, infrastructure, manufacturing etc, insulating the company from downturns in any particular industry. Credit weaknesses * Small scale of operation with weak financial profile- The scale of operations of the firm remained modest with an operating income of INR19.35 crore in FY2015. The financial profile remained weak characterized by low net-worth, weak cash accruals, high gearing and weak coverage indicators in FY2015. * Stretched liquidity position of the company - The company had high working capital intensity of ~29% in FY2015, due to delays in receipt from its customers. The liquidity position of the company remained stretched with high utilisation of working capital limits in FY2015. Leapfrog Engineering Services Private Limited was incorporated in 2005 by Mr. Prabhav N Rao in Bangalore, Karnataka. The company provides 'Design Build' solutions to its clients in the electrical and instrumentation, fire protection and detection, passive fire protection, and IT infrastructure and electronic security systems domains. The company has significant expertise in developing strategy, engineering and execution mechanisms for a range of industrial, commercial, and allied projects. It has successfully completed projects in India as well as overseas for industry sectors such as oil and gas, process industries, utilities and infrastructure, manufacturing and telecommunications. LOVE KUSH: CRISIL Reaffirms 'B' Rating on INR20MM Loan ------------------------------------------------------ CRISIL has reaffirmed its 'CRISIL B/Stable' rating on the long- term bank facilities of Love Kush Foods Private Limited (LKFPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 10 CRISIL B/Stable (Reaffirmed) Warehouse Financing 20 CRISIL B/Stable (Reaffirmed) The rating continues to reflect a modest scale of operations and exposure to intense competition. Revenue is estimated at INR58 crore in fiscal 2017, and INR39.71 crore for the four months ended July 31, 2017; revenue is expected to grow at 10-15% per fiscal over the medium term. Liquidity is supported by absence of debt-funded capital expenditure (capex) plans for the medium term. However, working capital requirement is large, with gross current assets (GCAs) estimated at 249 days as on March 31, 2017. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations: The scale of operation is modest in comparison with the size of the rice milling industry. The industry is fragmented because of low capital requirement and limited value addition, which result in low entry barriers. The fragmented nature of the industry and the company's small scale of operations limit the ability to bargain with suppliers and customers. * Working capital-intensive operations: GCAs were high due to substantial inventory of 244 days, on March 31, 2017. Paddy, the major raw material, is available only in the crop season (October to January). Therefore, players have to procure paddy during this period for their off-season requirement; this results in high inventory of 180 to 250 days. Operations are likely to remain working capital intensive over the medium term. * Below-average financial risk profile: The networth was low, estimated at around INR5.51 crore as on March 31, 2017, with limited increase expected over the medium term due to low accretion to reserves given the small scale of operations and average operating profitability. The total outside liabilities to tangible networth ratio was high, estimated at 6.97 times as on March 31, 2017, and is expected at 6.5-7.0 times over the medium term due to considerable reliance on external borrowing, despite the absence of any debt-funded capex plans. Debt protection metrics were weak: interest coverage and net cash accrual to total debt ratios were 1.26 times and 0.02 time, respectively, in fiscal 2017; the ratios are projected at 1.20- 1.30 times and 0.02 time, respectively, over the medium term. Strength * Experience of the promoters: The promoters have experience of a decade in the rice industry. This has resulted in a diversified clientele of around 40 rice exporters across Punjab and Delhi. Outlook: Stable CRISIL believes LKFPL will continue to benefit from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' in case of improvement in the financial risk profile, most likely through capital infusion, or substantially higher cash accrual arising from a significant increase in scale of operations and sustained or better profitability margins. The outlook may be revised to 'Negative' if the financial risk profile weakens further, most likely because of low cash accrual, large, debt-funded capex, or a considerable increase in inventory and bank borrowing. LKFPL, set up in 2002 by Mr. Sunil Kumar, Mr. Jiwan Kumar, Mr. Navjot Garg, and Mr. Prem Chand, mills basmati rice. Its manufacturing unit in Patran, Punjab, has a milling capacity of 6 tonne per hour (tph) and a sorting capacity of 3 tph. Profit after tax (PAT) was around INR0.13 crore on net sales of INR58.93 crore in fiscal 2017, against PAT of INR0.63 crore on net sales of INR53.47 crore in fiscal 2016. MAGNOLIA LTD: Ind-Ra Moves 'BB+' Issuer Rating to Not Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated M/s Magnolia Limited's (Magnolia) Long-Term Issuer Rating to the non- cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB+(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR23.95 mil. Term loan migrated to non-cooperating category with IND BB+(ISSUER NOT COOPERATING) rating; and -- INR65 mil. Fund-based facilities migrated to non-cooperating category with IND BB+(ISSUER NOT COOPERATING)/IND A4+(ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on June 2, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Magnolia was incorporated in 2010 and commenced operations in 2013. It develops, manufactures and markets chemicals and intermediates (CNIs), active pharmaceutical ingredients (APIs) and finished dosage forms (FDFs). In FY16, Magnolia derived 30% of revenue from CNIs and 20% from APIs, of which 90% was through the domestic market and 10% from exports. The remaining 50% was from FDFs, of which 100% was via exports. MAHADEV IRON: CRISIL Reaffirms B- Rating on INR5MM Cash Loan ------------------------------------------------------------ CRISIL has been consistently following up with Mahadev Iron and Steel Private Limited (MISPL) for obtaining information through letters and emails dated April 13, 2017 and May 10, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5 CRISIL B-/Stable (Issuer Not Cooperating; Rating Reaffirmed) Term Loan .94 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 Mahadev Iron and Steel 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 Mahadev Iron and Steel 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 B-/Stable'. Ghaziabad (Uttar Pradesh)-based MISPL was established in 1980 by Mr. Jugal Kishore Goel and Mr. Ajay Goel. It processes (including decoiling of thermo-mechanically treated bars and its cutting) and trades in steel, iron and its related products. MAHAKALI ISPAT: Ind-Ra Assigns 'B+' Issuer Rating, Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Mahakali Ispat Private Limited (MIPL) a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR45 mil. Fund-based limit assigned with IND B+/Stable rating; and -- INR11.5 mil. Non-fund-based limit assigned with IND A4 rating. KEY RATING DRIVERS The ratings reflect MIPL's small scale of operations and moderate credit metrics. According to provisional financials for FY17, revenue was INR124 million (FY16: INR315 million), interest coverage (operating EBITDA/gross interest expense) was 2.5x (2.3x) and net financial leverage (adjusted net debt/operating EBITDAR) was 2.4x (2.9x). Net financial leverage improved due to a slight decline in the debt level. The ratings are constrained by the company's tight liquidity profile as reflected from its over full working capital utilisation during the 12 months ended June 2017, which were regularised within four days. The ratings, however, are supported by the company's directors' over 10 years of experience in manufacturing sponge iron. RATING SENSITIVITIES Positive: An improvement in the scale of operations while maintaining the credit metrics could be positive for ratings. Negative: Further tightening of the liquidity will be negative for the ratings. COMPANY PROFILE Incorporated in 2003, MIPL manufactures sponge iron. It has an installed capacity of 100mt/day. It is managed by Mr. Bagaria and family. MAPLE RENEWABLE: CRISIL Ups Rating on INR178.82MM Loan to BB- ------------------------------------------------------------- CRISIL has revised its rating on the bank loan facilities of Maple Renewable Power Pvt Ltd (Maple) and companies under Leap Green group from 'CRISIL BBB-/Watch Negative' to 'CRISIL D'. Also, the rating has been simultaneously upgraded to 'CRISIL BB- /Watch Developing'. The Leap Green group comprises Leap Green Energy Pvt Ltd (Leap Green), Maple, Olive Ecopower Pvt Ltd (Olive), Clover Energy Pvt Ltd (Clover), Lotus Clean Power Venture Pvt Ltd (Lotus), Tulip Renewable Powertech Pvt Ltd (Tulip), Violet Green Power Pvt Ltd (Violet), Iris Ecopower Venture Pvt Ltd (Iris), and Orchid Renewable Powertech Pvt Ltd (Orchid). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 178.82 CRISIL BB- (Revised from 'CRISIL BBB-/Watch Negative' to 'CRISIL D' and simultaneously upgraded to 'CRISIL BB-'; Placed on 'Rating Watch with Developing Implications') The rating revision to 'CRISIL D' reflects delay in debt servicing reported in annual accounts of fiscal 2016 of Leap Green group of companies during the period January 2016 - May 2016. The rating upgrade to 'CRISIL BB-' considers the timely debt servicing track record for more than 6 months. Further, rating reflects the improvement in operational performance of the existing assets (447.8 megawatts [MW]) due to resolution of evacuation issues and better wind season, resulting in better generation leading to an expected average consolidated Debt Service Coverage Ratio (DSCR) of more than unity over the medium term. The rating also takes into account the diversification benefit of assets along with fungibility of funds between various Leap Green group of companies. The rating, however, continues to be constrained by weaker than expected liquidity. The rating watch is revised to 'Watch with Developing Implications' from 'Watch with Negative implications'. Earlier in April 2017, the rating was kept on a 'Watch with negative implication' following Leap Green's announcement of acquisition of wind energy assets with capacity of around 240 megawatts (MW) from Inox Renewables Ltd (IRL, rated 'CRISIL A-/Watch Developing') and Inox Renewables (Jaisalmer) Ltd (IRJL) on slump sale basis. The Inox wind asset acquisition entails incremental debt of INR1000 crore (Rs 750 crore of project debt plus INR250 crore short term debt). CRISIL will continue to monitor the development, and is in discussion with management of Leap Green group to better understand implications of the transaction on the company's business and financial risk profiles. CRISIL will remove the rating from watch and take a final rating action once it has more clarity on the transaction, including information on the operating performance of acquired assets, and potential synergies. Analytical Approach For arriving at its ratings, CRISIL has combined the business and financial risk profiles of Leap Green (capacity of 19.50 megawatt [MW]) and its eight subsidiaries: Maple (61.50 MW), Olive (51.55 MW), Clover (71.50 MW), Lotus (46.20 MW), Tulip (55.50 MW), Iris (42.05 MW), Violet (33.00 MW), Orchid (66.90 MW) and Citron Ecopower Pvt Ltd (75 MW). All these companies operate in the wind energy and related space, have significant operational linkages, and are under a common management. Furthermore, Leap Green has extended guarantees for the debt of the subsidiaries. Key Rating Drivers & Detailed Description Weakness * Delay in debt servicing in fiscal 2016: During fiscal 2016, there was substantial decline in PLFs and evacuation issues leading to inadequate cash accruals vis-a-vis debt repayment leading to stretched liquidity. The cash accruals were significantly lower than debt repayment for large part of fiscal 2016 which resulted in consumption of the liquidity available in the group. Moreover, the company was not able to tie-up working capital limits/overdraft limits resulting in delays in debt servicing during this period. * Weaker than expected liquidity position: Although the group's operating performance improved during first three months of current fiscal as compared performance in similar period in previous fiscal, the group's liquidity (including debt service reserve account) is less than 3 months of peak debt servicing as at June 30, 2017. Further, the group also contracted debt of around INR300 crore for acquisition of 75 MW asset in December 2016 which adversely impacted its liquidity. * Increase in counterparty risk and liquidity requirement: Leap Green, along with its special purpose vehicles (SPVs), had installed wind energy capacity of 523 MW as on March 31, 2017 which shall increase to around 760 MW post completion of acquisition. Earlier, nearly 75% of the capacity was in Tamil Nadu under a group captive model and balance was established under a preferential tariff model with long-term power purchase agreements (PPAs) with power distribution companies (discoms) in Rajasthan and Madhya Pradesh. As a result, the overall counterparty risk was moderate. However, post-acquisition, the capacity under group captive shall come down to 50% and concentration of capacity in Rajasthan shall increase to around 25% which is likely to increase the overall counterparty risk and hence liquidity requirement. Nonetheless, further clarity is awaited on the operating performance of acquired assets, and potential synergies. Strength * Enhanced revenue visibility, diversification benefit and fungibility of funds: In fiscal 2017, improvement in grid evacuation in Tamil Nadu and better wind season resulted in improvement in weighted average PLFs at around 21% and are expected to remain around 20-21% over the medium term. Given the improvement in the operational performance and established track record of the existing assets, CRISIL expects the group to maintain average consolidated DSCR of more than unity over the medium term. As on July 31, 2017, the group has banked units around 10 crore units which can be dipped into during the lean season to cater to demand of its contracted customers. The banked units provide visibility on revenue and also aid the cash flows during the lean season. Besides, the rating also benefits from diversification because of fungibility of funds among the Leap Green group companies. CRISIL expects the holding company (Leap Green) and SPVs will continue to support each other in case of a cash flow mismatch in any particular SPV. The companies have extended inter-corporate deposits to each other in the past. Any significant deviation from the above expectation will be a rating sensitivity factor. Leap Green, incorporated in October 2006, is a wind-power generation company with capacity of 523 MW (including SPVs) as on March 31, 2017. In December 2016, the group acquired 75 MW capacity in Tamil Nadu which is under group captive model and overall capacity increased to 523 MW. JP Morgan's Asian Infrastructure & Related Resources Opportunity Fund (AIRRO) held 84% equity stake in Leap Green as on March 31, 2017, and the remaining was held by founding directors Mr. Rajeev Akshay, Mr. Dev Anand V, Mr. Srihari Balakrishnan, and Mr. Narain Karthikeyan, directly or through their companies. Leap Green is managed by Mr. Rajeev Akshay (managing director) and Mr. Dev Anand V (executive director). In fiscal 2017, the group's net profit was INR36 crore on operating income of INR405 crore as against a net profit of INR0.3 crore on operating income of INR325 crore in previous fiscal. In first three months of fiscal 2018, the group's operating income was INR105 crore as against operating income of INR66 crore in similar period during previous fiscal. MLC PROPERTIES: CRISIL Lowers Rating on INR40MM LT Loan to 'B' -------------------------------------------------------------- CRISIL has been consistently following up with MLC Properties LLP (MLPRLL) for obtaining information through letters and emails dated Jan. 24, 2017 and Feb. 14, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term 40 CRISIL B/Stable (Issuer Not Bank Loan Facility Cooperating; Downgraded from 'CRISIL BBB+(SO)/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 CRISIL has downgraded its ratings on the bank facilities of GSIPL to 'CRISIL B/Stable' from 'CRISIL BBB+(SO)/Stable'. The 'SO' suffix is being removed in line with CRISIL's policy with regards to SO ratings. The downgrade reflects CRISIL's inability in maintaining the ratings of MLPRLLat 'CRISIL BBB+(SO)/Stable' due to inadequate information and lack of management cooperation. GIPL scores high ('L') on availability of past information on account of availability of financial statements of the company. It scores low ('L') on future information due to non-availability of financials. It scores low ('L') on the stability attributes listed in CRISIL's criteria for surveillance of ratings of non- cooperative issuers. Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of MLPRLL. 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 GIPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with 'CRISIL BBB rating category or lower.' Therefore, on account of inadequate information and lack of management co-operation, CRISIL has downgraded it's the rating to 'CRISIL B/Stable'. MLC is a Limited Liability Partnership firm incorporated on 30 March 2013 and is based out of Bangalore. The firm, earlier, was a partnership firm started on September 25, 2003 and is partnered by the Sundarmurthy family. MLC derives its revenues from leasing out commercial properties situated in Bangalore and Goa. Presently, the firm has 3 properties- two in Bangalore and one in Goa out of which only one is operational and the other two are yet to become operations in 2015-16. NIMRA EDUCATIONAL: ICRA Moves D Rating to Issuer Not Cooperating ---------------------------------------------------------------- ICRA has moved the ratings for the INR39.00 crore bank facilities of Nimra Educational Society to the 'Issuer not co-operating' category. The rating is now denoted as: "[ICRA]D; ISSUER NOT CO- OPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based Cash 4.00 [ICRA]D; ISSUER NOT Credit CO-OPERATING; Rating moved to the 'Issuer not co- operating' category Fund-based Term 35.00 [ICRA]D; ISSUER NOT Loan CO-OPERATING; Rating moved to the 'Issuer not co- operating' category Rationale As part of its process and in accordance with its rating agreement with NES, ICRA has been trying to seek information from the company so as to undertake a surveillance of the ratings, but despite repeated requests by ICRA, the company's management has remained non-cooperative. In the absence of requisite information, ICRA's Rating Committee has taken a rating view based on best available information. In line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, the company's rating is now denoted as: "[ICRA]D ISSUER NOT COOPERATING". The lenders, investors and other market participants may exercise appropriate caution while using this rating, given that it is based on limited or no updated information on the company's performance since the time it was last rated. Key rating drivers Credit strengths * Significant experience of promoters in the field of education and established presence of colleges under trust-The promoters have more than 25 years of experience in educational sector and has 4 colleges under the society; two engineering colleges, a pharmacy college, and a business management college * Diversified revenue source-The revenues of the company are diversified by way of various courses offered by the society from graduation to masters across various streams such as engineering, business management and pharmacy which mitigates the risk pretending to any particular course. Credit weaknesses * Highly regulated nature of the Indian education sector and fee fixation by the State Government-The fees are fixed by the Fee Regulatory Commission and other Government bodies, and the society charges fees in accordance with principles laid down by these bodies. For AY2012-13, the Andhra Pradesh Fee Regulatory Commission fixed a uniform fee structure for both General Quota (Category A) and Management Quota (Category B) of students, and adopted a college-wise price fixation which restricts the margins for the society * High competition from other colleges in the vicinity-The society's occupancy levels are fluctuating due to increase in competition from other colleges in the vicinity; as all colleges in the vicinity offer same facilities * Delay in receipt of fee reimbursements- The government in Andhra Pradesh reimburses the fee to the students enrolling for the course, particularly those meeting certain criteria set by government; which are generally delayed which negatively impacts liquidity profile of the trust, impacting debt repayment capability NES was set up in 1991 by Dr. Mohammed Vizarath Rasool Khan under the Andhra Pradesh Societies Registration Act, 1350 Fasli. The society operates four colleges in and around Vijayawada in Andhra Pradesh, offering varied courses, such as bachelor of technology, bachelor of pharmacy, Master of technology, Master of computer application, Master of pharmacy and Master of business administration. Currently, NES operates two engineering colleges, one pharmacy college, and one business Management College, with total student strength of 1584. All the colleges are affiliated to the Jawaharlal Nehru Technical University, Kakinada (Andhra Pradesh). NINA REALTORS: CRISIL Lowers Rating on INR10MM Term Loan to D ------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank loan facility of Nina Realtors to 'CRISIL D' from 'CRISIL BB-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 10 CRISIL D (Downgraded from 'CRISIL BB-/Stable') The downgrade reflects delays in servicing term debt owing to weak liquidity caused by cash-flow mismatches. The primary reason from these cash-flow mismatches is low customer advances following delay in construction in ongoing project. Key Rating Drivers & Detailed Description Weaknesses * Delay in debt servicing: The firm has been consistently delaying on the installments of its term loans due to its weak liquidity. The demonetization exercise in November 2016 led to delay in construction in the ongoing project by more than six months and resulted in low customer advances, thereby severely impairing the debt servicing ability of the firm. * Exposure to intense competition in real estate industry: NR is undertaking a residential real estate development project in Mumbai comprising one building at an estimated cost of INR18.08 crores. NR faces competition from other ongoing projects in nearby areas, such as Naminath Arihant Heights and Naina Kripa Apartment which may impact future booking rates. Furthermore, realisation and advances to be received for this project are subject to fluctuation in the real estate prices. Any delay in inflow of customer advances or bookings from current and future customers may impact the project cash flows. CRISIL believes that NR's business risk profile will remain exposed to intense competition in the real estate industry. * Weak financial risk profile: NR's has a small net worth, estimated to be about INR2 crore as at March 31, 2017. The small net worth and high gearing levels have resulted in unhealthy total outside liabilities to tangible net worth, estimated to be around 8.8 times as at March 31, 2017. Also, the debt protection metrics are poor, as reflected by Interest coverage and net cash accruals to total debt of 1.08 times and 5 percent respectively, for fiscal 2017. In the absence of significant risk mitigating factors, CRISIL believes that NR's financial risk profile will exhibit inherent weakness in the medium term. Strength * Promoters' extensive experience in real estate business: NR's main promoter, Mr. Sabbir Nirman, has around 15 years of experience in the construction industry. He has successfully completed around seven residential projects in Byculla, Bandra, Khar, Dongri, and Pydhonie with total saleable area of 7.85 lakh square feet (sq ft) under different entities. Mr. Nirman is also currently undertaking five projects at Byculla, Duncan Road, and Mustafa Bazar with a total area of over 8 lakh sq ft through other group companies. CRISIL believes that NR will benefit over the medium term from its promoters' extensive experience in the real estate industry. NR was set up in fiscal 2014 as a partnership firm by Mr. Sabir Nirman, Mr. Musafir Moin Chashmawala, Mr. Nazir M. Munshi, Mr. Salman N. Munshi and Mr. Tanveer N. Munshi. The firm is currently undertaking a residential redevelopment project at Chakala Street at Masjid Bandar, Mumbai. NR made an estimated Profit after Tax (PAT) of INR0.15 crore on estimated net sales of INR0 in fiscal 2017 as against reported PAT of INR0.01 crore on reported net sales of INR0 in fiscal 2016. OM TRADING: ICRA Assigns B+ Rating to INR5.0cr Loan --------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]B+ to the INR5.00 crore1 fund based bank facility of Om Trading Company. ICRA has also assigned the long-term rating of [ICRA]B+ and a short-term rating of [ICRA]A4 to the INR4.00 crore unallocated limit of the firm. The outlook on the long-term rating is 'Stable'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based limit 5.00 [ICRA]B+(Stable); Assigned Unallocated limit 4.00 [ICRA]B+(Stable)/[ICRA]A4; Assigned Rationale The assigned ratings are constrained by the company's leveraged capital structure due to a low net worth base and its high working capital intensity of operations, largely on account of its stretched receivable position. The liquidity was impacted by the firm's high working capital intensity, which was partly supported by creditor funding, which further led to a high TOL/TNW ratio3 in the last three fiscals. ICRA notes the high level of competition in the network cable segment, leading to pricing pressures and low bargaining power with customers. The operations in the cable industry remain exposed to delays in end- customer projects, which could lead to delays in product off-take and volatility in order inflows. However, the ratings favorably factor in the extensive experience of the promoters spanning over three decades in the metals and cables industry, and the operational support provided by the group company, Sol Cables. The financial profile of OTC, which is marked by consistent growth in turnover and healthy profitability, was a rating comfort. ICRA also positively factors in the healthy order book of the firm, which provides revenue visibility in the near-term. Key rating drivers Credit strengths * Extensive experience of the promoter in the cables industry - The promoter of the firm, Mr. Sacchin Bora has an experience of more than 25 years in the cables and metals business though other family owned company. * Operational support provided by the group company - The operational support is provided by its group company, Sol Cables which is its major supplier accounting for around 43% of the total purchase in FY2017. * Financial profile marked by consistent growth in turnover and healthy profitability; healthy order book provides revenue visibility in the medium term - The operating income of the company has grown at a healthy Compounded Annual Growth Rate (CAGR) of 91% in the last three years and stood at INR18.40 crore in FY2017. The operating profit margin also grew in FY2017 to 11.16%, majorly due to the change in product profile, with the addition of 2-core cables in the firm's product line, which earned better realisation than other cables. Consequently, the net profit margin increased to 8.29% in FY2017. OTC has orders- in-hand of INR11.14 crore which are to be executed by the end of October 2017. The healthy order book position of the firm lends visibility to the revenues in the near-term. Credit weaknesses * Working capital intensive nature of operations due to high receivables; reliance on creditors for funding the working capital requirements resulting in leveraged capital structure - The firm extends a credit period of 210 days to its major customer, NEC India Private Limited, because of which the working capital intensity stood high at 43% in FY2017. Subsequently, the increase in working capital requirements was partly funded by stretching the creditors which were at 127 days as on March 31, 2017. Due to the impact of creditor funding on the firm's liquidity, the TOL/TNW ratio stood high at 5.15 times as on March 31, 2017. * Operations in the cable industry remain exposed to delays in projects, which in-turn could lead to delays in product off-take and weak order inflows - OTC faces project execution risks, since order execution can be affected by delays from the client, thereby delaying the dispatch and subsequent receipt of payment for cables. * High level of competition in the cable segment leading to pricing pressures and low bargaining power with customers - The cable industry is characterised by a high degree of fragmentation, given the limited entry barriers and low product differentiation. Given the high competition, and since customers are typically large players in the networking/telecommunications space, OTC has limited bargaining power with them. The same has led to a limited scope for margin expansion, as well as higher receivables period. Om Trading Company is a proprietorship concern of Mr. Sacchin Bora, which was established in 2005. The firm is a trader of telecom kits and cables, with around 80% of sales in FY2017 coming from cables, and the rest from the sale of telecom kits. Around 43% of the procurement in FY2017 was made from its group company: Sol Cables (rated [ICRA]B+(Stable)/[ICRA]A4), while the rest was procured from other local players. OTC is a registered vendor with NEC India Private Limited and Zyxel India and sales to NEC accounted for around 77% of OTC's sales in FY2017. In Q1 FY2018, the firm reported a net profit of INR0.84 crore on an operating income of INR5.29 crore, as compared to a net profit of INR1.53 crore on an operating income of INR18.40 crore in FY2017 (provisional numbers). ORCHID RENEWABLE: CRISIL Ups Rating on INR164MM Term Loan to BB- ---------------------------------------------------------------- CRISIL has revised its rating on the bank loan facilities of Orchid Renewable Powertech Pvt Ltd (Orchid) and companies under Leap Green group from 'CRISIL BBB-/Watch Negative' to 'CRISIL D'. Also, the rating has been simultaneously upgraded to 'CRISIL BB- /Watch Developing'. The Leap Green group comprises Leap Green Energy Pvt Ltd (Leap Green), Maple Renewable Power Pvt Ltd (Maple), Olive Ecopower Pvt Ltd (Olive), Clover Energy Pvt Ltd (Clover), Lotus Clean Power Venture Pvt Ltd (Lotus), Tulip Renewable Powertech Pvt Ltd (Tulip), Violet Green Power Pvt Ltd (Violet), Iris Ecopower Venture Pvt Ltd (Iris), and Orchid. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Term Loan 1 CRISIL BB- (Revised from 'CRISIL BBB-/Watch Negative' to 'CRISIL D' and simultaneously upgraded to 'CRISIL BB-'; Placed on 'Rating Watch with Developing Implications') Term Loan 164 CRISIL BB- (Revised from 'CRISIL BBB-/Watch Negative' to 'CRISIL D' and simultaneously upgraded to 'CRISIL BB-'; Placed on 'Rating Watch with Developing Implications') The rating revision to 'CRISIL D' reflects delay in debt servicing reported in annual accounts of fiscal 2016 of Leap Green group of companies during the period January 2016 - May 2016. The rating upgrade to 'CRISIL BB-' considers the timely debt servicing track record for more than 6 months. Further, rating reflects the improvement in operational performance of the existing assets (447.8 megawatts [MW]) due to resolution of evacuation issues and better wind season, resulting in better generation leading to an expected average consolidated Debt Service Coverage Ratio (DSCR) of more than unity over the medium term. The rating also takes into account the diversification benefit of assets along with fungibility of funds between various Leap Green group of companies. The rating, however, continues to be constrained by weaker than expected liquidity. The rating watch is revised to 'Watch with Developing Implications' from 'Watch with Negative implications'. Earlier in April 2017, the rating was kept on a 'Watch with negative implication' following Leap Green's announcement of acquisition of wind energy assets with capacity of around 240 megawatts (MW) from Inox Renewables Ltd (IRL, rated 'CRISIL A-/Watch Developing') and Inox Renewables (Jaisalmer) Ltd (IRJL) on slump sale basis. The Inox wind asset acquisition entails incremental debt of INR1000 crore (Rs 750 crore of project debt plus INR250 crore short term debt). CRISIL will continue to monitor the development, and is in discussion with management of Leap Green group to better understand implications of the transaction on the company's business and financial risk profiles. CRISIL will remove the rating from watch and take a final rating action once it has more clarity on the transaction, including information on the operating performance of acquired assets, and potential synergies. Analytical Approach For arriving at its ratings, CRISIL has combined the business and financial risk profiles of Leap Green (capacity of 19.50 megawatt [MW]) and its eight subsidiaries: Maple (61.50 MW), Olive (51.55 MW), Clover (71.50 MW), Lotus (46.20 MW), Tulip (55.50 MW), Iris (42.05 MW), Violet (33.00 MW), Orchid (66.90 MW) and Citron Ecopower Pvt Ltd (75 MW). All these companies operate in the wind energy and related space, have significant operational linkages, and are under a common management. Furthermore, Leap Green has extended guarantees for the debt of the subsidiaries. Key Rating Drivers & Detailed Description Weakness * Delay in debt servicing in fiscal 2016: During fiscal 2016, there was substantial decline in PLFs and evacuation issues leading to inadequate cash accruals vis-a-vis debt repayment leading to stretched liquidity. The cash accruals were significantly lower than debt repayment for large part of fiscal 2016 which resulted in consumption of the liquidity available in the group. Moreover, the company was not able to tie-up working capital limits/overdraft limits resulting in delays in debt servicing during this period. * Weaker than expected liquidity position: Although the group's operating performance improved during first three months of current fiscal as compared performance in similar period in previous fiscal, the group's liquidity (including debt service reserve account) is less than 3 months of peak debt servicing as at June 30, 2017. Further, the group also contracted debt of around INR300 crore for acquisition of 75 MW asset in December 2016 which adversely impacted its liquidity. * Increase in counterparty risk and liquidity requirement: Leap Green, along with its special purpose vehicles (SPVs), had installed wind energy capacity of 523 MW as on March 31, 2017 which shall increase to around 760 MW post completion of acquisition. Earlier, nearly 75% of the capacity was in Tamil Nadu under a group captive model and balance was established under a preferential tariff model with long-term power purchase agreements (PPAs) with power distribution companies (discoms) in Rajasthan and Madhya Pradesh. As a result, the overall counterparty risk was moderate. However, post-acquisition, the capacity under group captive shall come down to 50% and concentration of capacity in Rajasthan shall increase to around 25% which is likely to increase the overall counterparty risk and hence liquidity requirement. Nonetheless, further clarity is awaited on the operating performance of acquired assets, and potential synergies. Strengths * Enhanced revenue visibility, diversification benefit and fungibility of funds: In fiscal 2017, improvement in grid evacuation in Tamil Nadu and better wind season resulted in improvement in weighted average PLFs at around 21% and are expected to remain around 20-21% over the medium term. Given the improvement in the operational performance and established track record of the existing assets, CRISIL expects the group to maintain average consolidated DSCR of more than unity over the medium term. As on July 31, 2017, the group has banked units around 10 crore units which can be dipped into during the lean season to cater to demand of its contracted customers. The banked units provide visibility on revenue and also aid the cash flows during the lean season. Besides, the rating also benefits from diversification because of fungibility of funds among the Leap Green group companies. CRISIL expects the holding company (Leap Green) and SPVs will continue to support each other in case of a cash flow mismatch in any particular SPV. The companies have extended inter-corporate deposits to each other in the past. Any significant deviation from the above expectation will be a rating sensitivity factor. Leap Green, incorporated in October 2006, is a wind-power generation company with capacity of 523 MW (including SPVs) as on March 31, 2017. In December 2016, the group acquired 75 MW capacity in Tamil Nadu which is under group captive model and overall capacity increased to 523 MW. JP Morgan's Asian Infrastructure & Related Resources Opportunity Fund (AIRRO) held 84% equity stake in Leap Green as on March 31, 2017, and the remaining was held by founding directors Mr. Rajeev Akshay, Mr. Dev Anand V, Mr. Srihari Balakrishnan, and Mr. Narain Karthikeyan, directly or through their companies. Leap Green is managed by Mr. Rajeev Akshay (managing director) and Mr. Dev Anand V (executive director). In fiscal 2017, the group's net profit was INR36 crore on operating income of INR405 crore as against a net profit of INR0.3 crore on operating income of INR325 crore in previous fiscal. In first three months of fiscal 2018, the group's operating income was INR105 crore as against operating income of INR66 crore in similar period during previous fiscal. PASOLITE ELECTRICALS: ICRA Moves B+ Rating to Not Cooperating ------------------------------------------------------------- ICRA has moved the long term rating outstanding of [ICRA]B+ on the INR8.00-crore fund based limits of Pasolite Electricals Private Limited (PEPL) to 'Issuer not cooperating' category. The rating is now denoted as '[ICRA]B+ (Stable) ISSUER NOT COOPERATING'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term-Fund- based limits (CC) 8.00 [ICRA]B+ (Stable); Rating moved to the 'Issuer Not Cooperating' category Rationale The rating is based on no updated information on the company's performance since the time it was last rated in February 2016. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating does not adequately reflect the credit risk profile of the entity. The entity's credit profile may have changed since the time it was last reviewed by ICRA; however, in the absence of requisite information, ICRA is unable to take a definitive rating action. As part of its process and in accordance with its rating agreement with Pasolite Electricals Private Limited, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information, and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. Key rating drivers Credit Strengths * Long-standing experience of the promoter in lighting solution business with pan-India presence facilitates client acquisition and repeat business. * Strong growth potential of the LED based products in the lighting segment of the domestic market owing to its energy saving benefits. * Pan India presence reduces the geographic concentration and provides a competitive advantage as only few other players have the reach on national level. Credit Weaknesses * Low entry barriers and highly competitive which impacts the bargaining power of the company. * Limited value addition owing to trading nature of the operations in highly fragmented industry. * High working capital intensity of operations on account of high level of inventory holdings. Incorporated in 1997, Pasolite Electricals Pvt Ltd is based out of Bangalore and is engaged in the business of trading wide range of user friendly light fixtures with emphasis on energy saving and custom design for two decades. Pasolite provide lighting solutions to all indoor, outdoor, industrial and residential applications. It also trades in exterior lighting, road and street lighting, and landscape lighting. PIK STUDIOS: ICRA Assigns C+ Rating to INR12cr Cash Loan -------------------------------------------------------- ICRA has assigned the long-term rating of [ICRA]C+ for the INR12.00 crore fund-based cash credit limit of PIK Studios Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based-Cash Credit 12.00 [ICRA]C+; Assigned Rationale The assigned rating is constrained by PIK's weak financial risk profile as characterised by de-growth in turnover over the last six years coupled with continued losses which have suppressed the coverage and return indicators. Furthermore, significant accumulated losses in the past have eroded PIK's net worth base leading to an adverse capital structure, though some comfort is drawn from the fact that a significant proportion of total debt is from the promoters and relatives. ICRA also notes that the company's liquidity profile is stretched owing to high inventory holding on the backdrop of its product profile which has in turn entailed full limit utilisation of fund based limits from the bank. Moreover, the rating also factors in the vulnerability of the company's revenues to adverse fluctuation in the key raw material prices with the main raw material being polypropylene granules, a crude oil derivative. The rating, however, favorably takes into account the extensive experience of the promoters in the writing instrument manufacturing business. Key rating drivers Credit strengths * Experience of the promoters in the manufacturing of writing instruments of over 25 years - Established in 1965 as a partnership firm, and thereafter converted into a private limited company in 1998, PIK Pens Private Limited is managed by Rajiv Sawhney who has an extensive experience in the writing instruments industry. In 2016, the company ventured into cosmetics (eye liner, perfumers and kajal) and thereafter the name was changed to PIK Studios Private Limited. Credit weaknesses * Financial profile characterised by declining sales and continued losses at operating level in past which has muted the coverage and return indicators - PIK was unable to secure sufficient orders and optimally utilise its production capacity till FY2017 due to persistent labour disputes since FY2012 which affected the company's operations. With an year on year decline in the operating income, PIK was exposed to unabsorbed fixed and operational costs, leading to continuous losses over a period six years from FY2012 to FY2017. The disputes were resolved in the last quarter of FY2016; however, the financial profile continued to remain weak in FY2017. * Weak capital structure marked by significant erosion of net worth base owing to large accumulated losses in the past - The net worth of the company has eroded as a result of continuous losses since FY2012. Nevertheless, the promoters and relatives have infused funds in form of interest bearing unsecured loans to support the growth in the revenue. However, an increase in the debt component and erosion of net worth has adversely impacted the capital structure as indicated by a gearing ratio of 27.78 times and TOL/TNW of 42.27 times as on March 31, 2017. Further, losses at operating level since the last three years has led to negative coverage indicators thereby indicating weak financial position of the company. * Weakened liquidity profile emanating from rise in inventory levels which has in turn entailed full limit utilisation - Given the nature of the business, PIK has to hold high inventory for the intermediary goods (pens and markers' components) to ensure timely delivery of the finished goods to the consumers. Consequently, this has resulted in high working capital intensity of 75% as on March 31, 2017 and near to full utilisation of working capital limit in the past 15 months from January 2016 to March 2017. * Vulnerability of profitability to any adverse fluctuation in raw material prices - The company's profitability is vulnerable to raw material price fluctuation, with the main raw material being polypropylene granules, a crude oil derivative. Established in 1965 as a partnership firm, V K Industries was majorly into manufacturing various components used in writing instruments like plastic body, nibs, ink and ink reservoir. The firm was converted into a private limited company in 1998, and renamed to 'PIK Pens Private Limited'. The company manufactures wide range of writing instruments like fibre tip pens, permanent markers, white board markers, highlighters, ball point pens, etc. and sells it under the brand name 'PikPens'. In 2016, the company ventured into cosmetics (eye liner, perfumers and kajal) and thereafter the name was changed to PIK Studios Private Limited. Further, PIK also undertakes job work for other writing instrument manufacturers. PIK has its factory unit spread over three acres in Umbergaon, with approximately 250,000 square feet of built up area, and an installed capacity of manufacturing 69.6 million pen sets per annum. PRAKASH AUTO: CRISIL Lowers Rating on INR11.7MM Loan to 'B+' ------------------------------------------------------------ CRISIL has downgraded its rating on the long-term bank facilities of Prakash Auto Pvt Ltd (PAPL) to 'CRISIL B+/Stable' from 'CRISIL BB-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Inventory Funding 11.7 CRISIL B+/Stable (Downgraded Facility from 'CRISIL BB-/Stable') Overdraft 0.3 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') The downgrade reflects weakening liquidity due to stretch in working capital cycle arising from pile-up of inventory in July 2017, and decline in sales due to implementation of the Goods and Service Tax. Liquidity is expected to remain stretched due to incremental working capital requirement over the medium term. Hence, timely and commensurate funding from promoter will be a key rating sensitivity factor. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations With revenue of INR102 crore in fiscal 2017, scale is small. This is compounded by competition from other Maruti Suzuki India Ltd (MSIL; rated at 'CRISIL AAA/Stable/CRISIL A1+) dealers in the vicinity, and from dealers of other passenger car manufacturers such as Hyundai Motor India Ltd (rated 'CRISIL A1+') and Tata Motors Ltd. Scale will remain modest over the medium term due to regional presence. * Low profitability PAPL has limited pricing power with principal, given its marginal contribution to MSIL's sales. Also, as the company has a non- exclusive contract with principal, it is susceptible to competition, leading to modest operating margin. Strengths * Extensive experience of promoter The promoter has been in the automobile dealership segment for around two decades. He has started focusing on car servicing and sales of accessories to sustain operating margin in a competitive environment. * Above-average financial risk profile Total outside liabilities to tangible networth ratio and debt protection metrics are comfortable. Though financial risk profile is constrained by a small networth, in the absence of capital expenditure, and controlled reliance on bank debt, it will remain steady. Outlook: Stable CRISIL believes PAPL will benefit over the medium term from its longstanding association with MSIL. The outlook may be revised to 'Positive' if liquidity shores up with fund infusion from promoter and sustained correction in working capital cycle. The outlook may be revised to 'Negative' if financial risk profile weakens due to lower profitability or large working capital requirement. Incorporated in July 2005 and promoted by Mr. Prakash Ahuja, PAPL is an authorised dealer of MSIL's entire range of passenger vehicles. It also deals in spare parts and car accessories, and provides servicing. The company has three showrooms, one each in Ulhasnagar, Kongaon, and Badlapur in Thane. Provisional profit after tax (PAT) is INR0.7 crore on net sales of INR102 crore for fiscal 2017; PAT was INR0.4 crore on net sales of INR93.4 crore. REAL GROWTH: ICRA Lowers Rating on INR21cr Fund Based Loan to D --------------------------------------------------------------- ICRA has revised its long-term rating on the INR25.00-crore fund- based and non-fund based facilities of Real Growth Commercial Enterprises Limited to[ICRA]D from [ICRA]B+. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based Limits 21.00 [ICRA]D; revised from [ICRA]B+ Non-fund Based Limits 4.00 [ICRA]D; revised from [ICRA]B+ Rationale The rating revision is on account of instances of devolvement of letter of credit (LC) owing to RGCEL's stretched liquidity position. ICRA, however, takes note of the company's experienced promoters. ICRA also notes that the Securities and Exchange Board of India (SEBI), vide its letter (reference no. SEBI /HO/ISD/OW/P/2017/18183) dated August 7, 2017, has published a list of 331 shell companies, as identified by the Ministry of Corporate Affairs, and RGCEL is also a part of the list. ICRA is in discussion with the company and will monitor developments in this regard. Going forward, the company's ability to improve its liquidity position and service its debt in a timely manner will be the key rating sensitivity. Key rating drivers Credit strength * Experienced management provides a competitive edge - The promoters have been involved in the steel-trading business for around a decade and have a thorough knowledge of the market. Credit weaknesses * Stretched liquidity position leads to delays in debt servicing - There have been recent instances of LC devolvement for more than 30 days owing to the company's stretched liquidity position. * Intense competition puts pressure on profitability - The steel-trading business is highly competitive and fragmented in nature because of the presence of a large number of organised and unorganised players. Given the low investment required, the entry barriers have remained low, resulting in the entry of a large number of small-to-medium scale enterprises. This in turn has put pressure on profitability. RGCEL was incorporated in 1995 under the name KRS Financials Pvt. Ltd. In 2001, it was taken over by the RG Group and its name was changed to Rajesh Projects & Finance Limited, which was subsequently renamed to Real Growth Commercial Enterprises Ltd. in January 2011. The company was involved in the development of commercial offices-cum-shopping complexes till 2007. It commenced trading in stainless steel sheets of various dimensions in January 2010 in Bhiwadi (Rajasthan). In FY2017, RGCEL reported a net profit of INR0.46 crore on an operating income (OI) of INR284.04 crore, compared with a net profit of INR0.89 crore on an OI of INR245.42 crore in the previous year. RELISYS MEDICAL: CRISIL Reaffirms B- Rating on INR31MM Loan ----------------------------------------------------------- CRISIL has reaffirmed its rating on the non-convertible debentures of Relisys Medical Devices Limited at 'CRISIL B- /Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Non Convertible Debentures 31 CRISIL B-/Stable (Reaffirmed) The rating continues to reflect RMD's weak financial risk profile because of a negative net worth, large working capital requirement, and small scale of operations. These weaknesses are partially offset by the extensive experience of its promoter in the healthcare industry. Key Rating Drivers & Detailed Description Weakness * Small scale of operations RMD's scale of operations is small, as reflected in its revenues of about INR26.5 crore in fiscal 2017. The same is expected to improve over the medium term on account of better scale of operations and diversification of product portfolio. * Weak financial risk profile RMD's financial risk profile is weak, marked by a weak net worth which is estimated at negative INR4.86 crore as on March 31, 2017. This in turn has resulted in weak gearing levels. Strengths * Experience of promoters in cardiac stent industry RMD was promoted in 1998 by a group of doctors, including Dr. N G Badari Narayan, Dr. B K S Sastry, Dr. N Krishna Reddy, and Dr. N Ramakrishna Rao. Dr. Krishna Reddy is the managing director and chairman of Quality Care India Ltd and has extensive experience in the healthcare and medical industry. Also, the other promoters have extensive industry experience which continues to benefit RMD's business risk profile. Outlook: Stable CRISIL believes that RMD's business risk profile will be supported by its promoters' extensive industry experience over the medium term. The outlook may be revised to 'Positive' if RMD reports substantial and sustained improvement in its scale of operations and profitability, leading to higher-than-expected cash accruals and hence improvement in liquidity. Conversely, the outlook may be revised to 'Negative' if RMD is unable to scale up its operations, resulting in low cash accruals, or if there is a stretch in its working capital cycle, resulting in deterioration in the company's financial risk profile. Set up in 1998, RMD designs, develops and manufactures critical care devices like stents, catheters and stent systems used to treat cardiovascular, peripheral vascular, neurovascular (stroke) and other life-threatening diseases. Currently, the business operations of the company are actively managed by Dr. N Krishna Reddy, Dr. N Ramakrishna Rao and Dr. Somaraju. Provisional net profit was INR11.75 crore on revenues of INR26.48 crore in fiscal 2017; in fiscal 2016, net loss was INR5.36 crore on revenues of INR19.66 crore. ROSENTIQUES FINE: CRISIL Lowers Rating on INR4.30MM Loan to B -------------------------------------------------------------- CRISIL has been consistently following up with Rosentiques Fine Jewellery (RFJ) for obtaining information through letters and emails dated April 10, 2017 and May 8, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 3 CRISIL B/Stable (Issuer Not Cooperating; Downgraded from 'CRISIL BB/Stable') Mortgage Loan 4.3 CRISIL B (Issuer Not Facility Cooperating; Downgraded from 'CRISIL BB/Stable') Proposed Long Term 2.25 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 Rosentiques Fine Jewellery. 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 Rosentiques Fine Jewellery 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'. Set up in 2006 in Mumbai, RFJ is a partnership between Mr. Aadeesh Nahar, Mr. Siddharth Nahar, and Mr. Abhay Kumar Nahar. The firm manufactures and trades in diamond-studded gold jewellery, including rings, pendants, earrings, bracelets, bangles, and necklaces. RUDHRAYAN POLYESTERS: CRISIL Reaffirms B Rating on INR4.90MM Loan ----------------------------------------------------------------- CRISIL has reaffirmed its rating on the long-term bank facilities of Rudhrayan Polyesters (RP) at 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 4.90 CRISIL B/Stable (Reaffirmed) Term Loan 1.25 CRISIL B/Stable (Reaffirmed) The rating continues to reflect modest scale of operations in a fragmented industry and its below-average financial risk profile with modest networth and weak debt protection metrics. These rating weaknesses is partially offset by extensive industry experience of the promoters. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations: Scale of operation has been modest with revenue estimated at INR17.6 crore in fiscal 2017, thus reducing the bargaining power with customers and suppliers in the fragmented yarn industry. * Below-average financial risk profile: Financial risk profile is marked by small networth of INR4.14 crore and low interest coverage ratio of 1.4 times as on March 31, 2017. Strengths * Promoters' extensive industry experience: The promoters have more than 10 years' experience in the textile industry and the firm benefits from such extensive experience, understanding of dynamics of the local market, and established relationships with farmers and customers. Outlook: Stable CRISIL believes that RP will continue to benefit from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if scale of operations and profitability increase significantly leading to improvement in its financial risk profile. The outlook may be revised to 'Negative' if revenue or profitability declines or if the financial risk profile weakens, due to stretch in working capital cycle or any large debt-funded capital expenditure undertaken. RP, set up in 2010 as a partnership firm, manufactures texturised and twisted polyester partially oriented yarn in the denier range of 70-90. Profit after tax (PAT) was INR0.07 crore on net sales of INR20.01 crore in fiscal 2016, against PAT of INR0.06 crore on net sales of INR26.52 crore in fiscal 2015. SHIV SHAKTI: CRISIL Reaffirms B+ Rating on INR6MM Cash Loan ----------------------------------------------------------- CRISIL has reaffirmed its ratings on the bank facilities of Shiv Shakti Inter Globe Exports Private Limited (PIPL; formerly, Priyanka Constructions (Baroda) Private Limited) at 'CRISIL B+/Stable/CRISIL A4'. The ratings continue to reflect the company's modest scale and working capital intensity in operations in the intensely competitive civil construction industry. These rating weaknesses are partially offset by the extensive experience of the promoter. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 10 CRISIL A4 (Reaffirmed) Cash Credit 6 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 4 CRISIL B+/Stable (Reaffirmed) Proposed Term Loan 4 CRISIL B+/Stable (Reaffirmed) Analytical Approach Unsecured loans (INR1 crore as on March 2017) extended by the promoter, have been treated as neither debt nor equity because the loans bear interest at rates lower than that of the market, and will remain in the business. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations: The tender-driven nature of business, and geographic concentration in operations continue to restrict scalability: revenue was modest at INR21 crore in fiscal 2017, and will remain dependent on ability to bid successfully in tenders. * Large working capital requirements: Operations are working capital intensive, with gross current assets exceeding 257 days as on March 31, 2017, mainly on account of sizeable debtors and security deposits maintained. Strength * Extensive experience of promoter in civil construction: Benefits from the experience of around 30 years, of key promoter, Mr. Utkarsh Mehta, a civil engineer, and the company's status as a registered 'Class AA' contractor with Roads & Buildings Department, Vadodara Municipal Corporation, and Gujarat Industrial Development Corporation, should continue to support business. Outlook: Stable CRISIL believes PIPL will continue to benefit over the medium term from the promoter's extensive industry experience. The outlook may be revised to 'Positive' if significant ramp-up in scale of operations, profitability, and cash accrual, or infusion of substantial equity by the promoter, considerably strengthens financial risk profile. Conversely, the outlook may be revised to 'Negative' if decline in revenue or operating margin, stretch in working capital cycle, or any large capital expenditure constrains financial metrics, including liquidity. Set up in 1996 as a partnership firm, PIPL (formerly, Priyanka Constructions (Baroda) Private Limited) was reconstituted as a private limited company in 2002. It is promoted by the Vadodara- based Mr. Utkarsh Mehta. The company undertakes civil contract works, mainly building construction and industrial civil works. Profit after tax (PAT) was INR0.33 crore on net sales of INR21.75 crore in fiscal 2017, against net loss of INR0.13 crore on net sales of INR23.11 crore in fiscal 2016. SHREE RADHA: Ind-Ra Moves 'B' Issuer Rating to Not Cooperating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Shree Radha Vallabh Giriraj Marketing Private Limited's (SRVGM) Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using the rating. The rating will now appear as 'IND B(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR35 mil. Fund-based working capital limit migrated to non- cooperating category with IND B(ISSUER NOT COOPERATING)/IND A4(ISSUER NOT COOPERATING) rating; and -- INR110 mil. Non-fund-based working capital limit migrated to non-cooperating category with IND A4(ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on June 24, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 2000 and managed by Mr. Rajesh Goyal and his son Mr. Vikas Goyal, SRVGM imports, supplies and trades timber logs and ply. The company imports timber logs from New Zealand, Malaysia, South Africa and others, and processes and cuts them according to customer requirements. SHREE RENUKA: ICRA Reaffirms D Rating on INR3679.30cr Loan ---------------------------------------------------------- ICRA has reaffirmed the rating of [ICRA]D on the long-term and the short-term scale outstanding on the INR6,513.47 crore bank limits of Shree Renuka Sugars Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 3679.30 [ICRA]D reaffirmed Fund Based Limits 1218.00 [ICRA]D reaffirmed Non-Fund Based Limits 1616.17 [ICRA]D reaffirmed Rationale The reaffirmation of the rating takes into account the on-going delays in debt servicing by the company owing to its stretched liquidity position arising from inadequate accruals from core operations and high debt repayment obligations. The rating continues to remain impacted by the weak consolidated financial profile of the company as poor weather conditions in Brazil and increased liabilities on USD-denominated loans due to depreciation of the Brazilian currency have affected the company's plans of turning around its Brazilian subsidiaries in the sugar business. While loans for Renuka Vale do Ivai has been restructured with lower interest rates and longer repayment tenure, the management is currently in discussions with the lenders for a one-time settlement with a significant haircut for Renuka do Brasil. The rating also takes into account the risks arising out of the inherent cyclicality in sugar business, exposure to agro-climatic risks and vulnerability to regulatory policies, apart from the exposure to price fluctuations for the company's trading business. The company has seen a sharp decline in its domestic sugarcane crushing volumes due to lower availability of sugarcane in the surrounding areas which has also affected the operations of the co-generation and distillery operations. ICRA has also taken note of the sizeable amount of corporate guarantees extended by SRSL to its subsidiaries. ICRA, however, positively notes the company's complete forward integration into distillery and co-generation operations and advantage of being located in Maharashtra and Karnataka states that are regions with high recovery rates, long crushing season and relatively flexible Fair & Remunerative Price (FRP) based cane price regime. SRSL has recently announced additional equity infusion by Wilmar Group (which has a 27% stake in SRSL currently) of INR784 crore in the form of 0.01% compulsorily convertible preference shares subject to successful completion of a debt restructuring package and other requirements. As part of the proposed restructuring process, the existing lenders will also be converting part of the debt into fresh equity capital as well as convertible securities. This apart, the equity contribution from the Wilmar Group will be entirely used for debt repayments. The timeliness and the progress of the debt restructuring package remains a key monitorable from the credit perspective. Key rating drivers Credit strengths * Fully forward integrated into distillery and co-generation operations resulting in substantial de-risking of core sugar business- The company is forward integrated into distillery and co-generation operations that de-risks the core sugar business of the company and supports its profitability during periods of sugar cyclicality. During the last few years, while performance of sugar business has remained subdued, the distillery business has performed satisfactorily with PBIT margins of 24-25%. * Location of plants close to port and substantial in-house refinery capacity enabling it to export sugar when international markets are lucrative and import in periods of domestic shortage- The company's refining units also enjoy locational advantages being situated close to the ports, since bulk of the raw material is imported, while a significant portion of the refined sugar is exported to foreign markets. Since the company procures the raw sugar from international markets against favourable LC terms, it operates on a negative working capital cycle which reduces the interest burden. * Firm sugar realisations have supported improvement in contribution levels from the sugar business- Sugar realisations have seen sharp improvement over the past twelve to fifteen months on the back of lower sugarcane availability and healthy sugar demand. The prices have increased from ~ INR21-22/ kg in June 2015 to almost INR35-36/ kg in June 2017. This has led to improvement in the segmental performance with PBIT of INR137.6 crore in FY2017 as against losses at PBIT2 level of INR119.3 crore in FY2016. Credit weaknesses * Financial profile continues to remain stretched- The company's cash flow position has continued to remain weak owing to the subdued profitability levels. High leveraging levels have led to high interest expenses which continued to result in net losses for the company during FY2017. * Operations exposed to agro-climatic risks and cyclical trends in sugar business- The operations of the company remains exposed to the agro-climatic and cyclical risks associated with sugarcane production. During FY2017, the crushing volumes were significantly impacted owing to lower availability of sugarcane in Maharashtra and Karnataka due to weak monsoon scenario. * Vulnerability to government/regulatory policies- The sugar industry is highly regulated, with various Government Acts governing virtually all aspects of the business, which include the availability and pricing of sugarcane, sugar trade and by- product pricing. * Exposure of the company's trading business to market risks, especially price fluctuations- The company is also engaged in trading of raw sugar, white sugar and certain distillery products and remains exposed to price fluctuations. * Planned turnaround for Brazilian subsidiaries has not yet materialised owing to poor weather conditions in Brazil and increased liabilities on USD loans due to depreciation of Brazilian Real- Subsequent to the acquisition of the Brazilian entities, poor weather conditions in Sao Paulo affected the performance, delaying the planned turnaround of the entity. While the sugarcane crushing volumes gradually improved later, the financials of the Brazilian subsidiaries remained weak due to subdued global sugar prices and increased US Dollar denominated debt liabilities following the sharp depreciation of Brazilian Real against the US Dollar. While loans for Renuka Vale do Ivai has been restructured with lower interest rates and a longer repayment tenure, the management is currently in discussions with the lenders for a one time settlement with a significant haircut for Renuka do Brasil. Shree Renuka Sugars Limited (SRSL) is one of the largest private sector sugar manufacturers in the country, promoted by first generation entrepreneurs, viz. Murkumbi family, with a combined crushing capacity of about 42,000 TCD (across seven units) in India and 59,520 TCD (across four units) in Brazil. The plants in India are located in the states of Maharashtra and Karnataka. The company has significant presence in South Brazil through acquisitions of Renuka Vale do Ivai in March 2010 (100% owned) and Renuka do Brasil (formerly Euipav Acucar e Alcohol) in July 2010 (50.34% stake, which was increased to 59.4%3 by March 2012). SRSL has been one of the first mills to be fully forward integrated into distillery (using molasses, a by-product of sugar) and co-generation (based on bagasse) operations. SRSL mainly manufactures fuel grade ethanol that can be blended with petrol. Global distillery capacity of SRSL is 4,160 KL per day (KLPD) with Indian distillery capacity at 930 KLPD (630 KLPD from molasses to ethanol and 300 KLPD from rectified spirit to ethanol) and Brazil distillery capacity at 3,230 KLPD. The company has a total co-generation capacity of 584 MW with a total exportable surplus of 356 MW. The company also carries out refining activity, i.e. conversion of raw sugar to white sugar, from its 2,500 TPD unit at Haldia (West Bengal) and 3,000 TPD unit at Kandla (Gujarat). Renuka Vale do Ivai was previously a distressed Brazilian sugar and ethanol producer with a total crushing capacity of 3.1 million MT per annum and it has strategic stake in warehouses and loading facilities at Paranagua port in Brazil. Renuka do Brasil has sugar/ethanol mills with integrated co-generation facilities. It has about 10.5 million MT annual crushing capacity along with co-generation capacity of 295 MW. SHRIMATI POORNA: CRISIL Lowers Rating on INR9MM LT Loan to 'D' -------------------------------------------------------------- CRISIL has downgraded its rating on the bank facilities of Shrimati Poorna Devi Memorial Trust (SPDMT) to 'CRISIL D' from 'CRISIL B-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 9 CRISIL D (Downgraded from 'CRISIL B-/Stable') The downgrade reflects a recent instance of delay by SPDMT in servicing interest on the term loan. The delay has been caused by weak liquidity. The rating also factors in the trust's modest scale of operations. However, it is expected to benefit from the healthy demand prospects for nursing courses in India. Key Rating Drivers & Detailed Description Weakness * Delay in debt servicing: There was a recent instance of delay in servicing interest on term loan. * Modest scale of operations: At the end of fiscal 2017, its first year of operation, the trust's fee income was modest at under INR1 crore. Strengths * Healthy demand prospects for nursing courses: The demand for nursing courses is expected to remain healthy over the medium term, supporting the prospects for educational trusts such as SPDMT. SPDMT was set up in May 2015 by Mrs Deepti Rawat, Mr. Toshit Rawat, and Mrs Lakshmi Rana to establish a nursing and paramedical college at Shankarpur village, District Dehradun. For fiscal 2016, the trust reported excess of expenditure over income of INR27 lakh on nil fee receipts. For fiscal 2017, the fee receipts are estimated at INR88 lakh. SOL CABLES: ICRA Assigns B+ Rating to INR0.40cr Fund Based Loan --------------------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]B+ to the INR0.40 crore fund based bank facility of Sol Cables. The outlook on the long-term rating is 'Stable'. ICRA has also assigned the long- term rating of [ICRA]B+ and a short-term rating of [ICRA]A4 to the INR2.60 crore unallocated limit of the firm. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based limit 0.40 [ICRA]B+(Stable); Assigned Unallocated limit 2.60 [ICRA]B+(Stable)/[ICRA]A4; Assigned Rationale The assigned ratings are constrained by the company's small scale of operations and the high level of competition in the network cable segment, leading to pricing pressures and low bargaining power with customers. The ratings are also constrained by the firm's high working capital intensity of operations, largely on account of its stretched receivable position, which adversely impacted its liquidity in the last three fiscals. ICRA notes that although a high creditor funding supported the firm's liquidity to some extent, it kept the total outside liabilities relative to tangible net-worth at a high level in the last three years. The operations in the cable industry remain exposed to delays in end- customer projects, which could lead to delays in product off-take and volatility in order inflows. However, the ratings favorably factor in the extensive experience of the promoters spanning over three decades in the metals and cables industry, and the operational support derived from its group company, Om Trading Company (rated at ICRA]B+(Stable)/[ICRA]A4), which is engaged in similar line of business. Key rating drivers Credit strengths * Extensive experience of the promoter in the cables industry - The promoter of the firm, Mr. Sacchin Bora has experience of more than 25 years in the cables and metals business though other family owned company. * Operational support provided by group company - The operational support is provided by its group company, Om Trading Company which is its major customer accounting for around 65% of the total sales in FY2017. Credit weaknesses * Small scale of operations - The operations started in June 2010 and despite having improved at a Compounded Annual Growth Rate (CAGR) of around 92% over the FY2013-FY2017 period, the firm's operating income is still small at ~INR9.85 crore in FY2017, limiting economies of scale. * High reliance on creditors for funding the working capital requirements resulting in TOL/TNW of 2.78 times as on March 31, 2017 - The firm's significant receivables level led to a high working capital intensity of operations. Subsequently, the increase in working capital requirements was partly funded by stretching the creditors which were at 149 days as on March 31, 2017. Due to the impact of creditor funding on the firm's liquidity, the TOL/TNW ratio stood high at 2.78 times. * Operations in the cable industry remain exposed to delays in projects, which could lead to delays in product off-take and weak order inflows - SC faces project execution risks, since order execution can be affected by delays from the client, thereby delaying the dispatch and subsequent receipt of payment for the cables. * High level of competition in the cable segment leading to pricing pressures and low bargaining power with customers - The cable industry is characterised by a high degree of fragmentation, given the limited entry barriers and low product differentiation. Given the high competition, and since customers are typically large players in the networking/telecommunications space, SC has limited bargaining power with them. The same has led to a limited scope for margin expansion, and also higher receivables period. Mahalaxmi Industries was incorporated in June 2010; the firm was renamed as Sol Cables in April 2014. SC is a partnership firm, closely held within the Bora family. The firm manufactures various categories of network cables, with 2-core and Cat-5 cables forming majority of the revenue in the last 2 years. The cables are sold in the domestic market, mainly to its group company, Om Trading Company. SC's manufacturing facility in Kundaim, Goa with a production capacity of around 900 km. of cables per month. In FY2017, on a provisional basis, the firm reported a net profit of INR0.42 crore on an operating income of INR19.21 crore, as compared to a net profit of INR0.88 crore on an operating income of INR9.86 crore in the previous year. SOLAPUR BIO-ENERGY: ICRA Reaffirms D Rating on INR27.63cr Loan -------------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]D for the term loans and fund-based limits, aggregating to INR29.63 crore of Solapur Bio-Energy Systems Private Limited (SBES). ICRA has also reaffirmed the short-term rating of [ICRA]D to the non-fund based limits, aggregating to INR1.20 crore of SBES. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term: Term Loans 27.63 [ICRA]D re-affirmed Long-term: Fund- based Limits 2.00 [ICRA]D re-affirmed Short-term: Non- fund-based limits 1.20 [ICRA]D re-affirmed Rationale The rating reaffirmation reflects the irregularity in the company's debt servicing on account of the significant delay in project commissioning and also in the sale of power that has led to cash flow mismatches. While the company commissioned a 3-MW capacity in January 2013, significant deviations in the design parameters and the quality of waste supplied by Solapur Municipal Corporation (SMC) have led to the need for changes in the digesters and segregators. As a result, the plant was unable to achieve optimum utilisation levels, which has resulted in muted cash accruals and stretched liquidity position. However, the company has carried out design changes in the plant equipment and has commenced one line of 2MW capacity in March 2017. It is expected to commission other line of 2MW capacity in the near term. Further, the sizeable cost over-run has impacted the project metrics, and the company is seeking an increase in the tariff rates. The rating also takes into account the overall modest size of operations (planned plant capacity at 4MW) and the limited past of experience of its parent company viz. Organic Recycling Systems Private Limited (ORS), in setting up power plants based on Municipal Solid Waste (MSW) as fuel. ICRA notes that in view of the unconventional fuel-based power plant being setup by the company, its ability to achieve the envisaged operating parameters would be critical for overall profitability and debt coverage, going forward. ICRA, however, positively notes the low execution risks as the design changes needed to process the different quality waste are over and the 2-MW capacity has already commenced operation and the other 2-MW capacity is expected to start soon. Moreover, the low fuel supply risks for the company with the requisite MSW supply guaranteed by SMC; the low demand risk with long-term Power Purchase Agreement (PPA) in place with Maharashtra State Electricity Distribution Company Limited (MSEDCL); and the additional revenues likely to be generated from sale of compost/bio-fertilizers and Refused Derived Fuel (RDF) (by- product). Key rating drivers Credit strengths * Low fuel supply risks - The raw material required for the project is provided by SMC for free of cost. The fuel availability risk remains low as the MSW collected by SMC currently is not being utilised for any alternative purpose and is only being dumped. * Low demand risk - The company has long-term PPA in-place with MSEDCL at a levellised tariff of INR4.88/unit. However, the company is seeking an increase in tariff rates post completion of modification works. As Maharashtra Electricity Regulatory Commission (MERC) had accepted the company's plea for the inclusion of cost incurred on the pre-treatment process (into the total project cost) which was earlier excluded by the tribunal while fixing the tariff of INR4.88/unit. * Technology for the project developed in consultation with Waste Works (Ireland); experienced player in anaerobic digestion systems - ORS has entered into a technical consultancy with Waste Works of Ireland. Accordingly, ORS has developed the technology in-house considering the Indian MSW characterization for the project. Waste Works had extended its support & knowledge for the project. ORS is utilising the same technology for other similar projects that has been awarded. Credit weaknesses * Irregularity in debt servicing due subdued PLF levels - The company continues to delay its debt servicing requirements owing to poor plant performance. The PLF reported in FY2016 was substantially low as compared to design PLF. However, with full commissioning of plant in the near term, PLF levels are expected to improve. * Limited past experience of ORS in setting up power plants based on MSW processing- SBES is the wholly owned subsidiary of ORS which was formed with the aim of acting as a provider to construct, operate and maintain waste processing plants in the country for effective processing and disposal of Municipal Solid Waste generated. SBES is the first special purpose vehicle (SPV) of ORS based on the success of which ORS plans to open more plants in other cities. * Ability to ramp up production levels to achieve optimum utilisation in near term remains critical for achieving healthy profitability and debt coverage- Given that company has completed the design changes in the equipment, the ability of the company to achieve desired capacity utilisation level in the near future remains crucial. SBES, promoted by ORS, is a special purpose vehicle (SPV) set up to convert MSW into energy and compost. The company has set up a plant in Solapur (Maharashtra) and commissioned 3-MW capacity by January 2013. The remaining 1-MW capacity was expected to be commissioned by Q2 FY2017. However, because of significant deviations in the design parameters and the quality of waste supplied by SMC, the company carried out design changes in the equipment. It now expects to commission full capacity of 4-MW in FY2018. The company has entered into a long-term PPA with MSEDCL for sale of power at a tariff of INR4.88/unit for the 2.83 MW capacity and has also signed an in-principle PPA with MSEDCL for the remaining 1-MW capacity. The operations of the plant are based on bio- methanation Process, based on anaerobic digestion, designed by the company in collaboration with Waste Works of Ireland. SP SUPERFINE: ICRA Lowers Rating on INR66.94cr Term Loan to 'D' --------------------------------------------------------------- ICRA has downgraded the long-term rating outstanding on the INR66.94-crore term loans, the INR8.00-crore fund-based facilities and the INR28.52-crore proposed facilities of SP Superfine Cotton Mills Private Limited (SPSCM) from [ICRA]B- to [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term: Term Loan Facilities 66.94 [ICRA]D; downgraded from [ICRA]B- Long-term: Fund- based Facilities 8.00 [ICRA]D; downgraded from [ICRA]B- Long-term: 28.52 [ICRA]D; downgraded from Unallocated [ICRA]B- Facilities Rationale The downgrade in rating reflects the delays in debt servicing on the back of deterioration in the liquidity position of the company. The weaker than expected earnings from operations owing to the challenging demand scenario, high working capital intensity and sizeable debt repayment obligations had constrained the cash flows of the company. The company has requested for restructuring of its bank loans to tide over the tight liquidity position. SPSCM's financial profile remains weak, characterized by negative net-worth stemming from past accumulated losses, inadequate coverage metrics on the back of low operating profitability and working capital intensive nature of operations. With the debt repayments remaining high over the medium term, the ability of the company to improve its revenues and accruals and manage its working capital cycle would be critical to improve its liquidity position and regularize debt servicing. Key rating drivers Credit strengths * Long standing experience of the promoters and operational track record spanning over two decades: Relatively diversified customer base on the back of its operational track record and product presence spanning coarser and medium counts has supported revenues of SPSCM to an extent over the years * Strained liquidity position leading to delays in debt servicing: Cash flows of SPSCM has been strained owing to the pressure on earnings from operations, which coupled with high debt repayment obligations has led to delays in debt servicing * Weak financial profile characterized by negative net-worth and inadequate coverage metrics: Large accumulated losses carried forward coupled with lower than expected profits and high working capital intensity has resulted in capital structure and coverage metrics of the company remaining stretched * Small scale of operations and intense competition limits scale economics and pricing flexibility: Earnings of the company have been constrained by low economies of scale and exposure to fluctuations in raw material prices as witnessed during FY2017; pricing flexibility is limited on the back of intense competition in a highly fragmented industry with minimal product differentiation and challenging demand scenario Promoted by Mr. Velusamy in 1995, SPSCM is engaged in manufacturing of cotton yarn in the count range of 40s to 80s, with 40-50s forming a major share of the production. The Company has an installed capacity of 28,224 spindles and its spinning unit is located in Attur, Tamil Nadu. SRI LAKSHMI: CRISIL Lowers Rating on INR10MM Loan to 'D' -------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Sri Lakshmi Saraswathi Spintex Limited (SLSSL) to 'CRISIL D/CRISIL D' from 'CRISIL BB/Stable/CRISIL A4+'. The ratings downgrade reflects instances of delay in servicing term debt; the delays were on account of stretched liquidity. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 2 CRISIL D (Downgraded from 'CRISIL BB/Stable') Inland Guarantees 0.5 CRISIL D (Downgraded from 'CRISIL A4+') Letter of Credit 10.0 CRISIL D (Downgraded from 'CRISIL A4+') Packing Credit 9.65 CRISIL D (Downgraded from 'CRISIL A4+') Post Shipment Credit 5.0 CRISIL D (Downgraded from 'CRISIL A4+') Term Loan 1.85 CRISIL D (Downgraded from 'CRISIL A4+') The ratings continue to reflect the company's modest scale of operations in the intensely competitive textile industry. This weakness is partially offset by the extensive industry experience of its promoters. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations: At current capacities, scale of operations is expected to remain modest over the medium term'revenue was estimated at INR75 crore in fiscal 2017. * Exposure to intense competition: The presence of a large number of small scale players in the industry leads to intense competition, which constrains SLSSL's pricing power. Strength * Extensive experience of the promoters: The promoters' two- decade long experience in the industry and established relationship with customers has resulted in stable revenue growth, and steady order flow. Incorporated in 2010, Chennai-based SLSSL manufactures and exports hosiery garments. Its facility is in Tiruppur and operations are managed by promoters, Mr. C S Aditya Praveen and Mr. S Naveen Chandra. Profit after tax was INR0.79 crore on net sales of INR66.35 crore for fiscal 2016 against INR0.78 crore and INR54.23 crore, respectively, for fiscal 2015. SRINIVASA EDUCATIONAL: ICRA Moves B Rating to Not Cooperating ------------------------------------------------------------- ICRA has moved the ratings for INR10.00 crore bank facilities of Srinivasa Educational Society (SEC) to the 'Issuer Not Cooperating' category. The rating is now denoted as: "[ICRA]B (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 3.62 [ICRA]B(Stable)ISSUER NOT COOPERATING Rating moved to the 'Issuer Not Cooperating' category Long-term fund-based 0.70 [ICRA]B(Stable)ISSUER NOT COOPERATING Rating moved to the 'Issuer Not Cooperating' category Long-term unallocated 5.68 [ICRA]B(Stable)ISSUER NOT COOPERATING Rating moved to the 'Issuer Not Cooperating' category Rationale The rating is based on no updated information on the entity's performance since the time it was last rated in February, 2016. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating does not adequately reflect the credit risk profile of the entity. The entity's credit profile may have changed since the time it was last reviewed by ICRA; however, in the absence of requisite information, ICRA is unable to take a definitive rating action. As part of its process and in accordance with its rating agreement with SEC, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non- cooperative. In the absence of requisite information and in line with SEBI's Circular No.SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. Key rating drivers Credit strengths * Experience of the society members in the education industry - The society was started in 2004 and the society members have significant experience in the education industry. Credit weaknesses * Small scale of operations- With operating income of INR6.9 crore in FY2015, the scale of operations of the society is small limiting financial flexibility * High competition- The institute faces high competition from several other engineering colleges in the East Godavari district. * High receivables from government: The society receives significant proportion of revenues from government (as fee reimbursement); any delay in receipts would stretch the liquidity profile Srinivasa Educational Society, started in 2004 by Mr. B. Srinivasa Rao, has set up Kakinada Institute of Technology and Science (KITS, the institute) in 2008 which is affiliated to Jawaharlal Nehru Technical University, Kakinada (JNTUK). The institute offers 6 courses in B-tech, 6 specializations in M- tech, 2 specializations in M Pharmacy, MBA, and three polytechnic courses. SUSEE POLYMERS: CRISIL Reaffirms B+ Rating on INR6.5MM LT Loan -------------------------------------------------------------- CRISIL has reaffirmed its ratings on the bank facilities of Susee Polymers Private Limited (SPPL) at 'CRISIL B+/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 0.2 CRISIL A4 (Reaffirmed) Cash Credit 3.3 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 6.5 CRISIL B+/Stable (Reaffirmed) The ratings continue to reflect a modest scale of operations in the highly fragmented woven sacks industry, susceptibility to volatility in raw material prices, and a below-average financial risk profile because of a negative networth and weak debt protection metrics. These weaknesses are partially offset by the extensive industry experience of the promoters and their funding support. Analytical Approach To arrive at the ratings, unsecured loans of INR8.5 crore from the promoters as on March 31, 2017, are treated as neither debt nor equity. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations and susceptibility to volatility in raw material prices: With estimated net sales of INR24.8 crore in fiscal 2017, the scale remains small in the intensely competitive woven sacks industry with low entry barriers, limited gestation period, and easy availability of raw materials. Hence, the segment has many unorganised players with small capacities catering to regional demand. The modest scale restricts growth opportunities and limits pricing and bargaining power. Competition is also faced from jute bags used to pack agro commodities because of the government's initiative to encourage the jute industry. As the key input, polypropylene (PP) granules, is a crude oil derivative, its prices are highly volatile. Though limited bargaining power against large suppliers aggravates the risk, an order-backed model and quotation of prices based on existing inventory rates help alleviate the pressure. * Below-average financial risk profile: Losses incurred in the three fiscals through 2015 due to low capacity utilisation following frequent power cuts are likely to have resulted in a negative networth of INR3.8 crore as on March 31, 2017. Despite unsecured loans of INR8.9 crore from the promoters, financial flexibility will remain constrained. Debt protection metrics were moderate, with interest coverage and net cash accrual to total debt ratios estimated at 2 times and 0.22 time, respectively, for fiscal 2017. The metrics will remain in a similar range over the medium term. Strengths * Extensive industry experience of the promoters and established relationship with customers: A presence of more than a decade in the woven sacks segment has given the promoters a strong insight into market dynamics and enabled them to establish a healthy relationship with customers and suppliers. This has led to a compound annual growth rate of 25% in revenue over the three fiscals through 2017. Outlook: Stable CRISIL believes SPPL will continue to benefit from the industry experience of its promoters. The outlook may be revised to 'Positive' in case of more-than-expected revenue and sustainable improvement in the operating margin. The outlook may be revised to 'Negative' if the financial risk profile deteriorates because of lower-than-expected cash accrual, increased working capital debt, or large, debt-funded capital expenditure. SPPL, incorporated in August 2007, is part of the Susee group, managed by Mr. Soundararajan Subramania Nadar, Mr. Manivannan Soundararajan, and Ms Nanthini. The company manufactures high- density PP woven sacks at its plant in Vellore, Tamil Nadu, which has an installed capacity of 350 kilogram per hour. Profit after tax (PAT) was INR0.45 crore on operating income of INR24.76 crore in fiscal 2017, against INR0.44 crore and INR23.64 crore, respectively, in fiscal 2016. TNR ESTATES: ICRA Withdraws 'D' Rating on INR15cr Term Loan ----------------------------------------------------------- ICRA has withdrawn the long term rating of [ICRA]D assigned to the INR15.00-crore term loan limits of TNR Estates Private Limited (TEPL), in accordance with ICRA's policy on withdrawal and suspension at the request from the company based on No Objection Certificate (NOC) from lending bank. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 15.00 [ICRA]D Withdrawn TNR Estates Private Limited (TEPL) was incorporated in 2005 with the main objective of building and developing housing projects. The company is led by Mr. T.Ravinder Rao, Mr. M.Naveenkanth Reddy and Mr. S.Vikranth Reddy who have prior experience in real estate and building activities. The company is currently working on two projects: 1) "TNR North City Residences", a residential project at suchitra junction, jeedimetla, Hyderabad with a total build up area of 2,55,847 sft in 153 flats and 2) " TNR North City Mall & Multiplex", a commercial project at same location with a total build up area of 3,34,728 sq. ft. TRIVEDI CORP: CRISIL Assigns 'D' Rating to INR15MM Cash Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the bank facilities of Trivedi Corp Private Limited (TCPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Working Capital Term Loan 13 CRISIL D Bank Guarantee 5 CRISIL D Cash Credit 15 CRISIL D The rating reflects a delay in meeting term debt obligations and irregular utilisation of the cash credit facility for over six month. The working capital facility has been over-utilised and payment of interest on the facility delayed. Key Rating Drivers & Detailed Description Weakness * Delay in meeting term debt obligation and over-utilisation of the working capital facility: There has been a delay in term debt repayment in the past three months by over 15 days each month. The principal repayment and interest for June 2017 was outstanding and has been paid in the month of July. The working capital limit has been over-utilised in the 12 months through June 2017. A low order book resulted in reduced cash accrual, and hence in delay in payment of interest on the working capital limit. Strengths * Established market position and the extensive experience of the promoters in the stone products industry: The promoters, Mr. Kiran Trivedi and his family, have an industry experience of over 25 years. Over the years, they have successfully managed the business and supplied various stone products to established customers such as Uttar Pradesh Rajkiya Nirman Nigam Ltd (UPRNN Ltd), Oberoi Hotels, and ICICI Bank. Incorporated in 1991, TCPL manufactures stone products such as monuments, columns, and carved panels, and processes stones such as marble, at its facility at Abu Road, Rajasthan. Profit before tax (PBT) is estimated at INR1.1 crore on net sales of INR34.65 crore for fiscal 2017; PBT was INR6.62 crore on net sales of INR54.86 crore in fiscal 2016. VAMA WOVEN: Ind-Ra Migrates 'D' Issuer Rating to Not Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Vama Woven Fab Private Ltd's (VWPL) Long-Term Issuer Rating to the non- cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using the rating. The rating will now appear as 'IND D(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR120 mil. Term loans (long-term) migrated to non-cooperating category with IND D(ISSUER NOT COOPERATING) rating; and -- INR65 mil. Fund-based limits (long-term) migrated to non- cooperating category with IND D(ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on June 7, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 2011, VWPL manufactures woven sacks, rice packing, and packaging for agricultural produce and other food products. Its plant has a processing capacity of 4,800mt/annum of HDPE/PP woven bags. Its registered office is in Mumbai. VREP CONSTRUCTION: CRISIL Cuts Rating on INR0.5MM Loan to 'C' ------------------------------------------------------------- CRISIL has downgraded its ratings on the bank loan facilities of Vrep Construction and Consultants Private Limited (VCCPL) to 'CRISIL C/CRISIL A4' from 'CRISIL BB-/Stable/CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 4.5 CRISIL A4 (Downgraded from 'CRISIL A4+') Cash Credit 0.5 CRISIL C (Downgraded from 'CRISIL BB-/Stable') The downgrade reflects delays in servicing term debt owing to weak liquidity caused by stretch working capital cycle. Key Rating Drivers & Detailed Description Weakness * Delay in debt servicing: The company has delayed on the installments of its term loans due to its weak liquidity. The downgrade reflects delays in servicing term debt owing to weak liquidity caused by stretch working capital cycle Strengths * Extensive industry experience of promoter VCCPL with an established track record of around a decades. The company, started by Mr. S. Saikumar, Mechanical engineering with 25 years of experience and background for setting up of Industrial project for beverages, breweries, dairy, garments, soaps & detergents etc. Over a period, the company has established a strong relationship with major industry players such as Hindustan Coca-Cola beverages Pvt Ltd , Larsen And Toubro Limited , Mahle Engine Components India Private Limited. These clients have given repeat orders, which have enabled S. Saikumar company to grow in the size of INR25-30 crore over the past few years This has led to continuous increase in top line of the company with a CAGR of 32 per cent over the past three years ending March 31, 2016. VCCPL initially established as a partnership firm by Mr. S. Saikumar (Mechanical engineering with 25 years of experience and background for setting up of Industrial project for beverages, breweries, dairy, garments, soaps & detergents etc) in 2008 with registered office in Bangalore, Karnataka, was converted into a private limited company in 2012. The company undertakes civil works, mainly commercial and residential projects, from private players by bidding through tenders. The promoters of the company have over 25 years of experience in the construction industry. VCCPL is estimated to report profit after tax (PAT) of INR0.95 crore on net sales of INR31.01 core for fiscal 2017 and PAT of INR1.11 crore on net sales of INR28.85 crore in fiscal 2016. WINDSON CERAMIC: ICRA Withdraws B Rating on INR3.0cr Cash Loan -------------------------------------------------------------- ICRA has withdrawn the long-term rating of [ICRA]B, outstanding on the INR5.38 crore fund-based facilities of Windson Ceramic (WC). ICRA has also withdrawn the short-term rating of [ICRA]A4, outstanding on the INR1.00 crore non-fund-based facility of WC. Further, ICRA has also withdrawn its long-term rating of [ICRA]B and its short-term rating of [ICRA]A4 assigned to the INR1.12 crore unallocated limits of WC. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based-Cash Credit 3.00 [ICRA]B; Withdrawn Fund-based-Term Loan 2.38 [ICRA]B; Withdrawn Non-fund-based Bank Guarantee 1.00 [ICRA]A4; Withdrawn Unallocated limits 1.12 [ICRA]B/A4; Withdrawn Rationale The long-term and short-term ratings assigned to Windson Ceramic have been withdrawn at the request of the firm, based on the no- objection certificate provided by its banker. Formed in March 2013, Windson Ceramic (WC) is engaged in manufacturing of ceramic wall tiles at its production facility located at Morbi, Gujarat. The firm commenced commercial operations from October 27, 2013 and currently manufactures digitally printed ceramic wall tiles of two sizes 8" X 12" and 12"X12" with total installed capacity of ~5,000 boxes per day. The firm is promoted by ten partners who have experience in ceramic industry by way of their association with other related companies, with one of the partners having been associated with Johnson Tiles as an employee. * Forced Insolvency Taking India Deals to $80BB, Moelis Says ------------------------------------------------------------ Nupur Acharya and George Smith Alexander at Bloomberg News report that overseas fund managers and companies are tracking India's efforts to force its biggest defaulters into insolvency proceedings as interest in buying distressed assets grows, according to investment bank Moelis & Co. A dozen companies in sectors including steel, power and construction may become buyout targets after the Reserve Bank of India ordered lenders to take them to insolvency court and set in motion a timeline for them to devise a restructuring plan or face liquidation, Bloomberg says. The "finite" process under a 2016 law means some offshore investors may have the confidence to "take a shot" and bid for good-quality assets, said Manisha Girotra, chief executive for the India operations of Moelis, the investment bank founded by Kenneth Moelis, Bloomberg relays. "After they see a couple of test cases move smoothly, then you will probably see more interest," Bloomberg quotes Girotra as saying in an interview this month in Mumbai. "Let's see how these 12 pan out but, generally, the view is far more confident on these assets getting restructured today compared to seven months ago." According to Bloomberg, resolving India's $180 billion pile of stressed debt has become a priority for Prime Minister Narendra Modi as he struggles to kick-start capital spending in the private sector and create much-needed jobs. The central bank's list of 12 companies, which account for about $31 billion of soured loans, is said to include Essar Steel India Ltd., Bhushan Steel Ltd., Jyoti Structures Ltd, Jaypee Infratech Ltd. and ABG Shipyard Ltd., people familiar with the matter said earlier, Bloomberg discloses. Bloomberg says the National Company Law Tribunal has agreed to start insolvency proceedings against Essar Steel, Monnet Ispat & Energy Ltd., Jaypee Infratech and Bhushan Steel among others. A repayment plan must now be completed within 180 days, with a 90- day extension allowed, Bloomberg notes citing the Insolvency & Bankruptcy Code 2016. If a plan can't be agreed on or no plan is submitted, the companies will move into liquidation, the report says. "It is still early stage," Girotra said of the interest among global players, Bloomberg relays. "Initially there is always caution on whether this is going to go through, or how smooth it is going to be." She expects such stressed deals along with domestic consolidation in the financial services and fintech space to drive merger and acquisition volumes of around $70 billion to $80 billion this fiscal year, with some outbound purchases as well by pharmaceutical and technology firms, Bloomberg relays. Companies struggling to meet their debt obligations have pushed defaults on bonds and syndicated loans to a record of almost $2 billion so far this year, compared with $494 million for all of 2016, according to data compiled by Bloomberg. Ashok Wadhwa, group chief executive of Ambit Private Ltd., estimates that about 100 companies are stressed with debt of around three trillion rupees, Bloomberg reports. Even considering a 50 percent haircut for banks, there will be around $25 billion of deals over the next three years, he said. "It's a significant new business opportunity," Bloomberg quotes Wadhwa, who leads a home-grown investment bank, as saying. "A lot of these assets are in the infrastructure space. Pension funds, infrastructure funds and sovereign funds are likely to bid along with Indian companies." A joint venture set up by Bain Capital Credit and Indian conglomerate Piramal Enterprises Ltd. expects to complete two stressed-asset deals before March 31, Piramal Group Chairman Ajay Piramal said Aug. 1, according to Bloomberg. Investors including Canadian pension fund Caisse de depot et placement du Quebec, TPG and KKR & Co have also shown interest in investing in such assets, the report notes. ========= J A P A N ========= TOSHIBA CORP: Enter Talks With Western Digital on Memory Sale ------------------------------------------------------------- Nikkei Asian Review reports that Toshiba Corp. has begun negotiations with business partner Western Digital in hopes of reaching an agreement this month to sell its flash memory arm and salvage a vital part of its turnaround plans. A consortium including Western Digital, Kohlberg Kravis Roberts of the U.S., the public-private Innovation Network Corp. of Japan and the state-backed Development Bank of Japan has tendered a roughly JPY1.9 trillion ($17.3 billion) bid for Toshiba Memory, Nikkei relates. The American hard-drive manufacturer would contribute hundreds of billions of yen in funding without initially receiving voting rights. Its plan is to take a stake of less than 20% after the deal clears antitrust reviews. Nikkei says the Western Digital camp is expected to complete due diligence on the memory unit as early as next week. Toshiba aims to sign a final deal after getting the board's blessing at a meeting this month. But talks could hit an impasse if the two sides cannot agree on terms. If negotiations fall through, Toshiba will consider other options to get back on its feet, such as a capital increase, Nikkei relates. Western Digital, which invests in chip fabrication facilities in Japan with Toshiba, has locked horns with its partner over the Toshiba Memory sale since the plan came to light early this year, according to Nikkei. The American company filed a request for arbitration in May seeking to block the sale, arguing that any transfer of the unit without its consent would violate joint- venture agreements. The ensuing legal wrangling has soured relations. Yet the risk of an injunction against the sale has stymied progress on talks with Toshiba's original preferred bidder, an American-Japanese-South Korean consortium, and Western Digital is starting to feel the impact of the dispute on its chip business, Nikkei says. The two sides have been left with little choice but to try burying the hatchet. Western Digital told Toshiba earlier this month that the arbitration request will be withdrawn if a deal is reached. According to Nikkei, Toshiba President Satoshi Tsunakawa informed lenders this month that his company will prioritize talks with the Western Digital-KKR team. Representatives from Western Digital arrived in Japan this week and are now holding talks with counterparts from Toshiba and other related parties. Toshiba will likely demand that engineers and other employees be kept on as a condition of any sale. Nikkei says the DBJ and the INCJ are currently part of the three- country consortium, which also includes Bain Capital of the U.S. and South Korean chipmaker SK Hynix. But they are likely to team up with whichever group offers the best prospects for an early sale, at the behest of the Ministry of Economy, Trade and Industry. The two intend to jump ship to Western Digital's camp if the company reaches an accord with Toshiba. Once a buyer is chosen, antitrust reviews are expected to take six to nine months, Nikkei notes. Toshiba hopes to complete the sale within the fiscal year ending March 2018 in order to return its shareholders' equity to positive territory after crippling losses on U.S. nuclear operations -- a must for staying on the Tokyo Stock Exchange, says Nikkei. About Toshiba Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is a Japan-based manufacturer involved in five business segments. The Digital Products segment offers cellular phones, hard disc devices, optical disc devices, liquid crystal televisions, camera systems, digital versatile disc (DVD) players and recorders, personal computers (PCs) and business phones, among others. The Electronic Device segment provides general logic integrated circuits (ICs), optical semiconductors, power devices, large- scale integrated (LSI) circuits for image information systems and liquid crystal displays (LCDs), among others. The Social Infrastructure segment offers various generators, power distribution systems, water and sewer systems, transportation systems and station automation systems, among others. The Home Appliance segment offers refrigerators, drying machines, washing machines, cooking utensils, cleaners and lighting equipment. The Others segment leases and sells real estate. As reported in the Troubled Company Reporter-Asia Pacific on June 19, 2017, S&P Global Ratings said it has kept its 'CCC-' long-term and 'C' short-term ratings on 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. TOSHIBA CORP: Treading on Thin Ice, Leiko Tells Clients ------------------------------------------------------- Toshiba have been put in the spot light after much controversy as the company narrowly avoided delisting from the Tokyo Stock Exchange (TYO) for delaying its financial results, noted Leiko Tokyo Securities. With the company's financial future still uncertain and a lack of capital at hand, the company has not advanced in talks with the sale of its 'chips unit business' for the financial resources it so desperately needs to stay afloat. Leiko Tokyo Securities reported to its clients that the 140 year old company is treading on thin ice in regards to coming closer to a delisting. The Tokyo Stock Exchange triggers a company to drop of its exchange once a company has recorded a negative net worth and its liabilities over grow its assets for more than two years in a row. Toshiba have been battling to win approval over its shareholders as it lost trust over the last few years. Having inflated its profits within the last few years and a dispute between PwC that highlighted that some of its losses that were booked in the business year of 2017 should have been recorded in its previous year, Toshiba disagreed. "Toshiba's long-term prospectives are fading, the company needs to find an injection of capital to sustain the heavy losses," said Koyasu Oda who heads up the research depatment at Leiko Tokyo Securities. Its flash memory department recorded significant growth accounting for over 90% of its sales at 96 billion yen compared to the previous year at only 16 billion yen, showing the big leap. With Toshiba looking to sell its semiconductor division, many companies have been mentioned yet nothing has come off it. About Leiko Tokyo Securities (LTS) Founded in 2007, Leiko Tokyo Securities is a leading wealth management firm based in Tokyo, Japan. Today Leiko Tokyo Securities manage over 12.4 billion in assets under management. 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 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 ==================== CAVALIAR CORP: Warns of Breaching Bank Covenants ------------------------------------------------ Chris Hutching at Stuff.co.nz reports that Cavalier Corp. said a repeat of the past year's poor performance raised the risk it might breach banking covenants. According to the report, Chief executive Paul Alston said that over for the next 12 months the company will keep a tighter rein on spending, reduce stock, and debt. Cavalier was hit by a "dramatic drop" in wool prices, caused by reduced demand from China, Stuff says. It affected wool buying subsidiary Elco Direct as farmers and traders held onto wool in the hope prices would rise. The performance was reflected in the share price which has fallen from 90 cents a share a year ago to 30c, according to Stuff. Australian sales, accounting for 60 per cent of sale, were also down, the profitability of scouring was "hit hard", and bank debt rose, Mr. Alston said, Stuff relays. But Mr. Alston said the NZ$1.86 million after tax loss partly reflected the amount of restructuring over the past 12 months in the Christchurch, Wanganui and Napier factories, paving the way for growth, relates Stuff. The effect of falling sales was evident in the fall in revenue from NZ$190 million in 2016 to NZ$156m for the year ending June 2017, the report discloses. Cavalier's woollen felted production, initially manufactured in Christchurch, was struggling to meet increasing demand particularly from the Australian market. The felted yarn facility was relocated from Christchurch to Wanganui. Stuff quotes Mr. Alston as saying that: "While the decision to consolidate was necessary, it proved to be more costly than estimated and took longer. "Redundancy and plant relocation expenses were in-line with expectations, but the inefficiencies and disruption inherent in a major rationalisation took longer to be eliminated, affecting sales. "The rationalisation regrettably affected production of woollen ranges and therefore the company's ability to meet our customers' demand and our sales targets. "This was particularly apparent in the Australian market where we sell a higher proportion of woollen carpets." Mr. Alston said restructuring was largely completed and he forecast operational improvements. In recent weeks, general manager New Zealand sales Warren Drinkwater resigned after 15 years, and Sarah Hipkiss resigned from her position as chief financial officer, adds Stuff. ================= S I N G A P O R E ================= NAM CHEONG: To Default on Bond Coupon, Principal Payments --------------------------------------------------------- Marissa Lee at The Strait Times reports that ailing Malaysian shipbuilder Nam Cheong has confirmed that it will default on the SGD2.25 million coupon and SGD90 million principal owed to the holders of its Series 002 bonds on Aug. 28. Nam Cheong will also fail to pay the SGD5 million coupon owed to holders of its SGD200 million Series 003 bonds, which is due on Aug. 26, The Strait Times relates. According to the report, Nam Cheong said in a bourse filing on Aug. 23 that although these bonds are secured by deposits equivalent to two coupon payments each for the Series 002 and Series 003 bonds which are held in an escrow account by DBS Trustee, the company is still in communication with DBS Trustee. However, Series 004 bond holders have been slightly more fortunate. Nam Cheong said that it had on Aug. 1 paid the coupon owed to holders of its SGD75 million Series 004 bonds, the report says. This amount - SGD2.44 million originally due on July 23 - had been paid out of the deposit in the escrow account for the Series 004 bonds. The Strait Times meanwhile reports that an informal steering committee comprising nine bondholders has been formed to facilitate meetings with Nam Cheong. Rajah & Tann has been engaged to advise this committee. The Strait Times relates that Nam Cheong said it intends to hold discussion groups with bondholders commencing this week. Trading of Nam Cheong shares were suspended last month, after it said it wanted to "temporarily cease" all debt repayments in a final bid to conserve cash and avoid liquidation, according to The Strait Times. Nam Cheong Ltd is an investment holding company. The Company and its subsidiaries operate as an offshore marine company. It operates through two segments: Shipbuilding and Vessel chartering. The Company's business is the construction and supply of offshore support vessels (OSVs) used in the offshore oil and gas exploration and production, and oil services industries, including safety standby vessels, anchor handling tug supply (AHTS) vessels, accommodation work barges and maintenance work vessels. AHTS vessels are designed to provide anchor handling for offshore drilling rigs, tow offshore drilling rigs, barges and other types of OSVs. Accommodation Work Barges are vessels designed to house and accommodate crew. Maintenance Work Vessel are vessels designed as a platform for the loading and unloading of cargo. Platform Supply Vessel is designed for the transportation of supplies and equipment to and from offshore oil and gas support production platforms and offshore drilling rigs. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman, Editors. Copyright 2017. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. 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