/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/170928.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, September 28, 2017, Vol. 20, No. 193 Headlines A U S T R A L I A FAST TRACK: Second Creditors' Meeting Set for Oct. 5 LAUNCH ELECTRICAL: Second Creditors' Meeting Set for Oct. 5 MAKIN & LUBY: Second Creditors' Meeting Set for Oct. 6 MATHIESON FAMILY: Second Creditors' Meeting Set for Oct. 5 MEAT-TING PLACE: First Creditors' Meeting Set for Oct. 6 MEDIA MOVERS: First Creditors' Meeting Set for Oct. 6 C H I N A CHINA METALLURGICAL: Moody's Raises BCA to Ba1; Outlook Stable GREENLAND HOLDING: S&P Lowers Guaranteed Notes Rating to 'BB-' HYDOO INT'L: Proposed Asset Disposal No Impact on Moody's B2 CFR JIAYUAN INTERNATIONAL: Moody's Assigns B2 CFR; Outlook Stable YUZHOU PROPERTIES: Moody's Rates Proposed USD Sr. Notes B1 I N D I A 134 INFRA: Ind-Ra Assigns 'BB+' Issuer Rating, Outlook Stable ADVANCE INFRASTRUCTURES: Ind-Ra Assigns 'B' Issuer Rating AKHAND JYOTI: CRISIL Reaffirms B+ Rating on INR1MM Loan AMRAPALI INFRASTRUCTURE: NCLT Admits Insolvency Proceedings B. SAMAYAKK: CARE Reaffirms B+ Rating on INR10cr LT Loan BABA BHUBANESWAR: CARE Assigns B Rating to INR8.13cr LT Loan BAIT LOGITECH: CRISIL Reaffirms B+ Rating on INR5.5MM Cash Loan BANSHIDHAR CONSTRUCTION: CRISIL Reaffirms B+ on INR8.75M Loan CHANDRAKONA COLD: Ind-Ra Affirms B Issuer Rating; Outlook Stable CLAVECON (INDIA): Ind-Ra Assigns B+ Issuer Rating, Outlook Stable CUTTACK RESINS: Ind-Ra Assigns 'B' Issuer Rating, Outlook Stable DHAN LAXMI: CRISIL Reaffirms B+ Rating on INR5MM Term Loan DINODIA EDUCATIONAL: CRISIL Reaffirms 'D' Rating on INR12MM Loan EMBEE AGRO: Ind-Ra Assigns 'BB-' Issuer Rating, Outlook Stable EUROKON GLOBAL: CRISIL Reaffirms B+ Rating on INR15MM Cash Loan GARG GRANITES: Ind-Ra Moves 'B+' Issuer Rating to Non-Cooperating GAUTAMBUDH CARS: CARE Assigns B Rating to INR15cr LT Loan IDT CLOTHING: Ind-Ra Moves 'B+' Issuer Rating to Non-Cooperating INNOVATIVE INFRA: CRISIL Reaffirms 'D' Rating on INR17.8MM Loan JAYDEEP TUBES: Ind-Ra Moves 'B+' Issuer Rating to Non-Cooperating KALPATARU COLD: Ind-Ra Moves 'D' Issuer Rating to Non-Cooperating KANACHUR ISLAMIC: CARE Assigns B Rating to INR140cr LT Loan KP PACKAGING: Ind-Ra Migrates D Issuer Rating to Non-Cooperating KRISHNA COTTON: CARE Assigns B+ Rating to INR8.50cr LT Loan MAGNUM AVIATION: CARE Lowers Rating on INR13.50cr ST Loan to D NAND ENTERPRISE: CARE Assigns B+ Rating to INR6.50cr LT Loan NHC FOODS: Ind-Ra Lowers Issuer Rating to BB+ Not Cooperating PLANET PR: CRISIL Reaffirms 'B' Rating on INR8MM Cash Loan PRAFULLYA COLD: Ind-Ra Moves 'D' Issuer Rating to Non-Cooperating RAM COIR MILLS: Ind-Ra Moves B+ Issuer Rating to Non-Cooperating RAYBAN FEEDS: CRISIL Reaffirms 'D' Rating on INR12MM Cash Loan RELIANCE COMMUNICATIONS: NCLT Moves Ericsson's Bid Hrg. to Oct. 6 S. RASIKLAL: CRISIL Reaffirms 'D' Rating on INR15.75MM Loan SEAGULL TRUST II: Ind-Ra Assigns Prov B+ Rating on Series A2 PTCs SENGUPTA MOTORS: CARE Assigns B+ Rating to INR5.80cr LT Loan SHARMA CONSTRUCTION: CARE Moves B+ Rating to Not Cooperating SHREE BALAJI: CARE Moves 'D' Rating to Not Cooperating Category SHREE KRISHAN: Ind-Ra Affirms 'BB' Issuer Rating, Outlook Stable SHIRISH HOTELS: CARE Assigns B+ Rating to INR13.35cr LT Loan SPRAY ALCANS: CRISIL Reaffirms D Rating on INR5.2MM Term Loan SRI KAVERI: CARE Reaffirms B+ Rating on INR15.55cr LT Loan SRI LAXMI: CARE Lowers Rating on INR6cr LT Loan to 'D' STEEL & METAL: Ind-Ra Affirms 'B+' Issuer Rating, Outlook Stable VASHU YARN: CRISIL Assigns 'D' Rating to INR9.32MM Cash Loan VISAKHA TRADES: Ind-Ra Affirms 'B+' Issuer Rating, Outlook Stable ZEARS DEVELOPERS: CARE Cuts Rating on INR25cr LT Loan to B+ I N D O N E S I A INDIKA ENERGY: Moody's Puts B2 CFR on Review for Upgrade J A P A N TOSHIBA CORP: WD to Block Chip Unit Sale to Bain-led Group N E W Z E A L A N D SKY TELEVISION: To Close Fatso DVD Rental Business on Nov. 23 WINDFLOW TECHNOLOGY: Henderson to Step Down as CEO P H I L I P P I N E S WORLD PARTNERS: Creditors Have Until Nov. 9 to File Claims S I N G A P O R E FALCON ENERGY: Notes Maturity Date Extended by 3 Years SWISSCO HOLDINGS: Judicial Management Orders Extended to March 18 - - - - - ================= A U S T R A L I A ================= FAST TRACK: Second Creditors' Meeting Set for Oct. 5 ---------------------------------------------------- A second meeting of creditors in the proceedings of Fast Track Engineering Pty Ltd has been set for Oct. 5, 2017, at 11:00 a.m., at Level 27, 259 George Street, in Sydney. The purpose of the meeting are (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Oct. 4, 2017, at 4:00 p.m. Henry Mckenna and Trent Andrew Devine of Jirsch Sutherland were appointed as administrators of Fast Track on Aug. 30, 2017. LAUNCH ELECTRICAL: Second Creditors' Meeting Set for Oct. 5 ----------------------------------------------------------- A second meeting of creditors in the proceedings of Launch Electrical Services Pty Ltd has been set for Oct. 5, 2017, at 10:30 a.m., at the offices of Cor Cordis Chartered Accountants 'One Wharf Lane', Level 20, 161 Sussex Street, in Sydney. The purpose of the meeting are (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Oct. 4, 2017, at 4:00 p.m. Ozem Kassem and Alan Walker of Cor Cordis Chartered Accountants were appointed as administrators of Launch Electrical on Sept. 22, 2017. MAKIN & LUBY: Second Creditors' Meeting Set for Oct. 6 ------------------------------------------------------ A second meeting of creditors in the proceedings of Makin & Luby Pty Ltd has been set for Oct. 6, 2017, at 3:30 p.m., at the offices of Grant Thornton Australia Limited, The Rialto, Level 30 525 Collins Street, in Melbourne, Victoria. The purpose of the meeting are (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Oct. 5, 2017, at 4:00 p.m. Andrew Hewitt and Matthew Byrnes of Grant Thornton were appointed as administrators of Makin & Luby on Sept. 25, 2017. MATHIESON FAMILY: Second Creditors' Meeting Set for Oct. 5 ---------------------------------------------------------- A second meeting of creditors in the proceedings of Mathieson Family Enterprises Pty Ltd has been set for Oct. 5, 2017, at 10:00 a.m., at the offices of BPS Reconstruction and Recovery Suite 6, Level 5, 350 Collins Street, in Melbourne. The purpose of the meeting are (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Oct. 4, 2017, at 4:30 p.m. Simon Patrick Nelson of BPS Reconstruction and Recovery were appointed as administrators of Mathieson Family on Sept. 7, 2017. MEAT-TING PLACE: First Creditors' Meeting Set for Oct. 6 -------------------------------------------------------- A first meeting of the creditors in the proceedings of The Meat- Ting Place Organics Pty Ltd will be held at the offices of SV Partners, SV House, 138 Mary Street, in Brisbane, Queensland, on Oct. 6, 2017, at 10:30 a.m. Terrence John Rose at SV Partners was appointed as administrator of The Meat-Ting Place on Sept. 25, 2017. MEDIA MOVERS: First Creditors' Meeting Set for Oct. 6 ------------------------------------------------------ A first meeting of the creditors in the proceedings of Media Movers Pty Ltd will be held at Gateway Building, Level 36, 1 Macquarie Place, in Sydney, on Oct. 6, 2017, at 10:00 a.m. Andrew Peter Schwarz -- andrew@asadvisory.com.au -- and Matt John Adams of AS Advisory were appointed as administrators of Media Movers on Sept. 25, 2017. ========= C H I N A ========= CHINA METALLURGICAL: Moody's Raises BCA to Ba1; Outlook Stable -------------------------------------------------------------- Moody's Investors Service has upgraded the issuer ratings of China Metallurgical Group Corporation (CMGC) and its key subsidiary, Metallurgical Corporation of China Ltd. (MCC) to Baa1 from Baa2. Moody's has also raised CMGC's baseline credit assessment (BCA) to ba1 from ba2. At the same time, Moody's has upgraded the backed senior unsecured rating on the bonds issued by MCC Holding (Hong Kong) Corporation Limited and guaranteed by MCC to Baa1 from Baa2. The ratings outlook is stable. RATINGS RATIONALE "The upgrades reflect Moody's expectations that CMGC's financial leverage will continue to improve on a sustained basis over the next 12-18 months, supported by a robust order backlog, cost control measures and deleveraging efforts," says Chenyi Lu, a Moody's Vice President and Senior Credit Officer. "These factors will translate into steady revenue growth, improved earnings and reduced debt levels," adds Lu. Moody's expects that CMGC's revenue will increase by more than 6% over the next 12-18 months, on the back of its robust order backlog at end-June 2017. The company's adjusted EBITDA margin will also improve to 9.2%- 9.3% over the same period from 8.8% in 2016, underpinned by its continued focus on its profitable construction businesses and real-estate development, and on expense and cost control measures. In addition, Moody's expects that CMGC's adjusted debt will fall gradually over the next 1-2 years from RMB139 billion at end-June 2017, driven by: (1) higher earnings, better working capital management and lower capital expenditure, which together should result in positive free cash flow for debt repayment; (2) management's plan to utilize part of the high cash balance on hand to repay debt; and (3) its moderate investment needs. CMGC's financial leverage - as measured by adjusted debt/EBITDA - will fall to about 4.5x-5.0x over the next 12-18 months from 6.3x in 2016; a situation which supports the raising of its BCA. Moody's projects a similar improving credit trend for CMGC's core subsidiary, MCC, due to the fact that the credit profiles of CMGC and MCC are closely linked. MCC accounts for more than 90% of the parent group's revenue, adjusted EBITDA, assets and 90% of CMGC's adjusted debt. As a result, MCC's rating and outlook mirror those of CMGC. CMGC's Baa1 issuer rating incorporates its BCA of ba1 and a three- notch uplift based on Moody's assessment of a high level of support for the company from its owner - the Chinese government (A1 stable) - in times of need. This high support assessment is underpinned by CMGC's key role in the renovation and upgrade of steel plants in the domestic steel industry, its importance to the development of the construction industry in China, its 100% government ownership, and the track record of government support for the company. It also factors in the Chinese government's strong ability to provide support, as reflected by the sovereign's A1 rating. Moody's notes that CMGC will become a core subsidiary of China Minmetals Corporation (Baa1 negative) - after CMGC completes its business registration to change its shareholder from the State Council of China to China Minmetals - because of the proposed merger of these two central state-owned-enterprises in December 2015. Nevertheless, Moody's expects that central government support for CMGC will continue be provided directly to CMGC or flow through from its future parent, China Minmetals, based on CMGC's highly strategic importance to China Minmetals and the Chinese government. CMGC accounted for 52%, 56% and 51% of China Minmetals' revenue, adjusted EBITDA, and assets, respectively, in 2016. CMGC's BCA - which is mainly supported by MCC's standalone credit profile - reflects its: (1) Track record, strong market position and large operating scale in the Chinese engineering and construction (E&C) sector, particularly in the construction of steel plants; (2) Expansion into non-metallurgical construction, including the building, transportation and infrastructure construction sectors, which helps reduce the impact of the mature metallurgical construction sector; and (3) Good access to the domestic banks and capital market financing. On the other hand, CMGC's BCA is constrained by: (1) its exposure to the pressured steel sector; and (2) the execution and financial risks associated with its large E&C and overseas mining projects. The stable outlook on CMGC's rating incorporates Moody's expectations over the next 12-18 months that: (1) CMGC's credit metrics will be maintained at levels that are appropriate for its BCA; and (2) its important role in the country's metallurgical and construction sectors and the Chinese government's ability to support the company will remain intact, with the latter reflected by the stable outlook on the sovereign's rating. CMGC's issuer rating is unlikely to be upgraded in the near term, given its stable rating outlook, which already factors in the likely strengthening of CMGC's financial profile. The rating could be upgraded over time if CMGC's BCA improves significantly, underpinned by steady revenue growth, stable profitability and debt reductions, such that adjusted debt/EBITDA falls below 3.5x-4.0x on a sustained basis. A sovereign upgrade will unlikely trigger a rating upgrade for CMGC, if the company's BCA does not improve, because Moody's government support assessment for CMGC is at the high end among Moody's-rated central state-owned-enterprises in the Chinese construction industry. An upgrade of CMGC's rating will trigger an upgrade of MCC's rating. CMGC's rating will be downgraded if Moody's lowers the company's BCA - because of a material deterioration in its business or financial profile - absent any material changes in the support assessment. Credit metrics indicative of downward pressure on CMGC's BCA include a weakening in its order backlog, lower profitability and/or an increase in debt, such that adjusted debt/EBITDA fails to trend below 5.0x-5.5x over the next two years. A downgrade of CMGC's rating, without a change in its BCA, could also be triggered by a weakening of Moody's government support assessment for the company, either directly or via its future parent, China Minmetals, due to its weakened strategic importance. A downgrade of CMGC will trigger a downgrade of MCC's rating. The principal methodologies used in rating China Metallurgical Group Corporation were Construction Industry published in March 2017, and Government-Related Issuers published in August 2017. The principal methodology used in rating Metallurgical Corporation of China Ltd. and MCC Holding (Hong Kong) Corporation Limited was Construction Industry published in March 2017. China Metallurgical Group Corporation (CMGC) is engaged in the business of engineering and construction, equipment manufacturing, property development, and resources development. Headquartered in Beijing, CMGC is a central state-owned enterprise wholly owned by the State Council of China, and supervised by the State-owned Assets Supervision and Administration Commission. Metallurgical Corporation of China Ltd. - which is about 59.18% owned by CMGC - is a core subsidiary of CMGC and accounted for 98%, 99%, 97% and 90% of CMGC's revenue, adjusted EBITDA, assets and reported debt, respectively, in 2016. GREENLAND HOLDING: S&P Lowers Guaranteed Notes Rating to 'BB-' -------------------------------------------------------------- S&P Global Ratings said that it has reviewed its senior unsecured issue-level ratings for Greenland Global Investment Ltd. that were labeled as "under criteria observation" (UCO) after publishing its revised issue ratings criteria, "Reflecting Subordination Risk In Corporate Issue Ratings" on Sept. 21, 2017. S&P said, "With our criteria review complete, we are removing the UCO designation and are lowering our issue rating to 'BB-' from 'BB' on the senior unsecured notes issued by Greenland Global Investment and guaranteed by its parent, Greenland Holding Group Co. Ltd. (BB/Negative/--)." S&P said, "This rating action stems solely from the application of our revised issue rating criteria and does not reflect any change in our assessment of the corporate credit ratings for the issuer of the affected debt issue. "Our rating action takes into consideration Greenland Holding Group's capital structure. This consists of Chinese renminbi (RMB) 116 billion of secured debt and RMB62 billion unsecured debt issued or guaranteed by Greenland Holding Group, and RMB117 billion of unsecured debt issued or guaranteed by the company's operating subsidiaries, as of June 30, 2017. "We have therefore arrived at the following analytical conclusion: The senior unsecured notes issued by Greenland Global Investment Ltd. are rated a notch below the corporate credit rating of Greenland Holding Group (guarantor), reflecting significant subordination of this senior unsecured debt relative to other debt in the issuer's consolidated capital structure." HYDOO INT'L: Proposed Asset Disposal No Impact on Moody's B2 CFR ---------------------------------------------------------------- Moody's Investors Service says that Hydoo International Holding Limited's (B2 negative) proposed disposal of its entire 84% ownership in Xingning Hydoo Trade Logistics Centre Limited will not immediately affect Hydoo's B2 corporate family rating, B3 senior unsecured ratings or the negative outlook on the ratings. On September 20, 2017, Hydoo announced that it had agreed to sell its entire 84% interest in Xingning Trade Center to an independent third party - Shenzhen Ruihefeng Industrial Limited - for RMB489 million. Xingning Trade Center holds Hydoo's trade center project in Xingning city, with a land bank of around 1.2 million sqm in gross floor area (GFA) as of June 30, 2017. "While the project to be disposed of represented around 10% of Hydoo's total land bank as of June 30, 2017, the impact of the impending sale on the company's contracted sales and credit metrics will not be material over the next 1-2 years," says Kaven Tsang, a Moody's Vice President and Senior Credit Officer. The Xingning trade center project generated around 11% of Hydoo's contracted sales in 2016, but its contribution will fall to below 5% of target sales in 2017. Its contribution to Hydoo's revenues will also be less than 10% in 2017. While the disposal will provide Hydoo with additional liquidity, Moody's expects that Hydoo will use the proceeds to fund its operations and new business opportunities rather than debt repayment. As a result, Hydoo's financial metrics will remain weak over the next 12-18 months. The weak metrics are a result of the company's low level of contracted sales, against the backdrop of slower economic growth in China (A1 stable). Hydoo's weak credit profile is consistent with the company's negative ratings outlook. Moody's expects that Hydoo's revenue/adjusted debt will fall to around 45%-50% over the next 12-18 months from 52.1% for the 12 months to June 30, 2017, and its EBIT/interest will worsen to around 1.3x from 1.8x over the same period. Hydoo's B2 corporate family rating continues to reflect its track record of developing trade centers in low-tier Chinese cities, tempered by the challenges of: (1) the inherent business volatility associated with the company's business model; (2) its small scale; and (3) its high leverage. The principal methodology used in these ratings was Homebuilding And Property Development Industry published in April 2015. Established in 2010, Hydoo International Holding Limited is a Chinese property developer that specializes in developing and operating trade centers in low-tier cities in China. As of June 30, 2017, it had a land bank of about 11.4 million square meters in GFA. The company listed on the Hong Kong Stock Exchange in October 2013, and was 52% owned by the Wang family as of June 30, 2017. JIAYUAN INTERNATIONAL: Moody's Assigns B2 CFR; Outlook Stable ------------------------------------------------------------- Moody's Investors Service has assigned a first-time B2 corporate family rating to Jiayuan International Group Limited. The rating outlook is stable. RATINGS RATIONALE "Jiayuan's B2 rating reflects its established track record in its core markets -- Nanjing, Yangzhou and Taixing -- in Jiangsu Province, low-cost land bank, and focus on mass-market housing, as well as management's demonstrated abilities in identifying quality land," says Kaven Tsang, a Moody's Vice President and Senior Credit Officer. These strengths will support the company's execution of its business growth plan and provide it with pricing flexibility, if the property markets in Jiangsu Province weaken. Jiayuan has kept its unit land acquisition cost at below 20% of its average selling price over the past three years, supporting a high gross margin of 34% in 2016. Its strategy of focusing on mass-market housing and end-users would also lower the company's exposure to the risk of regulatory controls targeting investors. Jiayuan achieved a strong 67% year-on-year growth in contracted sales to RMB4.8 billion in the first eight months of 2017 after showing 21.6% year-on-year growth in 2016. "Jiayuan's rating is also constrained by its small operating scale, high geographic concentration in Jiangsu Province, the execution risks associated with its fast growth plan in the next 1-2 years, and its weak liquidity," adds Tsang, also Moody's lead analyst for Jiayuan. Its small and Jiangsu-centric operation mean that the company's business performance is highly dependent on the sales and completion of a small number of key projects, as well as the state of housing demand, the availability of bank credit, and the regulatory environment in Jiangsu Province. Moody's notes that Jiayuan's four major markets -- Nanjing, Taixing, Nantong and Yangzhou in Jiangsu -- accounted for more than 80% of the company's contracted sales in the first seven months of 2017. Additionally, the company has a high exposure to low-tier cities (cities other than Nanjing and Yangzhou) in Jiangsu, which accounted for around 74% of its land bank as of June 2017. Moody's believes the availability of bank credit in low-tier cities will be more affected than major cities if the banks tighten lending to the property sector, which in turn will affect the company's sales. While Jiayuan's expansion into new cities -- Shenzhen, Hainan and Macau -- will gradually improve its geographic diversification, the fast pace of expansion and the entry into multiple cities in a short time frame entail execution risks and high funding needs. Moody's expects Jiayuan's leverage will rise as a result, with projected revenue/adjusted debt falling to 45%-50% at the end of 2017 from 60% at the end of June 2017 and 58% at the end of December 2016 due to its debt-funded growth. But the ratio will recover to around 55% by the end of 2018 when the company's revenues increase, supported by its higher contracted sales. Moody's also expects the high profit margin and lower funding costs after its IPO in 2016 will partly mitigate the effect of higher borrowings. As a result, Jiayuan's projected EBIT/interest will stay at 2.6x-3.0x in the next 12-18 months, versus 2.9x for the 12 months ended June 2017 and 2.4x in 2016. Nevertheless, Moody's believes Jiayuan's projected financial metrics are appropriate for its B2 CFR. Jiayuan has to seek new financing to support its liquidity. Its cash holding of RMB3.3 billion at the end of June 2017 is insufficient to cover payments of RMB4.8 billion for its committed land acquisitions and the high refinancing needs for its short- term debt of RMB2.2 billion. On the other hand, Moody's notes that Jiayuan's cash/short-term debt coverage strengthened to 1.6x at the end of June 2017 from 0.4x at the end of 2016 due to its growing contracted sales and equity issuance in June 2017. Its cash holding was RMB1.4 billion at the end of 2016. Jiayuan's stable rating outlook reflects Moody's expectations that (1) the company will grow sales as planned, and (2) it will adjust its speed of expansion in accordance with market conditions and maintain adequate liquidity by improving its funding channels and strengthening its banking relationships both onshore and offshore. Upward rating pressure could emerge if Jiayuan (1) materially grows its scale and geographic coverage with financial discipline; (2) builds up its brand in new locations outside its home market; (3) maintains strong liquidity with cash/short-term debt coverage of over 1.5x, and (4) improves its financial metrics with EBIT/interest coverage consistently above 3.0x and revenue/adjusted debt over 70%-75% on a sustained basis. Downward rating pressure could emerge if (1) Jiayuan's liquidity profile weakens materially; (2) contracted sales or revenue fall short of Moody's expectations or profit margins substantially decline, which in turn affects interest coverage and financial flexibility; or (3) the company engages in material debt-funded acquisitions. Metrics indicative of downward rating pressure include Jiayuan's cash falling below 1x of short-term debt, or the company's EBIT/interest coverage weakening below 1.5x on a sustained basis. The principal methodology used in these ratings was Homebuilding And Property Development Industry published in April 2015. Jiayuan International Group Limited develops mass-market residential properties mainly in Jiangsu Province. The company had a total land bank of around 6.9 million square meters (sqm) across 11 cities at the end of June 2017. Mr. Shum Tin Ching is the chairman, holding a 60.81% stake as of June 2017. YUZHOU PROPERTIES: Moody's Rates Proposed USD Sr. Notes B1 ---------------------------------------------------------- Moody's Investors Service has assigned a B1 senior unsecured rating to Yuzhou Properties Company Limited's (B1, positive) proposed USD senior perpetual capital securities. The perpetual securities will be issued directly by Yuzhou and rank pari passu with all other present and future senior obligations of Yuzhou. Yuzhou plans to use the proceeds of the new USD notes issuance to refinance existing debt and for general working capital purposes. RATINGS RATIONALE "The proposed perpetual securities will extend Yuzhou's debt maturity profile and will not have a material impact on its credit metrics, as the proceeds will mainly be used to refinance existing debt," says Chris Wong, a Moody's analyst. Moody's views the proposed perpetual securities as pure debt instruments and accordingly does not apply any equity treatment to these securities. Yuzhou's B1 corporate family rating reflects the company's growing operating scale, supported by its good sales performance over the past one to two years. The rating is further supported by Yuzhou's increasing geographic diversification beyond its home market of Xiamen. The rating also takes into account the company's above-peer- average profitability and strong liquidity profile. However, the rating is tempered by the company's moderately high debt leverage (as measured by revenue/adjusted debt) for its rating. The positive outlook on Yuzhou's B1 rating reflects Moody's expectation that Yuzhou's debt leverage will improve over the next two years, based upon the assumption that the company can contain the growth in its debt, slow its land acquisitions and maintain its sales growth over the next two years. Upward rating pressure for the company's corporate family rating could emerge if Yuzhou: (1) achieves sustainable contracted sales growth, (2) reduces its debt leverage by controlling its appetite for land acquisitions while ramping up revenue recognition, or (3) maintains high profit margins, strong liquidity and interest coverage. Credit metrics indicative of upward rating pressure include revenue/adjusted debt above 70%-75% and EBIT/interest coverage above 3.0x-3.5x on a sustained basis. On the other hand, the ratings outlook could return to stable if: (1) Yuzhou posts slower-than-expected growth in contracted sales and revenue, (2) it shows a strong appetite for land acquisitions, or (3) its credit metrics are unlikely to reach upgrade levels over the medium term. Metrics indicative of such a situation include EBIT/interest coverage below 3.0x and/or revenue/adjusted debt below 65%-70%. The rating could also be affected if Moody's assessment of subordination risk on the company's senior unsecured debt rating changes as a result of the proposed introduction in Moody's rating methodology of specific guidance on structural subordination. The principal methodology used in this rating was Homebuilding And Property Development Industry published in April 2015. Yuzhou Properties Company Limited is a property developer that focuses on residential housing in the West Strait Economic Zone and Yangtze River Delta. The company moved its headquarters to Shanghai from Xiamen in 2016. At end-July 2017, it had a land bank of over 10.1 million square meters in terms of total saleable gross floor area. ========= I N D I A ========= 134 INFRA: Ind-Ra Assigns 'BB+' Issuer Rating, Outlook Stable ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned 134 Infra a Long- Term Issuer Rating of 'IND BB+'. The Outlook is Stable. The instrument-wise rating action is: -- INR1,210 mil. Proposed term loan* assigned with Provisional IND BB+/Stable rating. * The rating is provisional and shall be confirmed upon the sanction and execution of loan documents for the above facilities by 134 Infra to the satisfaction of Ind-Ra. KEY RATING DRIVERS The ratings reflect a high finance risk faced by 134 Infra. The finance risk is high as the firm is yet to receive a sanction for an INR1,210 million term loan for CASA RIVERA, a 0.85-million- square-foot residential space on the Pal-Hazira Road in Surat. It has received an in-principle sanction. The project cost is estimated at about INR2,900 million. Moreover, a partner contribution of INR850 million and a customer advance of INR840 million will fund the project cost. As of 30 June 2017, the partners had contributed INR340 million and the firm had INR100.2 million in customer advances (5% of the total booking value). The ratings also reflect a high execution risk, considering 134 Infra has completed 15% of the project so far. Timely sanction of the term loan and receipt of customer advances will be critical for timely project execution. The ratings, however, are supported by a moderate offtake risk, as 44% of the project has been booked. Ind-Ra expects booking to improve further as the project nears completion. Ind-Ra expects cash DSCR to be in the range of 2.3x-6.0x over the project life, considering timely realisation from bookings. The ratings are also supported by the partners' track record in successful project completion and extensive experience in the Surat real estate market. It has 14 partners, who are promoters of Marvella Group and Vasupujaya Group, each of which have over 10 years of experience in the real estate market of Surat. Vasupujaya Group has completed nine residential projects (total saleable area of 2.5 million square feet). On the other hand, Marvella Group had completed nine projects (total saleable area of 2.6 million square feet). The project has obtained the construction permission, the approval for the layout plan, the environment clearance and the airport no-objection certificate, indicating a low regulatory risk. RATING SENSITIVITIES Negative: Lower-than-expected bookings, slow realisation of customer advances and/or significant time or cost overruns could result in a downgrade. Positive: Fast bookings, along with timely realisation of customer advances and timely project execution without additional debt, could result in an upgrade. COMPANY PROFILE 134 Infra is a registered partnership firm with 14 partners. ADVANCE INFRASTRUCTURES: Ind-Ra Assigns 'B' Issuer Rating --------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Advance Infrastructures Private Limited (AIPL) a Long-Term Issuer Rating of 'IND B'. The Outlook is Stable. The instrument-wise rating actions are: -- INR115 mil. Fund-based working capital limit assigned with IND B/Stable rating; and -- INR115 mil. Non-fund-based working capital limit assigned with IND A4 rating. KEY RATING DRIVERS The ratings factor AIPL's small scale of operations and weak credit metrics due to high competition in the construction industry and input price fluctuation depending on the type of contract. According to the FY17 provisional financials, revenue was INR233 million (FY16: INR235 million), gross interest coverage was 1.2x (FY16: 1.2x) and net financial leverage (adjusted net debt/operating EBITDAR) was 5.2x (FY16: 3.9x). The net financial leverage deteriorated due to increased debt level. The ratings also factor in the firm's tight liquidity situation as reflected in its average working capital utilisation of 99% for the 12 months ended August 2017 along with instances of overutilisation between August 2016-April 2017, which were regularised within 55 days. The ratings, however, are supported by the company's founder's decade-long experience in the execution of engineering, procurement and construction contracts in the pipeline laying business and volatile-but-strong EBITDA margin (FY17: 11%; FY16: 8.8%). RATING SENSITIVITIES Negative: Further deterioration in liquidity profile will lead to a negative rating action. Positive: An improvement in the liquidity profile along with improvement in the credit metrics will lead to a positive rating action. COMPANY PROFILE AIPL was incorporated in 2006 by Mr. Surendra Kumar Sharma in Gujarat. The company is engaged primarily in the business of construction of cross-country pipelines, city gas distribution network, plant piping, equipment erection, and associated civil, structural, electrical, instrumentation and telecommunication work, civil work related to sewerage, pipelines, etc. Around 71% of the revenue is generated from the oil and gas sector. However, the company is gradually diversifying into power and telecom, and civil and infrastructure sector. AKHAND JYOTI: CRISIL Reaffirms B+ Rating on INR1MM Loan ------------------------------------------------------- CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on the long-term bank facility of Akhand Jyoti Jan Kalyan Sewa Samiti. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Overdraft 1 CRISIL B+/Stable (Reaffirmed) The rating reflects the society's average financial risk profile because of weak cash flow and stretched receivables, and low operating margins. This weakness is partially offset by its established track record in implementing social welfare development schemes. Key Rating Drivers & Detailed Description Weakness * Average financial risk profile: Small networth of INR2.8 crore as on March 31, 2016 and estimated at similar level in fiscal 2017, constrains financial flexibility. However, gearing and debt protection metrics are comfortable in the absence of debt obligation. The society is not expected to contract any debt over the medium term as well. * Low operating profit margin: Given the not-for-profit nature of operations, the operating margin has been around 1-2 percent during past three years ended March 2017 and is likely to remain low over the medium term. Strengths * Healthy track record: Authorised members have experience of over three decades and healthy relationship with government authorities, leading to steady winning of projects. Outlook: Stable CRISIL believes AJJKSS's credit risk profile will remain constrained over the medium term by small scale of operations and low cash accrual. The outlook may be revised to 'Positive' if increase in revenue and cash accrual improves financial risk profile. The outlook may be revised to 'Negative' if decline in income or cash accrual or large, debt-funded capital expenditure weakens financial risk profile. Set up in 1999 in Balrampur, Uttar Pradesh, AJJKSS is a not-for- profit society managed by Mr. Chandreshwar Yadav (president) and Mr. Ravi Shankar Tripathi (vice-president). It implements schemes operated by state and central governments, such as running Kasturba Gandhi Balika Vidyalaya, Uttar Pradesh Skill Development Mission, and Mid-Day Meal in Balrampur, Sitapur, and Gonda (all in Uttar Pradesh). AMRAPALI INFRASTRUCTURE: NCLT Admits Insolvency Proceedings ----------------------------------------------------------- The Economic Times reports that the principal bench of the National Company Law Tribunal (NCLT) on Sept. 26 admitted an insolvency petition against Amrapali Infrastructure, filed by Bank of Baroda. ET relates that the lender approached the tribunal after the Amrapali group company defaulted on a loan of Rs97.30 crore. NCLT will now appoint an insolvency resolution professional (IRP) to manage the company. The IRP gets 270 days to turn around the company, failing which its assets will be liquidated and the proceeds will go towards repaying the loan, the report states. According to the report, Bank of Baroda had on August 10 moved NCLT to start insolvency proceedings against Amrapali Infrastructure under the Insolvency and Bankruptcy Code. The case was heard on the same day, but the court reserved its order and pronounced it on Sept. 26. "We will find a resolution in this matter within 3-5 months after appointment of IRP. There are many companies interested in taking up a stake in Amrapali Infrastructure," the report quotes Shiv Priya, a director of Amrapali group, as saying. ET relates that Priya said the company had invested around INR500 crore in the factory. "We had applied for restructuring of the company's loans with the bank and asked for more time for payment of dues. However, it denied our request and moved the NCLT," he said. Law firm Cyril Amarchand Mangaldas' Bishwajit Dubey had appeared for Bank of Baroda in the case, the report discloses. Tata Capital Financial Services and Magma Fincorp had also filed separate cases in NCLT to initiate insolvency proceedings against Amrapali Infrastructure, claiming to be financial creditors to the company, ET notes. They will now have to file their claims before the IRP. Amrapali Infrastructure engages in leasing of construction equipment. It has a factory in Greater Noida that makes hollow core slabs and column beams for affordable housing projects. B. SAMAYAKK: CARE Reaffirms B+ Rating on INR10cr LT Loan -------------------------------------------------------- CARE Ratings reaffirmed ratings on certain bank facilities of B. Samayakk Agri Cottons (BSA), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 10.00 CARE B+ Reaffirmed Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of B. Samayakk Agri Cottons (BSA) takes into account growth in total operating income and significant improvement in interest coverage ratio in FY17 (refers to period April 1 to March 31). The rating continues to be tempered by short track record and small scale of operations, thin profitability margins, leveraged capital structure, proprietorship nature of operations with inherent risk of with drawl of proprietor's capital at the time of personal contingency, highly fragmented industry and regulated by government, operating margins susceptible to cotton price fluctuation and seasonality associated with the cotton industry. The rating is, however, underpinned by the experience of proprietor in the cotton processing business and moderate operating cycle. Going forward, the ability of the firm to increase its scale of operations and profitability margins in competitive environment, improve its capital structure and manage working capital requirements efficiently would be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses * Short track record of operations along with proprietorship nature of operations: The firm started its commercial operations from October 21, 2015 hence can be termed as short track record. Furthermore, BSA constitution as a proprietorship firm has the inherent risk of with drawl of proprietor's capital at the time of personal contingency and the firm being dissolved upon the death / retirement / insolvency of proprietor. Moreover, Proprietorship firms have restricted access to external borrowings. * Thin profitability margins: The firm experienced decline in profitability margins during the review period. The PBILDT margin of the firm declined from 4.55% in FY16 to 1.90% in FY17 due to increase in raw cotton prices as the monsoon for the crop was not favourable during the period. The PAT margins of the firm also declining from 2.09% in FY16 to 1.58% in FY17 on account of decrease in PBILDT levels coupled with increase in depreciation expenses. However, interest expense has decline in FY17 on account of closure of long term loan. * Weak capital structure and debt coverage indicators: The capital structure of the firm remained leveraged for the last two balance sheet dates. The overall gearing deteriorated from 4.12x as on March 31, 2016 to 5.18x as on March 31, 2017 at back of increase in working capital utilization coupled with increase in unsecured loans. Total debt/GCA also deteriorated from 12.99x in FY16 to 14.87x in FY17 on account of increase in debt levels of the firm. However, PBILDT interest coverage increased significantly and remained comfortable at 20.07x in FY17 compared from2.18x in FY16 at the back of decrease in interest and finance charges. Key Rating Strengths * Experience of proprietor in the cotton processing business: The key proprietor, Mr. Veerendar Kumar Jain, is associated with the cotton industry for around 9 years and looks after the overall management of the firm. He was also associated with an associate concern engaged in cotton ginning and pressing viz. Veerendar Cotton Ginners. The firm discontinued the operations during 2015 and the factory along with the machines was leased out to BSA for a period of 20 years. Furthermore, the proprietor have also established a long standing relationship with the customers and suppliers who are farmers supplying raw cotton over the past. Growth in total operating income during the review period The total operating income of the firm increased and doubled from INR23.23 crore in FY16 to INR46.54 crore in FY17 on account of increase in demand for cotton bales, cotton seeds and cotton lint from its customers. The firm earns most of its revenue from the sale of cotton bales which yields 68.25% cotton seeds, 30.75% of cotton lint and remaining 0.75% from others. Moreover, BSA operated at a capacity utilization of 50% during the FY17. * Moderate operating cycle: The operating cycle of the firm as on March 31, 2017 remained moderate at 72 days. The firm receives payment from its customer on average of 30 days and makes the payment to its suppliers in 15-20 days due to low bargaining power. The inventory days of BSA remained 57 days as on March 31, 2017 as the cotton is being agro commodity its production is seasonal (harvesting) from November to February in a year. Apart from that cotton ginners usually have procure raw cotton in bulk quantity to get better discount from its suppliers. Significant improvement in interest coverage ratio PBILDT interest coverage increased significantly and remained comfortable at 20.07x in FY17 compared from 2.18x in FY16 at the back of decrease in interest and finance charges. Raichur based, B. Samyakk Agri Cottons (BSA) was established on May 6, 2015 and started commercial operations from October 21, 2015. The firm was established as a proprietorship firm by Mr. Veerendar Kumar Jain who is managing the overall business operations of BSA. The firm is engaged in the cotton ginning and pressing activity with a total installed capacity of 380 quintals per day for cotton bales and 700 quintals for cotton seeds per day as on March 31, 2016. Due to seasonal nature of raw material, the company operates for only 9 months in a year and remains closed in the months of July, August and September. The manufacturing unit of the firm is located at Raichur, Karnataka. BABA BHUBANESWAR: CARE Assigns B Rating to INR8.13cr LT Loan ------------------------------------------------------------ CARE Ratings has assigned rating to the bank facilities of Baba Bhubaneswar Cold Storage Private Limited (BCS), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 8.13 CARE B; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of BCS is constrained by its small scale of business along with short track record of operations, regulated nature of business, dependence on vagaries of nature along with seasonality of business, presence in a highly fragmented industry leading to intense competition, working capital nature of operations and high leverage ratios. The aforesaid constraints are partially offset by experienced promoters and proximity to potato growing areas. Ability of the company to grow its scale of operations, improve profitability margins and manage working capital effectively would be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses * Small scale of business along with short track record of operations: BCS is a relatively small player in the cold storage industry having total operating income and net loss of INR2.38 crore and INR0.23 crore respectively in FY16. Further, the net worth base and total capital employed was low at INR3.62 crore and INR14.11 crore respectively as on Mar.31, 2016. The small scale of operation restricts the financial risk profile of the company limiting its ability to absorb losses or financial exigencies in adverse economic scenario. Further, BCS commenced operation since April, 2015 and accordingly has a limited operational track record of around two years. The management has informed that it has achieved the TOI of around INR2.50 crore during the financial year ended on March 31, 2017. * Regulated nature of business: In West Bengal, the basic rental rate for cold storage operations is regulated by the state government through West Bengal State Marketing Board. The rent of these cold storages is decided by taking into account political considerations, not economic viability. Due to severe government intervention, the cold storage facility providers cannot enhance rental charge commensurate with increased power tariff and labor charge. Dependence on vagaries of nature and seasonality of business BCS's operation is seasonal in nature as potato is a winter season crop with its harvesting period commencing in March. The loading of potatoes in cold storages begins by the end of February and lasts till March. Additionally, with potatoes having a preservable life of around eight months in the cold storage, farmers liquidate their stock from the cold storage by end of season i.e., generally in the month of November. Furthermore, lower agricultural output may have an adverse impact on the rental collections as the cold storage units collect rent on the basis of quantity stored and the production of potato is highly dependent on vagaries of nature. * Presence in a highly fragmented industry leading to intense competition: In spite of being capital intensive, the entry barrier for new cold storage is low, backed by capital subsidy schemes of the government. As a result, the potato storage business in the region has become competitive, forcing cold storage owners to lure farmers by providing them interest bearing advances against stored potatoes which augments the business risk profile of the companies involved in the trade. * Working capital intensive nature of operations and high leverage ratios: BCS is engaged in the cold storage business and accordingly its operation is working capital intensive. Accordingly the requirement of working capital remains high and therefore the average utilization of cash credit remained at about 95% during the last 12 months ended May 31, 2017. The capital structure of the company is moderately high marked by debt equity ratio of 1.20x and high overall gearing of 2.88x as on March 31, 2016. The leverage ratios are high due to completion of heavily debt funded project in the initial stage of operation. Key Rating Strengths * Experienced promoters: The promoter of BCS is Mr. Radha Raman Mondal, Director, aged about 53 years, having more than two decades of experience in the cold storage industry. He is being duly supported by the other promoter director Mr. Swapan Kumar Ghosh, Mr. Basudeb Majhi and Mr. Manas Kumar Dhara having experience of around twenty years, fifteen years and twelve years respectively in similar line of business. The promoters are actively involved in the strategic planning and running the day to day operations of the company along with a team of experienced personnel. * Proximity to potato growing areas: BCS's storing facility is situated in the Burdwan district of West Bengal which is one of the major potato growing regions of the state. The favorable location of the storage unit, in close proximity to the leading potato growing areas provides it with a wide catchment and making it suitable for the farmers in terms of transportation and connectivity. Baba Bhubaneswar Cold Storage Private Limited (BCS), incorporated in the year 2014, is a Kolkata (West Bengal) based company, promoted by Mr. Radha Raman Mondal, Mr. Swapan Kumar Ghosh, Mr. Basudeb Majhi and Mr. Manas Kumar Dhara. BCS is engaged in the business of providing cold storage services to potato growing farmers and potato traders, having an installed storage capacity of 19,500 MT in Burdwan district of West Bengal, which is divided into two chambers. Mr. Radha Raman Mondal having more than two decades of experience in the cold storage industry, looks after the overall management of the company along with the other directors Mr. Swapan Kumar Ghosh, Mr. Basudeb Majhi and Mr. Manas Kumar Dhara and supported by the team of experienced professionals. BAIT LOGITECH: CRISIL Reaffirms B+ Rating on INR5.5MM Cash Loan --------------------------------------------------------------- CRISIL Ratings has reaffirmed its ratings on the bank facilities of Bait Logitech Pvt Ltd (BLPL) to 'CRISIL B+/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 6.6 CRISIL A4 (Reaffirmed) Cash Credit 5.5 CRISIL B+/Stable (Reaffirmed) The ratings continue to reflect the company's small scale, and a subdued financial risk profile, with small networth. These weaknesses are partially offset by the extensive experience of management in the logistics and liaison services industry. Key Rating Drivers & Detailed Description Weakness * Small scale of operations: Being a new entrant in the industry, scale is small, with operating income at INR26 crore in fiscal 2017. The steel structure fabrication business is highly fragmented with the presence of several small players. Modest scale and limited track record in the business restrict bargaining power with customers. * Subdued financial risk profile: Networth remained modest at INR3.71 crore in fiscal 2017. Small networth exposes the credit risk profile to sudden changes in business conditions. Strength * Extensive experience of management: BLPL was incorporated in 2010. However, the management's extensive experience in the steel industry has helped establish healthy relationships with customers and suppliers, resulting in repeat orders. Outlook: Stable CRISIL believes BLPL will continue to benefit from its experienced management team. The outlook may be revised to 'Positive' in case of a significant increase in revenue and operating margin, while capital structure remains stable. The outlook may be revised to 'Negative' in case of stretch in working capital cycle, or deterioration in capital structure due to large, debt-funded capital expenditure. Incorporated in May 2010, in Bhubaneswar, BLPL, promoted by Mr. Brahma Nanda Mishra, was set up to provide logistics and liaison services for the iron ore mining industry. It also fabricates heavy steel structures, and provides project and mining consultancy services. Its manufacturing unit is at Tangi in Odisha. BANSHIDHAR CONSTRUCTION: CRISIL Reaffirms B+ on INR8.75M Loan ------------------------------------------------------------- CRISIL Ratings has been consistently following up with Banshidhar Construction Private Limited (BCPL) for obtaining information through letters and emails dated July 13, 2017 and August 9, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. CRISIL gave these ratings: Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 8.75 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 Banshidhar Construction Private Limited. This restricts CRISIL's ability to take a forward Banshidhar Construction Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB rating category or lower. Based on the last available information, CRISIL has reaffirmed the rating at 'CRISIL B+/Stable'. BCPL, incorporated in 2007-08 (refers to financial year, April 1 to March 31), undertakes construction of roads, and irrigation projects for Water Resource Department for Bihar. The company is promoted by Mr. Subhash Yadav, Mr. Ram Prasad Rai, Mr. Ashok Rai, and Mr. Dev Prasad. CHANDRAKONA COLD: Ind-Ra Affirms B Issuer Rating; Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Chandrakona Cold Storage Private Limited's (CCSPL) Long-Term Issuer Rating at 'IND B'. The Outlook is Stable. The instrument-wise rating action is: -- INR72.5 mil. (increased from INR50 mil.) Fund-based limits assigned with IND B/Stable rating. The final rating has been assigned following the receipt of sanction letter by Ind-Ra. KEY RATING DRIVERS The affirmation reflects CCSPL's continued small scale of operations and moderate credit metrics. As per FY17 provisional financials, revenue was almost stable at INR23.2 million (FY16: INR22.8 million). Operating EBITDA margins declined to 12.4% (23.4%) due to an increase in storage expenses. Net leverage (total adjusted net debt/operating EBITDA) deteriorated to 28.5x (1.4x) due to additional debt availed to fund its working capital requirement. However, interest coverage (operating EBITDA/ gross interest expense) improved to 3.3x in FY17P (FY16: 2.3x;) due to a decline in financial cost and lower utilisation of limits. The liquidity position of the company remains comfortable with 90.8% utilisation of the working capital limits during the 12 months ended August 2017. The ratings continue to be supported by CCSPL's founders' more than two decades of experience in the cold storage business. RATING SENSITIVITIES Positive: A sustained improvement in the scale of operations along with an improvement in the overall credit metrics will be positive for the ratings. Negative: Deterioration in the liquidity position will be negative for the ratings. COMPANY PROFILE Incorporated in 1989, CKCS has a cold storage business through which it stores potatoes. The cold storage is located in Paschim Mednipur, West Bengal with a storage capacity of 221,163.6 quintals of potatoes. It is managed by two of its directors, Kannai Lal Roy and Jayanta Kumar Roy. CLAVECON (INDIA): Ind-Ra Assigns B+ Issuer Rating, Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Clavecon (India) Private Limited (CIPL) a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR79.57 mil. Term loan due on August 2022 assigned with IND B+/Stable rating; -- INR35 mil. Fund-based limit assigned with IND B+/Stable/ IND A4 rating; -- INR5 mil. Non-fund-based limit assigned with IND A4 rating; and -- INR5 mil. Proposed non-fund-based limit* assigned with Provisional IND A4 rating. * The rating is provisional and shall be confirmed upon the sanction and execution of loan documents for the above facility by CIPL to the satisfaction of Ind-Ra. KEY RATING DRIVERS The ratings reflect CIPL's limited operational track record, given the company commenced commercial operations from May 2015, and small scale of operations. According to provisional financials for FY17, revenue was INR233.75 million (FY16: INR135.73 million). The improvement in revenue was driven by regular orders from existing clients and the addition of new clients. The ratings also reflect CIPL's weak credit metrics. In FY17, net leverage (total adjusted net debt/operating EBITDA) was 5.90x (FY16: 10.77x) and gross interest coverage (operating EBITDA/gross interest expense) was 1.34x (1.07x). The improvement in credit metrics was due to an increase in EBITDA (FY17: INR26.85 million; FY16: INR16.99 million) and a decrease in debt (INR159.99 million; INR189.04 million). The ratings, however, are supported by a comfortable EBITDA margin of 11.49% in FY17 (FY16: 12.52%) and liquidity position, indicated by an average utilisation of about 76.81% of its fund-based limits for the 12 months ended August 2017. The fall in EBITDA margin was due to an increase in raw material costs. RATING SENSITIVITIES Negative: A substantial decline in operating profitability leading to deterioration in credit metrics could lead to a negative rating action. Positive: A significant increase in revenue, with operating profit leading to improved credit metrics, could lead to a positive rating action. COMPANY PROFILE Incorporated in 2013, CIPL manufactures autoclaved aerated concrete and concrete blocks. It has an installed capacity of 15,000 cubic metres per month. CUTTACK RESINS: Ind-Ra Assigns 'B' Issuer Rating, Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Cuttack Resins Private Limited (CRPL) a Long-Term Issuer Rating of 'IND B'. The Outlook is Stable. The instrument-wise rating action is: -- INR70 mil. Fund-based limit assigned with IND B/Stable rating. KEY RATING DRIVERS The ratings reflect CRPL's lack of operational track record, given the company commenced commercial operations from May 2017. The ratings, however, are supported by CRPL's moderate liquidity, indicated by an average utilisation of about 60% for the four months ended August 2017, and the directors' extensive experience in trading. Moreover, CRPL has a location advantage, as it is based in Cuttack, which is in proximity to Bhubaneswar, the business capital of Odisha. RATING SENSITIVITIES Negative: Deterioration in liquidity will be negative for the ratings. Positive: Stabilisation of operations will be positive for the ratings. COMPANY PROFILE Incorporated on March 3, 2017, CRPL is engaged in the trading of synthetic resins used in the manufacturing of PVC pipes and moulds. Its registered office is in Cuttack, Odisha. It is managed by Mr. Piyush Pritam. DHAN LAXMI: CRISIL Reaffirms B+ Rating on INR5MM Term Loan ---------------------------------------------------------- CRISIL Ratings has been consistently following up with Dhan Laxmi Agromills India Limited (DAIL) for obtaining information through letters and emails dated July 10, 2017 and August 7, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. CRISIL gave these ratings: Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5 CRISIL B+/Stable (Issuer Not Cooperating; Rating Reaffirmed) Term Loan 5 CRISIL B+/Stable (Issuer Not Cooperating; Rating Reaffirmed) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Dhan Laxmi Agromills India Limited. This restricts CRISIL's ability to take a forward Dhan Laxmi Agromills India Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB rating category or lower. Based on the last available information, CRISIL has reaffirmed the rating at 'CRISIL B+/Stable'. DAIL is an Uttarakhand-based company established and promoted in 2013 by Mr. Meghraj Garg, Mr. Naveen Kumar Singhal, Mr. Rajendra Kumar Aggarwal, and Mr. Anshul Garg. It extracts rice bran oil and manufactures de-oiled rice bran. DINODIA EDUCATIONAL: CRISIL Reaffirms 'D' Rating on INR12MM Loan ---------------------------------------------------------------- CRISIL Ratings has been consistently following up with Dinodia Educational Society (DES) for obtaining information through letters and emails dated July 13, 2017 and August 10, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. CRISIL gave these ratings: Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 12 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 Dinodia Educational Society. This restricts CRISIL's ability to take a forward Dinodia Educational Society is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB rating category or lower. Based on the last available information, CRISIL has reaffirmed the rating at 'CRISIL D'. DES, established in 2008, is operating a school near Siliguri, West Bengal, under the name G D Goenka Public School, Siliguri (GDGPSS). DES is associated with the GD Goenka group of schools, and all the facilities have been built up and the school is operated under the ageis of the group. The school is located at Dagapur, around 7 Km away from the city of Siliguri, West Bengal, and is spread over an area of 7.32 acres. GDGPSS has commenced operation from 2009-10 and operate classes from Nursery to class XII under the affiliation of Central Board of Secondary Education. EMBEE AGRO: Ind-Ra Assigns 'BB-' Issuer Rating, Outlook Stable -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Embee Agro Food Industries Private Limited (Embee) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR 86 mil. Term loan due on June 2020 assigned with IND BB- /Stable rating; and -- INR140 mil. Fund-based working capital limits assigned with IND BB-/Stable/IND A4+ rating. KEY RATING DRIVERS The ratings reflect Embee's small scale of operations and weak credit metrics due to the seasonal nature of business. According to the FY17 provisional financials, revenue increased to INR492 million in FY17 from INR417 million in FY16 due to an increase in orders from existing customers. EBITDA interest coverage (operating EBITDA/gross interest expense) was stable at 1.5x in FY17 (FY16: 1.5x) while net financial leverage (total adjusted net debt/operating EBITDAR) improved to 7.2x (7.8x) due to an increase in absolute EBITDA. The ratings further reflect the company's volatile operating profitability account of raw material price fluctuations due to the seasonal nature of availability of paddy. EBITDA margins fluctuated in the range of 4.2%-13.1% over FY14-FY17 and declined to 9.8% in FY17 from 10.1% in FY16. The ratings factor in Embee's tight liquidity position as reflected in the average maximum working capital utilisation of 93.5% over the 12 months ended July 2017. Net working capital cycle remained long in FY17 at 203 days, despite improving from 223 days in FY16 due to an increase in creditor days. The inventory period is long due to the storage of paddy rice. The ratings, however, are supported by the company's promoters' more than two decades of experience in the processing of rice. RATING SENSITIVITIES Positive: Substantial growth in the revenue and EBITDA margin and an improvement in the liquidity leading to an improvement in the credit metrics could be positive for the ratings. Negative: A substantial decline in the top line and profitability and sustained deterioration in overall credit metrics or deterioration in the overall liquidity profile could lead to a negative rating action. COMPANY PROFILE Established in 2001 in Yadgiri District, Karnataka, Embee has an 8 tonnes per hour rice processing mill. EUROKON GLOBAL: CRISIL Reaffirms B+ Rating on INR15MM Cash Loan --------------------------------------------------------------- CRISIL Ratings has reaffirmed its ratings on the bank facilities of Eurokon Global Exports Private Limited (EGE) at 'CRISIL B+/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 15 CRISIL B+/Stable (Reaffirmed) Foreign Documentary Bills Purchase 2 CRISIL A4 (Reaffirmed) Packing Credit 4 CRISIL B+/Stable (Reaffirmed) The ratings continue to reflect a modest scale of operations, large working capital requirement, and a weak financial risk profile because of below-average debt protection metrics. These weaknesses are partially offset by promoters' extensive experience in the metal sheet components industry. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations in highly fragmented industry: Scale is modest, as reflected in revenue of about INR32.69 crore in fiscal 2017. Revenue dipped 40% in fiscal 2017 as the domestic business, which was started in fiscal 2016, was discontinued on account of working capital challenges. Furthermore, the metal sheet components industry is highly fragmented, with several small players and hence in the medium term, the firm is expected to report revenue of INR35-36 crore. The operating margin is expected to be at 8.0-8.5% owing to 100% export business. * Working capital-intensive operations: Operations are working capital intensive as reflected in gross current assets of 169 days as on March 31, 2017, driven by inventory of 48 days and debtors of 65 days, further with working capital challenges faced by company in domestic markets. Debtors include over six months recoverable of INR2.25 crore as on March 31, 2017. In the medium term, in the absence of any exposure in the domestic market, the working capital cycle is expected to improve. * Below-average financial risk profile: Financial risk profile is subpar, with below-average debt protection metrics-interest coverage and net cash accrual to adjusted debt ratios were at 1.44 times and 0.05 time, respectively, for fiscal 2017-though constrained by weak capital structure due to modest accretion to reserve. With sustenance of working capital cycle and nil significant, debt-funded capital expenditure plans, the financial risk profile is expected to remain average over the medium term. Strength * Promoters experience in the industry: The promoters have been in the business of metal sheet components for over eight years and have developed established relations with customers, leading to steady orders over the medium term. Outlook: Stable CRISIL believes EGE will continue to benefit over the medium term from the promoters' extensive experience. The outlook may be revised to 'Positive' in case of significantly high revenue and profitability, along with diversity in customer base and geographical reach, leading to higher cash accrual, and improvement in capital structure mainly due to capital infusion by promoters. Conversely, the outlook may be revised to 'Negative' in case of a considerable decline in revenue or profitability, deterioration in working capital management, or large, debt-funded capital expenditure, leading to deterioration in the financial risk profile, particularly liquidity. Incorporated in 2009, EGE manufactures and exports sheet metal components such as brackets and clamps which find application in building hardware and furniture. The company is based in Faridabad, Haryana. GARG GRANITES: Ind-Ra Moves 'B+' Issuer Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Garg Granites Private Limited's (GGPL) Long-Term Issuer Rating to the non- cooperating category. The issuer did not participate in the rating exercise, despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND B+(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR60 mil. Fund-based working capital limits migrated to non- cooperating category with IND B+(ISSUER NOT COOPERATING)/IND A4(ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on Sept. 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 1993, GGPL is engaged in processing and trading of marble slabs and tiles of various texture and design. The processing facility is situated at Kishangarh in Rajasthan with an annual installed capacity of 3,000,00 cubic feet. GAUTAMBUDH CARS: CARE Assigns B Rating to INR15cr LT Loan --------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Gautambudh Cars Private Limited (GCPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 15.00 CARE B; Stable Assigned Detailed Rational and key rating drivers The rating assigned to the bank facilities of GCPL is primarily constrained by its low profitability margins, leveraged capital structure and weak debt service coverage indicators. The rating is further constrained by working capital intensive nature of operations and pricing constraints and margin pressure arising out of competition from various commercial auto dealers in the market. The rating, however, draws comfort from experienced promoters and growing scale of operations. Going forward, the ability of the company to increase its scale of operations while registering improvement in its profitability margins and capital structure alongside effective management of working capital requirement shall be the key rating sensitivity. Detailed description of key rating drivers Key Rating Weakness * Low profitability margins: An automotive dealer's revenues are driven by volumes while the profits are driven by sale of spares and service income as the latter fetch higher profit margins. The company has limited negotiating power with manufactures and has no control over the selling price of the vehicles as the same is fixed by the manufacturers. The PBILDT margin stood low at 3.22% for FY17 (FY refers to the period April 1 to March 31; based on provisional results) and showing decline from 3.63% for FY16. Furthermore, owing to high interest expense and deprecation cost PAT margin below unity at around 0.50% for the past three financial year FY15-FY17. * Leveraged capital structure and weak coverage indicators: The capital structure of the company marked by overall gearing ratio stood leveraged on the balance sheet date of past three financial years i.e. FY15-FY17 on account of high dependence on external borrowing to meet the working capital requirements of the company coupled with low net worth base of the company. The overall gearing ratio stood leveraged at above 15 times as on March 31, 2017. Further, the debt service coverage indicators of the company remained weak marked by interest coverage ratio of 1.33x and total debt to GCA of 28.80x respectively in FY17 on account of high debt level resulting into high interest cost and low profitability margins. * Working capital intensive nature of operations: The company needs to stock different models of vehicles and spares in the showrooms in order to ensure ample availability and visibility, which leads to inventory holding days of around 2 months. Though the sales to customers are made on "Cash and Carry" basis however, around 70% of the cars are bought on vehicle financing basis through banks/financial institutions resulting into collection period of around a week and debtors are mainly the banks/financial institutions. Further, the company has to make advance/cash payments to the manufacturers for procurement. The large working capital requirements are met through bank borrowings which remained almost fully utilized for the last 12 months ended July, 2017. * Pricing constraints and margin pressure arising out of competition from various auto dealers in the market: The margin on products is set at a particular level by Ford India Limited thereby restricting the company to earn incremental income. With the large dealership network of Ford India Limited, the bargaining power of the dealer with the customer is further reduced. The market also faces aggressive competition from various other established automobile dealers of companies like Hyundai Motor Company and Honda Motors Company Limited etc. In order to capture the market share, the auto dealers have to offer better buying terms like providing credit period or allowing discounts on purchases which create margin pressure and negatively impact the earning capacity of the company. Key Rating Strengths * Experienced Promoters: The company was promoted by Mr. Parveen Goel and Mr. Rama Murti. Mr. Parveen Goel is a chartered accountant by qualification and has an experience of around two decades in the dealership business through his association with this entity and other group associates. Mr. Rama Murti has an experience of around five decades in the dealership business through his association with GCPL and other group concerns. Further company has a dedicated team of marketing and sales professionals, service in-charge and customer relation officers, who have more than one and half decade of experience in their respective field. Growing scale of business: The total operating income of GCPL has grown at a compounded annual growth rate (CAGR) of around 45% from INR48.41 crore during FY15 to INR101.56 crore in FY17 (based on provisional results) mainly attributed to increase in vehicles sold. Further, the company has achieved total TOI of approx. INR35 crore till July 31, 2017. Noida (Uttar Pradesh) based Gautambudh Cars Private Limited (GCPL) was incorporated in 2013. The company is currently being managed by Mr. Parveen Goel and Mr. Rama Murti. GCPL is an authorized dealer of Ford India Limited (FIL) vehicles since 2013 and operates though its single 3S (sales, spare service) facility located in Noida, Uttar Pradesh. Rama Motors Services Private Limited (an authorized dealer of Ford India Limited) and Sharnam Motor Services Private Limited (authorized dealer of Chevrolet India) are the other associate concerns of GCPL engaged in the business of auto dealership. IDT CLOTHING: Ind-Ra Moves 'B+' Issuer Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated IDT Clothing Pvt Ltd's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND B+(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR125 mil. Fund-based working capital limit migrated to non-cooperating category with IND B+(ISSUER NOT COOPERATING)/IND A4(ISSUER NOT COOPERATING) rating; and -- INR7.5 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 April 10, 2015. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 2001, IDT manufactures readymade garments and exports them to foreign markets, mainly Canada, European countries and the US. IDT's plant is located in Bhiwandi, Maharashtra. The company is focusing on expanding presence in the domestic market. IDT is managed by two brothers: Suraj Gupta and Amar Gupta. INNOVATIVE INFRA: CRISIL Reaffirms 'D' Rating on INR17.8MM Loan --------------------------------------------------------------- CRISIL Ratings has been consistently following up with Innovative Infraprojects Private Limited (IIPL) for obtaining information through letters and emails dated July 11, 2017 and August 10, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. CRISIL gave these ratings: Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 17.8 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 Innovative Infraprojects Private Limited. This restricts CRISIL's ability to take a forward Innovative Infraprojects Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB rating category or lower. Based on the last available information, CRISIL has reaffirmed the rating at 'CRISIL D'. IIPL, incorporated in 2009, develops residential and commercial real estate projects in Dhanbad, Jharkhand. Its daily operations are managed by Mr. Kashish Vyas. JAYDEEP TUBES: Ind-Ra Moves 'B+' Issuer Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Jaydeep Tubes Pvt Ltd's (JTPL) Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND B+(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR20 mil. Fund-based working capital limit migrated to non- cooperating category with IND B+(ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on Sept. 12, 2015. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 1999, JTPL manufactures Curpo nickel tubes, copper tubes, brass tubes, PVC copper tubes, copper alloy and others at its plant in Umbergaon, Gujarat. JTPL is managed by Ashok J Shah and Mukesh J Shah. KALPATARU COLD: Ind-Ra Moves 'D' Issuer Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Kalpataru Cold Storage Private Limited's (Kalpataru) Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the surveillance exercise, despite continuous requests and follow- ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND D(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR41.8 mil. Term loans (Long-term) migrated to non- cooperating category with IND D(ISSUER NOT COOPERATING) rating; -- INR78.8 mil. Fund-based working capital limit (Long- term/Short-term) migrated to non-cooperating category with IND D(ISSUER NOT COOPERATING) rating; and -- INR2.0 mil. Non-fund-based working capital limit (Short-term) migrated to non-cooperating category with IND D(ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on Sept. 2, 2014. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Kalpataru Cold Storage was incorporated by G.P. Sinha in 1988 in West Bengal. It operates a 220,092 quintals cold storage unit for the preservation of agricultural produces mainly seeds and table potatoes on a rental basis. KANACHUR ISLAMIC: CARE Assigns B Rating to INR140cr LT Loan ----------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Kanachur Islamic Education Trust (KIET), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 140.00 CARE B; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of KIET are constrained by its weak capital structure owing to the debt availed for the setup of medical college and hospital, weak profitability and hence cash accruals from operations in relation to the debt as hospital and medical college operations yet to stabilize, regulatory risk and competition from established and upcoming educational institutes. The rating however derive strength from experienced and resourcefulness of its promoters, and strong demand for its medical course with full intake in the first year of class. Going forward the ability of trust to deleverage its capital structure with additional funds from promoters, and improve its cash accruals post the commencement of medical college's operations would be the key rating sensitivities. Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of Kanachur Islamic Education Trust (KIET) are constrained by its weak capital structure owing to the debt availed for the setup of medical college and hospital, weak profitability and hence cash accruals from operations in relation to the debt as hospital and medical college operations yet to stabilize, regulatory risk and competition from established and upcoming educational institutes. The rating however derive strength from experienced and resourcefulness of its promoters, and strong demand for its medical course with full intake in the first year of class. Going forward the ability of trust to deleverage its capital structure with additional funds from promoters, and improve its cash accruals post the commencement of medical college's operations would be the key rating sensitivities. Detailed Description of the Key Rating Drivers Key Rating Weaknesses * Weak capital structure owing to debt availed for the setup of medical college and hospital: The capital expenditure towards the setup of the medical college and the tertiary hospital was around INR171.32 crore largely funded through debt. The trust has borrowed over INR 148 crore from various banks, out of which INR135 crore was used towards the setup of medical college and hospital. The capitalization structure will further weaken further as the trust has availed additional debt of INR50 crore in Q4FY17, towards the construction of additional building for the medical college. In the coming years, till the operations of hospital stabilizes and cash accruals from medical college increases with new batches every year, the promoters are expected to support the trust for meeting the debt obligations of the trust. * Weak profitability levels owing to high interest cost and operational expenditure on the hospital business: The profitability of the trust has been weak over the years, falling over the years from net profit of INR0.52 crore in FY14, to net losses of INR0.42 crore in FY15, deteriorating further to net loss of INR2.49 crore in FY16, owing to the large level of operational cost incurred over the years on the hospital. * Regulatory risks associated with the education industry: Despite the increasing trend of privatization of the education sector in India, educational institutes have to adhere to the regulations set by the regulatory authorities. The sector is regulated by the Ministry of Human Resources at the national level, by the education ministries in each state, as well as Central bodies like University Grants Commission (UGC) and 14 other professional councils like All India Council for Technical Education, Medical Council of India etc. The operating and financial flexibility of the higher education sector are limited, as regulations govern almost all aspects of operations, including fee structure, number of seats, changes in curriculum and infrastructure requirements. Karnataka is one among the states which has largest concentration of educational institutions especially Medical and Engineering colleges. Key Rating Strengths * Experienced and resourceful promoters: The promoters, Monu family has been involved in the education business for the last 15 years. They also have business interest in the areas of timber, commodities trading, hospitality, and real estate development, under its brand name 'Kanachur'. Mr. UK Monu, has an experience of over 40 years in the timber business, and has served as Vice President of South India Plywood manufacture INR Incorporated in 2001, KIET was founded by Mr. U. K. Monu along with his family members, to set up educational institute in Mangalore. Initially it started with a school (affiliated to CBSE board) in the year 2001, and over the years, it has started two new educational institutes, Kanachur PU College and Kanachur Institute of Management Science. In the year 2016-17, the trust started medical college and hospital (hospital was partly operational from FY15, and became fully operational from FY16-17). The trust's campus is spread across 25 acres in the outskirts of Mangalore. Presently society runs 7 educational institutions with over 252 faculty members and 123 supporting members for its 13 academic programs. KP PACKAGING: Ind-Ra Migrates D Issuer Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated K.P. Packaging Limited's (KPPL) 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 D(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR40 mil. Fund-based working capital limit (long-term) migrated to non-cooperating category with IND D(ISSUER NOT COOPERATING) rating; and -- INR50 mil. Non-fund-based working capital limit (short-term) migrated to non-cooperating category with IND D(ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on Sept. 13, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE KPPL was incorporated in 1998 as a partnership firm. Later, in July 2009, the entity was converted to a limited company. The company is primarily engaged in manufacturing all kinds of packaging products such as PVC film, aluminium foils, paper laminates, polyester laminates, BOPP laminates, etc. KPPL has two manufacturing units at Silvassa. KRISHNA COTTON: CARE Assigns B+ Rating to INR8.50cr LT Loan ----------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Krishna Cotton (KC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 8.50 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of KC is constrained on account of modest scale of operations, low profit margins owing to limited value addition nature of business with susceptibility to fluctuation in the raw material prices owing to change in government policies and seasonality associated with raw material availability. The rating is further constrained due to working capital intensive nature of operations, leveraged capital structure, weak debt coverage indicators, presence in fragmented and competitive cotton industry and partnership nature of constitution. The above weaknesses are off-set by the experience of promoters in the cotton ginning and pressing business along with long track record of operations of firm of more than one decade and location advantage emanating from proximity to raw material suppliers and customer. The ability of the firm to increase its scale of operations, improve its profitability and solvency position while efficiently managing its working capital requirements is the key rating sensitivity. Detailed description of the key rating drivers Key Rating Weaknesses * Modest scale of operations with low profitability: The scale of operations of the entity remained modest with TOI of INR40.71 crore during FY17 (Prov.), although, the same has been increasing at a CAGR of ~5% during last three years ending FY17. Despite, being operational for twelve years the net worth base remained low at INR1.83 crore as on March31, 2017(Prov.), limiting financial flexibility of the entity. Furthermore, owing to limited value addition nature of business and high competition operating profit margins of the entity remained low at 1.70% in FY17(Prov.). * Weak capital structure and debt coverage indicators: The capital structure of the entity remained weak owing to increased reliance on external borrowings. Furthermore, high debt profile against low networth, debt protection indicators also remained weak. * Working capital intensive nature of operations: The liquidity position of KC was low marked by low current ratio of 1.16x, owing to moderate inventory holding period. KC procures raw cotton from local farmers who provide a negligible credit period. Furthermore, as the raw material is seasonal in nature, the entity has to maintain higher inventory. The working capital requirements of the entity are met by the cash credit facility, the average utilization of the CC limit was on a higher side in the in peak season (October-April). * Susceptibility of margins to raw material price fluctuation: The price of raw cotton in India is regulated through function of MSP by the government. Furthermore, the price of raw cotton is highly volatile in nature and depends upon factors like area under production, yield for the year, international demand-supply scenario, export quota decided by government and inventory carried forward from previous year. Hence, any adverse change in government policy that is higher quota for any particular year, ban on the cotton or cotton yarn export may negatively impact the prices of raw cotton in domestic market and could result in lower realizations and profit for KC. * Presence in seasonal and fragmented industry: Operation of cotton business is highly seasonal in nature, as the sowing season is from March to July and the harvesting season is spread from November to February. Furthermore, the cotton industry is highly fragmented with large number (approx 80%) of players operating in the unorganized sector. Hence, KC faces stiff competition from other players operating in the same industry, which further result in its low bargaining power against its customers. * Partnership nature of constitution: Being a partnership firm, KC is exposed to the risk of withdrawal of capital by partners due to personal exigencies, dissolution of firm due to retirement or death of any partner and restricted financial flexibility due to inability to explore cheaper sources of finance leading to limited growth potential. This also limits the firm's ability to meet any financial exigencies. Key Rating Strengths * Satisfactory experience of partners along with long track record of the firm: KC was established in May, 2005 and is promoted by Mr. Rajendra K. Mali, Mrs. Shital R. Parekh, Mrs. Rajani C. Patil and Mr. Dinesh Singh R. Patil. The partners have an average experience of one decade in cotton ginning & pressing business. Furthermore, over the years, KC has established longstanding relations with its key customers and suppliers. * Location advantage emanating from proximity to raw material: The manufacturing facility of KC is located at Jalgaon, Maharashtra which contributes to 3% of cotton production in Maharashtra (2nd largest cotton producer in India). The presence of KC in cotton producing region fetches a location advantage owing to lower logistics expenditure and easy availability of customers and suppliers. Moreover, there is robust demand of cotton bales and cotton seeds in region due to presence of spinning and oil mills. Krishna Cotton (KC) was established as a partnership firm in June- 2005 and is engaged in the business of cotton ginning & pressing at its manufacturing facility based in Dharangaon (Maharashtra). The entity procures raw cotton from local farmers and Agriculture Produce Market Committee (APMC) and the purchase decision is dependent upon the MSP and market price of cotton. The major proportion of revenue is derived from ginning process (~99%) and rest from trading of cotton seed and cotton cake. MAGNUM AVIATION: CARE Lowers Rating on INR13.50cr ST Loan to D -------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Magnum Aviation Private Limited (MAPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 9.50 CARE D Revised from CARE BB; Stable Short term Bank Facilities 13.50 CARE D Revised from CARE A4 Rating Rationale The rating assigned to the bank facilities of MAPL is primarily constrained on account ongoing delays in debt servicing. Detailed description of the key rating drivers Key rating weakness * Ongoing delay in debt servicing: There have been delays in interest servicing of working capital borrowings on account of stressed liquidity position. Noida-based (Uttar Pradesh) MAPL was incorporated in 2002 by Mr. Vishal Varshnei and Ms Manvi Varshnei. The company is engaged in the trading of aircraft spares such as aircraft wheels, brakes, avionics, propellers hoses, lubricants, etc. Also, the company provides maintenance, repairs & overhaul (MRO) services for the aircraft components. MAPL has its service facility located in special economic zone in Noida, Uttar Pradesh. MAPL caters to the need of both civil and military aircraft customers in overseas markets as well as in domestic markets. The key customers of the company include ministry of defense, scheduled airlines, state government, civil aviation departments, non-scheduled manufacturers(OEM's) of various aircraft components for the procurement of the products and is an authorized distributors for thesupply and services of their products. NAND ENTERPRISE: CARE Assigns B+ Rating to INR6.50cr LT Loan ------------------------------------------------------------ CARE Ratings has assigned rating to the bank facilities of Nand Enterprise (NE), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 6.50 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of NE is primarily constrained by its small scale of operations with low net worth base, low profitability, leveraged capital structure and weak coverage indicator. The rating is further constrained by working capital intensive nature of operations, presence of the firm in highly competitive nature of industry and along with NE's constitution being partnership. The rating, however, draws comfort from experienced partners with long track record of operations in the industry. Going forward, the ability of the company to increase its scale of operations, improve the profitability margins and capital structure with effective working capital management shall be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses * Small scale of operations with low net worth base: The scale of operations of the firm has remained small marked by total operating income of Rs 31.95 crore during FY16 (FY refers to April 01 to March 31) with gross cash accruals of INR0.08 crore. Further, the net worth of the firm stood small at INR1.59 crore as on March 31, 2016. The small scale limits the firm's flexibility in times of stress and deprives it of scale benefits. Further, In FY17 the firm has achieved a total operating income of INR36.00 crore (Based on Provisional Results). * Low profitability, leverage capital structure and weak coverage indicators: The profitability margins of the firm have remained on the lower side owing to the trading nature of the business and intense market competition given the highly fragmented nature of the industry. Interest cost further restricted the net profitability of the firm. PBILDT and PAT margins of the firm stood at 2.95% and 0.15% in FY16. PBILDT margin of the firm has increased marginally owing to sale of product having higher profit margins. Further, PAT margin stood below 0.10% for the last three years i.e. FY14-FY16 mainly on account of high interest cost. The capital structure stood leveraged on the balance sheet date of past three financial years i.e. FY14-FY16 on account of high dependence on external borrowings to meet the working capital requirement against low net worth base. Overall gearing stood at 4.00x as on March 31, 2016 as against 4.31x as on March 31, 2015 mainly on account of higher net worth base owing to infusion of funds by partners'. The debt service coverage indicators as marked by interest coverage and total debt to GCA stood weak for past three financial years FY14-FY16 mainly on account of low profitability with high debt levels. Interest coverage and total debt to GCA at below 1. 2x and above 60x for FY15 and FY16. * Elongated operating cycle: The firm offers an average credit period of 30-45 days to retailers (in distributorship) and a week's time to customer (in retail trade) resulting in average collection period of 36 days for FY16. The firm procures the electronic goods i.e. television, washing machine, refrigerator etc. from LG mainly on cash and also receives a credit period of around a week on few products. Further, the firm maintains an adequate level of inventory to meet the immediate demand of the customers resulting in an average inventory holding 49 days in FY16. Entailing all lead to NE's high dependence on external borrowings which resulted in almost full utilization of its average working capital limits for the past twelve months ending May 2017. * Constitution of the entity being a proprietorship firm: NE's constitution as a partnership firm has the inherent risk of possibility of withdrawal of the partner's capital at the time of personal contingency and firm being dissolved upon the death/retirement/insolvency of partner. Moreover, Partnership firms have restricted access to external borrowing as credit worthiness of partners would be the key factors affecting credit decision for the lender * Highly competitive nature of the industry: NE operates in a highly fragmented industry wherein there is presence of a large number of players in the unorganized and organized sector There are number of small and regional players catering to the same market which has limited the bargaining power of the company and has exerted pressure on its margins. Key Rating Strengths * Experienced partners and long track record of operations: The operations of NE are currently managed by Mr. Basant Jain, Mr. Anil Kumar Jain and Mr. Anuj Kumar Jain and Mr. Vipul Jain. The firm is being managed by Mr. Basant and Mr. Anil; they have an experience of more than 3 decades in trading of electronic devices through his association with this entity and in individual capacity. They are further assisted by Mr. Vipul Jain, son of Mr. Basant, who has an experience of around 2 decade in trading industry. Kanpur (Uttar Pradesh) based Nand Enterprise (NE) was established in 1984. Kanpur (Uttar Pradesh) based Nand Enterprise (NE) was registered in 1984 as a partnership firm with Mr. Basant Jain, Mr. Vipul Jain, Mr. Nail Kumar jain, Mr. Anuj Kumar and Mrs. Shakuntala Jain as partners sharing profit and losses in the ratio 20% each. The firm is currently being managed by Mr. Basant Jain, Mr. Anil Kumar Jain and Mr. Anuj Kumar Jain and Mr. Vipul Jain. NE is an authorized dealer of electronics consumer products i.e. Refrigerators and Washing Machines of LG brand since 2004. NE operates though a retail outlet named "Nand Enterprise" located in Kanpur. NHC FOODS: Ind-Ra Lowers Issuer Rating to BB+ Not Cooperating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded NHC Foods Limited's (NHCFL) Long-Term Issuer Rating to 'IND BB+(ISSUER NOT COOPERATING)' from 'IND BBB-(ISSUER NOT COOPERATING)'. The Outlook is Stable. The instrument-wise rating actions are: -- INR22.6 mil. Term loan Downgraded and Maintained in Non- Cooperating Category with IND BB+(ISSUER NOT COOPERATING)/Stable rating; and -- INR240 mil. Fund-based facilities Downgraded and Maintained in Non-Cooperating Category with IND BB+(ISSUER NOT COOPERATING)/Stable/IND A4+(ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on best available information KEY RATING DRIVERS The downgrade reflects a sustained breach of Ind-Ra's negative rating guideline of interest coverage (EBITDA/interest expenses) below 2x since FY16 (1QFY18: 1.6x, FY17: 1.8x; FY16: 1.5x) due to lower-than-expected EBITDA margins. NHC reported EBITDA margins of 2.2% in FY17 (FY16: 2.1%) against the agency's expectation of around 2.9%, despite a decline in interest expenses to INR17 million (INR21.8 million). The ratings have been maintained in the non-cooperating category as the company did not provide Ind-Ra with a management certificate regarding timely debt servicing for the last 12 months and information related to working capital utilisation for the last two months, despite continuous requests and follow-ups. Investors and other users are advised to take appropriate caution while using these ratings. RATING SENSITIVITIES Positive: An improvement in the profitability, leading to EBITDA interest coverage exceeding 2x on a sustained basis will be positive for the ratings. Negative: Further deterioration in the EBITDA margins, leading to the EBITDA interest coverage reducing below 1.5x on a sustained basis will be negative for the ratings. COMPANY PROFILE NHCFL was incorporated in 1960 by Himatlal Shah. The company processes and exports spices and food grains. PLANET PR: CRISIL Reaffirms 'B' Rating on INR8MM Cash Loan ---------------------------------------------------------- CRISIL Ratings has been consistently following up with Planet PR Appartment Private Limited (Planet PR) for obtaining information through letters and emails dated July 10, 2017 and August 07, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. CRISIL gave these ratings: Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 8 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 Planet PR Appartment Private Limited. This restricts CRISIL's ability to take a forward Planet PR Appartment Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB rating category or lower. Based on the last available information, CRISIL has reaffirmed the rating at 'CRISIL B/Stable'. Planet PR, promoted by Odisha-based Mr. Ranjan Kumar Pattanayak and Mr. Pradyumna Singh, trades in iron ore and coal. Its operations are primarily managed by Mr. Ranjan Kumar Pattanayak. PRAFULLYA COLD: Ind-Ra Moves 'D' Issuer Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Prafullya Cold Storage's (Prafullya) Long-Term Issuer Rating to the non- cooperating category. The issuer did not participate in the surveillance exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND D(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR12 mil. Long-term loans (long-term) migrated to non- cooperating category with IND D(ISSUER NOT COOPERATING) rating; -- INR39.8 mil. Fund-based working capital limit (long-/short- term) migrated to non-cooperating category with IND D(ISSUER NOT COOPERATING) rating; and -- INR1.5 mil. Non-fund-based working capital limit (short-term) migrated to non-cooperating category with IND D(ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on Sept. 2, 2014. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Prafullya, a partnership firm, was incorporated by GP Sinha in 1968 in West Bengal. It operates a 106,829-quintal cold storage unit for the preservation of agricultural produces, mainly seeds and table potatoes, on a rental basis. RAM COIR MILLS: Ind-Ra Moves B+ Issuer Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Ram Coir Mills' (RCM) Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise, despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND B+(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR130 mil. Fund-based working capital limits migrated to non-cooperating category with IND B+(ISSUER NOT COOPERATING)/IND A4(ISSUER NOT COOPERATING) rating; and -- INR38.4 mil. Term loan limits migrated to non-cooperating category with IND B+(ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on July 12, 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 1952, Kerala-based RCM is an export-oriented unit that manufactures vinyl-backed coir products, coir mats, jute products, rubber-moulded coir products, 100% rubber mats and polypropylene mats. The firm is SA8000:2008 certified. RAYBAN FEEDS: CRISIL Reaffirms 'D' Rating on INR12MM Cash Loan -------------------------------------------------------------- CRISIL Ratings has been consistently following up with Rayban Feeds and Hatcheries Private Limited (RFHPL) for obtaining information through letters and emails dated July 10, 2017 and August 9, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. CRISIL gave these ratings: Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 12 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Long Term Loan 11 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Proposed Long Term 2 CRISIL D (Issuer Not Bank Loan Facility 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 Rayban Feeds and Hatcheries Private Limited. This restricts CRISIL's ability to take a forward Rayban Feeds and Hatcheries Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB rating category or lower. Based on the last available information, CRISIL has reaffirmed the rating at 'CRISIL D'. Incorporated in 2011, RFHPL is engaged in poultry farming. The company was incorporated as a joint venture between the Elahi and Vadivel families, based in Hapur, Uttar Pradesh,-and Coimbatore, Tamil Nadu, respectively. It has a registered office in Coimbatore while its poultry farming unit is in Hapur; the unit commenced operations in fiscal 2014. RELIANCE COMMUNICATIONS: NCLT Moves Ericsson's Bid Hrg. to Oct. 6 ----------------------------------------------------------------- The Economic Times reports that the National Company Law Tribunal (NCLT) has adjourned the hearing of Ericsson's petition to admit the insolvency case against Reliance Communications (RCom) to October 6. Rcom's senior counsel Ravi Kadam told the bench comprising of BSV Prakash Kumar and V Nallasenapathy that if both parties do not reach a settlement by the allotted date, he would file his affidavit to the court, ET relates. However, sources said that reaching a conclusion after failed initial rounds of negotiations would be tough, the report says. Last week, ET reported that the first round of talks between Ericsson and Reliance Communications (RCom) have been inconclusive, with the Swedish equipment maker sticking to its stand on dragging the Anil Ambani group flagship through a bankruptcy process if dues not paid, spelling more bad news for the telco's merger with Aircel. Sources had then said that Ericsson expected Rs550 crore to be paid upfront because RCom had promised them that amount in different stages of the process but failed to live up to it, the report relays. On September 11, Ericsson had filed for insolvency in the NCLT under the newly-formed Insolvency and Bankruptcy Code to recover INR1,150 crore from RCom for services and equipment it had earlier supplied, ET recalls. Under this, the tribunal can initiate takeover of the company or even liquidation to settle debt. Last month, the court had rejected Ericsson's right to object to admitting the merger application of Aircel and RCom as the amount it was due was below 5% of RCom's total debt, the report states. The application to object was simultaneously filed by 13 others, apart from Ericsson, who were claiming dues from RCom, adds ET. About Reliance Communications Based in Mumbai, India, Reliance Communications Ltd (BOM:532712) -- http://www.rcom.co.in/Rcom/personal/home/index.html-- is a telecommunications service provider. The Company operates through two segments: India Operations and Global Operations. India operations segment comprises wireless telecommunications services to retail customers through global system for mobile communication (GSM) technology-based networks across India; voice, long distance services and broadband access to enterprise customers; managed Internet data center services, and direct-to- home (DTH) business. Global operations comprise Carrier, Enterprise and Consumer Business units. It provides carrier's carrier voice, carrier's carrier bandwidth, enterprise data and consumer voice services. The Company owns and operates Internet protocol (IP) enabled connectivity infrastructure, comprising over 280,000 kilometers of fiber optic cable systems in India, the United States, Europe, Middle East and the Asia Pacific region. As reported in the Troubled Company Reporter-Asia Pacific on June 8, 2017, Moody's Investors Service has downgraded Reliance Communications Limited's (RCOM) corporate family rating and senior secured bond rating to Ca from Caa1. The outlook is negative. This concludes the review of the ratings initiated by Moody's on May 30, 2017. The TCR-AP reported on June 8, 2017, that Fitch Ratings downgraded India-based Reliance Communications Limited's (Rcom) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) to 'RD' from 'CCC'. Fitch has also downgraded the rating on Rcom's USD300 million 6.5% senior secured notes due 2020 to 'C/RR4' from 'CCC/RR4'. The downgrade follows Rcom's June 2, 2017 announcement that all of its bank lenders are prepared to waive debt service obligations until end-2017 to provide time for the company to lower its debt through two proposed transactions and present a plan demonstrating how the debt can be serviced over the long term. Under Fitch ratings definitions this situation constitutes a restricted default, as multiple waivers or forbearance periods have been extended in parallel following a non-payment event. S. RASIKLAL: CRISIL Reaffirms 'D' Rating on INR15.75MM Loan ----------------------------------------------------------- CRISIL Ratings has been consistently following up with S. Rasiklal and Co. for obtaining information through letters and emails dated July 11, 2017 and August 7, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. CRISIL gave these ratings: Amount Facilities (INR Mln) Ratings ---------- --------- ------- Adhoc Limit 1 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Foreign Exchange .6 CRISIL D (Issuer Not Forward Cooperating; Rating Reaffirmed) Packing Credit 4.65 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Post Shipment Credit 15.75 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Proposed Long Term 12.00 CRISIL D (Issuer Not Bank Loan Facility 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 S. Rasiklal and Co. This restricts CRISIL's ability to take a forward S. Rasiklal and Co. is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB rating category or lower. Based on the last available information, CRISIL has reaffirmed the rating at 'CRISIL D/CRISIL D'. Set up in 1969 as a proprietorship concern by Mr. Rasiklal Shah, S. Rasiklal was reconstituted as a partnership firm in 1972. The firm is currently managed by Mr. Pravin Shah and his family. The firm manufactures and exports cut and polished diamonds. It is also engaged in the trading of polished diamonds. SEAGULL TRUST II: Ind-Ra Assigns Prov B+ Rating on Series A2 PTCs ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Seagull Trust II (an ABS transaction) the following ratings: -- INR2,711.6 mil. Series A1 pass-through certificates (PTCs) due on February 2019 assigned with Provisional IND AA+(SO)/Stable rating; and -- INR301.3 mil. Series A2 PTCs due on February 2019 assigned with Provisional IND B+(SO)/Stable rating. The final ratings will be contingent upon the receipt of executed documents conforming to the information already received by Ind-Ra. The nature of underlying loans securing the Series A1 and Series A2 PTCs are similar to the microfinance loans and disbursed under Joint Liability Group structure and are of unsecured nature with loan tenors in the range of 12-24 months. Credit underwriting is based on the income generation ability of the borrowers. L&T Finance Limited (LTFL; originator or seller or servicer) internally classifies these loans as micro loans, as all the loan features may not necessarily fall in the requirements for microfinance loans as defined in the Reserve Bank of India guidelines for microfinance institutions. The micro loan pool to be assigned to the trust has been originated by LTFL. KEY RATING DRIVERS Transaction Rating Support Drivers: The provisional ratings are based on the origination, servicing, collection and recovery capabilities of LTFL, the legal and financial structure of the transaction and the credit enhancement (CE) provided in the transaction. The agency is of the opinion that the issuer's origination and servicing capabilities are of an acceptable standard. The rating of Series A1 PTCs is supported by the robust and exhaustive quality of the originator's specific portfolio and pool data, superior credit quality of pool compared to the overall portfolio of the originator and the financial strength of LTFL. The superior pool credit quality includes nil overdue loans across life of pool till the pool cut-off date, significantly high pool collection efficiency of above 99% even in times of extreme stress such as demonetisation, and significantly high weighted average (WA) seasoning of 9.6 months and WA amortisation of 39.2%. While about 75% of the average peak defaults have been observed in LTFL's micro loan portfolio at seasoning levels of nine to 10 months, the proposed securitised pool has remained non-delinquent till date. Additionally, Ind-Ra derives comfort from the significant ability of the servicer to perform pool collections on a steady state basis even in times of severe economic downturn or idiosyncratic events such as demonetisation. Transaction Structure: The provisional rating of Series A1 PTCs addresses the timely payment of interest on monthly payment dates and the ultimate payment of principal by the final maturity date of February 2019, in accordance with transaction documentation. The provisional rating of Series A2 PTCs addresses the timely payment of interest on monthly payment dates only after the complete redemption of Series A1 PTCs and the ultimate payment of principal by the final maturity date of February 2019, in accordance with transaction documentation. Availability of Credit Support: The transaction benefits from an internal CE on account of excess interest spread and subordination. The level of subordination available to Series A1 PTCs is 10% of the initial pool principal outstanding (POS). The total excess cash flow or internal CE including subordination and excess interest spread available to Series A1 and A2 PTCs is 20.2% and 9%, respectively, of the initial POS. The transaction also benefits from an external CE of 6.5% of the initial POS in the form of fixed deposits in the name of the originator with a lien marked in favour of the trustee. Additionally, the total excess interest spread of the pool shall be trapped in an escrow account if the 0+ days past due is greater than 5.0% of the initial POS during the transaction tenor and shall be available for unscheduled amortisation of Series A1 PTCs. The external CE will be used in case of a shortfall in a) the complete redemption of both PTCs on the final maturity date, b) the monthly interest payment to Series A1 investors c) the monthly interest payment of Series A2 investors after the complete redemption of Series A1 investors. Key Pool Characteristics: The collateral pool to be assigned to the trust had an aggregate outstanding principal balance of INR3,012.9 million as of the pool cut-off date of 31 August 2017. The pool consisting of 1,81,572 loans has a weighted average seasoning of 9.6 months and WA amortisation of 39.2%. The WA balance tenor remaining for the pool is around 14.4 months. Also, the WA internal rate of return is 24%. The pool is concentrated close to 88% of POS in only two states viz. Tamil Nadu (66.4%) and Kerala (22.0%). However, in the past the average collection efficiency of the meeting centres in these states was greater than 99%. Originator's Servicing, Underwriting & Collection Capabilities: LTFL provides micro loans for income-generating purposes to Joint Liability Groups, comprising women, typically in groups of five to 16 and in the age limit of 20 to 60. The loans are sourced directly by an in-house 3,000 member team of front line officers who are also engaged in collection activities. The loan amount provided depends on the cycle of the loan, the income-generating capacity of the borrower, and the total household annual income of the borrower which typically exceeds INR0.1 million for loan eligibility. The key features of the credit underwriting process include assessment of credit worthiness and leverage of borrowers and mandatory requirement of Aadhar Card by borrower as a part of Know Your Customer norms. Additionally, business concentration of micro loans in any district is capped at below 2% of the district population and in any state it is less than 25% of the product portfolio. Key Assumptions: Ind-Ra has derived a base case net default rate after adjusting for seasoning and amortisation in the range of 3%- 4%. The agency has analysed the characteristics of the pool and established its base-case assumptions through the four key performance variables namely default rate, recovery rate, recovery timeline and prepayment rate, which collectively affect the credit risk in a transaction. Ind-Ra considers both long-term historical average of the key performance variables of the old static pools and the performance of the latest static pools. The current pool comprises micro loans which are unsecured in nature. As the chances of recovery from these loans are less likely, Ind-Ra has not assumed any recovery rate from the underlying loans. Also, considering that the weighted average balance tenor of the micro loans in the pool is only 14.4 months, Ind-Ra does not perceive significant prepayment risk in the pool. Ind-Ra stressed the above variables for the rating level as per 'Rating Criteria for Indian Asset-Backed Securitisations'. RATING SENSITIVITIES As part of its analysis, Ind-Ra built a pool cash flow model based on the transaction's financial structure. The agency analysed historical data to determine the base values of key variables that would influence the level of expected losses in this transaction. The base values of the default rate and recovery rate, time to recovery, collection efficiency, prepayment rate and pool yield were stressed to assess whether the level of CE was sufficient for the current rating levels. Ind-Ra also conducted rating sensitivity tests. If the assumptions of both base case default rate worsened by 20%, the model-implied rating sensitivity suggests that the rating of Series A1 PTCs will be downgraded by two notches to 'IND AA-(SO)' and the rating of Series A2 PTCs will be not be impacted. COMPANY PROFILE LTFL was established as Family Credit Ltd. (erstwhile Apeejay Finance Group Ltd.) in 1993. LTFL is a registered non-banking financial corporation. Its registered office is in Kolkata. L&T Finance Holdings Limited (LTFHL) is a subsidiary of Larsen & Toubro Limited, which is the flagship holding company for the financial services business of the L&T Group. LTFL, which is recognised as a systemically important non-deposit taking non- banking financial corporation, is a wholly owned subsidiary of LTFHL. LTFHL completed the amalgamation of its wholly owned subsidiaries LTFL and L&T Fincorp Ltd. with Family Credit Limited in February 2017. Family Credit Limited was subsequently renamed as L&T Finance Limited. The total micro loan book of LTFL stood at INR38.12 billion as on Jun' 2017 and registered an Year-on-Year (Y-o-Y) growth of 57% as compared to overall micro loan book of INR24.21 billion as on June 2016. The company classifies any loan as a non-performing asset if it is overdue for over 90 days. The reported gross NPA and net NPA of the rural finance business segment (36% of which comprises micro loans) were 11.35% and 7.62%, respectively, as of June 2017. SENGUPTA MOTORS: CARE Assigns B+ Rating to INR5.80cr LT Loan ------------------------------------------------------------ CARE Ratings has assigned rating to the bank facilities of Sengupta Motors (SGM), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 5.80 CARE B+; Stable Assigned Short-term Bank Facilities 1.20 CARE A4 Assigned Detailed Rationale & Key Rating Drivers The ratings assigned to the bank facilities of SGM are constrained by its nascent stage of operations, linkage to the fortunes of Bajaj Auto Limited (Bajaj), limited profitability associated with dealership business, renewable based dealership agreement, working capital intensive nature of operations, proprietorship nature of constitution, pricing constraints and margin pressure arising out of competition from various auto dealers in the market. The ratings, however, derive strength from experienced proprietor, authorized dealership agreement with Bajaj and its integrated nature of business. Going forward, the ability of the firm to achieve the envisaged revenue and profit margins with effective working capital management shall be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses * Nascent stage of operations: SGM is an authorised dealer of Bajaj, started its commercial operation from April, 2017 onwards. Therefore, the firm has an extremely short track record of operations. During 5MFY18, the firm has achieved turnover of INR10.00 crore as maintained by the management. Going forward, the ability of the firm to achieve revenue and profit margins as envisaged will be critical for the firm. * Linkage to the fortunes of Bajaj: SGM, being an authorised dealer of Bajaj, deals exclusively with Bajaj two wheelers, spares parts and accessories. Accordingly, its fortunes are linked to the performance of Bajaj's products. As such, any shift in customer preference and brand equity will negatively impact SGM. * Limited profitability associated with dealership business: Automobile dealership is a volume driven business as margins on vehicles and spares are controlled by automobile manufacturers. Accordingly, due to limited pricing power of the firm profitability levels and margins of SGM is estimated to remain on the lower side in the future periods. Hence the firm's growth prospects depend on the ability to increase its volume momentum and capitalize on the spares fetching higher margin and service segment. * Renewal based dealership agreement: The dealership agreement between Bajaj and SGM is valid for three years expiring on March 2020, thereafter subject to automatic renewal for two years unless it is terminated due to breach of contract/fraud by the firm or it's going into liquidation. Going forward, the ability of the firm to meet the expectation of the principal i.e. Bajaj and regular renewal of the dealership agreement with the principal will be critical for the firm. * Working capital intensive nature of operations: The business of automobile dealership is having inherent high working capital intensity due to high inventory holding requirements. The firm has to maintain the fixed level of inventory for display and to guard against supply shortages. Furthermore, Bajaj demands payment in advance, resulting in higher working capital requirements. The average fund-based working capital utilization remained high at about 95% during the last five months ended August 31, 2017. * Proprietorship nature of business: SGM, being a proprietorship firm, is exposed to inherent risk of withdrawal of capital by the proprietor, restricted access to funding and risk of dissolution on account of poor succession planning. Furthermore, proprietorship firms have restricted access to external borrowing as credit worthiness of proprietor would be the key factors affecting credit decision for the lenders. * Pricing constraints and margin pressure arising out of competition from various auto dealers in the market: Bajaj has currently one dealer for each district thus eliminating the scope of competition from other Bajaj dealers. With the sole authorized dealership of Bajaj in Agartala (Tripura) the bargaining power of SGM with customers is high. However, the firm is exposed to external competition from other dealers of companies such as Suzuki, Yamaha, TVS, Honda, etc. In order to capture the market share, the auto dealers generally have to offer better buying terms like providing credit period or allowing discounts on purchases. Such discount creates margin pressure and negatively impact the earning capacity of the firm. Key Rating Strengths * Experienced proprietor albeit lack of experience in auto dealership business: Mr. Avik Sengupta (Proprietor) has around 8years of business experience in construction industry through his partnership firm 'Chandan Sengupta'. However, he lacks experience in automobile dealership business. He is associated with the firm since its inception, looks after the day to day operations of the firm supported by experienced personnel. * Authorized dealership agreements with Bajaj: SGM enjoys the leverage of being an authorized dealer of Bajaj which is one of the largest two and three wheelers manufacturers in India. Integrated nature of business: SGM also provides authorized after sales service and deals in original accessories & spare parts apart from selling two wheelers by virtue of being a 3-S authorized dealer of Bajaj. Owning authorized service centre helps the firm to tap a larger client base who prefers to purchase two wheelers from dealers having own authorized service centre to avoid hassles in case of breakdown and requirement of service. SGM was established as a proprietorship firm in October 2016 by Mr. Avik Sengupta. SGM is an authorised dealer of Bajajand deals exclusively with Bajaj two wheelers, its spares parts & accessories and after sales services (repair and refurbishment) for the entire state of Tripura. The firm has commenced operations from April 2017 onwards and currently, it is operating through its two showrooms which are located in Agartala, Tripura West. SHARMA CONSTRUCTION: CARE Moves B+ Rating to Not Cooperating ------------------------------------------------------------ CARE Ratings has moved rating to the bank facilities of Sharma Construction Company, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 5.00 CARE B+; Issuer not cooperating; based on best available information Short term Bank Facilities 3.00 CARE A4; Issuer not cooperating; based on best available information Detailed Rationale & Key Rating Drivers Sharma Construction Company has not paid the surveillance fees for the rating exercise agreed to in its Rating Agreement. In line with the extant SEBI guidelines, CARE's rating on Sharma Construction Company's bank facilities will now be denoted as CARE B+ /CARE A4; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The ratings take into account the small scale of operations with low net-worth base, moderate capital structure and geographically concentrated revenue profile. Further, the ratings are constrained by fragmented nature of the construction sector albeit improving growth prospects and constitution of the entity being a proprietorship firm. The ratings derive benefit from experienced proprietor, established track record of entity, comfortable profitability margins with satisfactory debt coverage indicators and improvement in operating cycle. Detailed description of the key rating drivers At the time of last rating in May 2016, the following were the rating strengths and weaknesses (Updated for the year FY17 based on information provided by client): Key rating Weaknesses * Small scale of operations with low net-worth base: Despite being in operations for more than two and a half decades, the firm's scale of operations has remained low marked by Total Operating Income (TOI) of INR58.75 crore in FY17 (refers to the period April 01 to March 31) and networth base of INR5.38 crore as on March 31, 2017. The small scale limits the firm's financial flexibility in times of stress and deprives it from scale benefits. * Moderate capital structure: The capital structure of SCC stood moderate at 1.56x as on March 31, 2017. The same improved from 9.46x as on March 31, 2015 on account of increase in net worth base of the firm coupled with repayment of term loans. * Geographically concentrated revenue profile: SCC entirely derives its revenue from the orders in the Punjab state which exposes the firm to geographical concentration risk and closely ties its fortunes to the incremental development of infrastructure projects in the state. * Fragmented nature of the construction sector albeit improving growth prospects: The construction sector in India is highly fragmented with a large number of small and mid-sized players. This coupled with tendering process in order procurement results into intense competition within the industry. Despite these road blocks faced by the industry, the sector is expected to grow, given huge economic significance associated with it and rising investor interest. * Constitution of the entity being a proprietorship firm: SCC's constitution as a proprietorship firm has the inherent risk of possibility of withdrawal of the proprietor's capital at the time of personal contingency and firm being dissolved upon the death/retirement/insolvency of proprietor. Key Rating Strengths * Experienced proprietor and established track record of entity: SCC is engaged in the civil construction work and is managed by Mr. Naval KishoreSharma, having around two and a half decades of industry experience. The proprietor has gained this experience through his association with SCC only. The proprietor has adequate acumen about various aspects of business which is likely to benefit SCC in the long term. * Comfortable profitability margins with satisfactory debt coverage indicators: The profitability margins of the firm remained comfortable marked by PBILDT margin and PAT margin of 9.57% and 6.13% respectively in FY17. Additionally, the debt coverage indicators remained at a comfortable level characterized by total debt to GCA ratio of 1.75x as on March 31, 2017 and interest coverage ratio of 6.72x in FY17. * Improvement in operating cycle: The average operating cycle of the firm stood at -23 days for FY17. The same improved from 44 days for FY15. The firm receives payment from the client on percentage of completion basis. Nearly 95% of the bill amount raised by the firm is received within 1-2 days while the remaining payment is made after competition of the contract. The same has resulted in low collection period. Further, the average inventory period of the firm improved from 76 days for FY15 to 3 days for FY17. Furthermore, firm receives average credit period of around one month from its suppliers of raw materials. SCC is a proprietorship firm established in 1990 by Mr. Naval Kishore Sharma. SCC is engaged in the civil construction work in Punjab, mainly including road work projects. The firm is registered as a 'class A1' contractor with Bridge &Road Division (B&R), Municipal Corporation and Improvement Trust of Punjab. The orders undertaken by the firm are secured through the competitive bidding process. Besides SCC, the proprietor is also engaged in another group concern, namely, Sharma Vibrotech Pipes (SVP), a partnership firm, engaged in the manufacturing of cement pipes. SHREE BALAJI: CARE Moves 'D' Rating to Not Cooperating Category --------------------------------------------------------------- CARE Ratings has moved rating to the bank facilities of Shree Balaji Steel, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 4.80 CARE D; ISSUER NOT Facilities COOPERATING; on Best Available Information Detailed Rationale & Key Rating Drivers CARE has been seeking information from Shree Balaji Steel to monitor the rating vide e-mail communications/letters dated June 29, 2017, September 6, 2017 and September 9, 2017 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the rating. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on Shree Balaji Steel's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The rating takes into account the continuous delay in servicing of debt obligations by the firm. Detailed description of the key rating drivers At the time of last rating on July 14, 2017, the following were the rating strengths and weaknesses: Key Rating Weakness * Delay in servicing of debt obligations: As per the interaction with the banker, there are continuous delays in repayment of term loan and overdrawals in cash credit facility and the account has been classified as NPA. Shree Balaji Steel (SBS), based out of Nagpur, Maharashtra is a proprietorship entity promoted by Mr. Radheshyam Sarda and commenced operation in January 1981. SBS is engaged in trading of iron &steel products such as Thermo Mechanically Treated (TMT) bars, round bars, angles, channels, beams, flats, sheets, etc. which find application in industries like construction, infrastructure and engineering. The entity has its registered office and servicing facility based in Nagpur, Maharashtra. The servicing facility is rented and has an area of 800 sq. ft. The entity procures materials from domestic suppliers players based in Nagpur and sells its products in the state of Maharashtra and Chhattisgarh. SHREE KRISHAN: Ind-Ra Affirms 'BB' Issuer Rating, Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Shree Krishan Co (Manufacturers) Private Limited (SKCMPLI) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR55 mil. (increased from INR33 mil.) Fund-based working capital limit affirmed with IND BB/Stable rating; -- INR117.9 mil. (reduced from INR154.7 mil.) Term loan due on April 2022 affirmed with IND BB/Stable rating; and -- INR17.5 mil. Non-fund-based limit affirmed with IND A4+ rating. KEY RATING DRIVERS The affirmation reflects the company's continued small scale of operations, as reflected from its revenue of INR343 million based on the provisional FY17 financials (FY16: INR277 million), due to the short track record of its director in the snack manufacturing business. Also, the working capital cycle has been considerably long (FY17: around 119 days; FY16: 107 days) due to high inventory days. The ratings, however, are supported by SKCMPLI's continued moderate-to-strong credit metrics, as reflected from its EBITDA interest coverage of 3.8x in FY17 (FY16: 2.8x) and net financial leverage of 2.3x (4.2x).The improvement in the credit metrics was due to improved EBITDA and reduced debt. Moreover, the liquidity profile of the company is moderate, with average utilisation of around 90% during the 12 months ended August 2017. The ratings are further supported by SKCMPLI's strong operating EBITDA margin (FY17: 22.1%; FY16: 17.2%) and its recent association with PepsiCo India Holdings Pvt Ltd for its Uncle Chips brand. RATING SENSITIVITIES Positive: A substantial improvement in the scale of operations while maintaining the credit metrics will be positive for the ratings. Negative: A decline in the operating margins will lead to a negative rating action. COMPANY PROFILE Incorporated in 1975, SKCMPLI started commercial operation in 2013. It manufactures chips and snacks. The company has an installed capacity of 6,700 metric tonnes per annum and sells its products under its own brand name Njoy. It is managed by Mr. K. D. Agarwal and its registered office is located in Howrah, West Bengal. SHIRISH HOTELS: CARE Assigns B+ Rating to INR13.35cr LT Loan ------------------------------------------------------------ CARE Ratings has assigned rating to the bank facilities of Shirish Hotels Private Limited (SHPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 13.35 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of SHPL takes into consideration short track record of the company with small scale of operations, seasonality associated with hotel industry, moderate capital structure and liquidity position, competition from other players in the industry with geographic concentration risk. The rating, is however, underpinned by the experience of the promoter in hotel industry over two decades in hotel industry along with locational advantage of the hotel. Going forward, the company's ability to increase occupancy level to improve scale of operations coupled with increase in average room rent to improve its profitability margins would be key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses * Seasonality associated with hotel industry: The demand for hotel and hospitality sector has direct relation to the overall health of economy. The Indian hotel industry normally experiences high demand during April to November month, mainly on account of summer vacations and marriage season in the state. However, this trend is seeing a change over the recent few years. Hotels have introduced various offerings to improve performance (occupancy) during the lean months. These include targeting the conferencing segment and offering lucrative packages during the lean period. * Competition from other players in the industry: The company faces competition from a number of small and medium players since it is located in commercial area of the city. Though there are other regional players offering services, SHPL is able to withstand in the market through its vast experience through its associate firm with continuous business promotion activities. Apart from this, expansion of business operations will help the company to attract new customers as well. * Geographic concentration risk: The business operations of the company are geographically concentrated to Hyderabad, Telangana State. However, the company is diversifying by opening multiple branches in the state of Telangana which would mitigate the risk of geographical concentration to an extent. * Moderate capital structure and liquidity position: The company's initial capital expenditure for setting up the hotel land and building along with infrastructure funded through own funds of around INR 4.00 crores and bank term loan of INR 12 crores and unsecured loan of INR 1 crore. High amount of long term debt of the company impacted in higher debt equity and overall gearing ratio of 3.16x and 3.29x respectively as on March 31, 2017. The same are estimated to be around 2.77x and 2.86x as on March 31, 2018 with accretion of profits of FY2018 to networth. Further the current ratio of the company stood moderate at 1.05 times as on March 31, 2017 and the same is likely to reduce further due to increasing current portion of the term loans availed by the company. Key Rating Strengths * Experience of promoter in hotel industry for over two decades: SHPL was incorporated in the year 2016, promoted by Mr. Yugandhar Dande(Managing Director),Mr. Shanmy Shirish Dande (Director), and Mrs Uma Devi Dande(Director). All the directors are qualified graduates and have more than a decade of experience in hotel industry through its associate firm (Shirish Hotels). Mr. Yugandhar Dande is also proprietor of "Shirish Hotels" under which the proprietor runs a hotel located at Panjagutta, Hyderabad. The directors are actively involved in day to day operations of the company. The operations of the company are well supported by strong management team who are qualified and experienced in their respective fields. * Location advantage of the Hotel: SHPL has the location advantage, as the hotel premise is located in one of the prime commercial areas of Hyderabad city. The hotel provides restaurant, coffee shop, bar and banquet hall services. With the commercial nature of location of the hotel, the company is likely to have assured business from room bookings, restaurant business and other related incomes. Hyderabad based, Shirish Hotels Private Limited (SHPL) was incorporated on September 12, 2016 as a private limited company by Mr. Yugandhar Dande (Managing Director), Mr. Dande Shanmug Shirish (Director) and Mrs Uma Devi Dande (Director). The company is engaged in hospitality business and offers services in the area of restaurants, bar, banquet hall, rooms, and coffee shop. Mr. Yugandhar Dande is also proprietor of "Shirish Hotels (SH)" under which the proprietor runs a hotel located at A.S Rao Nagar, Main Road, Hyderabad. SH is engaged in bar & restaurants, Currently, the company is managed by Mr. Yugandhar Dande and his son Mr. Shanmug Shirish who look after overall operations of the company. SPRAY ALCANS: CRISIL Reaffirms D Rating on INR5.2MM Term Loan ------------------------------------------------------------- CRISIL Ratings has been consistently following up with Spray Alcans (SA) for obtaining information through letters and emails dated July 10, 2017 and August 9, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. CRISIL gave these ratings: Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 2.5 CRISIL D (Issuer Not Cooperating; Rating Reaffirmed) Proposed Long Term .1 CRISIL D(Issuer Not Bank Loan Facility Cooperating; Rating Reaffirmed) Term Loan 5.2 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 Spray Alcans. This restricts CRISIL's ability to take a forward Spray Alcans is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB rating category or lower. Based on the last available information, CRISIL has reaffirmed the rating at 'CRISIL D'. Set up in March 2015 as a partnership firm by Ms. Ashu Goel and her son, Mr. Aayush Goel, SA purchased an existing aluminium can manufacturing unit in Dehradun in November 2015 and commenced operations from February 2016. SRI KAVERI: CARE Reaffirms B+ Rating on INR15.55cr LT Loan ---------------------------------------------------------- CARE Ratings reaffirmed ratings on certain bank facilities of Sri Kaveri Cotton Industries (SKCI), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 15.55 CARE B+; Stable Reaffirmed Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of SKCI takes into account achievement of reasonable total operating income during five months of operation along with satisfactory operating cycle in FY17 (refers to period April 1 to March 31). The rating continues to be tempered by limited track record and small scale of operations, thin profitability margins, leverage capital structure and weak debt coverage indicators, highly fragmented industry and regulated by government, operating margins susceptible to cotton price fluctuation and seasonality associated with the cotton industry and constitution of entity as a partnership concern with inherent risk of possibility of withdrawal of the partner's capital. However, the rating continues to derive benefits from experienced partners and established relationship with clients and suppliers. Going forward, the ability of the firm to increase the scale of operations and profitability margins in a competitive environment along with improvement in capital structure are the key rating sensitivities. Detailed Description of the key rating drivers Key Rating Weaknesses * Limited track record of operations coupled with relatively small scale of operations: SKCI was established in the year 2013 and the commercial operation started from Nov 2016. Hence, the firm has very short track record of operations. However, the firm has achieved total income of INR40.05 crore in FY17 and has networth of INR2.96 crore as on March 31, 2017. * Leverage capital structure and weak debt coverage indicators: The capital structure of the firm stood leveraged marked by overall gearing of 5.87x as on March 31, 2017 due to low networth and higher outstanding balance of working capital facility as on account closing date along with term loan facility availed for setting up of the cotton ginning unit. The total debt/GCA of the firm was high at 12.07x in FY17 due to lower cash accruals on account of only 5 months of operations in FY17. The interest coverage ratio stood satisfactory at 2.73x in FY17. * Highly fragmented industry and regulated by government The ginning and pressing of cotton, which involves very limited value addition and hence, results in thin profitability. Moreover, on account of large number of units operating in the cotton ginning business, the competition within the players remains very high resulting in high fragmentation and further restricts the profitability. Thus, ginning players have very low bargaining power against its customer as well as suppliers. Furthermore, the cotton prices in India are regulated by government through MSP (Minimum Support Price) fixed by government, though due to huge demand-supply mismatch the prices have rarely been below the MSP. Moreover, exports of cotton are also regulated by government through quota systems to suffice domestic demand for cotton. Hence, any adverse change in government policy, i. e, higher quota for any particular year, ban on the cotton or cotton yarn export may negatively impact the prices of raw cotton in the domestic market and could result in lower realizations and profit. * Operating margins susceptible to cotton price fluctuation and seasonality associated with cotton industry: Operations of cotton business are seasonal in nature, as sowing season is done during March to July and harvesting cycle (peak season) is spread from October to February every year. Prices of raw material, i. e, raw cotton are highly volatile in nature and depend upon factors like monsoon condition, area under production, yield for the year, international demand supply scenario, export policy decided by government and inventory carried forward of the last year. Ginners usually have to procure raw materials at significantly higher volume to bargain bulk discount from suppliers. Furthermore, cotton being a seasonal crop, the inventory levels of the entity generally remains high at the end of the financial year. Thus, aggregate effect of both the above factors results in exposure of ginners to price volatility risk and high dependence on working capital bank borrowings. * Constitution of the entity as a Partnership firm with inherent risk of withdrawal of capital and limited access to funding: Constitution as a partnership firm has the inherent risk of possibility of withdrawal of the partner's capital at the time of personal contingency which can adversely affect its capital structure. Furthermore, partnership firms have restricted access to external borrowings as credit worthiness of the partners would be key factors affecting credit decision for the lenders. Key Rating Strengths * Experience of the partner for three decade in cotton industry: SKCI is promoted by Mr. K Ramesh and their relatives. Mr. K Ramesh has three decades of experience in cotton industry. He is also actively involved in the associate concerns Kaveri Ginning Mills Private Limited, Kaveri Ginning Industries Private Limited, Swathi Ginning Mills Private Limited. Apart, Mr. K. Ramesh is actively involved in Kaveri Cotton Traders which is in the name of Mrs. K. Sujana (Spouse of Mr. K. Ramesh). Due to long term presence in the market, the partners have established relations with the customer and supplier which will further enable the firm to grow in future. * Achieved reasonable revenue and profit margins within 5 months of operations: SKCI was established in the year 2013 and the commercial operations started from Nov 2016, hence it has a very short operational track record. However, within a short period of time, the firm achieved total operating income of INR40.05 crore in FY17 on account of established customer base due to presence of associated entities in the similar line of business. The PBILDT margin and PAT margin stood at 2.75% and 0.54% respectively in FY17. * Satisfactory operating cycle: The operating cycle of the firm remained satisfactory at 67 days in FY17. The firm extends credit period of around 30-40 days to its customers while it makes payment to the raw material suppliers (farmers) within a week and sometimes by way of upfront cash. However, the firm also avails credit period of 15-25 days based on the long standing relationship with some of the farmers. The firm holds the inventory of around two months which includes raw cotton, inventory of raw cotton under process and finished inventory of cotton bales and cotton seeds to meet customer requirements. The average monthly utilization of working capital was 40% for the last 12 month ended August 31, 2017. Sri Kaveri Cotton Industries (SKCI), [erstwhile Kaveri Cotton Industries] was established on April 27, 2013 and the firm stated its commercial operation from Nov 2016. SKCI was promoted by Mr. K Ramesh, his friends and relatives/family members. The firm is engaged in manufacturing of cotton bales and cotton seeds. The firm procures the raw cotton from the farmers located in and around Karimnagar. The firm sells its products i.e. cotton bales and cotton seeds to the spinning millers located at Tamil Nadu and Andhra Pradesh. SRI LAXMI: CARE Lowers Rating on INR6cr LT Loan to 'D' ------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of Sri Laxmi Narasimha Rice Industries (SLN), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term bank Facilities 6 CARE D; Revised from CARE B Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of SLN factors in the ongoing delays in servicing of debt obligations by the firm. Establishing a clear track record of timely debt servicing is the key rating sensitivity. Detailed description of the key rating drivers Key Rating Weakness * Delay in debt servicing obligations: As per interaction with the banker, there are on-going delays in in repayment of term loan installment, interest obligations and overdrawals in cash credit facility. Sri Laxmi Narasimha Rice Industry (SLN) is a partnership firm established in April 2015. The firm started with its commercial operations from April 2016 onwards. The partners of the firm are Mr. K. Janardhana Reddy, Mr. P. Ramalinga Reddy, Ms. K. Sesha Reddy and Mr. S. Ramesh. The mill is located in Sriguppa in Bellary district of Karnataka. STEEL & METAL: Ind-Ra Affirms 'B+' Issuer Rating, Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Steel & Metal Tubes (India) Private Limited's (SMT) Long-Term Issuer Rating at 'IND BB+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR90 mil. Fund-based working capital limit affirmed with IND BB+/Stable/IND A4+ rating; and -- INR130 mil. Non-fund-based limits affirmed with IND A4+ rating. KEY RATING DRIVERS The ratings continue to reflect SMT's moderate scale of operations and credit metrics. Revenue increased to INR851.86 million in FY17 from INR838.57 million in FY16. In FY17, net interest coverage (operating EBITDA/gross interest expense) was 1.71x (FY16: 3.21x) and net leverage (total adjusted net debt/operating EBITDAR) was 5.40x (3.67x). The deterioration in credit metrics was on account of a significant decline in EBITDA margin. The ratings continue to reflect volatile operating EBITDA margin (1.4%-2.5% over FY14-FY17) due to fluctuations in raw material prices. The ratings are, however, continued to be supported by a comfortable liquidity profile and SMT's promoters' three-decade experience in the iron and steel industry. Its average working capital utilisation was about 56% for the 12 months ended August 2016. RATING SENSITIVITIES Negative: A significant fall in overall revenue and operating EBITDA margin leading to sustained deterioration in credit metrics will be negative for the ratings. Positive: Substantial revenue growth, with an improvement in operating EBITDA margin leading to sustained improvement in credit metrics, could be positive for the ratings. COMPANY PROFILE SMT was incorporated in 1971 as a private limited company. In July 1984, it was reconstituted as a deemed limited company. The company manufactures pipes such as electric resistance welded pipes and tubes. It has a 50,000-tonne-per-annum manufacturing plant in Ghaziabad, Uttar Pradesh. VASHU YARN: CRISIL Assigns 'D' Rating to INR9.32MM Cash Loan ------------------------------------------------------------ CRISIL Ratings has revoked the suspension of its rating on bank facilities of Vashu Yarn Mills India Private Limited (VYPL) and assigned its 'CRISIL D' rating to these bank facilities. CRISIL had suspended the rating vide its rating rationale dated April 22, 2013, as VYPL had not provided necessary information required for a rating review. The company has now shared the requisite information, enabling CRISIL to assign its rating to the bank facilities. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 9.32 CRISIL D (Assigned; Suspension revoked) Letter of Credit 1.00 CRISIL D (Assigned; Suspension revoked) Term Loan 4.68 CRISIL D (Assigned; Suspension revoked) The ratings reflect the company's delays in meeting term debt obligation due to weak liquidity. The company also has large working capital requirement and a below-average financial risk profile. However, it benefits from the extensive experience of its promoter in the cotton industry. Key Rating Drivers & Detailed Description * Delays in meeting term debt obligation due to weak liquidity: VYPL has been delaying interest and principal obligations on its term loan. These delays are caused because of stretched liquidity resulting from working capital intensive nature of operations. The company's working capital requirements are intensive as indicated by the gross current asset (GCA) of 166 days primarily driven by the inventory holding of 3 to 4 months and receivables of 2-3 months. Consequently, the company's working capital limits are fully utilised. Weakness * Working capital-intensive operations and susceptibility to volatility in prices and availability of raw material: VYPL had gross current assets of 166 days as on March 31, 2017. It holds large cotton inventory of 3-4 months because of the seasonal availability of cotton. The company does not get significant credit from its suppliers but has to extend credit of 30-60 days to customers, resulting in high bank line utilisation of almost 100% over the 9 months through June 2017. CRISIL believes VYPL's working capital-intensive operations will continue to constrain its liquidity and financial flexibility. Cotton, VYPL's key raw material, accounts for 70% of the company's turnover. Cotton prices are volatile as they depend on the monsoon and international demand. Volatility in availability and prices of cotton affects the margins of cotton yarn. The company's profitability may be adversely affected if it is unable to pass on increase in cotton prices to customers. * Below-average financial risk profile: The company's financial risk profile is constrained by modest networth and high gearing of INR7 crore and 2.77 times, respectively, as on March 31, 2017. Networth was eroded due to losses. Though the networth is expected to improve over the medium term, it will remain modest due to low accretion to reserves driven by constrained revenue. The gearing is expected to remain high due to large working capital debt. The debt protection measures were subdued with net cash accrual to total debt and interest coverage ratios at 0.15 time and 2.91 times, respectively, in fiscal 2017. The debt protection measures are expected to remain weak over the medium term due to modest accrual. Strength * Extensive experience of the promoter in the textile industry: VYPL has an established regional presence in the cotton yarn segment, aided by the extensive experience of its promoter and established relationships with customers and suppliers. Promoter- director Mr. K S Vasudevan has been in a similar business for more than a decade, and his relationships with suppliers date back to around a decade. VYPL has 15-20 customers based in Tamil Nadu. Set up in 2003, VYPL manufactures cotton yarn. Its facility in Vijayamangalam, Tamil Nadu, has installed capacity of 18,000 spindles. The company also generates wind power, and has installed capacity of 2.35 megawatt. VISAKHA TRADES: Ind-Ra Affirms 'B+' Issuer Rating, Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Visakha Trades' (VT) Long-Term Issuer Rating at 'IND BB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR3.25 mil. Long-term loans withdrawn (repaid in full) with WD rating; -- INR40 mil. Fund-based facilities affirmed with IND BB- /Stable/IND A4+ rating; -- INR20 mil. Non-fund-based facilities affirmed with IND A4+ rating. KEY RATING DRIVERS The ratings reflect VT's continued small scale of operations and moderate credit metrics. According to provisional financials for FY17, revenue was INR126 million (FY16: INR123 million). VT registered a fall in orders due to demonetisation. In FY17, interest coverage (operating EBITDA/gross interest expense) was 3.8x (FY16: 2.6x) and net financial leverage (adjusted net debt/operating EBITDAR) was 3.4x (FY16: 3.5x). The improvement in credit metrics was driven by an increase in EBITDA and the repayment of the term loan. VT booked INR21.97 million in revenue for 4MFY18. EBITDA margin increased to 10.3% in FY17 (FY16:9.3%), driven by the execution of high-margin orders. The ratings also continue to reflect the sole proprietorship nature of business. The ratings, however, continue to be supported by moderate liquidity, indicated by an average working capital limit utilisation of 80% for the 12 months ended August 2017. Moreover, the ratings are supported by the proprietor's over two-and-half- decade experience in refurbishing the cabins of naval ships and building porta cabins. RATING SENSITIVITIES Negative: Any decline in revenue and EBITDA margin leading to deterioration in credit metrics could lead to a negative rating action. Positive: Substantial revenue growth and a rise in profitability leading to an improvement in credit metrics would be positive for the rating. COMPANY PROFILE Visakhapatnam-based VT is engaged in the refurbishing of the cabins of naval ships, and the building and selling of porta cabins. ZEARS DEVELOPERS: CARE Cuts Rating on INR25cr LT Loan to B+ ----------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Zears Developers Private Limited, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 25.00 CARE B+; ISSUER NOT Facilities COOPERATING; Revised from CARE BB- on the basis of best available information CARE has been seeking information from Zears Developers Private Limited to monitor the rating(s) vide e-mail communications/ letters dated August 16, 2017, August 24, 2017 and August 28, 2017 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on Zears Developers Pvt. Ltd's bank facilities will now be denoted as CARE B+; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The ratings have been revised on account of losses incurred by company in past two years along with increased in overall gearing and weak debt coverage indicator. Detailed description of the key rating drivers At the time of last rating on July 14, 2016, the following were the rating strengths and weaknesses (updated for the information available from Registrar of Companies). Key Rating Weaknesses * Project execution risk: As on June 15, 2016, ZDPL has incurred INR47.30 crore (63.07% of total cost) on project which was funded through promoter's contribution (infused 100% of estimated), bank borrowings (56% of estimated) and customer advance (incurred 42% of estimated). Since the future construction is largely dependent on customer advances (58% yet to be received) and bank loan (44%), therefore its ability to monetize the project and timely receive customer advances, shall be critical for completing the project in timely manner. Furthermore the ability of the entity to book the units remains highly critical as repayment of term debt majorly depends on customer bookings. * High salability risk with low booking status: The project is located in Bandra (West), being a premium location in Mumbai, thereby having high cost for each unit. Out of the 59 units (11 shops and 48 flats) being built only 21 flats will be saleable for a total estimated value of INR88 crore, further the project has received INR12.30 crore as advances till June 2016 towards four flat booking (14% of total advances envisaged), majority of the booking is yet to be done. Moreover majority of the term debt repayment significantly relies on customer advances therefore the ability of the entity to sell the units at the predicted prices and timely booking of flats will be critical from credit perspective. * Moderate project execution risk: The project was started in December 2013 and is expected to complete by December2016. As on June 15, 2016, the construction work up to 17th floor of project has been completed and the interior work is in progress. Company incurred 63% of total cost on the project funded through promoter's contribution (100% of estimated) and unsecured borrowings (100%). Hence, the future construction is primarily depended up on bank debt, customer advances and timely monetization of space. Furthermore the total committed outflow remained at INR52.38 crore as against total expected inflow of INR15.44 crore. The project execution risk remains moderate as majorly of the work has been completed. * Presence in cyclical real estate sector: The real estate in India is highly fragmented and is capital intensive in nature. The life cycle of a real estate project is long and the state of the economy at every point in time, right from land acquisition to construction to actual delivery, has an impact on the project. This capital intensive sector is extremely vulnerable to the economic cycles. Adverse movement in interest rate affects the real estate players in both ways by hampering demand as well as increasing the cost of construction. The expectations of many, the developers have been able to hold on to the prices so far. However, given the considerable inventory levels, which direction the price graph goes remains to be seen. Key rating strengths * Experienced promoters: The promoters have been engaged in real estate business since more than a decade. The overall operations are being looked after by Mr. Ziauddin Siddique, promoter, having experience of about a decade, looks after the execution of the projects and business development aspect of the company. The company has executed one project in Mumbai. * Location advantage: The project is located in Bandra (W) and has location advantage in terms of being located in a premium location, good connectivity to south Mumbai, close proximity to railway station. Furthermore, the project is located in close proximity of school, hospital, shopping mall and sports complex. Incorporated in 2004, Zears Developers Private Limited (ZDPL) is engaged into development of residential and commercial projects in Mumbai. ZDPL is currently developing a redevelopment residential project in Bandra, West under the name Shiv Asthan Heights. The project includes construction of single residential building with 17 floors comprising of 59 units of which 38 units redevelopment (including 11 shops) and 21 saleable flats). The project includes 2/3/4 BHK and Duplex flats with the average size of saleable flats in the range of 758 sq ft to 2896 sq ft. ================= I N D O N E S I A ================= INDIKA ENERGY: Moody's Puts B2 CFR on Review for Upgrade -------------------------------------------------------- Moody's Investors Service has placed on review for upgrade the B2 corporate family rating (CFR) of Indika Energy Tbk (P.T.) (Indika) and the B2 ratings on the $500 million backed senior secured notes issued by Indo Energy Finance II B.V. and the $265 million backed senior secured notes issued by Indika Energy Capital II Pte. Ltd. RATINGS RATIONALE The review follows Indika's announcement on September 25, 2017 that it has signed share purchase agreements with Samtan Co. Ltd and Muji Ini Utama to acquire an additional 45% of the shares of Kideco Jaya Agung (P.T.), Indonesia's third largest coal producer. Post-acquisition, Indika's ownership in Kideco will increase to 91% from the current 46%. Completion of the transaction is subject to customary regulatory and shareholder approvals. The total purchase consideration comprises an upfront payment of $517.5 million and a contingent liability of $160 million, which will be adjusted for certain terms and conditions. The acquisition will be fully debt funded and expected to close by the end of 2017. "Moody's views the proposed acquisition of Kideco as credit positive as Indika will gain control over the third largest coal mining asset in Indonesia which has a long reserve life of over 13 years, based on its projected 2017 production volume. The company's credit profile will also improve post-acquisition, with consolidated leverage of around 3.6x on a look-through basis," says Rachel Chua, a Moody's Assistant Vice President and Analyst. "Upon successful completion of the transaction, such that the acquisition cost and funding structure are in line with Moody's expectations, the ratings will likely be upgraded by two notches," adds Chua, who is also Moody's Lead Analyst for Indika. Moody's review will focus on: 1) the timing, execution and structure of a successful acquisition by Indika; 2) the final funding structure of the transaction; and 3) Indika's capital structure, credit profile and interest burden following the completion of the proposed transaction. Moody's will conclude the review at the completion date of both the acquisition and its associated financing. While the ratings could be upgraded to Ba3, subject to a satisfactory conclusion of the review, reflective of Indika's medium term credit profile, there will remain a high degree of event risk given the expiry of Kideco's coal contract of work (CCoW) in 2023. Negotiations for the extension of the CCoW can only commence in 2021 and while it is Moody's current views that an extension on similar terms will be forthcoming, Moody's remains cognizant of the regulatory risk and the impact on Indika's credit profile and ratings should that renewal not materialize in a timely fashion. The principal methodology used in these ratings was the Global Mining Industry published in August 2014. Indika Energy Tbk (P.T.) is an Indonesian integrated energy group listed on Indonesia's Stock Exchange. As of June 30, 2017, its principal investment is a 46% stake in Kideco Jaya Agung (P.T.), Indonesia's third-largest domestic coal producer and one of the world's lowest-cost producers and exporters of coal. ========= J A P A N ========= TOSHIBA CORP: WD to Block Chip Unit Sale to Bain-led Group ---------------------------------------------------------- The Japan Times reports that Western Digital Corp. said on Sept. 27 that it will seek an interim injunction to prevent Toshiba Corp. from selling its chip unit to a Japan-U.S.-South Korea consortium. The suit to be filed with the International Court of Arbitration is the latest salvo in the companies' bitter legal battle, the report states. If Western Digital's request is accepted, the sale could be suspended. According to The Japan Times, Toshiba is racing against the clock to sell Toshiba Memory Corp. to cover massive losses stemming from its now-bankrupt U.S. nuclear unit Westinghouse Electric Co. by the end of next March. If it fails to eliminate its negative net worth, the Japanese firm will be delisted from the Tokyo Stock Exchange. Last week, Toshiba said it had chosen a consortium led by U.S. investment fund Bain Capital over a Western Digital group following a prolonged sale process that went through twists and turns until the very last minute, the report says. As Toshiba has shown no willingness to resolve a number of legal disputes in a constructive manner, "we intend to continue our successful legal efforts into the binding arbitration process," Western Digital said in a statement released on Sept. 27, the report relays. The report notes that Western Digital, which jointly invests in Toshiba's Yokkaichi flash memory plant in Mie Prefecture, filed a request for arbitration with the international court in May to block Toshiba from selling the unit on the grounds that the sale would breach their joint venture contract. But as the legal process is likely to take more than two years, Western Digital has decided to seek an interim injunction that would temporarily halt the sale until a court decision is made, the report says. Western Digital is set to file for a request within the next few weeks, according to sources, and believes a temporary order preventing Toshiba from selling the chip unit could be issued as early as the beginning of next year, according to the report. At one point, Toshiba had leaned toward a bid by the Western Digital group and went as far as reaching a broad accord with the company, but it eventually picked the Japan-U.S.-South Korea group after talks with Western Digital stalled, the report says. Toshiba is expected to seal a deal with the Bain Capital-led group soon, The Japan Times adds. About Toshiba Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is a Japan-based manufacturer involved in five business segments. The Digital Products segment offers cellular phones, hard disc devices, optical disc devices, liquid crystal televisions, camera systems, digital versatile disc (DVD) players and recorders, personal computers (PCs) and business phones, among others. The Electronic Device segment provides general logic integrated circuits (ICs), optical semiconductors, power devices, large- scale integrated (LSI) circuits for image information systems and liquid crystal displays (LCDs), among others. The Social Infrastructure segment offers various generators, power distribution systems, water and sewer systems, transportation systems and station automation systems, among others. The Home Appliance segment offers refrigerators, drying machines, washing machines, cooking utensils, cleaners and lighting equipment. The Others segment leases and sells real estate. As reported in the Troubled Company Reporter-Asia Pacific on June 19, 2017, S&P Global Ratings said it has kept its 'CCC-' long-term and 'C' short-term ratings on 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 ==================== SKY TELEVISION: To Close Fatso DVD Rental Business on Nov. 23 ------------------------------------------------------------- Tom Pullar-Strecker at Stuff.co.nz reports that Sky Television will close its Fatso DVD rental business in November, as internet streaming continues to grow in popularity. Spokeswoman Kirsty Way said Fatso had "fewer than 10,000 customers" and had become uneconomic, Stuff relates. "The numbers are dwindling and it doesn't make sense anymore." Stuff say Fatso lets people rent DVDs from a catalogue of 32,000 movie titles, TV shows and console games, with plans ranging from NZ$9.95 a month. The service operates nationwide via free post, instead from a store. A selling point has been that customers can hang on to DVDs for as long as they like, so long as they do not exceed the number they are entitled to under their plan. But Fatso had been impacted by the same forces that have led to the closure of most of the country's DVD stores, Ms. Way, as cited by Stuff, said. Sky tweeted that it would be donating its catalogue of DVDs to schools, hospitals, retirement villages and potentially other recipients, inviting suggestions on Twitter, the report relays. According to the report, customers will be offered half-price access to Sky's Neon internet television service for three months, as a consolation. Neon, which normally costs NZ$20 a month, offers a catalogue of movies as well as TV shows. Ms. Way said Sky was starting to communicate the closure to Fatso customers on Sept. 20, Stuff adds. The service will shut on November 23, meaning there will be only one more billing cycle, she said. WINDFLOW TECHNOLOGY: Henderson to Step Down as CEO -------------------------------------------------- Chris Hutching at Stuff.co.nz reports that Geoff Henderson, the founder of twin blade electricity wind turbine company Windflow Technology will resign as chief executive as the company winds down operations. According to the report, Mr. Henderson said he will remain a director and will be available to in a consulting role in 2018, "depending on the future plans of around business development, capital raising and licensing of intellectual property". His departure from active management marks 17 years since the company was set up, the report states. But his legacy continues in NZ Windfarms, which bought and operates 96 Windflow turbines on the Tararua Ranges. Stuff relates that NZ Windfarms chief executive John Worth said he wished Henderson well and his work was not be belittled as evidenced by improved performance at his company's Te Rere Hau windfarm after a restructure and efficiency improvements. Mr. Worth said the turbines were robust and well suited to New Zealand's windy conditions, Stuff relays. Over the years, Mr. Henderson has proved tenacious and dogged in the promotion of his twin blade turbine against international rivals with multi-million dollar budgets, the report states. Windflow listed on the New Zealand Stock Exchange in 2003 with shareholder support by some leading names in the alternative energy sector including former Green Party leader at the time Jeanette Fitzsimons, Stuff discloses. But it proved impossible to break into the market in a big way, aside from establishment of NZ Windfarms, an unrelated company in terms of shareholders or management, although several of its engineers came from Windflow. Two weeks ago Windflow released its annual report including the announcement that the decision has been taken to close the factory in Christchurch, Stuff recalls. The company has trimmed full time equivalent staff numbers from 14.4 to 4.8 who will continue to support the operation of Windflow turbines installed in the UK and any other revenue-generating activities, such as supporting a US prototype Class 2 turbine in Texas, according to the report. Windflow also has potential to market its patented synchronous generators, which help manage electricity surges on the grid. "Transmission operators in places like South Australia, Ireland, north-western China and Germany are becoming concerned about the lack of stability that synchronous generators provide," the report quotes Mr. Henderson as saying. "There's reason for optimism the synchronous power-train may be an idea whose time has come." He will vacate the chief executive role at the end of December and the company will continue as a going concern with a small engineering team helping support the UK turbines, Stuff notes. According to Stuff, Windflow owns eight turbines in the UK, and six of them will be sold to shareholder David Iles in exchange for a NZ$23 million debt to him. This will restructure the balance sheet to give it positive equity, Stuff states. For the year ended June 2017, Windflow earned revenue of NZ$1.7 million. After overheads and finance costs it posted a NZ$4.3 million loss, Stuff notes. Christchurch, New Zealand-based Windflow Technology Limited -- http://www.windflow.co.nz/-- is engaged in the development and manufacture of wind turbines. The Company's wholly owned subsidiaries include, Wind Blades Ltd, Pacific Windfarms Ltd and Windflow Hawaii Ltd. The Company has one customer, NZ Windfarms Ltd. Wind Gears Ltd is owned 50% by Windflow Technology Limited. Wind Gears Ltd is engaged in the development and construction of gear boxes for the wind turbines. Windpower Otago Ltd is owned 20% by the Company. ===================== P H I L I P P I N E S ===================== WORLD PARTNERS: Creditors Have Until Nov. 9 to File Claims ---------------------------------------------------------- All creditors of the closed World Partners Bank (A Thrift Bank), Inc. have until November 9, 2017 to file their claims against the assets of the closed bank either personally or by mail. Creditors refer to any individual or entity with a valid claim against the assets of the closed World Partners Bank and include depositors whose deposits exceed the maximum deposit insurance coverage (MDIC) of PHP500,000. The Philippine Deposit Insurance Corporation (PDIC) said that creditors and depositors with uninsured deposits may file their claims personally at the PDIC Public Assistance Center located at the 3rd Floor, SSS Bldg., 6782 Ayala Avenue corner V.A. Rufino St., Makati City, Monday to Friday, 8:00 AM to 5:00 PM. Claims may also be filed through mail addressed to the PDIC Public Assistance Department, 6th Floor, SSS Bldg., 6782 Ayala Avenue corner V.A. Rufino St., Makati City. A sample Claim Form against the assets of the closed bank may be downloaded from the PDIC website, www.pdic.gov.ph. Claims filed after November 9, 2017 shall be disallowed. PDIC, as Receiver, shall notify creditors of denial of claims through mail. Claims denied or disallowed by the PDIC may be filed with the liquidation court within sixty (60) days from receipt of final notice of denial of claim. In addition, PDIC said that depositors with account balances of more than the maximum deposit insurance coverage (MDIC) of PHP500,000 who have already filed claims for the insured portion of their deposits are deemed to have filed their claims for the uninsured portion or the amount in excess of the MDIC. PDIC, as Receiver of closed banks, requires personal data from creditors to be able to process their claims and protects these data in compliance with the Data Privacy Act of 2012. World Partners Bank was ordered closed by the Monetary Board (MB) of the Bangko Sentral ng Pilipinas on August 11, 2017 and PDIC, as the designated Receiver, was directed by the MB to proceed with the takeover and liquidation of the closed bank in accordance with Section 12(a) of Republic Act No. 3591, as amended. The bank's Head Office is located at 74 A. Mabini St., Brgy. Poblacion, San Pedro City, Laguna. Its four branches are located in Meycauayan and Sta. Maria in Bulacan, San Pablo City in Laguna, and Tanauan City in Batangas. All requests and inquiries relating to World Partners Bank shall be addressed to the PDIC Public Assistance Department through mail at the 6th Floor, SSS Bldg., 6782 Ayala Avenue corner V.A. Rufino St., Makati City, or through telephone numbers (02) 841-4630 or 841-4631. Depositors and creditors outside Metro Manila may call the PDIC Toll Free Hotline at 1-800-1-888-PDIC (7342). Walk-in clients may also visit the PDIC Public Assistance Center at the 3rd Floor, SSS Bldg., 6782 Ayala Avenue corner V.A. Rufino St., Makati City, Monday to Friday, 8:00 AM to 5:00 PM. ================= S I N G A P O R E ================= FALCON ENERGY: Notes Maturity Date Extended by 3 Years ------------------------------------------------------ Rachael Boon at The Strait Times reports that bondholders of mainboard-listed Falcon Energy Group have agreed to extend the maturity date of its SGD$50 million notes - originally due Sept 2017 - by three years and also waive all financial covenants. Out of 168 votes cast, 156 were in favor of the resolution, the report says. Falcon Energy is among the offshore and marine firms putting out updates about debt restructuring efforts amid a protracted slowdown in the sector, The Strait Times notes. Singapore-based Falcon Energy Group Limited is an investment holding company. The Company, through its subsidiaries, operates in oil and gas industry, providing a range of services to global oil companies and contractors, from the initial exploration-stage to production and post-production stage. It operates in four segments: Marine, Oilfield and drilling services, Oilfield Projects and Resources. SWISSCO HOLDINGS: Judicial Management Orders Extended to March 18 ----------------------------------------------------------------- Rachael Boon at The Strait Times reports that the judicial managers of oil services firm Swissco Holdings and its unit said the Singapore High Court granted several orders on Sept. 13. One was for the judicial management orders to be extended to March 18, and for the judicial managers to be given until Oct. 31 to give creditors a statement of proposals, the report states. ST relates that the judicial managers will also have until Nov. 14 to convene meetings of creditors to consider the statement. They also announced that Swissco's applications to the High Court for directions on third-party securities are fixed for a full day hearing on Oct. 13, the report adds. Swissco Holdings Limited (SGX:ADP), along with its subsidiaries -- http://swissco.net/html/index.php-- is a Singapore-based integrated oil and gas service provider. The Company provides drilling rigs, accommodation jackups and vessel chartering services for the oil and gas industry. The Company's segments are Drilling, which includes drilling rig chartering; Offshore support vessels (OSV), which includes vessel chartering (such as sale of out-port-limit services), ship repair and maintenance services, maritime related services (such as sale of vessels) and OSV related investment activities; Service assets, which includes accommodation and service rig chartering, and Others segment, which includes corporate activities. Its OSV segment owns and operates a fleet of over 40 offshore support vessels that provide a range of offshore chartering services for the marine, offshore oil and gas, and civil construction industries. Its subsidiaries include Swissco Energy Services Pte Ltd, Swissco Offshore (Pte) Ltd and Seawell Drilling Pte Ltd. Swissco and SOPL entered into judicial management last November after the listed holding company slipped into a US$296 million quarterly loss on booking massive impairments. A Singapore court in April 2017 approved the application made by Swissco to be placed under judicial management after company failed to receive support from its major creditors. ********* 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Joseph Cardillo at 856-381-8268. *** End of Transmission ***