/raid1/www/Hosts/bankrupt/TCRAP_Public/171019.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, October 19, 2017, Vol. 20, No. 208
Headlines
A U S T R A L I A
AUSTRADIA PTY: Administrators Blame Arcadia Group Over Collapse
BIGWAY INTERIORS: Second Creditors' Meeting Set for Oct. 23
BLUESTONE ANIMAL: Second Creditors' Meeting Set for Oct. 23
HENGRONG PTY: First Creditors' Meeting Set for Oct. 24
IDEAPOINT PTY: First Creditors' Meeting Set for Oct. 27
PERPETUAL TRUSTEE: Moody's Assigns (P)B2 Rating to Cl. F Notes
STREBLIG PTY: First Creditors' Meeting Set for Oct. 24
C H I N A
DALIAN WANDA: Unit Talks With Lenders After Ratings Cut to Junk
LVGEM (CHINA): Fitch Places B+ IDR on Watch Negative
LVGEM (CHINA): Moody's Revises Outlook to Neg.; Affirms B2 CFR
ONE HORIZON: Issues 3M Shares as Inducement Grants to CEO and COO
I N D I A
ANALCO INDIA: CRISIL Reaffirms B+ Rating on INR5MM Bank Loan
ANANTHA PVC: CARE Reaffirms 'B' Rating on INR8.0cr LT Loan
B D ROADWAYS: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating
BEEHIVE ALCOVEB: Ind-Ra Assigns BB Issuer Rating, Outlook Stable
BHARAT CONSTRUCTION: Ind-Ra Moves BB- Rating to Non-Cooperating
BSCPL INFRASTRUCTURE: CRISIL Reaffirms D Rating on INR1.88BB Loan
CHAUDHARY JAI: CRISIL Reaffirms 'B' Rating on INR4.7MM LT Loan
COCHIN STEEL: CRISIL Reaffirms 'B' Rating on INR2MM LT Loan
EASTERN PILLING: CRISIL Reaffirms B+ Rating on INR5MM Cash Loan
EMSON GEARS: CRISIL Reaffirms B+ Rating on INR64.71MM Term Loan
G S ROADLINES: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating
G S ROADWAYS: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating
GMR BAJOLI: CARE Lowers Rating on INR1,380cr LT Loan to 'D'
HOLO PACK: CARE Assigns B+ Rating to INR5.50cr LT Loan
HONEY PROPERTIES: CRISIL Reaffirms B Rating on INR7.05MM LT Loan
JAYPEE GROUP: Seeks Supreme Court's OK to Sell Yamuna Expressway
JKG OVERSEAS: CRISIL Raises Rating on INR12.05MM LT Loan to B+
JOMSONS ENTERPRISES: CRISIL Reaffirms B Rating on INR11MM Loan
KIZHAKKEBHAGATHU RICE: CRISIL Reaffirms C Rating on INR6MM Loan
LAL BABA: Ind-Ra Migrates BB Issuer Rating to Non-Cooperating
LILY HOTELS: Ind-Ra Affirms D Rating & Moves to Non-Cooperating
LODHA DEVELOPERS: Moody's Confirms B2 CFR; Outlook Stable
M. G. AUTOSALES: CARE Assigns 'B' Rating to INR14.25cr LT Loan
MADHAV COTTON: CARE Reaffirms B+ Rating on INR5.29cr LT Loan
MOTOR SALES: Ind-Ra Migrates B+ Issuer Rating to Non-Cooperating
MUTYALA AGRO: CARE Assigns B+ Rating to INR3.83cr LT Loan
NAGARJUNA OIL: IRP Invites Investors to Revive Business
NARAYANADRI HOSPITALS: Ind-Ra Moves B Rating to Non-Cooperating
NATIONAL CAPSULES: Ind-Ra Migrates BB- Rating to Non-Cooperating
NOBLE EDUCATIONAL: Ind-Ra Assigns 'BB' Rating to Bank Facilities
NORTHLAND RUBBER: CRISIL Reaffirms B- Rating on INR7MM Cash Loan
OSHO FORGE: CRISIL Reaffirms B+ Rating on INR40MM Cash Loan
P. PRABHAKARAN: CRISIL Assigns B+ Rating to INR14MM Cash Loan
PACK PAPER: Ind-Ra Assigns 'BB' Issuer Rating, Outlook Stable
PANYAM CEMENTS: CARE Reaffirms 'D' Rating on INR30cr LT Loan
PARVATIYA PLYWOOD: CRISIL Reaffirms B+ Rating on INR6.49MM Loan
PATNA OFFSET: CARE Raises Rating on INR1.99cr LT Loan to BB-
PP PANDEY: Ind-Ra Migrate BB+ Issuer Rating to Non-Cooperating
RAJA AGRO: CARE Assigns B+ Rating to INR9.76cr LT Loan
RAJENDRA RICE: CARE Moves B+ Rating to Not Cooperating Category
RAJLAXMI AGRO: CARE Moves B+ Rating to Not Cooperating Category
RELIANCE COMM: Tech Mahindra Files Insolvency Bid Against Firm
ROTON VITRIFIED: CRISIL Reaffirms B+ Rating on INR27MM Term Loan
SAMARA COLD: Ind-Ra Moves B Issuer Rating to Non-Cooperating
SATKAR PAPER: CRISIL Reaffirms 'B' Rating on INR11.14MM Term Loan
SHAMLAL COMPANY: CRISIL Reaffirms 'D' Rating on INR4.5MM LT Loan
SHRI VINAYAK: CARE Assigns 'B' Rating to INR16.25cr LT Loan
SREE HARICHARAN: CRISIL Reaffirms B- Rating on INR2.5MM Cash Loan
SRI MURUGAN: CRISIL Reaffirms B Rating on INR6MM Foreign LOC
SRI VISHNU: CARE Assigns B+ Rating to INR4.41cr LT Loan
STATE BANK: Moody's Affirms ba1 Baseline Credit Assessment
SUNSAT INFOTECH: CRISIL Reaffirms B+ Rating on INR16.25MM Loan
T. S. JAYAPRAKASH: CRISIL Reaffirms B Rating on INR4.65MM Loan
TMA INFRASTRUCTURE: CRISIL Cuts Rating on INR10MM Loan to D
TONI INDUSTRIES: CARE Reaffirms 'B' Rating on INR8.60cr Loan
UNIVERSAL ASSOCIATES: CRISIL Reaffirms D Rating on INR13MM Loan
VANI CONSTRUCTIONS: CRISIL Reaffirms B+ Rating on INR3.2MM Loan
VIJAYALAKSHMI DRIER: CARE Assigns B+ Rating to INR6.0cr LT Loan
I N D O N E S I A
ALAM SUTERA: Consent Solicitation No Effect on Moody's B2 CFR
REASURANSI NASIONAL: Fitch Affirms BB IFS Rating; Outlook Stable
M A L A Y S I A
PRESS METAL: Moody's Assigns Ba3 CFR; Outlook Stable
PRESS METAL: S&P Assigns Prelim 'BB-' CCR, Outlook Positive
M O N G O L I A
MONGOLIA: S&P Assigns B- Rating to U.S. Dollar-Denominated Notes
N E W Z E A L A N D
CRICHQ: Online Cricket App Business Goes Into Receivership
Q CARD: Fitch Assigns 'B' Rating to Class F-2017-1 Notes
S I N G A P O R E
ZETTA JET: Jonathan King Approved as Chapter 11 Trustee
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A U S T R A L I A
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AUSTRADIA PTY: Administrators Blame Arcadia Group Over Collapse
---------------------------------------------------------------
Sue Mitchell at The Australian Financial Review reports that the
AUD30 million collapse of Topshop Australia has been blamed on
high costs and poor product mix under a franchise agreement with
UK brand owner, Sir Philip Green's Arcadia Group.
Austradia, which collapsed in May, was unable to offer
competitive prices because of high franchise fees, according to a
report by the company's administrators, while inventory quality
and stock mix were sub-optimal due to the nature of the agreement
with Arcadia, AFR relates.
According to AFR, Austradia made matters worse, the
administrators said, by embarking on a rapid growth strategy --
including opening 17 concessions in Myer -- even though same-
store sales were falling by more than 10 per cent a year as
competition from retailers such as Zara and H&M increased.
Austradia directors have also pointed the finger at Arcadia,
blaming the company's demise on high fees and international
freight costs, out of season stock due to Arcadia's 'stock-push'
model, Arcadia's failure to deliver on commitments to change the
franchise model and the delayed introduction of a dedicated
Australian online store, AFR relays.
Arcadia bought back the Australian operations in June, paying
AUD5.3 million for remaining inventory, but not before five of
Topshop's nine stand-alone stores and 17 concessions in Myer were
closed, with the loss of more than 400 jobs, AFR states.
AFR, citing report to creditors by administrators James Stewart,
Jim Sarantinos and Ryan Eagle of Ferrier Hodgson, discloses that
Austradia's sales rose 9% to AUD92.4 million in 2017, but losses
almost doubled to AUD4.8 million.
Austradia had realisable assets of AUD10.2 million but
liabilities of almost AUD30 million, including about AUD2 million
owed to employees, AUD21.5 million to unsecured creditors and
AUD5.1 million to related parties, according to the
administrators' report cited by AFR.
AFR says Austradia was insolvent from at least May 24, the date
of the administration, when Arcadia told directors it was
unwilling to cough up an extra AUD6.4 million in financial
support after giving the company extra credit and reducing
franchise fees in late 2016.
The administrators have recommended Austradia be wound up, as no
restructuring proposal has been proposed, AFR notes.
According to AFR, Austradia's staff will be paid in full, but
secured creditors will receive between 33 cents and 39 cents in
the dollar and unsecured creditors will receive nothing.
The administrators are, however, examining whether a potential
claim can be made under the terms of the franchise agreement with
Arcadia, AFR notes.
About Topshop
Austradia Pty Ltd (trading as 'Topshop/Topman'), one of
Australia's best known fast fashion retailers, was placed into
voluntary administration on May 24.
Ferrier Hodgson partners James Stewart, Jim Sarantinos, and Ryan
Eagle were appointed voluntary administrators by the company's
board of directors.
Topshop and Topman are the foundational brands of Arcadia Group
Ltd, a British multinational fashion retailer. The separately
owned and operated Australian franchise, Topshop/Topman, opened
locally in 2011.
When it went into voluntary administration on May 25, Topshop
Australia had debts totalling AUD35 million, SMH disclosed.
BIGWAY INTERIORS: Second Creditors' Meeting Set for Oct. 23
-----------------------------------------------------------
A second meeting of creditors in the proceedings of Bigway
Interiors Pty. Ltd has been set for Oct. 23, 2017, at 3:00 p.m.,
at the offices of Farnsworth Shepard, Level 5, 2 Barrack Street,
in Sydney, New South Wales.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Oct. 19, 2017, at 5:00 p.m.
Benjamin Michael Carson of Farnsworth Shepard was appointed as
administrator of Bigway Interiors on Sept. 16.
BLUESTONE ANIMAL: Second Creditors' Meeting Set for Oct. 23
-----------------------------------------------------------
A second meeting of creditors in the proceedings of Bluestone
Animal Hospitals Pty Ltd has been set for Oct. 23, 2017, at
10:00 a.m., at Level 1, 14 Watt Street, in Newcastle, New South
Wales.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Oct. 20, 2017, at 4:00 p.m.
Bradd William Morelli and Stewart William Free of Jirsch
Sutherland were appointed as administrators of Bluestone Animal
on Sept. 15, 2017.
HENGRONG PTY: First Creditors' Meeting Set for Oct. 24
------------------------------------------------------
A first meeting of the creditors in the proceedings of Hengrong
Pty Ltd will be held at the offices of HoskingHurst Pty ltd,
Level 3, 65 York Street, in Sydney, on Oct. 24, 2017, at
11:00 a.m.
Philip Raymond Hosking of HoskingHurst was appointed as
administrator of Hengron Pty on Oct. 12, 2017.
IDEAPOINT PTY: First Creditors' Meeting Set for Oct. 27
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Ideapoint
Pty Limited will be held at the offices of HoskingHurst Pty ltd,
Level 3, 65 York Street, in Sydney, on Oct. 27, 2017, at
11:00 a.m.
David Anthony Hurst of HoskingHurst was appointed as
administrator of Ideapoint Pty on Oct. 17, 2017.
PERPETUAL TRUSTEE: Moody's Assigns (P)B2 Rating to Cl. F Notes
--------------------------------------------------------------
Moody's Investors Service has assigned the following provisional
ratings to notes to be issued by Perpetual Trustee Company
Limited in its capacity as trustee of RESIMAC Bastille Trust
Series 2017-1NC.
The transaction is a securitisation of a portfolio of Australian
non-conforming and prime housing loans originated by RESIMAC
Limited (RESIMAC).
Issuer: RESIMAC Bastille Trust Series 2017-1NC
AUD350.0 million Class A1 Notes, Assigned (P)Aaa (sf)
AUD75.0 million Class A2 Notes, Assigned (P)Aaa (sf)
AUD39.0 million Class B Notes, Assigned (P)Aa2 (sf)
AUD9.5 million Class C Notes, Assigned (P)A2 (sf)
AUD9.5 million Class D Notes, Assigned (P)Baa2 (sf)
AUD6.0 million Class E Notes, Assigned (P)Ba2 (sf)
AUD5.5 million Class F Notes, Assigned (P)B2 (sf)
The AUD5.5 million Class G Notes are not rated by Moody's.
The ratings address the expected loss posed to investors by the
legal final maturity.
RATINGS RATIONALE
The provisional ratings take into account, among other factors,
evaluation of the underlying receivables and their expected
performance, the evaluation of the capital structure, the
availability of excess spread over the life of the transaction,
the liquidity facility in the amount of 1.5% of the note balance
and the experience of RESIMAC as servicer.
Moody's MILAN CE - representing the loss that Moody's expects the
portfolio to suffer in the event of a severe recession scenario -
is 14.80%. Moody's expected loss for this transaction is 1.60%.
Key transactional features are:
* While Class A2 are subordinate to Class A1 in relation to
losses, Class A1 and Class A2 rank pari-passu in relation to
principal payments, on the basis of their stated amounts,
throughout the life of the deal. This principal paydown feature
reduces the absolute level of credit enhancement available to
Class A1 notes.
* Class B to Class F notes will start receiving their pro-rata
share of principal if step-down conditions are met. The pro-rata
allocation of principal (other than for Class A1 and A2 notes) is
effectively limited to a maximum of 2.5 years, with no principal
allocated to Class B to F in the first 18 months, and with
switchback to sequential four years after the closing date.
* A retention mechanism will be used to divert excess available
income towards the repayment of the Class F notes. In the first
year, the retention amount will be up to 0.25% of the outstanding
note balance, reducing to 0.20% and 0.15% in the second and third
year respectively, after closing. The total retention amount is
limited to AUD2 million. At the same time, the trustee will issue
additional Class G notes, equivalent to the retention amount
allocated to the Class F notes, leaving subordination to the
Class A to Class E notes unchanged.
Key pool features are:
* Compared to peer portfolios, this portfolio has a relatively
low weighted-average scheduled loan-to-value (LTV) of 66.9%. The
proportion of loans with scheduled LTV over 90% is only 0.2%.
* Based on Moody's classifications, the portfolio contains 18.9%
of loans to borrowers with prior adverse credit history (default,
judgment or bankruptcy). Moody's assesses these borrowers as
having a significantly higher default probability.
* The portfolio contains 76.6% of loans granted on the basis of
alternative income documentation, with a further 0.7% granted on
the basis of low income documentation.
* Investment and interest only loans represent 41.6% and 44.1% of
the pool, respectively.
The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
September 2017.
Moody's Parameter Sensitivities:
Parameter Sensitivities are designed to provide a quantitative
calculation of how the initial rating might change if key input
parameters used in the initial rating process - here the MILAN
Aaa CE and median expected loss - differed. The analysis assumes
that the deal has not aged. Parameter Sensitivities only reflect
the ratings impact of each scenario from a quantitative/model-
indicated standpoint.
Based on the current structure, if the MILAN CE was to increase
to 17% from 14.8%, the ratings of the Class A1 notes would remain
at the current Aaa, while Class A2 notes would fall by one notch
to Aa1. If the MILAN CE was to increase to 19.2%, both Class A1
and Class A2 notes would fall by one notch to Aa1. The
sensitivity in the rating for the Class A1 notes is due to the
pro-rata allocation of principal among the Class A1 and Class A2
notes, on the basis of their stated amounts, throughout the life
of the deal, thus reducing the absolute amount of credit
enhancement available to Class A1 notes.
Moody's ratings address only the credit risks associated with the
transaction. Other non-credit risks have not been addressed, but
may have a significant effect on yield to investors. Moody's
ratings are subject to revision, suspension or withdrawal at any
time at Moody's absolutes discretion. The ratings are expressions
of opinion and not recommendations to purchase, sell or hold
securities. Moody's issues provisional ratings in advance of the
final sale of securities and these ratings reflect Moody's
preliminary credit opinion regarding the transaction. Upon a
conclusive review of the final versions of all the documents and
legal opinions, Moody's will endeavour to assign a definitive
rating to the transaction. A definitive rating may differ from a
provisional rating.
Factors that would lead to an upgrade or downgrade of the
ratings:
A factor that could lead to an upgrade of the notes is better-
than-expected collateral performance and a rapid build-up of
credit enhancement.
A factor that could lead to a downgrade of the notes is worse-
than-expected collateral performance. Other reasons that could
lead to a downgrade include poor servicing, error on the part of
transaction parties, a deterioration in the credit quality of
transaction counterparties, lack of transactional governance and
fraud.
STREBLIG PTY: First Creditors' Meeting Set for Oct. 24
------------------------------------------------------
A first meeting of the creditors in the proceedings of Streblig
Pty Ltd, trading as Plush Cars Crash Repairs, will be held at the
offices of BRI Ferrier SA, Level 4, 12 Pirie Street, in Adelaide,
on Oct. 24, 2017, at 2:30 p.m.
Alan Geoffrey Scott and Stuart Otway of BRI Ferrier were
appointed as administrators of Streblig Pty on Oct. 12, 2017.
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C H I N A
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DALIAN WANDA: Unit Talks With Lenders After Ratings Cut to Junk
---------------------------------------------------------------
Bloomberg News reports that a unit of Dalian Wanda Group Co. is
negotiating with lenders about rescheduling some debt after its
credit ratings were cut to junk, triggering a clause requiring
early payment of some offshore loans, according to people
familiar with the matter.
Covenants requiring mandatory prepayments at Wanda Commercial
Properties were triggered on loans totaling more than $1 billion,
Bloomberg relates, citing people who aren't authorized to speak
publicly and asked not to be identified. Bloomberg says the
specific borrowings, according to the people, are:
* $400 million three-year loan due June 2019
* $487.5 million of borrowings due December 2019
* $500 million three-year loan due May 2018
Bloomberg notes that Moody's Investors Service and S&P Global
Ratings late last month downgraded the credit ratings of the
company's largest shareholder, Dalian Wanda Commercial Properties
Co., to below investment grade for reasons ranging from weakened
liquidity to an "abrupt change" in its strategy. Fitch Ratings,
which rates the property developer its second-lowest investment
grade, has said it may cut the rating to junk, citing concerns
about liquidity.
According to Bloomberg, the company has applied to China's State
Administration of Foreign Exchange for approval to remit funds
offshore from cash held in the mainland, said the people. Wanda
had sizable onshore cash of CNY137 billion ($21 billion) at end
of the first half, Fitch said.
Dalian Wanda "could get a waiver and/or make a repayment on the
loans given" cash onshore, JPMorgan Chase & Co. said in a credit
research note dated Oct. 17, Bloomberg relays. "We also do not
think SAFE would bar the company from remitting funds offshore
for meeting debt obligations."
Earlier this year, Wanda sold most of its theme-park and hotel
assets to Guangzhou R&F Properties Co. and Sunac China Holdings
Ltd. for more than $9 billion amid mounting government scrutiny
of Chinese borrowers, Bloomberg notes.
"We believe that investors are more than well compensated for
taking some headline risk," JPMorgan said in the note,
reaffirming its overweight recommendation on Wanda dollar bonds
maturing in 2018 and 2024, Bloomberg relays. "The bond prices
should remain volatile in the near term."
About Dalian Wanda
Dalian Wanda Commercial Properties Co., Ltd. (DWCP) develops,
operates and sells integrated properties in China, including
shopping malls, offices, houses and hotels.
Wanda Commercial Properties (HK) Co. Limited is the core offshore
funding and investment platform for DWCP. It is also a wholly
owned subsidiary of DWCP. Its main assets include a 65% equity
interest in Hong Kong-listed Wanda Hotel Development Company
Limited, as well as investments in five overseas property and
hotel projects in the UK, Australia and the US.
As reported in the Troubled Company Reporter-Asia Pacific on
Oct. 4, 2017, Moody's Investors Service has downgraded the
ratings of Dalian Wanda Commercial Properties Co., Ltd. (DWCP)
and Wanda Commercial Properties (HK) Co. Limited (Wanda HK).
The affected ratings are:
* DWCP's issuer rating of Baa3 has been downgraded to Ba1 and
withdrawn, and the company has been assigned a Ba1 corporate
family rating;
* Wanda HK's corporate family rating has been downgraded to Ba3
from Ba1;
* The senior unsecured ratings for the bonds issued by Wanda
Properties Overseas Limited and Wanda Properties International
Co. Limited have been downgraded to Ba3 from Ba1. Both
companies are wholly owned subsidiaries of Wanda HK.
The rated bonds are guaranteed by Wanda HK and supported by deeds
of equity interest purchase undertaking and keepwell deeds
between DWCP, Wanda HK and the bond trustee. The issuers of the
rated bonds have maintained - in interest reserve accounts - the
equivalent of two periods of interest payments on the bonds. The
outlooks on all ratings are negative.
S&P Global Ratings lowered the its long-term corporate credit
rating on China-based property developer Dalian Wanda Commercial
Properties Co. Ltd. (Wanda Commercial) to 'BB' from 'BBB-'. S&P
said, "We also downgraded Wanda Commercial's 100% owned
subsidiary Wanda Commercial Properties (Hong Kong) Co. Ltd.
(Wanda HK) to 'BB-' from 'BB+'. The rating outlooks on the two
companies are negative. Further, we downgraded our rating on the
senior unsecured notes guaranteed by Wanda HK to B+ from BB. We
also removed all these ratings from CreditWatch, where they were
placed with negative implications on July 17, 2017."
LVGEM (CHINA): Fitch Places B+ IDR on Watch Negative
----------------------------------------------------
Fitch Ratings has placed China-based LVGEM (China) Real Estate
Investment Company Limited's 'B+' Long-Term Foreign-Currency
Issuer Default Rating (IDR), senior unsecured rating and the
rating on its outstanding USD225 million 8.5% senior notes due
2020, including that of the bond re-tap announced on Oct. 16, on
Rating Watch Negative (RWN). The Recovery Rating is 'RR4'.
The RWN reflects Fitch expectations that LVGEM's leverage, as
measured by net debt/adjusted inventory, will increase to over
45% from 2018 if it does not alter its business plan, following a
planned HKD9 billion investment in a Hong Kong office building
that the company announced on 11 October 2017. The acquisition
falls outside the business plan the company had shared with Fitch
and will lead to higher leverage over a sustained period if the
company does not generate development sales from the building.
Fitch will resolve the RWN upon the completion of the
transaction, taking into consideration the company's financial
profile after reviewing its revised business plan.
KEY RATING DRIVERS
Acquisition-Raised Leverage: Fitch expects LVGEM's leverage to
increase to above 45% - a level above which Fitch would consider
a downgrade - from 41% in 2016, if the office building it plans
to acquire is held as an investment property. The construction of
the office tower LVGEM plans to acquire, which is located in Hong
Kong's Kwun Tong district in Kowloon city, will be completed by
November 2019. Thus, the earliest this acquisition can contribute
to company earnings is in 2020. The transaction is subject to the
conditions precedent being fulfilled. The company expects to
complete the transaction on 29 December 2017.
Business Plan Review: Fitch will review LVGEM's business plan to
assess the impact from the planned acquisition. LVGEM has the
option to sell parts of the office building or cut back on
further project acquisitions to manage its leverage. It can also
manage its leverage through new shares issuance, as LVGEM has an
existing mandate to issue new shares. The company's leverage will
exceed 45% after it acquires the office building if it also
pushes ahead with the development-property business plan it had
previously shared with us. The terms and timing of LVGEM's other
transactions, which are mostly injected from its controlling
shareholder - Mr. Wong Hong King - will also affect its financial
profile.
Development Expansion Delays Deleveraging: Fitch expects LVGEM's
leverage to continue gradually rising, as Mr. Wong is injecting
several projects to help the company boost contracted sales.
Fitch expects LVGEM's contracted sales to increase above CNY10
billion from 2018, compared with less than CNY4 billion before
2016. The company's inventory mainly consists of completed
development properties in Shenzhen, which will support its sales
in 2017 and 2018. After that, it will rely on new projects - like
its Liguang and Meijing urban redevelopments in Shenzhen - for
further growth.
LVGEM plans to obtain more urban redevelopment projects through
asset injections in 2017-2019 from Mr. Wong, who has secured
about 12 million square metres (sqm) of land, mainly in Shenzhen,
Dongguan and Zhuhai- three major cities in China's Guangdong
province. The Shenzhen project, which Fitch expects to have a
gross floor area of about 4 million sqm, will be injected in
2018-2019 and is likely to become LVGEM's flagship urban
redevelopment project.
Quality Investment Properties: LVGEM's investment property
portfolio includes the Shenzhen NEO complex, which has office and
retail components, and three Zoll community retail centres in
Shenzhen, one of which opened earlier this year. The Shenzhen NEO
complex is located in the city's CBD and is almost fully
occupied. Rents that were renewed in 2016 were re-contracted at
15% more on average compared with their previous rental rates.
The two older Zoll centres had approximately 90% occupancy rates
and positive rental reversion of more than 10% in 2016. The
contribution from the planned Hong Kong office building will
depend on the proportion of the building that is retained for
rental.
Deleveraging Plans Determine Rating: The RWN will be resolved
when the transaction is completed. Fitch will reviews LVGEM's
business plan to consider the impact on its leverage and the
sustainability of its property sales to derive the company's
ratings. Possible outcomes if the transaction is completed are
discussed below under Rating Sensitivities.
DERIVATION SUMMARY
LVGEM has a portfolio of quality investment properties, including
its centrally located Shenzhen NEO tower office buildings, which
enjoy near-full occupancy and double-digit positive rental
reversion on renewal. Fitch assesses LVGEM's high-quality
investment properties alone as having a business profile of
around 'BB', with more than USD50 million in rental EBITDA per
year and more than USD1.5 billion in rental-deriving assets. This
is comparable with Lai Fung Holdings Limited's (BB-/Stable) USD60
million in recurring EBITDA and USD2.0 billion investment
property value. LVGEM's recurring EBITDA/gross interest cover was
around 0.6x in 2014-2016; setting it apart from most Chinese
homebuilders that rely on more risky development-property sales
to service their debts. However, Fitch expects recurring
EBITDA/gross interest cover to deteriorate due to the company's
expansion in the property-development segment.
Fitch expects LVGEM's leverage of 41% in 2016 to increase to
above 45% after 2018, following the acquisition of a Hong Kong
office building and the injection of more urban development
projects. This level is similar to other 'B' rated peers, such as
Yida China Holdings Limited's (B/Positive) 46% and Hong Yang
Group Company Limited's (B/Stable) 53%. Fitch may downgrade
LVGEM's rating if its leverage exceeds 45% for a sustained period
or the development of its for-sale property projects is delayed.
KEY ASSUMPTIONS
Fitch's key assumptions within Fitch ratings case for the issuer
include:
- The HKD9 billion acquisition will be funded with 60% debt and
40% from new equity and internal resources.
- An injection of a large Shenzhen urban redevelopment project
in 2018-2019, with LVGEM financing the consideration due to
the controlling shareholder via equity issuance and
shareholder loans.
- LVGEM's contracted sales to reach CNY5 billion in 2017 and
CNY10 billion in 2018.
- The property-development segment's gross profit margin rising
to 68% in 2017 and 65% in 2018, from 47% in 2016.
- Recurring EBITDA to increase to above CNY400 million in 2017-
2018, from CNY380 million in 2016.
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Negative Rating Action.
If the transaction is completed, Fitch may downgrade LVGEM's
ratings, potentially by a notch, if its net debt/adjusted
inventory exceeds 45% for a sustained period or the development
of LVGEM's for-sale property projects is delayed.
Developments that May, Individually or Collectively, Lead to
Positive Rating Action.
- If the transaction takes place, Fitch may affirm LVGEM's 'B+'
rating with a Negative Outlook if net debt/adjusted inventory
exceeds 45%, but there is a clear deleveraging plan to below
that level in a short period.
- If the transaction does not take place, the ratings may be
affirmed with a Stable Outlook.
LIQUIDITY
Sufficient Liquidity for Acquisition: LVGEM will need to pay
around HKD5.5 billion, or CNY4.6 billion, in 2017 out of the
total consideration of HKD9 billion. The company's 1H17 available
cash of CNY3 billion and its US-dollar bond issuance will provide
sufficient liquidity to make this payment. LVGEM will also
arrange secured offshore loan financing using this new Hong Kong
office property as collateral. This, together with the company's
other financing plans, will allow LVGEM to replenish sufficient
liquidity to meet the operational needs of its development-
property business.
LVGEM (CHINA): Moody's Revises Outlook to Neg.; Affirms B2 CFR
--------------------------------------------------------------
Moody's Investors Service has changed to negative from stable the
outlook on: 1) LVGEM (China) Real Estate Investment Co. Ltd.'s B2
corporate family rating; and 2) the B3 backed senior unsecured
rating to the USD notes guaranteed by LVGEM and issued by
Gemstones International Limited, a wholly owned subsidiary of
LVGEM.
Moody's has also affirmed both ratings.
Moody's rating actions follow LVGEM's announcement on October 11,
2017 that it had entered into sales and purchase agreements to
acquire for around HKD9 billion, a Grade A office project in Kwun
Tong, Hong Kong, which is currently under development by Wharf
(Holdings) Limited.
RATINGS RATIONALE
"The negative outlook reflects LVGEM's acquisition of the sizable
office project in Hong Kong, which will weaken its liquidity
position and increase its debt leverage, without the benefit of
any near-term revenues from the project," says Chris Wong, a
Moody's Analyst.
Moody's points out that the HKD9 billion consideration - which
represents around 28% of LVGEM's total assets as of June 2017 -
is significant in respect of a single acquisition. The company
has increased its risk appetite beyond Moody's expectation.
Even though LVGEM can settle the purchase price by installments,
the payments are in Hong Kong dollars, which means they will be
funded substantially by offshore debt.
LVGEM has used HKD788 million of the note proceeds raised in
August 2017 to partly settle the acquisition payments of HKD5.4
billion due in 2017. This use has weakened the company's
liquidity position, because the note proceeds could have been
employed to support its core business of residential development
in China (A1 stable).
Unless the company can raise new equity quickly, raising new
offshore debt and the resultant increased debt servicing amounts
will increase the company's financial risk.
Moody's expects that LVGEM will increase its offshore debt to
meet the installments due in 2017.
If LVGEM can raise the aforementioned offshore debt, Moody's
expects that its adjusted debt/capitalization will rise to 65%-
70% over the next 12-18 months from 53.3% at end-June 2017. The
higher debt levels will pressure the company's ratings.
The office project will not generate any revenues until late
2019. The higher debt will therefore need to be serviced by
operating cash flow from its residential property projects.
Consequently, if the company cannot generate strong contracted
sales and revenue growth over the next two years, its ratings
would come under downgrade pressure.
LVGEM's B2 corporate family rating reflects its strong
profitability and low-cost land bank, which is a result of the
company's business strategy of executing urban redevelopment
projects in Shenzhen. The company's profitability is the highest
among its rated property peers in China, with its gross margin
exceeding 46% over the last three years (2014-2016). Such
profitability levels support its B2 rating.
The corporate family rating also reflects the company's stable
recurring rental income from its investment properties. For
example, its gross rental revenues will cover around 0.4x of its
interest expenses, which is another factor supporting its B2
rating.
However, the rating is constrained by LVGEM's small scale,
concentration of contracted sales in Shenzhen, weak liquidity and
volatile operating performance in its property development
business.
Rating downgrade pressure could arise if: (1) LVGEM's contracted
sales or revenue growth is below Moody's expectations for the
sufficient meeting of its debt servicing obligations; (2) the
company engages in further aggressive debt-funded acquisitions;
or (3) its liquidity position and/or credit metrics weaken
further.
Credit metrics and liquidity levels indicative of downgrade
rating pressure include: (1) adjusted EBIT/interest coverage
below 1.5x; or (2) cash/short-term debt below 1.0x on a sustained
basis.
Upward rating pressure is unlikely in the near term, given the
negative rating outlook.
Nevertheless, the company's rating outlook could return to stable
if LVGEM: (1) demonstrates satisfactory contracted sales and
revenue growth; (2) reduces its debt leverage through issuing new
equity, such that EBIT/interest coverage exceeds 2.0x-2.5x; and
its adjusted debt/capitalization is below 50%-55%; and (3)
maintains a good liquidity position both offshore and onshore.
The principal methodology used in these ratings was Homebuilding
and Property Development Industry published in April 2015.
LVGEM (China) Real Estate Investment Co. Ltd. listed on the Hong
Kong Stock Exchange in November 2015. At end-June 2017, the
company's attributable land bank totaled around 4.1 million
square meters, spread across Shenzhen, Hong Kong, Zhuhai, Suzhou,
and Maoming.
ONE HORIZON: Issues 3M Shares as Inducement Grants to CEO and COO
-----------------------------------------------------------------
One Horizon Group, Inc., disclosed additional information on
stock inducement grants for two recently appointed executives:
Mark White, chief executive officer, president and director; and
Edwin C. Lun, chief operating officer. Mr. White and Mr. Lun
will be based in Hong Kong at the new regional headquarters to
oversee the Company's business development and operations in
China and Hong Kong, and Mr. White will spend significant time
exploring acquisition opportunities particularly in the Asia
region.
As an inducement to join One Horizon, the Company has issued to
Mr. White 1,600,000 shares of its common stock. The Company has
issued to Mr. Lun 1,400,000 shares of its common stock as an
inducement grant.
About One Horizon
Ireland-based One Horizon Group, Inc. (NASDAQ: OHGI) --
http://www.onehorizongroup.com/-- is a reseller of secure
messaging software for the growing gaming, security and education
markets primarily in China and Hong Kong.
The Company's independent accountants Cherry Bekaert LLP, in
Tampa, Fla., issued a "going concern" opinion in its report on
the Company's consolidated financial statements for the year
ended Dec. 31, 2016, stating that the Company has recurring
losses and negative cash flows from operations that raise
substantial doubt about its ability to continue as a going
concern.
One Horizon reported a net loss of $5.54 million on $1.61 million
of revenue for the year ended Dec. 31, 2016, compared to a net
loss of $6.30 million on $1.53 million of revenue for the year
ended in 2015. As of June 30, 2017, One Horizon had $8.83 million
in total assets, $7.20 million in total liabilities and $1.63
million in total stockholders' equity
"As Horizon continues to pursue its operations and business plan,
it expects to incur further losses in 2017 which, when combined
with any investment in intellectual property, will generate
negative cash flows," said the Company in its quarterly report
for the period ended June 30, 2017. "As of June 30, 2017, the
Company did not have any available credit facilities. As a
result, it is in the process of seeking new financing by way of
sale of either convertible debt or equities. Subsequent to June
30, 2017, the Company entered into a series of transactions to
improve liquidity and reduce outstanding obligations... Whilst
it has been successful in the past in obtaining the necessary
capital to support its investment and operations, there
is no assurance that it will be able to obtain additional
financing under acceptable terms and conditions, or at all. In
the event, Horizon is unable to obtain sufficient additional
funding when needed in order to fund ongoing research and
development activities as well as operations, it would not be
able to continue as a going concern and maybe forced to severely
curtail or cease operations and liquidate the Company."
=========
I N D I A
=========
ANALCO INDIA: CRISIL Reaffirms B+ Rating on INR5MM Bank Loan
------------------------------------------------------------
CRISIL Ratings has been consistently following up with Analco
India Private Limited (AIPL) for obtaining information through
letters and emails dated July 7, 2017, and August 7, 2017, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 3.3 CRISIL B+/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Letter of credit & 4.7 CRISIL A4 (Issuer Not
Bank Guarantee Cooperating; Rating
Reaffirmed)
Proposed Letter of 2.0 CRISIL A4 (Issuer Not
Credit & Bank Cooperating; Rating
Guarantee Reaffirmed)
Proposed Long Term 5.0 CRISIL B+/Stable (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 Analco India Private Limited.
This restricts CRISIL's ability to take a forward looking view on
the credit quality of the entity. CRISIL believes that the
information available for Analco India 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/CRISIL A4'.
AIPL was incorporated in 1969, promoted by the Singhal family;
Mr. Satish Kumar and Mr. Vishwas Singhal are the majority
shareholders and directors. The company, which commenced
operations from 1995, trades in a wide range of products,
including timber, plywood, aluminium sheets, and adhesives.
ANANTHA PVC: CARE Reaffirms 'B' Rating on INR8.0cr LT Loan
----------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Anantha PVC Pipes Private Limited (Anantha PVC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 8.00 CARE B; Stable Reaffirmed
Short-term Bank
Facilities 7.00 CARE A4 Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of Anantha PVC
continues to be constrained by relatively small scale of
operation, risk associated with volatility in raw material
prices, moderately leveraged capital structure, working capital-
intensive nature of business and fragmented nature of the
industry with the presence of a large number of unorganized
players which results in intense competition. The rating also
factors in decline in profitability margins during FY17 (refers
to the period April 1 to March 31) and continued cash loss for
FY17; however lower losses vis-a-vis FY16. The ratings are,
however, underpinned by experienced promoter group and moderate
industry growth prospects. The ratings also take into account
significant growth in revenue during FY17. The ability of the
company to expand the scale of operation and make cash profits
while efficiently manage the working capital requirement are the
key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Strengths
Experienced promoter and management team: Anantha PVC belongs to
Nandi group, a South India based industrial house, promoted by
Mr. S.P.Y Reddy. The two directors on Board of Anantha PVC - Mr.
Sajjala Sreedhar Reddy and Ms. S. Sujala have an industrial
experience of more than a decade. Mr. Sajjala Sreedhar Reddy is
the Managing Director of the company and is supported by Ms. S.
Sujala (Director) who manages the operations of Anantha PVC as
well as of other group companies.
Significant increase in revenue: The total operating income of
the company increased by 31% from INR46.26 crore in FY16 to
INR61.03 crore in FY17 on the back of improved demand from the
irrigation sector.
Moderate industry growth prospects: The products of the company
mainly find application in the projects relating to irrigation,
sanitation & sewage disposal, water supply etc. Government of
India has been supporting the infrastructure industry through
continuous investment in water infrastructure in the country. The
demand of PVC pipes have been increasing given the low cost
advantage and operational advantage over steel pipes.
Key Rating Weaknesses
Volatility in raw material prices: The raw material prices are
extremely volatile in nature (with the prices of PVC resins &
chemicals driven by crude oil prices). Since the raw material
cost is the major cost (comprising around 87% of cost of sales
for FY17), any upward movement in raw material price would
escalate the cost of sales and put pressure on the profit
margins.
Decline in profit margins and continuing cash loss: The PBILDT
margin decreased from 5.33% in FY16 to 4.25% in FY17 on account
of higher raw material prices. The industry is highly fragmented
with presence of large number of unorganized small players which
results in intense competition. This has resulted in low
operating
margin for the company in the last three years. Further, due to
higher capital charge, the company reported cash loss of INR0.30
crore during FY17. The company, however, reported lower loss in
FY17 vis-a-vis FY16 on account of higher sales revenue.
Moderately leveraged capital structure and weak debt coverage
indicators: The capital structure of the company has deteriorated
as on March 31, 2017. The overall gearing deteriorated from 1.29x
as on March 31, 2016 to 1.61x as on March 31, 2017 on account of
increase in the working capital borrowing to INR9.56 crore in
FY17 from INR8.00 crore in FY16 (Ad-hoc limit being used) with
continued erosion of networth. The other debt coverage indicators
viz. Interest coverage ratio continued to remain weak during
FY17.
Working capital intensive nature of business: Anantha PVC
operates in a working capital intensive industry marked by
supplier concentration and intense competition leading to low
bargaining power. The working capital utilisation has been almost
full in the past 12 months ended in July 2017. Dependence on
working capital to finance the business operations has been on
higher side. However, the collection period of the company has
improved significantly during FY17 resulting in improved
operating cycle.
Anantha PVC Pipes Private Limited (Anantha PVC), incorporated in
2006, is part of Nandyal (Andhra Pradesh) based Nandi Group of
companies. Promoted by Mr. Sajjala Sreedhar Reddy, Anantha PVC is
engaged in the business of manufacturing of rigid Polyvinyl
Chloride (PVC) pipes and fittings (installed capacity of 12,800
MTPA) at its facilities located at Hampapuram (Andhra Pradesh).
The products are widely used in irrigation, telecommunication,
potable water supplies, electrical industry, construction
industry, sewerage and drainage etc. Besides, the company is also
engaged in trading of resins and chemicals.
Nandi group, promoted by Shri S.P.Y Reddy, is a South India based
industrial house having diversified business interest such as
cement, dairy, PVC pipes, construction etc.
B D ROADWAYS: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated B.D. Roadways'
(BDR) Long-Term Issuer Rating to the non-cooperating category.
The issuer did not participate in the rating exercise despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as 'IND BB-
(ISSUER NOT COOPERATING)' on the agency's website. The
instrument-wise rating actions are:
-- INR30.17 mil. Long-term loan migrated to non-cooperating
category with IND BB-(ISSUER NOT COOPERATING) rating;
-- INR14.3 mil. Fund-based working capital limits migrated to
non-cooperating category with IND BB-(ISSUER NOT COOPERATING)
rating; and
-- INR1 mil. Non-fund-based working capital limits migrated to
non-cooperating category with IND A4+(ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
October 6, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
BDR was incorporated in 2011 as partnership firm by Gujral Group.
The firm commenced commercial operations in 2012. It is primarily
engaged in the transportation business.
BEEHIVE ALCOVEB: Ind-Ra Assigns BB Issuer Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Beehive Alcoveb
(BA) a Long-Term Issuer Rating of 'IND BB'. The Outlook is
Stable. The instrument-wise rating actions are:
-- INR150 mil. Fund-based limit with IND BB/Stable/IND A4+
rating.
KEY RATING DRIVERS
The ratings reflect BA's weak EBITDA margin and tight liquidity
position. EBITDA margin was low at 2.5%- 2.8% during FY15-FY17,
with the FY17 level standing at 2.69%, owing to the trading
nature of the business. In addition, it operates in a highly
regulated liquor industry, where prices are regulated and
controlled by the state government. It fully utilised its working
capital limits during the seven months ended September 2017.
Also, cash flow from operations was negative at INR19.20 million-
52.21 million over FY16-FY17 owing to high working capital
requirements.
The ratings also reflect an annual license renewal risk faced by
BA. Any delay in licence renewal could result in a significant
revenue loss.
The ratings factor in the moderate scale of operations. Revenue
was INR2,746 million in FY17 (FY16: INR3,165.03 million). The
decline was due to the impact of demonetisation during the last
five months of FY17.
The ratings, however, are supported by comfortable credit
metrics. In FY17, gross interest coverage (operating EBITDA/gross
interest expense) was 175.64x (FY16: 367.79x) and net leverage
(total adjusted net debt/operating EBITDA) was 0.80x (0.43x). It
does not have any long-term debt, but it used the overdraft
limit, as and when required, until FY16 and paid minimal
interest. Credit metrics, especially interest coverage, are
likely to deteriorate substantially in FY18, as the firm took a
short-term debt of INR150 million in March 2017.
RATING SENSITIVITIES
Negative: A significant decline in revenue and/or operating
profit leading to deterioration in overall liquidity position
could lead to negative rating action.
Positive: An increase in revenue and EBITDA margin, along with an
improvement in the liquidity position, could lead to positive
rating action.
COMPANY PROFILE
Established in March 2013, BA is a wholesale liquor distributor
of Indian-made foreign liquor and beer in Lucknow, Varanasi and
Barabanki in Uttar Pradesh. The firm came online in FY14. BA has
two warehouses in Lucknow.
BHARAT CONSTRUCTION: Ind-Ra Moves BB- Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Bharat
Construction'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 BB-(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are:
-- INR120 mil. Fund-based facilities migrated to non-cooperating
category with IND BB-(ISSUER NOT COOPERATING)/IND A4+(ISSUER
NOT COOPERATING) rating; and
-- INR230 mil. Non-fund-based facilities migrated to non-
cooperating category with IND A4+(ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
October 17, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Bharat Construction, set up in 1999, is a partnership firm and
constructs roads and hydroelectric power plants in Uttarakhand
and Himachal Pradesh. Mr. Rajeev Garg and Mr. R S Panwar are
equal partners in the firm.
BSCPL INFRASTRUCTURE: CRISIL Reaffirms D Rating on INR1.88BB Loan
-----------------------------------------------------------------
CRISIL Ratings has been consistently following up with BSCPL
Infrastructure Limited (BSCPL) for obtaining information through
letters and emails dated June 19, 2017 and July 20, 2017 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1,884.09 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 600.00 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term 545.91 CRISIL D (Issuer Not
Bank Loan Facility Cooperating; Rating
Reaffirmed)
Term Loan 470.00 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 BSCPL Infrastructure Limited.
This restricts CRISIL's ability to take a forward looking view on
the credit quality of the entity. CRISIL believes that the
information available for BSCPL Infrastructure Limited is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower. Based on the last available information, CRISIL has
reaffirmed the rating at 'CRISIL D'.
Set up in 1981, BSCPL primarily constructs roads and buildings.
It also develops, operates, and maintains national and state
highways.
CHAUDHARY JAI: CRISIL Reaffirms 'B' Rating on INR4.7MM LT Loan
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Chaudhary
Jai Ram Cold Storage Private Limited (CJR) for obtaining
information through letters and emails dated July 10, 2017 and
August 8, 2017 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 3.1 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Overdraft 1.9 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term 4.7 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating; Rating
Reaffirmed)
Working Capital 0.3 CRISIL B/Stable (Issuer Not
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 Chaudhary Jai Ram Cold Storage
Private Limited. This restricts CRISIL's ability to take a
forward looking view on the credit quality of the entity. CRISIL
believes that the information available for Chaudhary Jai Ram
Cold Storage Private Limited is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL BB' category or lower. Based on the last
available information, CRISIL has reaffirmed the rating at
'CRISIL B/Stable.
Incorporated in December 2014, CJR is promoted by Mr Veerendra
Singh and Mr Gaurav Singh. It is engaged in providing cold
storage services to farmers for potatoes and perishable products.
COCHIN STEEL: CRISIL Reaffirms 'B' Rating on INR2MM LT Loan
-----------------------------------------------------------
CRISIL Ratings has reaffirmed its ratings on the bank facilities
of Cochin Steel Industrial Complex (Construction) (CSIC) at
'CRISIL B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 3 CRISIL A4 (Reaffirmed)
Overdraft 3 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 2 CRISIL B/Stable (Reaffirmed)
The ratings continue to reflect the firm's modest scale of
operations, exposure to intense competition, and large working
capital requirement. These weaknesses are partially offset by the
extensive experience of its promoter in implementing civil
construction projects.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations and susceptibility to intense
competition in civil construction segment: CSIC's revenue for
fiscal 2017 on provisional basis is expected around Rs.6.1
crores. The construction and civil works sector is marked by the
presence of large companies such as Larsen & Toubro Limited and
many other small players. Also, CSIC's small scale of operations
restricts it from bidding for larger projects.
* Large working capital requirements: CSIC's operation is highly
working capital intensive as reflected in its expected gross
current asset of around 613 days as on March 31, 2017.
Furthermore, the firm holds large work-in-progress inventory,
resulting in inventory-holding period of around 310 days, which
further strains the firm's liquidity.
Strength
* Proprietor's extensive experience: CSIC benefits from the
extensive industry experience of its proprietor, Mr. M M
Varghese. Mr. Varghese has experience of over three decades in
the engineering and construction industry. Proven track record of
executing orders timely has resulted in steady orders from
customers.
Outlook: Stable
CRISIL believes CSIC will continue to benefit over the medium
term from its proprietor's extensive industry experience. The
outlook may be revised to 'Positive' if there is a considerable
improvement in its revenue while maintaining its profitability
resulting in better cash accruals, thereby improving the
financial risk profile. The outlook may be revised to 'Negative'
in case of delays in completion of projects, or deterioration in
receivables management, or large, debt-funded capital
expenditure, weakening the financial risk profile.
CSIC, set up in 2000, is a proprietorship concern undertaking
civil contracts for the government of Kerala. Its operations are
managed by its proprietor, Mr M M Varghese.
EASTERN PILLING: CRISIL Reaffirms B+ Rating on INR5MM Cash Loan
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Eastern
Pilling and Construction Private Limited (EPCPL) 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.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 10 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 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 Eastern Pilling and
Construction Private Limited. This restricts CRISIL's ability to
take a forward looking view on the credit quality of the entity.
CRISIL believes that the information available for Eastern
Pilling and Construction Private Limited is consistent with
'Scenario 1' outlined in the 'Framework for Assessing Consistency
of Information with CRISIL BB' category or lower. Based on the
last available information, CRISIL has reaffirmed the rating at
'CRISIL B+/Stable/CRISIL A4.
EPCPL, established in 1991, is promoted by Mr. Abhay Kumar Das
and is based in Cuttack, Odisha. Its operations involve
conducting surveys, procuring raw material as per approved
designs, and complete installation of transmission lines,
including sub-station repair work, mainly for private companies,
apart from government agencies.
EMSON GEARS: CRISIL Reaffirms B+ Rating on INR64.71MM Term Loan
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Emson
Gears Limited (EGL; part of the Emson group) for obtaining
information through letters and emails dated July 10, 2017, and
August 09, 2017, among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 24 CRISIL B+/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Cash 6 CRISIL B+/Stable (Issuer Not
Credit Limit Cooperating; Rating
Reaffirmed)
Proposed Long Term 5.29 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating; Rating
Reaffirmed)
Term Loan 64.71 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 Emson Gears Limited. This
restricts CRISIL's ability to take a forward looking view on the
credit quality of the entity. CRISIL believes that the
information available for Emson Gears 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'.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of EGL and Osho Forge Ltd (OFL). This is
because these companies, collectively referred to as the Emson
group, operate in the same line of business and are under a
common management. OFL manufactures gears, crown wheels, and
pinions, all of which are used as raw material by EGL. CRISIL
used to consolidate Osho Gears and Pinion Ltd (OGPL) also,
however, the same is now merged with EGL.
The Emson group comprises EGL and OFL. EGL was established as a
partnership firm, Emson Sales, in 1981. The firm, founded by Mr
Ashok Kumar Dhall and Mr Vimal Dhall, manufactures gears and was
reconstituted as a limited company in 1981. In 1993, the group
established OFL to implement vertical integration into the
forgings segment. In the same year, another facility to
manufacture gears and pinions was set up under OGPL, the same is
now merged with EGL.
G S ROADLINES: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated G.S. Roadlines'
(GSR) Long-Term Issuer Rating to the non-cooperating category.
The issuer did not participate in the rating exercise despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as 'IND BB-
(ISSUER NOT COOPERATING)' on the agency's website. The
instrument-wise rating actions are:
-- INR45.43 mil. Term loan migrated to non-cooperating category
with IND BB-(ISSUER NOT COOPERATING) rating;
-- INR15.3 mil. Fund-based working capital limits migrated to
non-cooperating category with IND BB-(ISSUER NOT COOPERATING)
rating; and
-- INR1.00 mil. Non-fund-based working capital limits migrated
to non-cooperating category with IND A4+(ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
October 6, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
GSR was incorporated in 2011 as partnership firm by Gujral Group.
The entity commenced commercial operations in 2012. It is
primarily engaged in the transportation business.
G S ROADWAYS: Ind-Ra Moves BB- Issuer Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated G.S. Roadways'
Long-Term Issuer Rating to the non-cooperating category. The
issuer did not participate in the rating exercise, despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as 'IND BB-
(ISSUER NOT COOPERATING)' on the agency's website. The
instrument-wise rating actions are:
-- INR33.69 mil. Term loan with migrated to non-cooperating
category with IND BB-(ISSUER NOT COOPERATING) rating;
-- INR13.40 mil. Fund-based working capital limits migrated to
non-cooperating category with IND BB-(ISSUER NOT COOPERATING)
rating;
-- INR1.00 mil. with Non-fund-based working capital limits
migrated to non-cooperating category with IND A4+(ISSUER NOT
COOPERATING) rating.
COMPANY PROFILE
G.S. Roadways was incorporated in 2011 as partnership firm by
Gujral Group. The entity started its commercial operations in
2012. It is primarily involved in the transportation business.
GMR BAJOLI: CARE Lowers Rating on INR1,380cr LT Loan to 'D'
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
GMR Bajoli Holi Hydro Power Pvt Ltd (GBHHPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Facilities 1,380.00 CARE D Revised from
(Term Loan) Senior CARE BBB-
Debt
Long term bank 25.00 CARE D Revised from
Facilities-Non fund CARE BBB-
based (bank Guarantee)
Detailed Rationale & Key Rating Drivers
The rating revision of GBHHPPL takes into account the instance of
delay in servicing the debt obligations by the company. Going
forward, the company's ability to timely service its debt
obligations and register improvement in the overall project
progress shall be the key rating sensitivities.
Detailed description of the key rating drivers
Delays in servicing the debt obligations: The company had delayed
the interest payment on its term loan for the month of August,
2017. The delay in payment by the GBHHPPL was largely
attributable to delay in receipt of equity from Delhi
International Airport Limited (DIAL). GBHHPPL has entered into a
long-term Purchase Power Agreement to supply power to DIAL on
September 11, 2017 under the group captive arrangement. The PPA
was earlier expected to be executed before Q1FY18 against which
DIAL had to contribute equity for the project. The delay in
signing of PPA led to delay in fund infusion which coupled with
committed debt obligations led to cash flow mismatches.
Update on the Project: As per the Lender Engineer's report dated
September 14, 2017 for the quarter ended June 30, 2017, the
physical progress of the project is 50 percent as against the
planned 58 percent. In terms of engineering progress, the project
is 71.5 percent complete with engineering progress for civil
works, electro mechanical works and hydro mechanical works at
79.50 percent, 64 percent and 37 percent respectively. The
construction progress for civil works is 46.32 percent against
the planned 51 percent. Further, against the total length of 16
kilometers, the head race tunnel of 9.3 kilometers is completed.
The estimated cost of the project is INR2,205 cr which is
proposed to be funded by way of debt of INR1,580 cr and
promoters' contribution of INR625 cr. As per LE report the
company has spent INR1192 cr. till June 30, 2017 which was funded
by way of debt of INR757 cr., promoter's contribution of INR411
cr and remaining by project creditors of INR24 cr. The project is
slated to achieve COD by August 31, 2018.
GMR Bajoli Holi Hydropower Pvt. Ltd (GBHHPL), incorporated on
October 1, 2008, is special purpose vehicle (SPV) promoted by GMR
group under its energy subsidiary GMR Energy Limited for
implementing 180 MW (3 x 60 MW) hydro power plant (run-of-river
with pondage) on the upper reaches of river Ravi, which belongs
to the Indus river system in Chamba district of Himachal Pradesh.
The project was allotted to GEL by Government of Himachal Pradesh
(GoHP) in July 2007 on Build, Own, Operate and Transfer (BOOT)
basis through international competitive bidding process based on
payment of highest one time up-front premium. As per the company,
GBHHPL has signed Power Purchase Agreement with Delhi
International Airport Pvt Ltd a subsidiary company of GIL for
off-take of the entire power generated by GBHHPL for long period
from COD. GBHHPL is a part of the GMR group, which is a leading
business house having interest in the infrastructure sector with
presence in energy, road, airport, and SEZ. Over the years, the
group has demonstrated successful execution capabilities across
diverse sectors.
HOLO PACK: CARE Assigns B+ Rating to INR5.50cr LT Loan
------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Holo
Pack Securities (HPS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 5.50 CARE B+; Stable Assigned
Detailed Rationale& Key Rating Drivers
The rating assigned to the bank facilities of HPS takes into
consideration small scale of operations with thin profit margins
and high gearing levels, short track record of the entity in
highly fragmented industry with intense competition from large
number of players along with partnership nature of constitution
with inherent risk of withdrawal of capital. The rating, however,
derive strength by experience of the partners for more than two
decades in packaging industry, growth in total operating income,
moderate debt coverage indicators and comfortable operating cycle
days along with moderate order book position along and stable
outlook of packaging industry.
Going forward, ability of the firm to increase its scale of
operations and improve profitability margins in competitive
environment and manage working capital requirements effectively
would be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Short track record of the entity with low net worth base: The
firm has a short track record of 3 months from commencement of
operations as it was established in May 2015 and commenced
operations from Jan 2017. HPS has low net worth base of INR0.55
crore as compared to other peers in the industry.
Small scale of operations with thin profit margins and high
gearing ratio: The firm achieved total sales of INR2.00 crore in
FY17 (Provisional) and produced 134 tons of packaging material in
3 months(from Jan 2017 to March 2017) being its first year of
operations. The PBILDT margin stood at 27.52% and APAT margins
at -17.23% in FY17(Provisional) due to high depreciation and
interest cost. HPS has leveraged capital structure marked by
highdebt-equity and gearing ratio,both stood at 4.43x as on
March 31, 2017 (Provisional) due to high debt level coupled with
low networth base.
Partnership nature of constitution with inherent risk of
withdrawal of capital: 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 affect its
capital structure. Further, partnership concern has restricted
access to external borrowing which limits their growth
opportunities to some extent.
Susceptibility of profit margins to volatility in raw material
prices: HPS intends to procure its key raw materials i.e.,
LDPE(Low-density polyethylene) domestically. However, the key raw
material being derivative of crude oil, profit margins of HPS
would be susceptible to volatility in global crude prices.
Highly fragmented industry with intense competition from large
number of players: The firm is engaged in manufacturing of
flexible packaging material which is highly fragmented industry
due to presence of large number of organized and unorganized
players in the industry resulting in huge competition.
Key Rating Strengths
Experience of the partners for more than two decades in packaging
industry: The partners of HPS have more than two decades of
experience in packaging industry. Mrs. M.Goda Devi is associated
with M/s Reliable Packaging from 1995 onwards which was also
engaged in manufacturing of packaging material located at Krishna
district.
Moderate debt coverage indicators and comfortable operating
cycle: The debt coverage indicators marked by interest coverage
and Total debt/GCA are moderate at 5.96x (annualized) and 8.96x
(annualized) in FY17 (Provisional) due to moderate debt levels
considering low cash accruals. The operating cycle of the firm
remained comfortable and stood at 20 days (annualized) in
FY17(Prov.). The firm receives the payment from its customers
within 2-4 months. Furthermore, the firm makes the payment to its
suppliers within 15-30 days.
Moderate order book of INR4.10 crore to be executed by Q1FY19:
HPS has healthy order book of INR4.10crore as on August 31, 2017
which translates to 205x of total operating income of FY17 and
the same is likely to be completed by Q1FY19. The said order book
provides revenue visibility for short term period. The entire
order value of INR4.10 crore pertains to packaging materials from
Virat Crane Industries Limited, Maharaja Industries among others.
Stable industry outlook and growth prospects: The packaging
industry in India is expected to reach $73 billion in 2020 from
$32 billion in FY 15, according to a report prepared by FICCI and
Tata Strategic Management Group (TSMG) on plastic industry titled
Plastic packaging. In the coming years, Indian packaging industry
is anticipated to register 18 percent annual growth rate, with
the flexible packaging and rigid packaging expected to grow
annually at 25 percent and 15 percent, respectively.
Holo Pack Securities was established in the year 2015and
operations were commenced from January 2017. HPS is promoted by
Mrs. M.Goda Devi along with her daughter Ms. M.Ramya Lakshmi at G
Kondur Mandal, Krishna District(Andhra Pradesh). The firm is
engaged in manufacturing of flexible packaging materials along
with secured printing. The firm purchases raw materials like
polyester, LDPE(Low-density polyethylene), aluminium foils,
adhesives and solvents among others from local suppliers. The
clientele of the firm covers Andhra Pradesh and Telangana like
Virat Crane Industries Limited, PVS Laboratories Limited and KCP
Sugar Industries among others. The firm has installed capacity of
2400 tons per annum.
HONEY PROPERTIES: CRISIL Reaffirms B Rating on INR7.05MM LT Loan
----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Honey
Properties (HP) 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.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 7.05 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 Honey Properties. This
restricts CRISIL's ability to take a forward looking view on the
credit quality of the entity. CRISIL believes that the
information available for Honey Properties is consistent with
'Scenario 1' outlined in the 'Framework for Assessing Consistency
of Information with CRISIL BB' category or lower. Based on the
last available information, CRISIL has reaffirmed the rating at
'CRISIL
Established in 2014, HP is engaged in real estate development.
The company is promoted by Mr. K.S. Sameeulla and Mr. K.S. Suna
Miandad.
JAYPEE GROUP: Seeks Supreme Court's OK to Sell Yamuna Expressway
----------------------------------------------------------------
Vandana Ramnani at Moneycontrol.com reports that four days after
it made a futile attempt before the Supreme Court to extend the
date for depositing INR2000 crore for refunding home buyers, JP
Associates on Oct. 13 sought the Apex court's permission to sell
its Yamuna Expressway project to raise the amount.
According to the report, the embattled Jaypee group on Oct. 13
informed the Supreme Court that it wants to "hive off" the multi-
crore Yamuna Expressway in order to generate money.
Moneycontrol.com relates that lawyers present in court said that
the SC allowed the application and is likely to take a decision
on the matter on October 23. The bench of Chief Justice Dipak
Misra and Justices A M Khanwilkar and D Y Chandrachud said it
will hear the matter on October 23.
The court was hearing a plea by over 40 home buyers of Jaypee
Wish Town project at Noida in Uttar Pradesh who have challenged
certain provisions of the Insolvency and Bankruptcy Code, 2016,
the report states.
Moneycontrol.com says the Supreme Court on September 11 had
directed JP Associates (parent company) to deposit INR2,000 crore
by October 27 and ordered that even if the company planned to
sell its assets to raise money, it would need to seek court's
permission.
While handing over the management of Jaypee Infratech to
insolvency resolution professional (IPR), the court had also
restrained its real estate promoters, directors and managing
director from travelling abroad without this court's permission,
Moneycontrol.com states. "You can't be so selfish. This is a
human problem with great magnitude. We are only concerned about
the homebuyers. We are not concerned about the company. The
companies can drown in the Bay of Bengal," Chief Justice of India
Dipak Misra had observed, Moneycontrol.com relays.
"Technically, Yamuna Expressway is a Jaypee Infratech property
and since insolvency proceedings are currently on against the
company, Jaypee Associates cannot sell it. Only a part of Jaypee
Sports City on Yamuna Expressway belongs to JAL. Homebuyers will
oppose the sale of any Jaypee Infratech assets for discharging
the liabilities of JAL," Moneycontrol.com quotes Ramakant Rai, of
Trilegal, who is advising Jaypee homebuyers, as saying.
On September 11, the Supreme Court also appointed senior advocate
Shekhar Naphade as amicus curiae to assist the proceedings of the
IRP, which will submit a resolution plan indicating how to
safeguard the interests of home buyers and secured creditors.
On October 9, the Supreme Court had refused to defer the deadline
of October 27 to deposit INR2,000 crore, the report notes. The
holding company Jaiprakash Associates Ltd. (JAL) had pleaded for
the extension.
Yamuna Expressway is a 6-lane, 205 km long, expressway,
connecting Greater Noida with Agra, Moneycontrol.com notes.
JKG OVERSEAS: CRISIL Raises Rating on INR12.05MM LT Loan to B+
--------------------------------------------------------------
CRISIL Ratings has upgraded its rating on the long-term bank
facilities of JKG Overseas Private Limited (JKG) to 'CRISIL
B+/Stable' from 'CRISIL B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2.75 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Proposed Long Term 12.05 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B/Stable')
The rating upgrade reflects CRISIL's belief that JKG's business
and financial risk profile will continue to improve over the
medium term. In fiscal 2017, net sales increased to Rs. 25.7
crores against CRISIL's expectation of Rs. 21 crores over the
same time period. Operating margin too improved to 2.2% in fiscal
2017 from 1.7% in previous year on account of economies of scale.
Further, company's milling plant is expected to start from
January 2018 onward. Hence, operating income is expected to reach
Rs. 40 crores and margins are expected to improve to over 2.5% in
fiscal 2018. With expected increase in operating margin, interest
coverage ratio is expected to improve to over 3 times in fiscal
2018 from 1.6 times in fiscal 2017. However, financial risk
profile is expected to be constrained by high expected total
outside liabilities to adjusted networth ratio (TOLANW) of over 3
times for March 31, 2018 from 1.7 times as on March 31, 2017
because of term loan taken for milling plant.
The rating reflects modest scale of operations in highly
fragmented industry and modest networth. These weaknesses are
partially mitigated by the extensive experience of the promoters
& their funding support.
Analytical Approach
Unsecured loans from promoters of INR81 lakhs as on March 31,
2017 have been treated as neither debt nor equity as they are
subordinated to bank debt and are expected to remain in business
over the medium term.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations in highly fragmented industry:
Modest scale of operations is reflected in the turnover of Rs.
25.9 crores in fiscal 2017. The industry is highly fragmented
which limits individual players' bargaining power with suppliers
and customers and result in limited pricing flexibility. However,
scale of operations is expected to increase over the medium term
with further scaling up of operations and starting of milling
capacity in current fiscal.
* Modest networth: Company's networth is modest at Rs.1.8 crores
as on March 31, 2017. Modest networth limits the financial
flexibility of the company. The same is expected to increase
gradually backed by modest accretion to reserves in the absence
of any significant equity infusion.
Strengths
* Extensive experience of the promoters & their funding support:
The promoters have over three decades of industry experience in
the rice milling business through group entities; enabling them
to establish healthy relationship with customers and suppliers
and have also extended the funding support in the form of
unsecured loan to support the business. Benefits from promoters'
experience and their funding support is expected to continue over
the medium term.
Outlook: Stable
CRISIL believes that JKG will continue to benefit from the
extensive industry experience of its promoters. The outlook may
be revised to 'Positive' if increase in revenue and profitability
or significant capital infusion lead to better financial risk
profile, particularly capital structure. The outlook may be
revised to 'Negative' in case of weakening of capital structure,
lower-than-expected cash accrual, or substantial debt-funded
capital expenditure.
Incorporated in 2014, JKG is engaged in processing and selling of
basmati rice. It is promoted by Nipun Garg, Mayank Garg, Shubham
Garg, and Sobir Garg. Its facility is at Taraori, Karnal
(Haryana).
JOMSONS ENTERPRISES: CRISIL Reaffirms B Rating on INR11MM Loan
--------------------------------------------------------------
CRISIL Ratings has reaffirmed its rating on the long-term bank
facilities of Jomsons Enterprises (India) Private Limited (JE;
part of the Jomsons group) at 'CRISIL B/Stable', while removing
the rating from 'Issuer Not Cooperating'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 11 CRISIL B/Stable (Reaffirmed;
Removed from 'Issuer Not
Cooperating')
Long Term Loan 9.5 CRISIL B/Stable (Reaffirmed;
Removed from 'Issuer Not
Cooperating')
The rating continues to reflect the Jomsons group's below-average
financial risk profile, with high gearing and modest networth
levels. This weakness is partially offset by promoter's extensive
experience in the polyvinyl chloride (PVC) industry, and their
established customer relationships, particularly in Kerala.
Analytical Approach
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of JE and Bestin Plast (BP). This is
because both the entities, together referred to as the Jomsons
group, are in the same line of business, have operational and
financial linkages, and are managed by the same promoter.
Key Rating Drivers & Detailed Description
Weakness
* Below-average financial risk profile: The financial risk
profile is constrained by small networth and average debt
protection metrics. Networth, through modest due to losses and
low accretion to reserve in the past, is expected to improve
marginally with better margins. Debt protection metrics were
average, with interest coverage and net cash accrual to total
debt ratios expected to remain at 1.0 time-1.5 times and 2-4%,
respectively, over the medium term.
Strength
* Promoter's extensive experience and established market
position: The promoter has over two decades of experience in
dealing with various PVC products and has demonstrated business
acumen in diversifying into other fields. Furthermore, the group
has established relationships with these companies and enjoys a
robust bargaining power.
Outlook: Stable
CRISIL believes the Jomsons group will continue to benefit over
the medium term from the promoter's experience. The outlook may
be revised to 'Positive' if sustained increase in profitability
and scale, and better working capital management improve
liquidity. Conversely, the outlook may be revised to 'Negative'
if the Jomsons group's profitability is low or working capital
management weakens, leading to deterioration in liquidity.
The Jomsons group trades in PVC panel profiles and is venturing
into customised printing in 3D texture on doors, ceilings,
floors, and other surfaces. JE, formerly known as Jomsons
Plastics, was established in 2011 and BP in 1993. Both entities,
based in Thrissur (Kerala), are managed by Mr Bestin Joy.
KIZHAKKEBHAGATHU RICE: CRISIL Reaffirms C Rating on INR6MM Loan
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with
Kizhakkebhagathu Rice Mills (KRM) 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.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Open Cash Credit 6 CRISIL C (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Kizhakkebhagathu Rice Mills.
This restricts CRISIL's ability to take a forward looking view on
the credit quality of the entity. CRISIL believes that the
information available for Kizhakkebhagathu Rice Mills is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower. Based on the last available information, CRISIL has
reaffirmed the rating at 'CRISIL C.
Set up in 1997, KRM mills and processes paddy into rice, rice
bran, broken rice and husk. It has an installed paddy milling
capacity of 5 tonnes per hour (tph). Its rice mill is located at
Muvattupuzha, Kerala. Its operations are managed by Mr. Dinu
Kurien.
LAL BABA: Ind-Ra Migrates BB Issuer Rating to Non-Cooperating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Lal Baba
Industrial Corporation Private Limited's (LBIPL) Long-Term Issuer
Rating to the non-cooperating category. The issuer did not
participate in the rating exercise despite continuous requests
and follow-ups by the agency. Therefore, investors and other
users are advised to take appropriate caution while using these
ratings. The rating will now appear as 'IND BB(ISSUER NOT
COOPERATING)' on the agency's website. The instrument-wise rating
actions are:
-- INR114 mil. Fund-based limits migrated to non-cooperating
category with IND BB(ISSUER NOT COOPERATING) rating; and
-- INR30 mil. Non-fund-based limits migrated to non-cooperating
category with IND A4+(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
September 27, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
LBIPL was established by Mr. Babu Lal Dhanuka and Mr. Murari Lal
Dhanuka as a partnership entity in 1961. The firm was converted
into a private limited company in 2010 under its current name.
LILY HOTELS: Ind-Ra Affirms D Rating & Moves to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Lily Hotels
Private Limited's (LHPL) Long-Term Issuer Rating at 'IND D'. The
rating has also been migrated to the non-cooperating category.
The issuer did not participate in the surveillance exercise,
despite continuous requests and follow-ups by the agency. Thus,
the rating is based on the best available information. 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 action is:
-- INR254.6 mil. Term loan (Long-term) affirmed and migrated to
non-cooperating category with IND D(ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; Based on
the best available information
KEY RATING DRIVERS
The affirmation reflects LHPL's continued delays in debt
servicing during the 12 months ended September 2017 due to a
tight liquidity position.
RATING SENSITIVITIES
Positive: Timely debt servicing for three consecutive months
would be positive for the ratings.
COMPANY PROFILE
LHPL was incorporated in 2008. The company is run by Mr. Anupam
Bora and Mrs. Lilima Bora. LHPL owns and operates 'The Lily
Hotels' in Guwahati. The commercial operation of the hotel
started in July 2014.
LODHA DEVELOPERS: Moody's Confirms B2 CFR; Outlook Stable
---------------------------------------------------------
Moody's Investors Service has confirmed Lodha Developers Private
Limited's (LDPL) B2 corporate family rating.
At the same time, Moody's has also confirmed the B2 backed senior
unsecured debt rating of the US dollar denominated bonds issued
by Lodha Developers International Limited and guaranteed by LDPL.
The outlook on all ratings is stable.
The rating action on the CFR and senior unsecured rating
concludes a review for downgrade initiated on July 27, 2017 and
follows the announcement by the company that it has completed the
refinancing of its bridge loan for the Grosvenor Square
development in London.
RATINGS RATIONALE
"The confirmation of the ratings reflects the alleviation of the
refinancing risk following the establishment of a loan that will
mature in 40 months to fund construction for the Grosvenor Square
development," says Saranga Ranasinghe, a Moody's Assistant Vice
President and Analyst.
Despite the reduction in immediate refinancing risk, LDPL has a
weak liquidity profile.
It will be reliant on external sources of funding, given its high
level of short-term debt maturities in India.
At June 30, 2017, it had around INR146 billion of short term debt
maturities in India, out of which around INR20 billion is due in
the next 12 months. This compares to INR 5.7 billion of cash on
hand at June 30, 2017.
However, Moody's expects the company to continue to have access
to project construction loans to refinance these borrowings
because of its track record of successful refinancing in India
and its position as one of the leading developers in India.
At the same time, the ratings factor in the recent improvements
in the company's operating performance.
Moody's expects LDPL's credit metrics to improve from fiscal
2018, once it starts recognizing sales from projects launched
over the last two to three years in India. At the same time, LDPL
will recognize revenue and earnings from its developments in
London, which will further improve its credit metrics. Moody's
expects adjusted debt/homebuilding EBITDA to improve to around
4.8x in fiscal 2018 from around 5.3x in fiscal 2017. Moody's
calculations for debt includes the debt at the London entities.
"The stable outlook reflects Moody's expectations that LDPL will
sustain the recent improvements in operating sales and
collections," adds Ranasinghe, who is also Moody's lead analyst
for LDPL.
Reorganization of the group is likely to be completed by January
2018, following which the London properties will become a part of
the restricted group.
Moreover, the two London properties have secured long-term
construction funding that will cover construction costs, interest
during construction and any contingencies.
Following the reorganization, LDPL will own at least 75% of the
two London entities, which have a combined discounted cash flow
value of around GBP567 million
Bondholders will benefit from the diversification to the London
real estate market as well as from having access to the cash
flows from the London properties.
B2 rating reflects LDPL's position as the largest developer of
residential properties in India, the high quality of its projects
under construction and its strong execution capability. At the
same time, the rating is constrained by the weak liquidity
profile given the short term nature of debt and historically weak
credit metrics.
The ratings could be upgraded if LDPL is able to demonstrate
sustained improvements in its sales performance and positive free
cash flow generation.
Moody's would also look to an improvement in its liquidity
profile with solid liquidity in the form of cash balances and
committed facilities to cover short-term debt maturities.
The credit metrics that will support an upgrade include adjusted
debt/homebuilding EBITDA below 4.0x and adjusted homebuilding
EBIT/interest coverage above 2x on a sustained basis.
At the same time, the ratings could be downgraded if the
company's operating performance and liquidity position fail to
improve, or if it engages in any material debt-funded land
acquisitions. Credit metrics indicative of such downward pressure
include: 1) adjusted debt/homebuilding EBITDA above 5.5x and/or
2) homebuilding EBITA/interest below 1.5x.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in April 2015.
Lodha Developers Private Limited is the largest real estate
developer in India by sales of residential apartments.
LDPL is focused on residential development in the Mumbai
Metropolitan Region, with some projects in nearby Pune. Recently,
the company and its promoters expanded into the London market by
acquiring two properties, now in the process of development.
LDPL is privately held by the Lodha family.
M. G. AUTOSALES: CARE Assigns 'B' Rating to INR14.25cr LT Loan
--------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of M. G.
Autosales Private Limited (MGPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Bank
Facilities 14.25 CARE B; Stable Assigned
Short-Term Bank
Facilities 0.25 CARE A4 Assigned
Detailed Rationale and Key Rating Drivers
The ratings assigned to the bank facilities of MGPL are primarily
constrained by its modest and declining scale of operations, low
profitability margins, leveraged capital structure and weak
coverage indicators. The rating is further constrained by working
capital intensive nature of operations, intense competition,
regional concentration and linkage to fortunes of the
manufacturer (Honda Cars India Pvt Ltd.) The rating, however,
draws comfort from experienced promoters in the auto dealership.
Going forward; the ability of MGPL to increase its scale of
operations while registering improvement in its profitability
margins and capital structure while effective management of its
working capital requirement shall be the key rating
sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Modest and declining scale of operations: The scale of operations
of the company stood modest and declining scale as evident from
operating income of INR94.42 crore in FY17 (FY refers to a period
of April 1 to March 31; based on provisional results) as against
INR112.35 crore in FY15. The decline in total operating income
was driven by increasing competition from other automobile
players resulted in decline in quantity sold. Further, gross cash
accruals stood at INR0.87 crore during FY17. The modest scale
limits the company's financial flexibility in times of stress and
deprives it of scale benefits. The company has achieved TOI of
around INR40.85 crore in 5MFY18 (refers to period April 1 to
August 31, based on provisional results).
Thin 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 suppliers and has no
control over the selling price of the vehicles as the same is
fixed by the suppliers. High interest cost and depreciation cost
continues to restrict the PAT margin below unity levels in the
last three financial years (FY15-FY17). The profitability margins
of the company marked by PBIDLT and PAT margins stood at 3.37%
and 0.34% respectively in FY17 as compared to 2.82% and 0.36% in
FY16.
Leveraged capital structure and weak debt coverage indicators:
The capital structure of the company stood leveraged on the
balance sheet date of last three financial years i.e. FY15-FY17
on account of high dependence on external borrowings to meet
working capital requirements coupled with low net worth base.
Overall gearing level stood at 9.35x as on March 31, 2017 as
compared to 11.27x as on March 31, 2016. Improvement was on
account of increase in net
worth base owing to infusion of funds by directors with retention
of profits to its reserves.
Further company has weak debt coverage indicators evident from
interest coverage and total debt to gross cash accruals (GCA) at
1.51x and 26.35x, respectively in FY17 on account of high debt
levels against thin profitability resulting into low GCA levels
in FY17.
Working Capital Intensive nature of operations: The company needs
to stock different models of vehicles and spares in the showrooms
in order to ensure adequate availability and visibility, which
leads to inventory holding days of around 82 days in FY17. Though
the sales to customers are made on "Cash and Carry" basis
however, around 70% of the vehicles are bought on vehicle
financing basis through banks. The said phenomenon results in a
collection period of around 11 days in FY17. Further, the company
received a credit period of around 7 days from the suppliers for
procurement. Besides this, the large working capital requirements
are met through bank borrowings which remained almost fully
utilized for the last 12 months ended August, 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 Honda Cars India
Limited thereby restricting the company to earn incremental
income. With the large dealership network of Honda Cars 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 Maruti Suzuki motors, Hyundai Motors and Toyota Motors 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 in the Auto dealership: MGPL business is
supported by the experienced management viz. Mr. Abhishek
Agarwal, Mr. Mahendra Agarwal, Mrs. Vani Agarwal and Mrs Mudita
Agarwal. Mr Mahendra Kumar Agarwal has total experience of more
than 3 decades of experience through association with the MGPL
and its associate concerns. He is well supported by Mr Abhishek
Agarwal, Mrs. Vani Agarwal and Mrs. Mudita Agarwal each of which
have more than 8 years of experience as auto dealer through their
association with the MGPL.
Lucknow (Uttar Pradesh) based M.G. Autosales Private Limited
(MGPL) was incorporated in 2008. The company is currently being
managed by Mr. Abhishek Agarwal, Mr. M.K. Agarwal, Mrs. Vani
Agarwal and Mr. Mudita Agarwal. MGPL is an authorized dealer for
passenger cars manufactured by Honda Cars India Limited and
operates under the brand name 'Stallion Honda'. The company
manages its operations through its 3S (Sales, spare service)
facility located in Lucknow, Uttar Pradesh. The showroom has
attached workshop facility for the post sales services of cars.
MGSL is part of MG group of companies which has interest in
multiple businesses in the automotive sector including dealership
for other OEMs in the passenger vehicles and other diversified
businesses.
MADHAV COTTON: CARE Reaffirms B+ Rating on INR5.29cr LT Loan
------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Madhav Cotton Private Limited (MCPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 5.29 CARE B+; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of MCPL continues to
remain constrained on account of its thin profitability margins,
leveraged capital structure and moderately stressed liquidity
position. The rating, further, continues to remain constrained on
account of susceptibility of profitability to cotton price
fluctuation, changes in the government policy and seasonality
associated with the cotton industry.
The rating, however, continues to derive comfort from the
experience of the promoters into cotton industry and proximity of
its manufacturing facility to the cotton growing areas of
Maharashtra.
MCPL's ability to improve its scale of operations coupled with an
improvement in overall financial risk profile marked by
improvement in profit margins, capital structure and debt
coverage indicators while managing its working capital
requirement efficiently remain the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weakness
Decline in profitability margins, leveraged capital structure and
moderately stressed liquidity position: The profitability margins
of the company remained thin marked by PBILDT and PAT margin of
1.54% and 0.13% respectively in FY17. During FY17, PBILDT margin
of the company has declined by 144 bps over FY16 mainly due to
higher material cost.
The capital structure of the company stood leveraged as on
March 31, 2017, declined marginally mainly on account of higher
utilization of working capital bank borrowings. The liquidity
position of the company stood moderately stressed marked by 80-
90% utilization in seasonal time and 40-50% utilization in non-
seasonal duration during last twelve months ended August, 2017.
The cash flow from operating activities stood negative during
FY17.
Operating margins are susceptible to cotton price fluctuation,
changes in the government policy and seasonality associated with
the cotton industry: Operations of cotton business are seasonal
in nature. 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. Furthermore, cotton being a
seasonal crop, the inventory levels of the entity generally
remains high at the end of the financial year.
Key Rating Strengths
Significant improvement in Total Operating Income (TOI): During
FY17, TOI of the company has improved significantly by 44.82%
over FY16 mainly on account of increase in sale of cotton seeds
and bales and registered TOI of INR51.73 crore as against
INR35.72 crore in FY16.
Strategically located in the cotton growing region: Gujarat,
Maharashtra, Andhra Pradesh, Haryana, Madhya Pradesh and Tamil
Nadu are the major cotton producer states in India. The plant of
NGF is located in one of the cotton producing belt of Sendhwa
(Madhya Pradesh) in India. The presence of NGF in cotton
producing region results in benefit derived from lower logistics
expenditure (both on transportation and storage), easy
availability and procurement of raw materials at effective price.
MCPL was incorporated in June 2011 by Mr Kailash Mittal and Mrs
Savita Mittal as a private limited company. MCPL is engaged into
the business of cotton ginning and pressing. MCPL deals in 'Mech-
1' type of cotton which is being sourced through local farmers
from Maharashtra. MCPL operates from its sole manufacturing
plant located at Beed (Maharashtra).
MOTOR SALES: Ind-Ra Migrates B+ Issuer Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Motor Sales
Limited's (MSL) 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:
-- INR186 mil. Fund-based working capital limit migrated to non-
cooperating category with IND B+(ISSUER NOT COOPERATING)/IND
A4(ISSUER NOT COOPERATING) rating; and
-- INR65.68 mil. Term loan migrated to non-cooperating category
with IND B+(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
October 20, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
MSL was established in 1955 by Late Mr HC Gupta. It is engaged in
the dealership for the vehicles manufactured by Tata Motors
Limited in Uttar Pradesh. It has a sales-spares-service outlet to
sell spare parts and accessories and cars.
MUTYALA AGRO: CARE Assigns B+ Rating to INR3.83cr LT Loan
---------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Mutyala Agro Tech LLP (MAT), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 3.83 CARE B+; Stable Assigned
Short-term Bank
Facilities 1.80 CARE A4 Assigned
Detailed Rationale and key rating drivers
The ratings assigned to the bank facilities of MAT are
constrained by its short track record with small scale of
operations, regulation by government in terms of minimum support
price for its basic raw material, seasonal nature of availability
of raw material resulting in high working capital intensity and
exposure to vagaries of nature, leverage capital structure with
moderate debt coverage indicators and its presence in a highly
fragmented and competitive industry. The ratings, however, derive
strength from the experience partners, close proximity to raw
material sources and favorable industry scenario.
Going forward, the ability of the firm to grow its scale of
operations, improve its profit margins and manage working capital
effectively will be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Short track record and small scale of operations: MAT has started
operations from December 2015 onwards and thus has very short
track record of operations. Furthermore, the scale of operations
of the firm also remained small marked by total operating income
of INR1.96 crore (INR1.19 crore in FY16) with a net loss of
INR0.02 crore (INR0.63 crore in FY16) in FY17 Provisional.
However, the firm has reported GCA of INR0.72 crore in FY17. The
networth base of the firm was at 2.14 crore as on March 31, 2017.
Regulation by Government in terms of minimum support price (MSP):
The Government of India (GOI), every year decides a minimum
support price (MSP - to be paid to paddy growers) for paddy
which limits the bargaining power of rice millers over the
farmers. The MSP of paddy has increased during the crop year
2017-18 to INR1550/quintal (as suggested by the Commission for
Agricultural Costs and Prices, the apex body to advice on MSP to
the government) from INR1470/quintal in crop year 2016-17. Given
the market determined prices for finished product vis-a-vis fixed
acquisition cost for raw material, the profitability margins are
highly vulnerable. Such a situation does not augur well for the
firm, especially in times of high paddy cultivation.
Seasonal nature of availability of raw material resulting in
working capital intensity and exposure to vagaries of nature:
Agro product processing business is working capital intensive as
the millers have to stock paddy by the end of each season till
the next season as the price and quality of agro products are
better during the harvesting season. Further, the firm extends
credit of around two and half months to its customers.
Accordingly, the working capital intensity remains moderate
impacting firm's profitability. However the firm receives credit
of around three months from its suppliers. The average fund based
working capital utilisation remained high at 95% during the last
twelve months
ended July 31, 2017.
Leverage capital structure with moderate debt coverage
indicators: The capital structure of the firm remained leveraged
marked by debt equity and moderate overall gearing ratios of
1.40x and 1.97x
respectively as on March 31, 2017. The debt protection indicators
remained moderate marked by interest coverage ratio of 2.23x and
total debt to GCA stood at 5.88x in FY17.
Fragmented and competitive nature of the industry: MAT's plant is
located at Bargarh, Orisha which is in close proximity to hubs
for paddy/rice cultivating region of Odisha. The firm procures
raw materials from Odisha State Civil Supplies Corporation Ltd
and sells its products majorly (95%) to Odisha State Civil
Supplies Corporation Ltd. Owing to the advantage of close
proximity to raw material sources, large numbers of small units
are engaged in milling and processing of rice in the region. This
has resulted in intense competition which is also fuelled by low
entry barriers. Given that the processing activity does not
involve much of technical expertise or high investment, the entry
barriers are low.
Key Rating Strengths
Experienced management: Mr. M. V. V. Satyanarayan is the managing
partner of the firm. He has around three decades of experience in
the rice milling business and looks after the day to day
operations of the firm supported by the other partners. Close
proximity to raw material sources and favorable industry
scenario: MAT's plant is located in Bargarh, Odisha which is
close to the vicinity to a major rice growing area of Odisha,
thus, resulting in logistic advantage. Further, rice being a
staple food grain with India's position as one of the largest
producer and consumer, demand prospects for the industry is
expected to remain good in near to medium term.
MAT was established as a Limited Liability Partnership in
November 2013 to set up a rice milling and processing plant at
Bargarh, Odisha. The firm has been engaged in rice milling and
processing business and it has commenced its operations from
December 2015 onwards. The manufacturing plant of the firm is
located at Bargarh, Orissa with aggregate installed capacity of
17520 metric ton per annum of rice milling and processing. Apart
from own rice milling, the firm also does the rice milling for
Odisha State Civil Supplies Corporation Limited on job work
basis.
NAGARJUNA OIL: IRP Invites Investors to Revive Business
-------------------------------------------------------
Business Standard reports that the National Company Law Tribunal
(NCLT)-appointed interim resolution professional (IRP) has
invited an expression of interest (EOI) from investors to revive
Nagarjuna Oil Corporation Ltd (NOCL).
The IRP, S Rajendran, has invited EOI from prospective resolution
applicants for the purpose of submission of the resolution plan,
the report states. Rajendran said that financial investors,
including mutual funds, private equity and venture capital funds,
domestic/foreign investment institutions, and others, can also
apply.
The corporate insolvency resolution process (CIRP) has been
initiated with regard to NOLC under the provisions of the
Insolvency and Bankruptcy Code (IBC) 2016, Business Standard
notes.
According to the report, NOCL is currently implementing a 6-
million metric tonnes per annum (MMTPA) petroleum oil refinery
project on the south-east coast of India at Cuddalore, around 200
km south of Chennai.
Business Standard relates that the project had been partially
completed in December 2011 when a cyclone and shortage of funds
stopped work. With the fund infusion, the refinery can start
production in two-three years after completing the balance work.
The plant is capable of meeting Euro VI requirements with some
additions.
Most of the statutory clearances for the refinery are in place,
with a few requiring renewal. Land is also available for
expansion up to 30 MMTPA. VAT benefit in the form of structural
financial assistance is also available, said the IRP, the report
says.
Since 2012, NOCL has been looking for a strategic investor to
pump in fresh equity and revive the project, Business Standard
notes.
While NOCL's management was not available for comment
immediately, insiders said that to commence the project, the
company would require around INR14,000-15,000 crore, including
debt and principal amount, according to Business Standard.
Around 15 lenders had invested in the project. Subsequently, the
banks sought the Reserve Bank of India's dispensation in view of
the assets being likely to be classified by the central bank as
non-performing assets (NPAs), the report relays.
Business Standard notes that the IBC gives 180 days for a
resolution and a one-time extension of 90 days. After this, the
NCLT can appoint a liquidator to wind up the company. As the
lenders and creditors don't want to wind up the company, since
they will end up losing a lot of money, they are also keen on
reviving the project by bringing in investors.
A few strategic investors, mainly from overseas, have shown
interest in backing the project, said a senior company official
on the condition of anonymity, Business Standard states.
"We have got some proposals from a few strategic investors, who
are mostly outside India," the official, as cited by Business
Standard, added.
About Nagarjuna Oil
Hyderabad-based Nagarjuna Oil Refinery (NORL) holds 46.78% of the
equity share capital in NOCL, which is involved in setting up of
a refinery at Cuddalore in Tamil Nadu.
The National Company Law Tribunal's (NCLT) Chennai bench on
July 25, 2017, appointed an Insolvency Resolution Professional
(IRP) for Nagarjuna Oil Corporation (NOCL) based on an
application filed by one of its creditors.
NARAYANADRI HOSPITALS: Ind-Ra Moves B Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Narayanadri
Hospitals and Research Institute Private Limited's (NHRIPL) 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
B(ISSUER NOT COOPERATING)'on the agency's website. The
instrument-wise rating actions are:
-- INR19.5 mil. Fund-based limit migrated to non-cooperating
category with IND B(ISSUER NOT COOPERATING)/IND A4(ISSUER NOT
COOPERATING) rating; and
-- INR104.1 mil. Term loans migrated to non-cooperating category
with IND B(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
June 10, 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 2010, NHRIPL is a 250-bed multi-specialty
hospital located in Tirupati. It provides orthopaedic, urology,
neurology, and cardiology services.
NATIONAL CAPSULES: Ind-Ra Migrates BB- Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated National
Capsules Private Limited's (NCPL) Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will now appear as 'IND BB-(ISSUER NOT COOPERATING)' on the
agency's website. The instrument-wise rating actions are:
-- INR35.2 mil. Long-term loan migrated to non-cooperating
category migrated to non-cooperating category with IND BB-
(ISSUER NOT COOPERATING) rating; and
-- INR27.5 mil. Fund-based working capital limits migrated to
non-cooperating category with IND BB-(ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
September 20, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
NCPL was incorporated in 2010 by Mr. Rakesh Sharma and Mrs.
Pretti Sharma. The company manufactures empty hard gelatin
capsules and transmissible spongiform encephalopathy/bovine
spongiform encephalopathy free capsules in Vidisha, near Bhopal,
Madhya Pradesh.
NOBLE EDUCATIONAL: Ind-Ra Assigns 'BB' Rating to Bank Facilities
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Noble
Educational Trust's (NET) bank facilities ratings as follows:
-- INR35.29 mil. Term loan due on March 31, 2022 assigned with
IND BB/Stable rating;
-- INR2.5 mil. Fund-based working capital assigned with IND
BB/Stable rating; and
-- INR55 mil. Proposed term loan* with Provisional IND BB/Stable
rating.
* The final rating will be assigned following the receipt of
the sanction letter for the term loan by Ind-Ra.
KEY RATING DRIVERS
The ratings reflect NET's tight liquidity position with cash and
unrestricted investments of INR1.26 million at FYE17, providing
weak financial cushion to financial leverage (FYE17: 2.92%, FY16:
1.83%) and operating expenditure (1.68%, 1.82%). FY17 figures are
provisional in nature.
The ratings also factor in NET's moderate operating margins of
above 24% during FY12-FY17. In FY17, the operating margin
decreased to 26.87% (FY16: 33.13%) on account a 29.87% yoy
increase in key expenditure to INR74.82 million; while income
increased 18.74% yoy to INR102.30 million.
However, the ratings benefit from NET's increasing headcount,
which grew at a CAGR of 5.65% during FY12-FY17. In FY17,
headcount rose 20.52% yoy to 2,096 on account of an increase in
school intake capacity to 2,500 students. Ind-Ra expects the
headcount to increase as NET will start an arts college in FY19
with an annual approved intake of 250 students. For this, the
trust has a capex plan of INR91.90 million for FY18-FY19, to be
funded by debt (60%) and equity/internal accruals (40%). However,
Ind-Ra expects this will inflate debt burden in FY18 (FY17:
1.57x).
The ratings are also supported by NET's comfortable credit
metrics with debt service coverage ratio of 1.71x in FY17 (FY16:
1.51x) and interest service coverage of 4.52x (3.20x). Ind-Ra
expects the trust's debt service capability to continue to be
viable despite the increase in debt.
RATING SENSITIVITIES
Negative: Any unexpected decline in student headcount and NET's
debt servicing ability would lead to a negative rating action.
Positive: A sustained improvement in the operational performance
and a comfortable liquidity profile would lead to a positive
rating action.
COMPANY PROFILE
NET was established as Public Charitable Trust in 2002 by Dr. A S
A Jerald Gnanarathinam. The trust manages Noble Matriculation
Higher Secondary School (NMHSS) in Aruppukottai, Tamil Nadu which
provides education from L.K.G to K-12. The school is affiliated
to the Directorate of Matriculation Schools, Tamil Nadu which
have unique curriculum until grade X and follow the Tamil Nadu
State Board curriculum for grades XI and XII. The campus is
spread across 8.33 acres in Aruppukottai, Tamil Nadu.
NORTHLAND RUBBER: CRISIL Reaffirms B- Rating on INR7MM Cash Loan
----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Northland
Rubber Mills (NRM) 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.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 7 CRISIL B-/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Letter of Credit 2 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Northland Rubber Mills. This
restricts CRISIL's ability to take a forward looking view on the
credit quality of the entity. CRISIL believes that the
information available for Northland Rubber Mills is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' category or lower.
Based on the last available information, CRISIL has reaffirmed
the rating at 'CRISIL B-/Stable/CRISIL A4.
NRM, a partnership firm set up in 1965, manufactures textile
reinforced conveyor belts for industries such as steel, cement,
mining, thermal power, and fertilisers. Mr. Anil Mahajan, the key
partner, and other members of his family, oversee operations. The
manufacturing unit is at Sonipat, Haryana.
OSHO FORGE: CRISIL Reaffirms B+ Rating on INR40MM Cash Loan
-----------------------------------------------------------
CRISIL Ratings has been consistently following up with Osho Forge
Limited (OFL; part of the Emson group) 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.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 40 CRISIL B+/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Overdraft 5 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term 9 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating; Rating
Reaffirmed)
Term Loan 11 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 Osho Forge Limited. This
restricts CRISIL's ability to take a forward looking view on the
credit quality of the entity. CRISIL believes that the
information available for Osho Forge 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/CRISIL A4'.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of OFL and Emson Gears Ltd (EGL). This is
because these companies, collectively referred to as the Emson
group, operate in the same line of business and are under a
common management. OFL manufactures gears, crown wheels, and
pinions, all of which are used as raw material by EGL. CRISIL
used to consolidate Osho Gears and Pinion Ltd (OGPL) also,
however, the same is now merged with EGL.
The Emson group comprises EGL and OFL. EGL was established as a
partnership firm, Emson Sales, in 1981. The firm, founded by Mr
Ashok Kumar Dhall and Mr Vimal Dhall, manufactures gears and was
reconstituted as a limited company in 1981. In 1993, the group
established OFL to implement vertical integration into the
forgings segment. In the same year, another facility to
manufacture gears and pinions was set up under OGPL, the same is
now merged with EGL.
P. PRABHAKARAN: CRISIL Assigns B+ Rating to INR14MM Cash Loan
-------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable/CRISIL A4'
ratings to the bank facilities of P. Prabhakaran. The ratings
reflects modest scale of operations and susceptibility to intense
competition from large players alongwith its limited geographical
diversity in revenue profile. These weaknesses are partially
offset by experience of promoters in the civil construction
industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 4 CRISIL A4
Cash Credit 14 CRISIL B+/Stable
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations and susceptibility to intense
competition from large players: The firm is exposed to intense
competition in the civil construction industry which is highly
fragmented with the presence of large organized players and
several unorganized players. Civil construction of roads, water
and irrigation are highly competitive owing to its low entry
barriers. Strong growth prospects have resulted in several small
players entering these segments over the past few years. The firm
is exposed to intense competition from the large organized
players and other unorganized player present in the industry.
While the firm has high flexibility with regard to credit from
suppliers, the revenue profile remains dependent on the firm's
ability to win orders in orders in future through competitive
bidding. Further the firm's modest scale of operations is
reflected in its estimated operating income of Rs. 30 crore
during the year ended March 31, 2017. The firm's modest net worth
and significant working capital requirements for large scale
project may limit the firm's ability in significantly scaling up
its operations
* Limited Geographical diversity in revenue profile: The firm's
revenue profile has limited geographically diversity. The firm
executes its projects majorly in Kerela. This geographical
diversity exposes the firm to risk arising from slowdown in
project announcement in the particular regions of the firm's
operations.
Strengths
* Experience of promoters in the civil construction industry: P.
Prabhakaran benefits from the extensive experience of its
promoter in the civil construction industry. The firm is promoted
by Mr. P. Prabhakaran who has been associated with the civil
construction industry for more than 3 decade. The promoter has
established significant relationships with suppliers who are raw
material suppliers. Further the firm has a proven track record of
execution for projects for various public entities on account of
which it derives benefits during the future tendering process of
the project. The firm has a moderate unexecuted order book of Rs.
30 crore to be executed over the medium term
Outlook: Stable
CRISIL believes that P. Prabhakaran will benefit over the medium
term from the experience of its promoters in civil construction
industry. The outlook may be revised to 'Positive', if the firm
increases its scale of operations and operating profitability
significantly over the medium term in a sustainable fashion there
by leading to an improvement in its financial risk profile.
Conversely, the outlook may be revised to 'Negative', if the firm
undertakes any significant debt-funded capital expenditure or if
its revenues and operating profitability decline or if its
working capital cycle elongates or there are significant capital
with drawls leading to deterioration in its financial profile.
Set up in 1986, P. Prabhakaran is a proprietorship firm involved
in civil construction works like construction of roads, bridges
and construction and maintenance for irrigation facilities in
Kerela. The firm is being managed by Mr P. Prabhakaran.
PACK PAPER: Ind-Ra Assigns 'BB' Issuer Rating, Outlook Stable
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Pack Paper
Agencies Private Limited (PPAPL) a Long-Term Issuer Rating of
'IND BB'. The Outlook is Stable. The instrument-wise rating
action is:
-- INR205 mil. Fund-based working capital limits assigned with
IND BB/Stable/IND A4+ rating.
KEY RATING DRIVERS
The ratings reflect PPAPL's moderate scale of operations,
volatile EBITDA margins and weak credit metrics due to the
trading nature of business. As per provisional financials for
FY17, revenue declined to INR972 million (FY16: INR1,087 million)
due to decrease in orders led by demonetisation. PPAPL booked
revenue of INR 300 million in 1QFY18. As of September 2017, the
company had an order book of INR39.1 million, to be executed by
end-October 2017.
The EBITDA margins ranged between 2.6% and 4.2% over FY13-FY17
(FY17P: 3.3%, FY16: 2.8%). EBITDA interest coverage (operating
EBITDA/gross interest expense) was stable at 1.3x in FY17P (FY16:
1.3x), while net financial leverage (total Ind-Ra adjusted net
debt/operating EBITDA + rents) improved to 7.6x (8.1x) on account
of reduction in total debt and increase in absolute EBITDA.
The ratings also reflect PPAPL's tight liquidity position with
90.3% average utilisation of fund-based working capital limits
over the 12 months ended August 2017. However, the ratings are
supported by the promoter's more than two decades of experience
in the trading of paper and duplex board.
RATING SENSITIVITIES
Negative: A further decline in the revenue and operating
profitability resulting in a significant deterioration in the
credit metrics could be negative for the ratings.
Positive: A significant increase in the scale and profitability,
leading to a sustained improvement in the credit metrics could be
positive for the ratings.
COMPANY PROFILE
Incorporated in 2007, PPAPL is Surat, Gujarat-based paper and
duplex board dealer.
PANYAM CEMENTS: CARE Reaffirms 'D' Rating on INR30cr LT Loan
------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Panyam Cements & Mineral Industries Limited (PCMIL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 30.00 CARE D Reaffirmed
Short Term Bank
Facilities 9.32 CARE D Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating continues to factor in recent delays in debt servicing
on account of cash flow mismatches.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delays in interest servicing: Cash flow mismatches have resulted
in delays in debt servicing. Significant decline in PAT and PAT
margin albeit marginal improvement in PBILDT and PBILDT margin:
PBILDT and PBILDT margin improved marginally during FY17 vis-a-
vis FY16 on account lower contribution from power and fuel and
consumable store charges despite decline in realisations.
However, PAT declined significantly by 60.31% coming in at
INR4.24 crore in FY17. PAT margin also declined significantly by
294 bps in FY17 coming in at 1.92%. The decline in PAT and PAT
margin was on account of significant increase in capital charges
during FY17.
Continued leveraged capital structure with further deterioration:
The capital structure of the company continues to remain
leveraged and witnessed deterioration. PBILDT interest coverage
ratio deteriorated from 2.05x in FY16 to 1.69x in FY17 on account
of higher interest charges and lower PBILDT level.
Working capital intensive nature of business and deteriorating
liquidity position: The working capital cycle deteriorated from
26 days in FY16 to 34 days in FY17 mainly due to increase in
average collection period (30 days in FY17 vis-a-vis 22 days in
FY16). Additionally, the liquidity profile of the company also
deteriorated during the year as exhibited by gross cash accruals
of INR11.26 crore in FY17 vis-a-vis gross cash accruals of
Rs.16.95 crore in FY16.
Significant exposure to group companies: PCMIL continues to
extend support to its group companies. As on March 31, 2017,
PCMIL exposure to group companies has increased to INR297.38
crore (against INR262.44 crore as on March 31, 2016).
Key Rating Strengths
Experienced promoters with long track record of operations in
diversified business: PCMIL belongs to Nandi Group of Industries,
which has presence in diversified businesses such as cements,
dairy, construction, PVC pipes, etc mainly in Andhra Pradesh. The
main promoter, Mr S.P.Y. Reddy (Chairman) has business experience
of more than three decades. The business operations of the group
have benefited from Mr. Reddy's long established track record in
different businesses and the vast industry network developed over
the years.
Stable operational performance: The operational performance of
the company remained stable during FY17 wherein the capacity
utlisation level of cement was 57.49% vis-a-vis 58.97% during
FY16. Gross cement sales stood at INR266.55 crore for FY17 as
against INR273.03 crore for FY16. The average gross sales price
realization and volume sales, both witnessed marginal decline
during FY17 at the back of demonetisation.
Stable industry growth prospects: The industry is going through
challenging times in terms of demand with the housing and infra
sectors being the dominant sectors influencing the same.
Demonetization has had an impact on cement demand in the short
run. There are also cost side pressures on power and freight.
High build-up of capacity over time coupled with lower demand for
cement has kept the capacity utilization rates at subdued levels.
While the immediate outlook till March is not too positive, it is
expected that the budget will provide a fillip to housing and
infrastructure which in turn will provide a boost to demand for
cement. However, given the present dynamics, prices will remain
stable.
Panyam Cements & Mineral Industries Limited (PCMIL), incorporated
in June 1955, is part of Nandi Group of Industries based out of
Nandyal in Andhra Pradesh. PCMIL is currently engaged in
manufacturing of Ordinary Portland Cement (OPC) 53 grade & 43
grade and Pozzolona Portland cement (PPC) with installed capacity
of 1 million tons per annum (MTPA) at its manufacturing
facilities located at Kurnool District, Andhra Pradesh. PCMIL was
acquired by Nandi Group from its earlier promoters Mr. M. V.
Subba Rao and Associates during September 2004 when it was a sick
company. Over the years, Nandi Group has successfully revived the
company and furthermore, promoters have undertaken large
modernization and expansion projects to increase scale of
operations and reduce operational costs. Since 1978, the Nandi
group has built a diversified presence of businesses such as
cement, dairy, PVC pipes, construction, TMT bars etc.
PARVATIYA PLYWOOD: CRISIL Reaffirms B+ Rating on INR6.49MM Loan
---------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on
the long-term bank facilities of Parvatiya Plywood Pvt Ltd
(PPPL). The rating continues to reflect the company's modest
scale of operations, and large working capital requirement. These
weaknesses are partially offset by the extensive experience of
the promoters in the wood panels industry and an average
financial risk profile.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6.49 CRISIL B+/Stable (Reaffirmed)
Term Loan .51 CRISIL B+/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations: The company's modest scale is
reflected in operating income of 15.34 crore in fiscal 2017
against INR15.28 crore in the previous fiscal.
* Large working capital requirement: The operations are working
capital intensive because of large inventory to cater to demand
during the monsoon when the supply of raw material is limited.
Gross current assets were at 313 days as on March 31, 2017,
against 224 days a year earlier.
Strength
* Extensive industry experience of the promoters: The promoters'
extensive experience in the wooden panels industry has helped the
company build longstanding relationships with customers and win
repeat orders.
* Average financial risk profile: The net worth of the company is
moderate vis-a-vis its operations at 4.93 crore as on March 31,
2017. Gearing stood at 1.36 times as on March 31, 2017. The debt
protection indicators are average marked by average interest
coverage and net cash accruals to adjusted debt at 1.97 times and
0.11 times respectively. Thus, the financial risk profile is
average.
Outlook: Stable
CRISIL believes PPPL will continue to benefit from the extensive
experience of its promoters and their longstanding customer
relationships. The outlook may be revised to 'Positive' if
revenue increases while working capital management improves,
resulting in better net cash accrual and financial risk profile.
The outlook may be revised to 'Negative' if financial risk
profile weakens on account of decline in revenue and
profitability, or if the company undertakes larger-than-expected,
debt-funded capital expenditure, or if working capital cycle
stretches.
PPPL, incorporated in 1987 by Mr Akhilesh Pratap Saraswat and his
family members in Nainital (Uttarakhand), manufactures plywood,
block boards, and flush doors. Its registered office is in New
Delhi and plant is at Ramnagar, Nainital.
PATNA OFFSET: CARE Raises Rating on INR1.99cr LT Loan to BB-
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Patna Offset Press (POP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 1.99 CARE BB-; Stable Revised
Facilities From 'CARE B+'
Short-Term Bank
Facilities 3.00 CARE A4 Reaffirmed
Detailed Rationale & Key Rating Drivers
The revision in the long term rating assigned to the bank
facilities of Patna Offset Press (POP) is on account of growth in
its total operating income, improvement in its profit levels,
leverage ratios and debt coverage indicators as per provisional
FY17 (refers to period from April 01 to March 31) results.
However, the ratings continue to remain constrained by its
constitution being partnership, small scale of operations,
volatility in prices of raw material, highly fragmented and
competitive nature of industry with low entry barriers and
working capital intensive nature of business. The ratings,
however, continue to draw comfort from the entity's long &
established track record, vast experience of partners in the
printing industry and satisfactory client profile. Going forward,
the ability of the company to increase the scale of operations,
improve profitability margins and ability to manage working
capital effectively would be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Constitution being partnership: POP, being a partnership firm, is
exposed to inherent risk of the partner's capital being withdrawn
at time of personal contingency and firm being dissolved upon the
death/retirement/insolvency of the partners. Moreover,
partnership firms have restricted access to external borrowing as
credit worthiness of partners would be the key factors affecting
credit
decision for the lenders.
Small scale of operations: The scale of operations remained
modest. However, the firm has witnessed a significant increase in
total operating income of around 98.69% due to heavy demand &
orders of Printing. The firm has achieved a PAT of INR1.06 crore
(over INR0.14 crore in FY16) on total operating income of
INR18.22 crore (over INR9.17 crore in FY16) during FY17
(provisional). Furthermore, tangible networth of the firm also
remained low with the same being at INR5.44 crore (over INR3.58
crore as on
March 31, 2016) as on March 31, 2017 (provisional).
Volatility in prices of raw material: Material is the major cost
driver for the firm over the past years with about 60%-75%
contribution to the total cost of sales. The major raw materials
required by POP are paper, ink and flex, the prices of which are
highly volatile and market driven. The firm does not have any
long-term supply arrangement with any of its suppliers and
procures the same at spot price from the open market.
Accordingly, with increasing price trend among these materials
the price volatility is an area of concern.
Highly fragmented and competitive nature of industry with low
entry barriers: The off-set printing business is highly
fragmented with large number of organized and unorganized players
in India. There is high competition within the industry due to
low entry barriers. In such a competitive scenario smaller
entities like POP
in general are more vulnerable on account of its limited pricing
flexibility.
Working capital intensive nature of business: POP business is
working capital intensive in nature with high average collection
period as most of its orders are from public department and at
the same time the firm had high average creditor days.
Accordingly, the working capital limit utilization remained high
at around 98% during the last twelve months ending on August 31,
2017. However, despite the high working capital intensive
operations, liquidity position of the firm remained moderately
adequate marked by current ratio of 1.13x as on March 31, 2017
(Provisional).
Key Rating Strengths
Long & established track record and vast experience of partners
in the printing industry: Commenced operation in 1992, the firm
has a long and satisfactory track record of more than two decades
in the printing industry. The firm is headed by Mr. Vinay Singh
(aged 44 years), having over two decades of experience in the
printing
industry, looks after the overall management of the entity with
adequate support from other partners i.e. Mr. Amit Kumar Singh
and Mrs. Supriti Singh along with the team of experienced
professional who have rich experience in the same line of
business.
Satisfactory client profile: Over the years, POP has established
a good relationship with its customers and has reputed clientele
portfolio, which includes Bihar State Text Book Publishing
Corporation etc. on the back of its exhibited operational
efficiency, timeliness of delivery and quality control which has
helped the firm in acquiring repeat orders. There is one more big
client add up to the portfolio of POP, Bihar Integrated Child
Development Society, etc.
Established in April, 1992 as a proprietorship concern by Patna
based Singh family, M/s Balmiki Press later converted into
Partnership firm in the name of Patna Offset Press (POP) on
April 1, 2008. Since its formation the entity is engaged in the
business of off-set printing, pre-press (i.e. designing,
processing etc.) and post-press (i.e. binding, lamination etc.)
related activities at Patna, Bihar.
Mr. Vinay Singh (aged 44 years), having over two decades of
experience in the printing industry, looks after the overall
management of the entity with adequate support from other
partners i.e. Mr. Amit Kumar Singh and Mrs. Supriti Singh and a
team of experienced personnel.
PP PANDEY: Ind-Ra Migrate BB+ Issuer Rating to Non-Cooperating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated PP Pandey
Infrastructure Private Limited's (PPPIPL) Long-Term Issuer Rating
to the non-cooperating category. The issuer did not participate
in the rating exercise despite continuous requests and follow-ups
by the agency. Therefore, investors and other users are advised
to take appropriate caution while using these ratings. The rating
will now appear as 'IND BB+(ISSUER NOT COOPERATING)' on the
agency's website. The instrument-wise rating actions are:
-- INR80 mil. Fund-based limits migrated to non-cooperating
category with IND BB+(ISSUER NOT COOPERATING)/IND A4+(ISSUER
NOT COOPERATING) rating;
-- INR100 mil. Non-fund-based limits migrated to non-cooperating
category with IND A4+(ISSUER NOT COOPERATING) rating; and
-- INR46 mil. Term loan migrated to non-cooperating category
with IND BB+(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
October 17, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in July 2008, PPPIPL is engaged in the business of
civil construction works in roads and other allied works. Its
head office is located in Lucknow. The company is registered with
various state government and central government departments as an
'A' class contractor.
RAJA AGRO: CARE Assigns B+ Rating to INR9.76cr LT Loan
------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Raja
Agro Cold Storage (RACS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 9.76 CARE B+; Stable Assigned
Detailed Rationale and key rating drivers
The rating assigned to the bank facilities of RACS is primarily
constrained by its project risk. Further, the rating also factors
in the seasonality of business with susceptibility to vagaries of
nature and competitive and fragmented nature of the industry. The
rating, however, derives strength from the experience partners
and its proximity to agro commodity growing area.
Going forward, the ability of the firm to complete the on-going
project without any cost and time overrun and derive benefits out
of it as envisaged will be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Project risk: The firm is currently setting up a multipurpose
cold storage unit with a storage capacity of 4900 metric tons in
Balasore, Odisha. The total project cost is estimated to INR9.30,
crore which is to be funded by partners' contribution of INR3.14
crore and term loan of INR6.16 crore. The financial closure for
the debt has already been achieved and thus the project funding
risk is mitigated. However, the firm has spent only around
INR3.50 crore (37.63% of total project cost) till September 20,
2017. Since the project is into initial stage of implementation,
the project implementation risk exists. The cold storage unit is
estimated to be operational by April 2018.
Seasonality of business with susceptibility to vagaries of
nature: The cold storage business 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 perceivable 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. The unit
remains non-operational during the period from December to
January. However, the firm will store multi products which will
reduce the aforesaid risk to a certain extent. Moreover, 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 agro commodities are
highly dependent on vagaries of nature.
Competitive and fragmented nature of industry: 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.
RACS will be mainly into storage of vegetables, fruits and eggs
which is highly fragmented and competitive in nature due to
presence of many small players with low entry barriers. In such a
competitive scenario smaller companies like RACS in general are
more vulnerable on account of its limited pricing flexibility.
Furthermore, being new entrant in the industry, the firm will
face
intense competition from the established players in the industry.
Key Rating Strengths
Experienced partners: Key partner, Mr. Raju Gopal Sahu has two
decades of experience in diversified business. He will look after
the overall management of the firm. He will be supported by Mrs.
Sakuntala Sahu who also has around a decade of business
experience. However, the partners lack experience in cold storage
industry.
Proximity to agro commodity growing area: RACS's storage facility
is proposed to be located at Balasore, Odisha which is one of the
major agro commodities growing regions of the state. The
favourable location of the storage unit, in close proximity to
the leading agro commodities growing areas provides it with a
wide catchment and making it suitable for the farmers in terms of
transportation and connectivity.
RACS was established as a partnership firm in 2016 by Mr. Raju
Gopal Sahu and Mrs. Sakuntala Sahu to set up a multipurpose cold
storage facility with a storage capacity of 4900 metric tons in
Balasore, Odisha. The firm is currently setting up a multipurpose
cold storage unit with an aggregate project cost of INR9.30
crore. The cold storage unit is expected to be operational from
April 2018. RACS will provide cold storage facility primarily for
potatoes, vegetables, fruits and eggs to farmers & traders and
trading of the agro products.
RAJENDRA RICE: CARE Moves B+ Rating to Not Cooperating Category
---------------------------------------------------------------
CARE Ratings has been seeking information from Rajendra Rice &
General Mills (RRGM) to monitor the rating(s) vide e-mail
communications/letters dated September 4, 2017, August 21, 2017,
August 2, 2017 etc. and numerous phone calls. However, despite
CARE's repeated requests, the company has not provided the
requisite information for monitoring the ratings. In the absence
of minimum information required for the purpose of rating, CARE
is unable to express opinion on the rating. Further, Rajendra
Rice & General Mills has not paid the surveillance fees for the
rating exercise as agreed to in its rating agreement. In line
with the extant SEBI guidelines CARE's rating on Rajendra Rice &
General Mills 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).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.50 CARE B+; Issuer Not
Facilities Cooperating
Long-term/Short- 0.50 CARE B+/CARE A4;
Term Bank Issuer Not Cooperating
Facilities
Detailed description of the key rating drivers
At the time of last ratings in July 29, 2016 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Small scale of operations: Despite being operational for the past
three decades, the scale of operations remained small marked by a
total operating income and gross cash accruals of INR25.42 crore
and INR0.18 crore respectively during FY15. Furthermore, the
firm's capital base was relatively small at INR1.90 crore as on
March 31, 2015. The small scale limits the firm's financial
flexibility in times of stress and deprives it from scale
benefits.
Weak financial risk profile: The financial risk profile of the
firm was weak characterized by growing scale of operations,
low profitability margins, leveraged capital structure and weak
coverage indicators.
For the period FY13-FY15, the firm's total operating income grew
from INR13.91 crore to INR25.42 crore reflecting a compounded
annual growth rate of around 35%. In FY16 (based on unaudited
results) RSAP has achieved a total operating income of INR30
crore. The firm's profitability margins have been historically on
the lower side owing to the low value addition and intense market
competition given the highly fragmented nature of the industry.
This apart, interest burden on working capital borrowing also
dents the net profitability of the firm. Furthermore, the PBILDT
margin declined during the same period from 4.25% in FY14 to
3.50% in FY15 on account of low value addition and highly
fragmented and
competitive nature of industry. However, high financial charges
and depreciation restricted the net profitability of the firm
below unity at 0.31% in FY15.
The capital structure of the firm deteriorated and continue to
remained leveraged marked by overall gearing ratio of 4.28x as on
March 31, 2015 as against 3.24x as on March 31, 2014. The
deterioration was mainly on account of additional term loan taken
for plant & machinery and high dependence on external working
capital borrowings for managing working capital requirements of
the business.
The debt service coverage indicators of the firm remained weak in
FY15 on account of high reliance on external borrowings coupled
with low profitability. The interest coverage and total debt to
GCA of the firm stood weak at 1.24x and 8.07x respectively for
FY15.
Working capital intensive nature of operations: Operations of the
firm are working capital intensive in nature though the operating
cycle of company remained stood moderate at 87 days for FY15. The
firm procures paddy in the peak season during November to January
from agents and maintains inventory of raw material of around
three months for smooth running of its production processes and
finished goods to meet the immediate demand of its customers. The
firm gives credit up to one month to its customers. While it
procures the raw material mainly on cash basis and from some of
its suppliers it gets credit up to 30 days. On the balance sheet
date of FY15, the Inventory holding and payable period is high
due to the high procurement was done in the last quarter in FY15.
The working capital limits of the firm remain fully utilized
during the past 12 months ended June 30, 2016.
Fragmented and competitive nature of industry: The commodity
nature of the product makes the industry highly fragmented, with
numerous players operating in the unorganized sector with very
less product differentiation. There are several small scale
operators which are not into end-to-end processing of rice from
paddy, instead they merely complete a small fraction of
processing and dispose-off semi-processed rice to other big rice
millers for further processing. Furthermore, the concentration of
rice millers around the paddy growing regions makes the business
intensely
competitive.
Regulatory policy risk: The Government of India (GoI), every year
decides a minimum support price (MSP) of paddy which limits the
bargaining power of the rice millers over the farmers. Sale of
rice in the open market is also regulated by the government
through the levy system under which the rice millers have to
first supply to the government through Food Corporation of India
(FCI) at the predetermined prices. The millers can sell rice at
the market rates in the open market only after they fulfill the
levy quota. Frequent changes in the government policies regarding
imposition of ban on export and minimum export price are an
inherent risk for all the non-basmati rice processors.
Business susceptible to the vagaries of nature: Rice being mainly
a 'kharif' crop is a seasonal crop and is cultivated from June-
July to September-October, and the peak arrival of crop at major
trading centers begins in October. The output is highly dependent
on the monsoon. Unpredictable weather conditions could affect the
domestic output and result in volatility in the price of rice.
Key Rating strengths
Experienced partners in processing of rice: The operations of
RRGM are currently being managed by three partners namely Mr
Avtar Singh his son Mr Tarsem Singh and Ms Surinder Kaur. Mr
Avtar Singh and Ms Surinder Kaur has three decades of experience
in the rice processing industry through association with RRGM. Mr
Tarsem Singh, has one and half decade of experience in rice
business through association with RRGM.
Favorable manufacturing location: RRGM is mainly engaged in
milling and processing of rice. The main raw material (Paddy) is
procured from grain markets, located in Haryana, Delhi, U.P and
Bihar. The firm's processing facility is situated in Haryana
which is one of the highest producers of paddy in India. Its
presence in the region gives additional advantage over the
competitors in terms of easy availability of the raw material as
well as favorable pricing terms. RRGM owing to its location is in
a position to cut on the freight component of incoming raw
materials.
Tohana-based, (Haryana) Rajendra Rice & General Mills (RRGM) was
established in 1986 as partnership firm by Mr Avtar Singh and his
sons Mr Tarsem Singh and Ms Surinder Kaur sharing profit and
losses equally. RRGM is engaged in milling and processing of
basmati and Non-Basmati rice and the firm has an installed
capacity of 4 ton per day as on June 30, 2016. The firm is also
engaged in trading of basmati rice. The firm procures the raw
material (unprocessed rice/de-husked paddy) mainly from grain
markets in Haryana, Punjab through commission agents and sells
its product to export houses located in Punjab, Haryana, Delhi
and Mumbai. From July 2015 onwards, RRGM has also started
exporting basmati rice.
RAJLAXMI AGRO: CARE Moves B+ Rating to Not Cooperating Category
---------------------------------------------------------------
CARE Ratings has been seeking information from Rajlaxmi Agro
Processor Private Limited (RAPPL) to monitor the ratings vide
email communications/ letters dated Aug. 18, 2017, Aug. 25, 2017,
Aug. 31, 2017 and numerous phone calls. However, despite CARE's
repeated requests, the company has not provided the requisite
information for monitoring the ratings. In the absence of minimum
information required for the purpose of rating, CARE is unable to
express opinion on the rating. Further, RAPPL has not paid the
surveillance fees for the rating exercise as agreed to in its
Rating Agreement. In line with the extant SEBI guidelines CARE's
rating on Rajlaxmi Agro Processor Private Limited 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).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 6.00 CARE B+; ISSUER NOT
Facilities COOPERATING ISSUER NOT
COOPERATING
Detailed description of the key rating drivers
At the time of last rating in June 28, 2016 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Project implementation risk for debt funded project with
financial closure yet to be achieved: The company is in the
process to setting up a rice milling unit at a cost of INR8.21
crore, which is to be financed at a debt equity ratio of 1.56:1.
However, the financial closure is yet to be achieved. The
promoters have already infused funds amounting to INR1.35 crore
for civil and other project related works. The said project is
expected to be completed by January, 2017 subject to approval of
term loans.
Volatile agro-commodity (rice) prices with linkages to vagaries
of the monsoon: Rice is mainly a 'kharif' crop and is cultivated
from June-July to September-October and the peak arrival of crop
at major trading centers begins in October. The output is highly
dependent on the monsoon. Unpredictable weather conditions could
affect the domestic output and result in volatility in price of
rice. In view of seasonal availability of paddy, working capital
requirements remain high at season time owing to the requirement
for stocking of paddy in large quantity.
Regulated nature of the industry: The Government of India (GoI),
every year decides a minimum support price (MSP) to be paid to
paddy growers which limits the bargaining power of rice millers
over the farmers. The MSP of paddy has been increased to
INR1,470/quintal in 2016-17 (as mentioned by the Commission for
Agricultural Costs and Prices, the apex body to advice on MSP to
the government) from INR1410/quintal in crop year 2015-16. The
sale of rice in the open market is also regulated by the
government through levy of quota, depending on the target laid by
the central government for the central pool. Given the market
determined prices for finished product vis-a-vis fixed
acquisition cost for raw material, the profit margins are highly
vulnerable.
Intensely competitive nature of the industry with presence of
many unorganised players: Rice milling industry is highly
fragmented and competitive due to presence of many players
operating in this sector owing to its low entry barriers, due to
low capital and technological requirements. Murshidabad and
nearby districts of West Bengal are a major paddy growing area
with many rice mills operating in the area. High competition
restricts the pricing
flexibility of the industry participants and has a negative
bearing on the profitability.
Key Rating Strengths
Experienced promoters: The company is managed by Mr. Mrinal Kanti
Das, Director, with the help of the other director Mrs. Sujata
Das. He has around a decade of experience in rice milling and
trading business.
Locational advantage of the unit: The proposed milling unit of
RLAP is located at Murshidabad district of West Bengal which is a
paddy growing region in eastern India resulting in lower logistic
expenditure (both on transportation and storage), easy
availability and procurement of raw materials at effective
prices.
Rice, being one of the primary food articles in India, demand is
high throughout the country and with the change in life
style and health consciousness; by-products of the same like rice
bran oil etc. are in huge demand.
Rajlaxmi Agro Processor Private Limited (RAPPL) was incorporated
during March 2014 to initiate a rice milling unit at Murshidabad
in West Bengal. The area and the surrounding districts are
important agricultural and commercial areas in West Bengal where
availability of paddy and demand of rice and related products are
increasing. The day-to-day affairs of the company are looked
after by Mr Mrinal Kanti Das along with other director Mrs Sujata
Das (wife of Mr. Mrinal Kanti Das) and a team of experienced
personnel.
RELIANCE COMM: Tech Mahindra Files Insolvency Bid Against Firm
--------------------------------------------------------------
BloombergQuint reports that Tech Mahindra Ltd. has filed
insolvency petitions against Anil Ambani's Reliance
Communications Ltd. and two units, just days after its merger
with Aircel Ltd. collapsed, putting focus back on the telecom
operator's ability to repay its lenders.
The information technology services company has moved the Mumbai
bench of the National Company Law Tribunal, claiming INR8.2 crore
for unpaid bills for "services allegedly rendered" to Reliance
Communications, Reliance Telecom and Reliance Big TV, the telecom
operator said in a stock exchange filing, BloombergQuint relays.
"We submit that the petitions are misconceived, premature and
motivated by extraneous conditions," the filing added.
According to the report, Ambani's debt-ridden telecom unit was
dealt a blow earlier this month after its plan to merge with
Aircel lapsed due to "legal uncertainties" and "interventions by
vested interests." The proposed deal along with a plan to sell
stake in its tower business was crucial to Reliance
Communications as it would have cut its outstanding INR45,733-
crore debt by more than half.
Lenders, too, were banking on the deal to go through. They'd
invoked strategic debt restructuring in June after multiple
credit agencies downgraded Reliance Communications' debt to
default for missing interest payments, BloombergQuint relays. The
prospect of debt reduction from completion of the two deals had
won Ambani a seven-month moratorium till December to repay debt.
Ericsson India, in September also filed an insolvency plea under
the Insolvency and Bankruptcy Code to recover INR491.4 crore from
Reliance Communications, BloombergQuint discloses. Additionally,
it also filed petitions against Reliance Infratel and Reliance
Telecom, for recovering INR534.7 and INR129.3 crore,
respectively.
A "hyper competitive market" spurred by the free services offered
by Reliance Jio Infocomm Ltd., owned by Anil Ambani's older
brother Mukesh Ambani, forced rivals to cut tariffs, hurting
their financials in the six months to March, BloombergQuint
states. Reliance Communications was no exception, and posted two
straight quarters of losses, resulting in a significant stress on
its cash flow, says BloombergQuint.
Reliance Communications has said that it will pursue alternate
plans like selling its real estate assets and sharing of spectrum
to cut debt, BloombergQuint relays.
It plans to monetise its real estate assets, including 125 acres
at Dhirubhai Ambani Knowledge City in Navi Mumbai, and four acres
in Delhi to raise over to INR10,000 crore, BloombergQuint adds.
The development agreements will be finalised in the next few
weeks. It also plans to sell its tower and fibre assets as
already announced.
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 Rcom's 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.
ROTON VITRIFIED: CRISIL Reaffirms B+ Rating on INR27MM Term Loan
----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Roton
Vitrified Private Limited (RVPL) for obtaining information
through letters and emails dated July 11, 2017, and August 30,
2017, among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 4.5 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 7.0 CRISIL B+/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Term Loan 27.0 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 Roton Vitrified Private
Limited. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for Roton Vitrified Private
Limited is consistent with 'Scenario 2' outlined in the
'Framework for Assessing Consistency of Information with CRISIL
BBB' rating category or lower. Based on the last available
information, CRISIL has reaffirmed the rating at 'CRISIL
B+/Stable/CRISIL A4'.
RVPL, incorporated in Morbi in 2015, is promoted by Mr.
Lalitkumar Sanghani, Mr. Rahul Sanghani, and Mr. Brijesh
Sitapara. The company manufactures ceramic vitrified tiles; it
commenced operations in January 2016.
SAMARA COLD: Ind-Ra Moves B Issuer Rating to Non-Cooperating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Samara Cold
Chain's (SCC) Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND B(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are:
-- INR188 mil. Term loan migrated to non-cooperating category
due on March 2025 with IND B(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
September 28, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
SCC was established in November 2015 as a partnership firm
engaged in the cold storage of apple and other fruits.
SATKAR PAPER: CRISIL Reaffirms 'B' Rating on INR11.14MM Term Loan
-----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Satkar
Paper Mills Private Limited (SPMPL) 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.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1.00 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Term Loan 11.14 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 Satkar Paper Mills Private
Limited. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for Satkar Paper Mills Private
Limited is consistent with 'Scenario 1' outlined in the
'Framework for Assessing Consistency of Information with CRISIL
BB' category or lower. Based on the last available information,
CRISIL has reaffirmed the rating at 'CRISIL B/Stable.
Incorporated in May 1989 and promoted by Mr. Gurmit Singh, Mr.
Gagandeep Singh, and Mr. Avnit Singh, SPMPL manufactures kraft
paper at its existing unit in Ludhiana and is setting up another
kraft paper plant for enhancing its production capacities.
SHAMLAL COMPANY: CRISIL Reaffirms 'D' Rating on INR4.5MM LT Loan
----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Shamlal
Company India Private Limited (SCIPL) for obtaining information
through letters and emails dated July 17, 2017 and August 14,
2017 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bill Discounting 3.5 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Loan Against Property 2.0 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term 4.5 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 Shamlal Company India Private
Limited. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for Shamlal Company India Private
Limited is consistent with 'Scenario 1' outlined in the
'Framework for Assessing Consistency of Information with CRISIL
BB' category or lower. Based on the last available information,
CRISIL has reaffirmed the rating at 'CRISIL D'.
Set up as partnership firm (Shamlal and Company) in Salem, Tamil
Nadu, in 1957 by Mr. Shamlal Bajaj and Mr. Desraj Bajaj, and
reconstituted as a private limited company. SCIPL is engaged in
dying, processing and printing of fabric, and also trades in grey
fabric. The company used to trade in iron ore but discontinued
that business after ban on iron ore mining.
SHRI VINAYAK: CARE Assigns 'B' Rating to INR16.25cr LT Loan
-----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Shri
Vinayak Logsitic (SVL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 16.25 CARE B; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of SVL is primarily
constrained on account of project implementation risk associated
with the construction of warehouse, its constitution as a
proprietorship firm and its presence in highly fragmented as well
as government regulated industry and dependence on agriculture
commodities industry. The rating, however, derives strength from
the experienced management in the warehouse industry along with
its proximity to agro producing region of Madhya Pradesh.
The ability of the firm for successful implementation of project
with ability of the firm to timely initialize and stabilize its
operations coupled with achievement of envisaged level of TOI are
the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weakness
Project Implementation and stabilization risk associated with the
warehouse: The firm has envisaged total project cost of INR21.69
crore to be funded through term loan of INR16.25 crore and
remaining through partner's capital and unsecured loans. Till
September 12 2017, the firm has incurred INR8.15 crore towards
the project which was funded by term loan of INR2.25 crore and
remaining through unsecured loans and partner's own capital. The
firm is expecting to be complete its project and commence
operation from January, 2018. Hence, post implementation project
risk pertaining to stabilization of operations is high especially
in the backdrop of a predominantly debt funded capex.
Constitution as a proprietorship firm: SVL being a partnership
firm, is exposed to inherent risk of partner's capital being
withdrawn at time of personal contingency, and firm being
dissolved upon the death/insolvency of partners. Moreover,
partnership firms have restricted access to external borrowing as
credit worthiness of partner would be key factor affecting credit
decision for lenders.
Presence in highly fragmented as well as government regulated
industry and dependence on agriculture commodities industry: The
industry is characterized by highly fragmented and competitive in
nature as evident by the presence of numerous unorganized and few
organized players. The entry barriers in this industry are very
low on account of low capital investment and technological
requirement. Due to this, the players in the industry do not have
any pricing power. Further, the industry is characterized by high
degree of government control both in procurement and sales for
agrocommodities.
Key Rating Strengths
Experienced management in the warehouse industry: Mr. Meharban
Singh, partner, has around one decade of experience in warehouse
industry and looks after overall affairs of the firm. Mr. Anil
Choudhary has five years of experience and look after warehouse
related function of the entity. Mr. Vikas Choudhary, M.B.A. by
qualification, look after finance related function of the firm.
Mr. Vijay Kumar Choudhary, B.Sc. by qualification, has around 8-9
years of experience.
Proximity to agro producing region of Madhya Pradesh: SVL is
located at Indore in Madhya Pradesh state. Madhya Pradesh is
largest producer of soyabean, oilseeds, pulses, gram, garlic and
coriander. Madhya Pradesh has 11 different agro-climatic zones
due to its fertile agro-climatic conditions. Madhya Pradesh
produces around 25 per cent of pulses and 36 per cent of grams of
total national production. Moreover, commercially favoured
varieties of wheat and potato are grown in Madhya Pradesh.
SVL's presence in agro producing region helps in getting good
business both for its storage and warehousing receipt funding
operations as farmers from nearby areas can easily store their
produce at the warehouse facility of BEW. Further BEW also gets
locational advantage for its trading business due to easy
availability and procurement of agro-commodites at effective
prices.
Shri Vinayak Logistics (SVL) was formed in January 2015 as a
partnership concern by Mr. Meharban Singh, Mr. Anil Choudhary,
Mr. Vikas Choudhary and Mr. Vijay Kumar Choudhary with an
objective to set up a warehouse at Indore (Madhya Pradesh). The
firm has envisaged total project cost of INR21.69 crore towards
the project to be funded through term loan of INR16.25 crore and
remaining through partner's capital and unsecured loans. Till
September 12 2017, the firm has incurred INR8.15 crore towards
the project which was funded by term loan of INR2.25 crore and
remaining through unsecured loans from partner's and partner's
own capital. The firm is expecting to be complete its project and
commence operations from January 2018.
SREE HARICHARAN: CRISIL Reaffirms B- Rating on INR2.5MM Cash Loan
-----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Sree
Haricharan Granite Exports India Private Limited (SHGEIPL) for
obtaining information through letters and emails dated July 18,
2017, and August 17, 2017, among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2.5 CRISIL B-/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Export Packing 5.0 CRISIL A4 (Issuer Not
Credit Cooperating; Rating
Reaffirmed)
Letter of Credit 0.5 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Sree Haricharan Granite
Exports India Private Limited. This restricts CRISIL's ability to
take a forward looking view on the credit quality of the entity.
CRISIL believes that the information available for Sree
Haricharan Granite Exports India 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/CRISIL A4'.
SHGEIPL was set up in 2010 by Andhra Pradesh-based Mr. Damodara
Rao Potturi and Ms. Sulochana Potturi. The company has set up a
facility to process, polish, and export rough granite blocks to
make granite slabs and monumental slabs of different
specifications. It commenced commercial operations in February
2013.
SRI MURUGAN: CRISIL Reaffirms B Rating on INR6MM Foreign LOC
------------------------------------------------------------
CRISIL Ratings has reaffirmed its rating on the long-term bank
facility of Sri Murugan Timbers (SMT) at 'CRISIL B/Stable'. The
rating continues to reflect the modest scale of operations,
exposure to intense competition, and large working capital
requirement. The rating also factors in the weak financial risk
profile. These rating weaknesses are partially offset by
extensive experience of the partners in the timber trading
business.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1 CRISIL B/Stable (Reaffirmed)
Foreign Letter of
Credit 6 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 1 CRISIL B/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: Intense competition in the timber
trading business has kept the scale of operations modest, as
indicated by an operating income of INR4 crore for fiscal 2017.
* Below-average financial risk profile: Financial risk profile
was marked by small networth, constrained by modest accretion to
reserve, arising from lower revenue and profitability levels.
Strength
* Extensive experience of the partners: The two and half decade-
long experience of the partners, in the timber trading business,
and strong relationships with reputed customers, have ensured a
healthy order inflow, even though operations are at a nascent
stage.
Outlook: Stable
CRISIL believes SMT will continue to benefit from the extensive
experience of its partners. The outlook may be revised to
'Positive' if a significant increase in scale of operations and
operating margin, along with capital infusion by the partners,
strengthens the financial risk profile. The outlook may be
revised to 'Negative' if the financial risk profile weakens, due
to a decline in scale of operations and operating margin, or if a
stretch in the working capital cycle adversely affects liquidity.
SMT was set up as a partnership firm in 2014. The firm processes
and trades in timber. The processing facilities are at Tenkasi
(Tamil Nadu). Operations are managed by Mr Rajakani.
SRI VISHNU: CARE Assigns B+ Rating to INR4.41cr LT Loan
-------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Sri
Vishnu Buildcon Private Limited (SVBPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 4.41 CARE B+; Stable Assigned
Detailed Rationale and key rating drivers
The rating assigned to the bank facilities of SVBPL is
constrained by its small scale of operations with moderate profit
margins, project risk, geographical concentration risk with
operations confined to Bihar, competition from similar type of
projects in the adjoining areas, cyclical and competitive nature
of hotel industry. The ratings, however, derive strength from the
long track record of operations, experienced promoters and
satisfactory project execution capabilities.
The ability to complete the ongoing projects as per project
schedule without any major cost overrun and ability to sale out
its real estate projects, increase its scale of operations and
profitability margins will remain the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operations with moderate profit margins: The scale
of operations of the company remained small with total operating
income of INR4.21 crore with a PAT of INR0.03 crore in FY17
(Provisional). Furthermore, the tangible net worth of the company
also remained low at INR1.01 crore as on March 31, 2017. The
profit margins of the company remained low marked by PBILDT
margin of 10.00% and PAT margin of 0.60% in FY17.
Project risk: SVBPL is currently developing single real estate
project at aggregate project costs of INR4.20 crore with total
saleable area of 20300 square feet. SVBPL has spent around
INR4.00 crore till July 31, 2017 out of total project costs of
INR4.20 crore on the aforesaid project. Since the projects is
into advance stage of completion, the project implementation risk
very low. However, for diversifying its business profile, the
company is currently setting up a hotel with all modern amenities
and two marriage halls (Vishnu Plaza) with an aggregate project
cost of INR5.53 crore which will be financed at a debt equity of
0.37x. The financial closure of the project has already been
achieved and the company has already spent around INR2.77 crore
till July 31, 2017. The hotel will be operated by the company and
the same will be operational by June 2018. Since the company
spent only around 50% of total project cost, there exists project
implementation risk.
Geographical concentration risk with operations confined to
Bihar: SVBPL's operations are restricted to Bihar since inception
indicating high geographical concentration risk. Accordingly, any
change in the policy of the government might affect the
operations of the company directly. However, the promoters are
well versed with the local real estate market and its dynamics
which partly mitigates the risk associated with the completion of
the projects.
Competition from similar type of projects in the adjoining areas:
Real estate, while being one of the largest sectors of the
economy, is regional and fragmented in nature. In recent times,
many new real estate projects have been launched in Bihar, by
organized and unorganized players due to the surge in property
prices coupled with low entry barriers which has led to high
competition in real estate market.
Cyclical and competitive nature of hotel industry: The Indian
hotel industry is highly fragmented in nature with presence of
large number of organized and unorganized players spread across
various regions. Further, the hotel industry is region-based and
is highly sensitive to the untoward events such as slowdown in
the economy. Cyclical nature of the hotel industry and increasing
competition from already established branded hotels may impact
the performance of SVBPL.
Key Rating Strengths
Long track record of operations and experienced promoters: The
company is into real estate development business in the state of
Bihar since 2007 and thus has a long track record of 10 years.
The key promoter Mr. Ravi Kumar Chaurasia has over a decade of
experience in real estate business and the company is deriving
benefits out of the experience of the promoters.
Satisfactory project execution capabilities: SVBPL has executed
various real estate projects in the state of Bihar in the segment
of residential as well as commercial complex. Since its
inception, the company has executed various real estate projects
and thus has satisfactory track record of execution of real
estate projects.
Bihar based SVBPL was incorporated on October 17, 2017 and it is
currently managed by Mr. Ravi Kumar Chaurasia and Mrs. Sangita
Prasad. Since its inception, the company has been engaged in
development of commercial and residential projects in the state
of Bihar. In past, the company has developed various real estate
projects in the state of Bihar like Vishnu Pad Apartment, Aziza
Plaza Apartment, Ram Rattan Apartment, Manorama Apartment, Kanti
Complex, etc. For diversifying its business profile, the company
is currently setting up a hotel with all modern amenities and two
marriage halls (Vishnu Plaza) with an aggregate project cost of
INR5.53 crore. The hotel will be operated by the company and the
same will be operational by June 2018.
STATE BANK: Moody's Affirms ba1 Baseline Credit Assessment
----------------------------------------------------------
Moody's Investors Service has affirmed State Bank of India's
(SBI) local and foreign currency deposit ratings of Baa3/P-3. At
the same time, Moody's has affirmed the Baa3 rating on the bank's
senior unsecured debt (issued via its London branch) and (P)Baa3
rating on its senior unsecured medium term note (MTN) program.
Moody's has also affirmed SBI's baseline credit assessment (BCA)
of ba1 and its adjusted BCA of ba1.
And, Moody's has affirmed the ratings for the bank's foreign
currency subordinated MTN and foreign currency junior subordinate
MTN program of (P)Ba1 and (P)Ba2. Moreover, Moody's has affirmed
the B1(hyb) rating on the bank's preferred stock (non-cumulative)
(issued via its DIFC branch).
In addition, Moody's has affirmed SBI's Counterparty Risk
Assessment (CR Assessment) of Baa3(cr)/P-3(cr).
Moody's has affirmed all other short-term program ratings at
(P)P-3.
The outlook on all the long-term ratings above is positive.
The full list of affected ratings is provided at the end of this
press release.
RATINGS RATIONALE
The affirmation of SBI's ratings as well as its BCA reflect
Moody's expectation that the bank's financial profile will remain
stable over the next 12-18 months.
SBI's asset quality metrics deteriorated significantly after the
merger with associate banks, and also because of the economic
disruptions in the last few quarters. At end-March 2017, the
bank's reported gross nonperforming loan (NPL) ratio increased to
9.0% on a consolidated basis compared to 6.9% on a solo basis. At
the end of June 2017, the consolidated NPL ratio increased
further to 9.9%.
Moody's attributes some of the negative pressure on the bank's
asset quality to the one-off effect of the merger, and expects
asset quality to remain broadly stable, because the bank has been
proactive in recognizing legacy credit issues, while it has de-
risked its new origination book over the last two to three years.
Furthermore, a large proportion of its NPLs are under different
resolution processes, and, as such, any resolutions can improve
SBI's asset quality metrics.
Nevertheless, there are still some downside risks to asset
quality. Within the corporate book, the bank has identified
potential weak loans - the so-called watchlist loans - that could
slip within the financial year ending March 2018. Such loans
represent 1.3% of its gross loans as of June 2017. Furthermore,
risks could emerge in the bank's small and medium enterprises, as
well as retail and agriculture loan book, particularly if
economic indicators remain weak. SBI's performance in the most
recent quarter ended June 2017 provides some evidence to this
trend, as seen by 60% of the bank's new NPLs (slippages) emerging
in these segments.
Having said that, these risks are somewhat mitigated, given the
bank's loss absorbing buffers; specifically, its improving
capitalization and loan loss reserves. In June 2017, the bank
raised INR150 billion ($2.3 billion) in new capital via a
qualified institutional placement. As a result, at end-June 2017,
it reported a common equity tier 1 (CET1) ratio of 10.2%, up from
9.9% at end-March 2017.
SBI also has access to a number of sources of capital, including
the remaining 62.1% in its listed life insurance subsidiary -
which is valued at about INR435 billion ($6.6 billion) -
potential capital injections from the Indian government (Baa3
positive), as well as an ability to access the equity capital
markets.
In addition, Moody's expects that the bank's profitability
profile will gradually improve, as credit costs come down.
Despite the asset quality issues, SBI's operating profits have
broadly remained stable, reflecting its strong core franchise -
which has strengthened further after the merger with associate
banks - business diversification, as well as increased focus on
businesses that generate higher return on capital.
The bank's strong funding and liquidity profiles represent its
key credit strengths. Its core deposit base provides a low-cost,
stable and sustainable funding source. SBI's strong core deposit
base - mainly stemming from the retail sector - drives its firm
liquidity position, which Moody's says should persist over at
least the next 12-18 months.
Moody's also believes there is a very high probability of
government support for SBI, in the event of stress, given the
bank's: (1) sizeable 23% share of total system deposits as of the
end of June 2017 and 21% of system loans; (2) status as the
largest commercial bank in India; and (3) designation by the
Reserve Bank of India as one of the country's three major and
systemically important banks. The government owns a 57.07% stake
in SBI and is visibly involved in the management of the bank,
including the appointment of senior managers and setting of key
performance indicators.
WHAT COULD CHANGE THE RATINGS -- UP
SBI's senior unsecured debt and deposit ratings carry a positive
outlook, reflecting Moody's expectation of a very high level of
government support for the bank in times of need, as well as the
bank's relatively strong standalone credit profile or BCA of ba1
when compared with other Indian rated public sector banks.
Moody's assessment of government support for SBI indicates that
the bank's ratings would be likely to be upgraded if India's
sovereign rating is upgraded.
WHAT COULD CHANGE THE RATINGS -- DOWN
Downward pressure on SBI's standalone credit profile or its BCA
will arise if further credit losses worsen its capital position.
Additionally, any indications that support from the Government of
India has diminished or that additional capital requirements may
arise beyond the government's budgeted amount could put the
bank's deposit and senior unsecured debt ratings under pressure.
Any downward changes in the sovereign's ceilings could also
affect the bank's deposit and senior unsecured debt ratings.
The principal methodology used in these ratings was Banks
published in September 2017.
Taking into account announcement on SBI's ratings, the bank's
ratings are:
State Bank of India
Local currency deposit rating affirmed at Baa3/P-3; outlook on
the long-term rating is positive
Foreign currency deposit rating affirmed at Baa3/P-3; outlook on
the long-term rating is positive
Other short-term program rating affirmed at (P)P-3
Foreign currency senior unsecured MTN program rating affirmed at
(P)Baa3
Foreign currency subordinated MTN program rating affirmed at
(P)Ba1
Foreign currency junior subordinate MTN program rating affirmed
at (P)Ba2
Pref. stock (non-cumulative) MTN program rating affirmed at (P)B1
BCA and Adjusted BCA affirmed at ba1
CR Assessment affirmed at Baa3(cr)/P-3(cr)
Outlook maintained at Positive
State Bank of India, Hong Kong Branch
Foreign currency senior unsecured MTN program rating affirmed at
(P)Baa3
Foreign currency subordinated MTN program rating affirmed at
(P)Ba1
Foreign currency junior subordinate MTN program rating affirmed
at (P)Ba2
Pref. stock (non-cumulative) MTN program rating affirmed at (P)B1
Other short-term program rating affirmed at (P)P-3
CR Assessment affirmed at Baa3(cr)/P-3(cr)
Outlook maintained at Positive
State Bank of India, London Branch
Foreign currency senior unsecured debt rating affirmed at Baa3,
outlook is positive
Foreign currency senior unsecured MTN program rating affirmed at
(P)Baa3
Foreign currency subordinated MTN program rating affirmed at
(P)Ba1
Foreign currency junior subordinate MTN program rating affirmed
at (P)Ba2
Pref. stock (non-cumulative) MTN program rating affirmed at (P)B1
Other short-term program rating affirmed at (P)P-3
CR Assessment affirmed at Baa3(cr)/P-3(cr)
Outlook maintained at Positive
State Bank of India, Nassau Branch
Foreign currency senior unsecured MTN program rating affirmed at
(P)Baa3
Foreign currency subordinated MTN program rating affirmed at
(P)Ba1
Foreign currency junior subordinate MTN program rating affirmed
at (P)Ba2
Pref. stock (non-cumulative) MTN program rating affirmed at (P)B1
Other short-term program rating affirmed at (P)P-3
CR Assessment affirmed at Baa3(cr)/P-3(cr)
Outlook maintained at Positive
State Bank of India, DIFC Branch
Foreign currency senior unsecured MTN program rating affirmed at
(P)Baa3
Foreign currency subordinated MTN program rating affirmed at
(P)Ba1
Foreign currency junior subordinate MTN program rating affirmed
at (P)Ba2
Pref. stock (non-cumulative) MTN program rating affirmed at (P)B1
Pref. stock (non-cumulative) rating affirmed at B1(hyb)
Other short-term program rating affirmed at (P)P-3
State Bank of India, headquartered in Mumbai, reported total
consolidated assets of INR33.3 trillion at June 30, 2017.
SUNSAT INFOTECH: CRISIL Reaffirms B+ Rating on INR16.25MM Loan
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Sunsat
Infotech Private Limited (SIPL) for obtaining information through
letters and emails dated July 10, 2017 and August 8, 2017 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 16.25 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 Sunsat Infotech Private
Limited. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for Sunsat Infotech Private
Limited is consistent with 'Scenario 1' outlined in the
'Framework for Assessing Consistency of Information with CRISIL
BB' category or lower. Based on the last available information,
CRISIL has reaffirmed the rating at 'CRISIL B+/Stable.
SIPL, based in Delhi, was incorporated in 2008. The company's
operations are managed by its director, Mr Satpal Singh. It has
set up a warehouse facility, which has been rented out for e-
retailing. Commercial operation is expected to start from August
2016.
T. S. JAYAPRAKASH: CRISIL Reaffirms B Rating on INR4.65MM Loan
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with T. S.
Jayaprakash (TSJ) for obtaining information through letters and
emails dated July 17, 2017 and August 17, 2017 among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Overdraft 4.65 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Working 1.35 CRISIL B/Stable (Issuer Not
Capital 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 T. S. Jayaprakash. This
restricts CRISIL's ability to take a forward looking view on the
credit quality of the entity. CRISIL believes that the
information available for T. S. Jayaprakash is consistent with
'Scenario 1' outlined in the 'Framework for Assessing Consistency
of Information with CRISIL BB' category or lower. Based on the
last available information, CRISIL has reaffirmed the rating at
'CRISIL B/Stable/CRISIL A4'.
TSJ is a Palakkad (Kerala)-based civil contractor. Its operations
are managed by its proprietor, Mr. T S Jayaprakash.
TMA INFRASTRUCTURE: CRISIL Cuts Rating on INR10MM Loan to D
-----------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities
of TMA Infrastructure Private Limited (TMA) to 'CRISIL D/CRISIL
D' from 'CRISIL BB/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 2 CRISIL D (Downgraded from
'CRISIL A4+)
Overdraft 10 CRISIL D (Downgraded from
'CRISIL BB/Stable')
The downgrade reflects overdrawals in the working capital
facility by TMA for over 30 days. The delays have been caused by
stretch in receivables, thereby weakening liquidity.
The ratings also reflect large working capital requirement in the
intensely competitive civil construction industry. However, the
company benefits from experience of the promoter.
Key Rating Drivers & Detailed Description
Weakness
* Large working capital requirement: Stretched receivables of 2-3
months and maintenance of earnest money deposit of around 10% of
contract value lead to high working capital requirement. There
have been instances of delay in payment from the highway
department, Public Works Department (PWD) and local municipality.
Strength
* Experience of promoter: Benefits from the promoter's experience
of over two decades and healthy relations with customers and
suppliers should continue to support the business.
TMA was set up in 1989 as a proprietorship firm and was
reconstituted as a private limited company in 2011. It executes
civil contracts for the highway department, PWD, and municipality
of Tiruvarur in Tamil Nadu. Operations are managed by Mr T
Manoharan.
TONI INDUSTRIES: CARE Reaffirms 'B' Rating on INR8.60cr Loan
------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Toni Industries Private Limited (TIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Bank
Facilities 8.60 CARE B; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of Toni Industries
Private Limited (TIPL) continues to remain constrained by small
scale of operations coupled with low profitability margins and
leveraged capital structure. The rating further continues to
remain constrained by foreign exchange fluctuation risk along
with competition from organized and unorganized players. The
rating constraints are partially offset by support from the
experienced promoters and moderate operating cycle. Going
forward; TIPL's ability to profitability increase the scale of
operations while improving its capital structure and effective
management of working capital shall be the key rating
sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operations: Despite being operational for more
than two decades, the scale of operations has remained small
marked by total operating income of INR29.48 crore in FY17 (FY
refers to the period April 1 to March 31). The small scale limits
the company's financial flexibility in times of stress and
deprives it from scale benefits. Furthermore, the company
reported muted growth in TOI in FY17. In 5MFY18 (refer to period
April 1 to August 31), the company achieved TOI of INR25 crore.
Low profitability and leveraged capital structure: The
profitability margins of the company continue to remain low due
to its presence in highly competitive nature of the industry with
large number of unorganized players. The PBILDT margin declined
in FY17 and stood at 1.85% owing to product sold with low
profitability margins. However the PAT margin improved and stood
at 13.10% due to one-time extra ordinary income in form of sale
of property. The capital structure of the company stood leveraged
at ~2x for the past two balance sheet date i.e.FY16 and FY17
mainly on account of high dependence on external borrowings for
capex purpose and to meet working capital requirements. The
average working capital borrowing remained 90% utilized for the
past 12 months ended August 31, 2017.
Foreign exchange fluctuation risk: The company is mainly
importing material from European countries i.e. UAE & UK whereas
the product is completely sold in the domestic market. With
initial cash outlay for procurement in foreign currency and
significant chunk of sales realization in domestic currency, the
company is exposed to the fluctuation in exchange rates which the
company does not hedge. Though the company tries to pass on the
price and currency volatility to the end users, any adverse
fluctuations in the currency markets may put pressure on the
profitability of the company which already has quite low PAT
margins.
Competition from organized and unorganized players: The industry
is highly competitive with players present in both organized and
unorganized sectors. There are several large players such as YKK
India Private Limited, Ansun Multitech (India) Limited, Tex Corp
Limited and various unorganized players from which the company
faces tough competition. Also, with presence of various players,
TIPL has limited bargaining power which exerts pressure on its
margins.
Key Rating Strengths
Experienced promoters supported by qualified management: The
business of TIPL is promoted by Mr. Rajinder Sharma and Mr.
Sanjeev Kalra who has vast experience of over two decades
respectively in zip manufacturing and are aware of the demand and
dynamics of the business through its association with PIPL and
TIPL. Currently the overall business operations of TIPL is being
managed by Mr. Vinay Bhardwaj and Mr. Tanuj Bhalla having nearly
two decades of experience in manufacturing of zipper.
Moderate operating cycle: The operating cycle of TIPL stood
moderate at 83 days in FY17. The company primarily imports the
raw materials from overseas market and maintain inventory of
around 60 days in form of raw material and WIP form to meet the
sudden demand of its customers. Being a highly competitive
business and low bargaining powers with its customers, the
average collection period remained at around 43 days in FY17. The
company majorly purchases the material on cash and advance basis
from overseas market and also gets credit period of around 30
days from its domestic suppliers resulting in average payable
period of 51 days in FY17
Delhi based TIPL was incorporated in 1993 and is currently being
managed by Mr. Vinay Bhardwaj and Mr. Tanuj Bhalla. TIPL
manufactures wide range of zippers which finds its application in
different industries like garments, automobiles (seat cover),
shoes, clothing etc. TIPL has a two manufacturing facility
located in Wazirpur Industrial Area (New Delhi) and Rewari,
Haryana with an overall installed capacity for manufacturing
zipper made of Zinc 18,35,000 Kgs and Plastic 1,32,000 Kgs as on
March 31, 2017. The company sells its products all over India
through an established network of 50 wholesale distributors under
its brand name "TONI". The main raw materials used for
manufacturing zippers are zinc scrap which is imported (around
93% of the total raw material purchased in FY17) from U.A.E., U.K
etc. while plastic (granules) is procured from local market. TIPL
has one associate concern namely Polylace India Private Limited
(PIPL) which is engaged in similar line of business.
UNIVERSAL ASSOCIATES: CRISIL Reaffirms D Rating on INR13MM Loan
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Universal
Associates (UAS) for obtaining information through letters and
emails dated June 19, 2017 and July 20, 2017 among others, apart
from telephonic communication. However, the issuer has remained
non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 8.5 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 13.0 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 Universal Associates. This
restricts CRISIL's ability to take a forward looking view on the
credit quality of the entity. CRISIL believes that the
information available for Universal Associates is consistent with
'Scenario 1' outlined in the 'Framework for Assessing Consistency
of Information with CRISIL BB' category or lower. Based on the
last available information, CRISIL has reaffirmed the rating at
'CRISIL D/CRISIL D.
UAS was set up in 1987 as a partnership concern. The firm
undertakes civil construction works with road construction being
its main revenue contributor. Based in Bhavnagar (Gujarat), it
undertakes contracts for departments of the Gujarat government in
and around the Bhavnagar region. It has 'Class AA' certification
for road construction. The firm is managed by Mr. Rajnikant Patel
and his son, Mr. Bhavik Patel.
VANI CONSTRUCTIONS: CRISIL Reaffirms B+ Rating on INR3.2MM Loan
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Vani
Constructions (VC) for obtaining information through letters and
emails dated July 18, 2017, and August 17, 2017, among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit .76 CRISIL B+/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term 3.20 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating; Rating
Reaffirmed)
Rupee Term Loan 1.04 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 Vani Constructions. This
restricts CRISIL's ability to take a forward looking view on the
credit quality of the entity. CRISIL believes that the
information available for Vani Constructions 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'.
Setup in 2014, Vani Constructions (Vani) is a partnership concern
between Mr. P. Mallikaarjun Rao, Mr. P. Sriharsha, Miss. P.
Prasanthi and Mrs. P. Satyavani. The firm is engaged in
commercial blasting and painting process. The firm has its
manufacturing facility in Vishakapatnam, Andhra Pradesh.
VIJAYALAKSHMI DRIER: CARE Assigns B+ Rating to INR6.0cr LT Loan
---------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Vijayalakshmi Drier Industries (VDI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 6.00 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of VDI is tempered by
small scale of operations, Weak debt coverage indicators,
fluctuating profitability margins and seasonal nature of
availability of paddy resulting in working capital intensive
nature of operations. The rating further take into account
intense competition from several other players with material
price volatility and constitution of the entity as partnership
firm with inherent risk of withdrawal of capital. The rating is,
however, underpinned by the reasonable track record and
experience of partner for two decades in rice milling industry,
growth in total operating income, moderate capital structure and
operating cycle days along with healthy demand outlook of rice
and location advantage with presence in cluster and easy
availability of paddy.
Going forward, the ability of the firm to increase its scale of
operations and improve the profitability margins along with
managing the working capital effectively in competitive
environment would be the key rating sensitivities.
Detailed Description of the key rating drivers
Key Rating Weaknesses
Small scale of operations and fluctuating profitability margins
during review period: VDI was established in the year 2008. Thus,
the firm has reasonable track record of operations. The total
operating income stood moderate at INR29.19 crore in FY17 (A)
with low net worth base of INR2.59 crore as on March 31, 2017 (A)
when compared to other peers in the industry.
The profitability margins of the firm are seen fluctuating during
the review period. The PBILDT margins fluctuated within the range
of 1.75% -1.86% (FY15 to FY17), due to fluctuation in material
costs and other manufacturing expenses. The firm has thin PAT
margin during review period due to high interest cost. The PAT
margin of the firm is fluctuating within the range of 0.23%-0.31%
due to fluctuating interest expense and PBILDT in absolute terms.
Weak debt coverage indicators: The debt coverage indicators of
the firm remained at moderate level in FY17 marked by total
debt/GCA which deteriorated from 15.96x in FY15 to 23.03x in FY17
due to increase in total debt level. Furthermore, the PBILDT
interest coverage ratio, deteriorated from 1.76x in FY15 to 1.46x
in FY17 due to increase in interest cost on account of
enhancement in working capital facility.
Constitution of the entity as a partnership firm: VDI, being a
partnership firm, is exposed to inherent risk of the partner's
capital being withdrawn at time of personal contingency and firm
being dissolved upon the death/retirement/insolvency of the
partners. Moreover, partnership firm business has restricted
avenues to raise capital which could prove a hindrance to its
growth.
Seasonal nature of availability of paddy resulting in working
capital intensive nature of operations Paddy in India is
harvested mainly at the end of two major agricultural seasons
Kharif (June to September) and Rabi (November to April). The
millers have to stock enough paddy by the end of the each season
as the price and quality of paddy is better during the harvesting
season. During this time, the working capital requirements of the
rice millers are generally on the higher side. Majority of the
firm's funds of the firm are blocked in inventory and with
customers. Moreover, the paddy is procured from the farmers
generally against cash payments or with a minimal credit period
of 10- 15 days while the millers have to extend credit to the
wholesalers and distributors around 20-30 days resulting in high
working capital utilization reflecting working capital intensity
of business. The average utilization of fund based working
capital limits of the firm was utilized (90%) during the last 10
months period ended August 31, 2017.
Key Rating Strengths
Experience of promoter for two decades in rice business: VDI was
promoted by Mrs. Jasti Anantha Laxmi (Managing Partner) and his
family members. She is having around 20 years of experience in
rice processing business. Through his experience in the rice
processing, they have established healthy relationship with key
suppliers, customers, local farmers, dealers and also with the
brokers facilitating the rice business within the state.
Growth in total operating income during review period: The total
operating income of the firm has increased at a Compounded Annual
Growth Rate (CAGR) of 39.80% from INR24.88 crore in FY15 to
INR29.19 crore in FY17 due to continuous demand from existing
customers along with addition of new customers.
Financial risk profile marked by moderate capital structure and
operating cycle: The capital structure of the firm remained
moderate during review period. The debt equity ratio of the firm
has been improving year-on-year and remained below unity for the
last three balance sheet date ended March 31, 2017 due to
repayment of term loan coupled with increase in tangible net
worth. Due to the above said factor the overall gearing ratio
improved from 1.76x as on March 31, 2015 to 1.54x as on March 31,
2017. The operating cycle of the firm remained moderate at 66
days in FY17. The firm receives the payment from its customer
within 30-35 days and makes the payment to its supplier within
10-15 days. The firm holds the average inventory of around 30-40
days to meet the requirement of customer as on need basis. The
average utilization of working capital limit stood at 100% for
the last 12 month ended August 31, 2017.
Locational advantage with presence in cluster and easy
availability of paddy: The rice milling unit of VDI is located at
Koppal district which is the top district for producing rice in
Karnataka. The manufacturing unit is located near the rice
producing region, which ensures easy raw material access and
smooth supply of raw materials at competitive prices and lower
logistic expenditure.
Healthy demand outlook of rice: Rice is consumed in large
quantity in India which provides favorable opportunity for the
rice millers and thus the demand is expected to remain healthy
over medium to long term. India is the second largest producer of
rice in the world after China and the largest producer and
exporter of basmati rice in the world. The rice industry in India
is broadly divided into two segments -- basmati (drier and long
grained) and non-basmati (sticky and short grained). Demand of
Indian basmati rice has traditionally been export oriented where
the South India caters about one-fourth share of India's exports.
However, with a growing consumer class and increasing disposable
incomes, demand for premium rice products is on the rise in the
domestic market. Demand for non-basmati segment is primarily
domestic market driven in India. Initiatives taken by government
to increase paddy acreage and better monsoon conditions will be
the key factors which will boost the supply of rice to the rice
processing units. Rice being the staple food for almost 65% of
the population in India has a stable domestic demand outlook. On
the export front, global demand and supply of rice, government
regulations on export and buffer stock to be maintained by
government will determine the outlook for rice exports.
Vijayalakshmi Driyer Industries (VDI) was established in 2008 as
a partnership firm. VDI is engaged in milling and processing of
rice. The rice milling unit of the firm is located at Navanagar
Po: Marlanahalli, Gangavathi, Koppal, Karnataka. Apart from rice
processing, the firm is also engaged in selling off by-products
such as broken rice, husk and bran. The main raw material, paddy,
is directly procured from local farmers located in and around
Koppal District and the firm sells rice and other by-products in
the open markets of Karnataka. Present Installation capacity of
the firm is 8 tons per hour.
=================
I N D O N E S I A
=================
ALAM SUTERA: Consent Solicitation No Effect on Moody's B2 CFR
-------------------------------------------------------------
Moody's Investors Service says that the B2 corporate family
ratings of Alam Sutera Realty Tbk and B2 backed senior unsecured
debt rating of Alam Synergy Pte. Ltd., a wholly owned and
guaranteed subsidiary of Alam Sutera, remain unchanged, following
Alam Sutera's announcement of a consent solicitation in relation
to the $235 million 2020 notes and $245 million 2022 notes issued
by Alam Synergy Pte. Ltd.
The outlook on the ratings is stable.
Alam Sutera is seeking consent from noteholders to resolve a
technical breach which occurred as a result of an administrative
error, where the company paid a dividend of IDR29.5 billion ($2
million) to shareholders on July 7, 2017.
At the time of the dividend payout, Alam Sutera was not able to
make a restricted payment as it could not incur at least $1 of
indebtedness under its fixed charge coverage ratio test.
The test requires the company's EBITDA to cover more than 2.5x of
fixed charges, which include the interest expenses on its
borrowings and the hedging costs on its US dollar notes. However,
for the 12 months ended June 30, 2017, Alam Sutera's fixed charge
coverage ratio was around 2.4x.
Consequently, the dividend payment constitutes a breach of the
indenture.
"We believe noteholders will likely waive the technical breach,
given that the dividend payment was a small amount, and
noteholders will receive a consent fee of $2 per $1000 in
principal for the $235 million 2020 notes and $245 million 2022
notes," says Jacintha Poh, a Moody's Vice President and Senior
Analyst.
This technical breach will become an event of default if it is
not cured within 30 days after receiving written notice from the
trustee or 25% of noteholders. Following that, principal payment
of the notes totaling $480 million will accelerate.
However, Moody's views the occurrence of such an event to be
remote as the management team of Alam Sutera has shared that they
are committed to obtain consent from noteholders.
Assuming full consent is achieved, Alam Sutera will need to pay
$960,000 by way of fees to noteholders. While such a payment is
credit negative, it can be balanced against the company's
adequate liquidity profile supported by cash holdings of IDR1.4
trillion ($104 million) as of June 30, 2017.
Alam Sutera's B2 ratings reflect its ownership of a large and low
cost land bank which allows it to generate strong gross profit
margins of above 50%, as well as the company's proactive approach
towards debt capital management.
The ratings also take into account the increased volatility in
the company's earnings and cash flows over the last two years,
driven by larger contributions from one-off transactions instead
of income from its core business of property development.
Moody's expects Alam Sutera's revenue to grow marginally over the
next 12-18 months, despite a lackluster sales performance, owing
to contributions from its collaboration with China Fortune Land
Development Co., Ltd.
Hence, Moody's expects leverage, as measured by adjusted
debt/homebuilding EBITDA, to improve to around 4.0x, from 4.2x
for the 12 months ended June 30, 2017.
For the nine months of 2017, Alam Sutera had only achieved
marketing sales of IDR1.3 trillion - around IDR630 billion from
Alam Sutera township, IDR510 billion from Suvana Sutera, and the
rest from high-rise residential and offices - equivalent to about
25% of the company's full-year target of IDR5 trillion and 60% of
Moody's base case expectations.
The principal methodology used in this rating was Homebuilding
And Property Development Industry published in April 2015.
Established in November 1993 and listed on the Indonesian Stock
Exchange in December 2007, Alam Sutera Realty Tbk is an
integrated property developer in Indonesia that focuses on the
sale of land lots in accordance with township planning
requirements, as well as property development in residential and
commercial segments in Indonesia. The company is approximately
45%-owned by the family of The Ning King, as of September 30,
2017.
REASURANSI NASIONAL: Fitch Affirms BB IFS Rating; Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed PT Reasuransi Nasional Indonesia's
(Nasional Re) Insurer Financial Strength (IFS) Rating at 'BB'
with a Stable Outlook. At the same time, Fitch Ratings Indonesia
has affirmed the National IFS Rating at 'AA-(idn)' with a Stable
Outlook.
'AA' National IFS Ratings denote a very strong capacity to meet
policyholder obligations relative to all other obligations or
issuers in the same country, across all industries and obligation
types. The risk of ceased or interrupted payments differs only
slightly from the country's highest rated obligations or issuers.
KEY RATING DRIVERS
The rating affirmation reflects Nasional Re's business
concentration in the catastrophe-prone Indonesian market and its
strong market profile in the country, with more than 20 years of
operating history. The ratings also consider the company's
moderately weak capitalisation relative to its business
operations and domestic peers; fast-growing and healthy operating
performance; and conservative investment portfolio.
The company captured the second-highest market share, as measured
by total domestic reinsurance gross premiums, of 35% in 2016.
However, its overall market scale is small compared with regional
reinsurance peers, as the majority of reinsurance premiums in
Indonesia are ceded to offshore reinsurers.
Nasional Re's regulatory risk-based capital ratio was 155% at
end-June 2017 (end-2016: 164%), well in excess of the 120%
regulatory minimum. Fitch expects Nasional Re to improve its
capital position to keep up with its business expansion and
ensure sufficient capital buffers against adverse shocks, in view
of regulatory changes encouraging greater optimisation of
domestic reinsurance capacity.
Fitch sees Nasional Re's financial performance as strong with its
three-year average gross premium growth of around 56%.
Underwriting performance has been healthy, with a combined ratio
below 100% over the last five years. Lower claims frequency,
manageable underwriting expenses and steady investment returns
have also translated into a favourable bottom-line performance.
Nonetheless, continued business expansion is a key risk,
particularly if underwriting standards deteriorate and
capitalisation buffers are eroded.
Nasional Re's investment mix is prudent and liquid, with cash
equivalents and fixed-income instruments accounting for more than
80% of its invested assets as end-2016. Exposure to risky assets,
such as unaffiliated stocks, remained low relative to its
capitalisation.
RATING SENSITIVITIES
Upgrade rating triggers include:
- a sustained improvement in Nasional Re's capitalisation, with
its regulatory risk-based capital ratio consistently above
180%, and
- maintenance of its market position and operating performance
and a combined ratio consistently below 95%.
Downgrade rating triggers include:
- a significant deterioration in capitalisation, with its
regulatory risk-based capital ratio persistently below 130%,
and
- a weakening market franchise or operating performance and a
combined ratio above 105% over a prolonged period.
===============
M A L A Y S I A
===============
PRESS METAL: Moody's Assigns Ba3 CFR; Outlook Stable
----------------------------------------------------
Moody's Investors Service has assigned a Ba3 corporate family
rating (CFR) to Press Metal Aluminium Holdings Berhad (Press
Metal).
Moody's has also assigned a Ba3 rating to the proposed senior
notes due 2022.
The notes will be issued by Press Metal's wholly owned subsidiary
Press Metal (Labuan) Ltd.
The notes will be guaranteed by Press Metal, and key subsidiaries
including: 100%-owned Press Metal Berhad and 80%-owned Press
Metal Bintulu (PMB) and Press Metal Sarawak (PMS). Together, PMB
and PMS own and operate all of Press Metal's aluminum smelting
capacity.
The rating outlook is stable.
The proceeds of the notes issuance will be primarily used to
repay existing indebtedness.
RATINGS RATIONALE
"The Ba3 CFR reflects Press Metal's low-cost aluminum smelting
capabilities, supported by a long-term power purchase agreement
with Sarawak Energy, solid EBITDA margins, conservative financial
policies, and low financial leverage with debt/EBITDA, expected
to be around 2.0x in 2017," says Brian Grieser, a Moody's Vice
President and Senior Credit Officer.
Press Metal generated EBITDA margins in the mid-to-high teens
over the past three years. The company benefits from a low cash
cost per ton relative to other aluminum producers, driven
primarily by its access to low energy tariffs as part of its 25-
year power purchase agreement with Sarawak Energy.
Moody's expects Press Metal to maintain its cost advantages,
which partially mitigate the price risk on its aluminum sales.
Margins also benefit from low employee and logistic costs, and
the correlation between the price of aluminum and alumina, which
represents the largest component of its cash costs.
Press Metal's CFR also incorporates its small scale relative to
global competitors, limited operational track record, and
exposure to the volatility in the prices of aluminum and raw
materials.
The ratings also reflect Press Metal's geographic concentration,
with all its aluminium smelting capacity located in Sarawak,
Malaysia (A3 stable) and its dependence on Bakun Dam's hydro-
electric power plant -- operated by Sarawak Energy -- to supply
all the power needs of its two smelter locations.
Press Metal's longstanding relationship with Sumitomo Corporation
(Baa1 negative) as an investor, customer and marketer of its
products is a positive credit consideration. Sumitomo owns a 20%
share of both PMB and PMS, is the largest purchaser of its
aluminum production, and maintains board representation at the
PMB and PMS level.
The proceeds from Sumitomo's equity contributions supported the
construction of the aluminum smelting facilities in a financially
conservative manner.
"We view the ownership by Sumitomo and its level of aluminum
purchases as a credit positive for Press Metal. Moody's expects
Sumitomo to remain a supportive shareholder and influence Press
Metal to manage its balance sheet and growth strategy in a
conservative manner," adds Grieser.
The stable outlook incorporates Moody's expectations for modest
revenue growth coupled with EBITDA margins in the mid-to-high
teens over the next 12-18 months. Further, capital expenditures
are expected to be largely focused on the maintenance of existing
facilities and efficiency improvements, which will facilitate
free cash flow generation and debt reduction over this period.
The ratings are well positioned at Ba3. Over the longer term,
increased production capabilities and growth in its value-added
product sales would be supportive of an upgrade, assuming EBITDA
margins are consistently above 20% and leverage is maintained
below 2.0x. An upgrade is unlikely in periods of significant
investment where free cash flows are negative.
The ratings could be downgraded if there were a material erosion
in Press Metal's profitability, driven either by extended
operational shutdowns, increases in power costs, or extended
tightening of alumina-to-aluminum pricing, such that EBITDA
margins fall below 15% for an extended period.
Further, rating pressure would materialize if debt/EBITDA is
maintained above 3.5x for an extended period, or liquidity were
to deteriorate from a weakening of cash balances or cash flows.
The principal methodology used in these ratings was Steel
Industry published in September 2017.
Press Metal Aluminium Holdings Berhad is the largest aluminium
producer and extruder of aluminum products in Southeast Asia.
Press Metal owns and operates two aluminium smelters in Sarawak,
Malaysia with a combined smelting capacity of 760,000 tons and
two extrusion plants located at Selangor, Malaysia and Guangzhou,
China with a combined capacity of 160,000 tons.
Press Metal was founded in 1986 and is listed on Bursa Malaysia.
Press Metal is 60% owned by members of the Koon family and 40%
owned by public shareholders.
PRESS METAL: S&P Assigns Prelim 'BB-' CCR, Outlook Positive
-----------------------------------------------------------
S&P Global Ratings assigned its 'BB-' preliminary long-term
corporate credit rating to Press Metal Aluminium Holdings Bhd.
(PMB), a Malaysia-based aluminum extrusion and smelting company.
The outlook is positive. At the same time, S&P is assigning its
'BB-' preliminary issue rating to the proposed senior unsecured
notes to be issued by Press Metal (Labuan) Ltd. PMB, its two
smelting operating subsidiaries, and certain other subsidiaries,
unconditionally guarantee the proposed notes.
S&P said, "Our preliminary rating is based on the expectation
that PMB will use the proceeds from its proposed US$400 million
notes to refinance outstanding debt. This will help the company
maintain adequate liquidity after the note issuance. We believe
the company's liquidity could come under pressure, weakening its
credit profile, if the note issuance is less than US$400 million
or if it does not materialize." The preliminary rating on the
proposed notes is also based on the assumption that PMB's
operating subsidiaries, Press Metal Bintulu Sdn. Bhd. and Press
Metal Sarawak Sdn. Bhd., will unconditionally and irrevocably
guarantee the notes.
The rating on PMB reflects the company's modest production and
scale as an aluminum smelter and extruder, its single-asset and
single-metal exposure to aluminum, and a limited record of
operations at larger production levels. The company also has
debt-funded its capacity expansion, and its cash flow adequacy
ratios will remain sensitive to fluctuations in aluminum prices.
PMB's sound cost position with low power costs and limited
reinvestment needs in the operations support its debt reduction
potential through 2019 and mitigate these constraints.
S&P said, "We regard PMB's scale and fairly narrow operating
diversity as the main rating constraint. The company is a small
aluminum producer, with a capacity of 760,000 tons and aluminum
extrusion capacity of 160,000 tons. That's about 1% of the global
aluminum capacity and multiple times smaller than other peers
rated by S&P Global Ratings, such as Norsk Hydro ASA, Aluminium
Corp. of China, or Vedanta Resources Plc. PMB's scale is unlikely
to change materially over the next two to three years because it
would need to source low-cost power to remain cost competitive.
We also expect no major change to PMB's product range, which
currently focuses on commodity aluminum products, including
ingots, billets, and wire rod, for which barriers to entry are
limited.
"We expect PMB's production and cash flows to remain concentrated
to its Bintulu and Mukah sites in Sarawak, with contribution of
more than 80% through 2019. The high geographic and single-asset
exposures affect the company's credit profile because it reduces
earnings quality and predictability. In particular, operations
are solely dependent on Sarawak Energy Bhd., the state
electricity producer and sole electricity source for PMB,
providing uninterrupted power. A state-wide power outage in 2013
led to a 50% decline in sales volume at the Mukah plant; it took
nearly five months before full ramp-up could resume. We believe
another outage of this magnitude is unlikely, given the
additional power capacity built by Sarawak Energy since. A fire
in 2015 also led to production shutdown of several weeks at the
Bintulu plant. It generally takes several weeks before production
can resume safely even after a short few hours of production
shutdown.
"We view PMB's single-metal concentration to aluminum as
moderately credit negative. Aluminum prices are volatile, ranging
from US$2,000 per ton in the fourth quarter of 2014 to below
US$1,500 per ton for about 12 months between July 2015 and July
2016. However, PMB hedges the prices of part of its production
every year, with about 75% of projected production in 2018 hedged
at about US$1,860 per ton, and a further 15% of the 2019
production hedged. Hedging reduces the volatility of the
company's profits and cash flows. We estimate it would take a
sizable US$300 drop in aluminum prices over a full year for PMB's
EBITDA to decline 30% from our base case, assuming the company
hedges about 50% of its production annually. That compares with a
US$150 per ton drop, a much more likely scenario, in the absence
of hedging.
Despite the single-metal and single-site concentration risks,
PMB's cost position is a supporting factor for the rating. We
project the company's cash production costs, including overheads,
at about US$1,400 per ton through 2019, at the bottom of the
first quartile of the global cost curve. Unlike some of its
peers, such as Norsk Hydro, PMB is not vertically integrated into
power, bauxite, or alumina. However, its power cost is US$100-
US$150 per ton less than peers because of a long-dated power
purchase agreement with Sarawak Energy and with modest annual
escalation.
"We project PMB's EBITDA margin to exceed 15% in our pricing
assumption through 2019, given its cost base. The company's
quarterly EBITDA margin has been volatile historically, ranging
from our estimate of about 12% when aluminum prices fell below
US$1,600 per ton, to more than 20% currently. Nevertheless, the
partial hedging of production volumes into 2019 provides
visibility on absolute earnings and profit margins."
PMB built its smelting capacity at the expense of leverage over
the past few years. Its debt-to-EBITDA ratio averaged about 6.5x
between 2011 and 2013 following the commissioning of the first
320,000-ton aluminum capacity at the Bintulu plant. Although PMB
repaid some debt in 2014 with cash flows from new capacity, it
funded a second round of expansion in 2015 with debt and its
debt-to-EBITDA ratio increased to nearly 4.0x in 2015 from 2.9x
in 2014.
The positive rating outlook recognizes the prospect of declining
debt over the next 12-18 months. S&P estimates that PMB could
generate annual discretionary cash flows of Malaysian ringgit
(MYR) 500 million on average over 2017-2019, assuming annual
EBITDA of about MYR1.3 billion and combined spending and dividend
outflows below MYR500 million.
The positive outlook reflects the prospects of strengthened
credit metrics over the next 12 months and improved resilience to
future fluctuations in aluminum prices if PMB continues to pay
down debt with excess cash flows.
S&P said, "We may raise the rating within the next 12 months if
PMB continues to pay down debt with excess cash flows, such that
its ratio of funds from operations (FFO) to debt stays above 45%
on a sustainable basis. An upgrade to 'BB' would also be
contingent upon the company adopting a cautious approach to
liquidity management, with permanently reduced short-term debt
maturities and ample cash balances.
"We may revise the outlook back to stable if PMB's trend of
improving cash flow adequacy is interrupted and it becomes likely
that the ratio of FFO to debt fails to approach 45% sustainably.
This could materialize if: the company undertakes debt-funded
expansion or acquisitions significantly beyond our base case,
keeping net debt above MYR3 billion; aluminum prices fall
sustainably below US$1,650/ton; production declines below 550,000
tons because of unplanned interruptions with no prospect of near-
term recovery; or a combination of the three."
===============
M O N G O L I A
===============
MONGOLIA: S&P Assigns B- Rating to U.S. Dollar-Denominated Notes
----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' long-term foreign currency
issue rating to Mongolia's issuance of benchmark-size U.S.
dollar-denominated notes. The notes will constitute the direct,
unconditional, unsubordinated, and unsecured obligations of
Mongolia (B-/Stable/B).
S&P's sovereign credit ratings on Mongolia reflect the ongoing
challenges to the country's fiscal performance and growth
prospects. While Mongolia's fiscal deficits are stabilizing, they
remain considerable, reflecting shortfalls in revenues, elevated
spending levels, and our inclusion of commercial spending by the
Development Bank of Mongolia in the general government's
accounts.
As such, Mongolia's debt will remain high over the 2017-2020
period. In an acknowledgment of Mongolia's fiscal and balance-of-
payments stresses, the government secured a US$5.5 billion IMF-
led financing package in May 2017, which should mitigate short-
term liquidity pressures. Nevertheless, key rating weaknesses
remain.
The stable outlook on the rating on Mongolia reflects the
country's low-income resource-driven economy, emerging policy
environment and fiscal performance, high external risk, and
limited monetary flexibility. These factors are balanced against
the prospect that large mining projects could quickly reverse
Mongolia's sovereign credit profile during the next 12 months.
This outlook also assumes that official creditor support
continues to contain balance-of-payment and fiscal pressures. The
rating's upside potential could build if the development of the
Oyu Tolgoi and Tavan Tolgoi mines accelerates economic growth and
improves fiscal and external performances more than we currently
expect.
Downward pressure could emerge on the ratings if Mongolia's
external liquidity weakens markedly.
====================
N E W Z E A L A N D
====================
CRICHQ: Online Cricket App Business Goes Into Receivership
----------------------------------------------------------
Tamsyn Parker at The New Zealand Herald reports that an online
cricket app business whose shareholders include former Black Caps
captains Stephen Fleming and Brendon McCullum has gone into
receivership.
Receivers Brendan Gibson and Neale Jackson from Korda Mentha were
appointed to CricHQ on Oct. 17, the Herald discloses.
According to the Herald, the business launched in 2010 as a
cloud-based cricket scoring platform and expanded into
competition management, administration and a scoreboard and
statistics platform as well as data collection and predictive
scoring.
In December, former Saatchi & Saatchi executive Kevin Roberts
joined the board as chairman, the report says.
Last year, CricHQ was reportedly looking to raise US$10 million
(NZ$13.7 million) from investors and the company put a pre-money
valuation on CricHQ of US$77 million, the Herald recalls.
It was the third time the company had raised capital in its six-
year history after initially raising NZ$8 million from private
investors before raising a further NZ$10 million last year in a
round led by Singapore-based Tembusu Partners, according to the
Herald.
Money from the last capital raise was to be used to help develop
its smartphone apps and boost staff numbers, the report states.
According to the Herald, the National Business Review reported
the company was considering expanding into football with the
money raised in the coming period used to develop relationships
with broadcasters, a new fantasy league feature, payment
processing and e-commerce abilities.
It would also allow users to overlay wagon-wheels and other stats
onto video taken of amateur games.
The company was aiming to offer more features than its
competitors, which include CricInfo, now owned by US giant ESPN,
the Herald adds.
Q CARD: Fitch Assigns 'B' Rating to Class F-2017-1 Notes
--------------------------------------------------------
Fitch Ratings has assigned ratings to the issuance of
NZD120 million across seven floating-rate notes issued by the Q
Card Trust. The issuance consists of notes backed by credit card
receivables originated by Consumer Finance Limited, Columbus
Finance Limited, and Retail Financial Services (RFS) Limited. The
ratings are as follows:
- NZD39.5 million Class A-2017-3: 'AAAsf' ; Outlook Stable;
- NZD38.0 million Class A-2017-4: 'AAAsf' ; Outlook Stable;
- NZD12.0 million Class B-2017-1: 'AAsf' : Outlook Stable;
- NZD8.4 million Class C-2017-1: 'Asf' : Outlook Stable;
- NZD6.0 million Class D-2017-1: 'BBBsf' : Outlook Stable;
- NZD6.6 million Class E-2017-1: 'BBsf' : Outlook Stable;
- NZD2.4 million Class F-2017-1: 'Bsf' : Outlook Stable.
An additional NZD7.1 million of class S notes were also issued.
The notes are issued by The New Zealand Guardian Trust Company
Limited in its capacity as trustee of Q Card Trust.
Fitch confirms that the above issuance will not result in a
withdrawal or downgrade of any of the existing ratings of the
notes of Q Card Trust.
At the cut-off date 30 September 2017, the total collateral pool
consisted of NZD371.8 million in receivables, comprising 215,000
active customers with an average balance of NZD1,817. The trust
will utilise the new issuance proceeds to purchase Farmers card
receivables, originated by RFS. The credit metrics of the RFS
assets improve the overall credit metrics of the enlarged
portfolio.
KEY RATING DRIVERS
The ratings reflect Fitch's view that the available credit
enhancement and excess spread are able to support the current
ratings, the pool's stable credit quality and performance, and
Fitch's expectations of economic conditions in New Zealand.
The assignment of the ratings is based on:
Solid Asset Performance: Q Card Trust has stable performance with
key rating drivers such as yield, monthly payment rates, charge-
offs and arrears within Fitch's steady-state assumptions. Fitch
has set a yield steady-state assumption of 17.8%, a charge-off
steady-state assumption of 4.5% and a monthly payment rate (MPR)
steady state of 7.0%. The assigned steady states are unchanged
from previous rating actions.
These assumptions are stressed at various multiples dependent on
the rating level tested (AAA / AA / A / BBB / BB / B), and the
utilised stresses are as follows:
Gross Yield: 35% / 30% / 25% / 20% / 15% /10%
MPR: 35% / 30% / 25% / 20% / 10% / 5%
Charge-offs: 4.75x / 4.00x / 3.10x / 2.40x / 1.90x / 1.30x
Sufficient Credit Enhancement: All classes of notes benefit from
sufficient subordination.
Stable Asset Outlook: Fitch expects stable New Zealand credit-
card performance in the medium term, as macroeconomic conditions
in New Zealand are expected to remain benign.
Performance Triggers: The transaction benefits from several
performance triggers, which if breached, can potentially lead to
rapid amortisation of the transaction to prevent exposure to
further deterioration in asset performance
RATING SENSITIVITIES
Fitch has modelled three scenarios compared with existing
performance to evaluate the sensitivity of the ratings to:
Increased charge-offs:
Increase base case by 25% / 50% / 75%
Series A-2017-3: AAAsf / AA+sf / AA+sf
Series A-2017-4: AAAsf / AA+sf / AA+sf
Series B-2017-1: AAsf / AA-sf / A+sf
Series C-2017-1: Asf / A-sf / BBB+sf
Series D-2017-1: BBBsf / BBBsf / BBB-sf
Series E-2017-1: BBsf / BBsf / BB-sf
Series F-2017-1: Bsf / Bsf / Bsf
Reduced yield:
Decrease base case by 15% / 25% / 35%
Series A-2017-3: AAAsf / AAAsf sf / AAAsf sf
Series A-2017-4: AAAsf / AAAsf sf / AAAsf sf
Series B-2017-1: AAsf / AAsf / AAsf
Series C-2017-1: Asf / Asf / Asf
Series D-2017-1: BBBsf / BBBsf / BBBsf
Series E-2017-1: BBsf / BBsf / BBsf
Series F-2017-1: Bsf / Bsf / Bsf
Reduced monthly payment rate:
Decrease base case by 15% / 25% / 35%
Series A-2017-3: AA+sf / AAsf / A+sf
Series A-2017-4: AA+sf / AAsf / A+sf
Series B-2017-1: AA-sf / A+sf / A-sf
Series C-2017-1: Asf / A-sf / BBBsf
Series D-2017-1: BBBsf / BBBsf / BBB-sf
Series E-2017-1: BBsf / BBsf / BBsf
Series F-2017-1: Bsf / Bsf / Bsf
Defined sensitivities for relative increases in charge-offs that
are required to reduce the ratings of the notes by (i) one full
category (ii) to non-investment grade (iii) to 'CCCsf' from their
breakeven charge-off levels:
Reduce the rating by one full category:
Series A-2017-3: 125%
Series A-2017-4: 125%
Series B-2017-1: 123%
Series C-2017-1: 118%
Series D-2017-1: 118%
Series E-2017-1: 123%
Series F-2017-1: 119%
Reduce the rating to non-investment grade:
Series A-2017-3: 215%
Series A-2017-4: 215%
Series B-2017-1: 189%
Series C-2017-1: 150%
Series D-2017-1: 131%
Series E-2017-1: 100%
Series F-2017-1: 78%
Reduce the rating to 'CCCsf':
Series A-2017-3: 284%
Series A-2017-4: 284%
Series B-2017-1: 253%
Series C-2017-1: 206%
Series D-2017-1: 186%
Series E-2017-1: 151%
Series F-2017-1: 128%
The ratings are sensitive to large increases in charge-offs and
defaults and reduced monthly payment rates, but less sensitive to
decreased yields.
=================
S I N G A P O R E
=================
ZETTA JET: Jonathan King Approved as Chapter 11 Trustee
-------------------------------------------------------
Zetta Jet on Oct. 16, 2017, disclosed that Jonathan King has been
approved by the Bankruptcy Court to serve as Zetta Jet's Chapter
11 Trustee, overseeing the company's restructuring and business
affairs.
Mr. King has retained, subject to Bankruptcy Court approval, the
global law firm DLA Piper LLP (US) as his counsel, and Seabury
Corporate Finance LLC and Seabury Securities LLC as his financial
advisor and investment banker. Seabury is a leading global
aviation and aerospace financial advisory and investment banking
firm.
"We look forward to working together with Jon and his team
throughout the restructuring process," said Zetta Jet President
and CEO Michael Maher. "They bring invaluable experience and
resources that will help us successfully complete our Chapter 11
debt restructuring. Having an independent and impartial trustee
of Jon's caliber protects the interests of all of our
stakeholders."
Mr. King is a partner and co-chair of DLA Piper's White Collar,
Corporate Crime and Investigations Practice. His primary focus
is on white collar crime, and related issues including corporate
compliance and internal investigations. He has directed and
conducted numerous cross-border investigations.
Prior to joining DLA Piper, he served as an Assistant U. S.
Attorney in Chicago and an Assistant State's Attorney in the Cook
County State's Attorney's Office. Mr. King earned his Bachelor's
from the University of Chicago and his J.D. from Northwestern
University.
Zetta Jet filed its Chapter 11 bankruptcy petition on
September 15, 2017.
About Zetta Jet USA, Inc.
Headquartered in Singapore, Zetta Jet claims to be the world's
first truly personalized private airline. Zetta Jet promises to
deliver the ultimate in bespoke luxury experiences to a
discerning clientele with its unique experience that combines the
dedicated Asian service philosophy with the flexibility and 'can-
do' spirit of the U.S., adorned with the glamour of Europe's
enduring chic on its Bombardier fleet with ultra-long range
intercontinental capabilities across the Pacific Rim.
Zetta Jet is a FAA-certificated air carrier and the first only
part 135 operator authorized to conduct Polar flights, enabling
Zetta Jet to optimize routes without limitation. The Company has
offices both in Los Angeles and Singapore, and a network of sales
and support offices in New York, London, San Jose, Harbin and
Singapore.
Burbank, California-based Zetta Jet USA, Inc., and its Singapore-
based parent, Zetta Jet Pte. Ltd, filed voluntary bankruptcy
petitions under Chapter 11 of the U.S. Bankruptcy Code in Los
Angeles (Bankr. C.D. Cal. Case No. 17-21386 and 17-21387) on
Sept. 15, 2017.
Zetta Jet PTE and Zetta Jet USA each estimated assets and debt of
$50 million to $100 million.
Levene, Neale, Bender, Yoo & Brill L.L.P, serves as counsel to
the Debtors.
*********
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 ***