/raid1/www/Hosts/bankrupt/TCRAP_Public/171108.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
Wednesday, November 8, 2017, Vol. 20, No. 222
Headlines
A U S T R A L I A
BEAM TECHNOLOGY: Second Creditors' Meeting Set for Nov. 14
CMK JOINERY: First Creditors' Meeting Set for Nov. 15
COUNTRY CREDITS: Second Creditors' Meeting Set for Nov. 16
EMECO HOLDINGS: S&P Alters Outlook to Stable & Affirms 'B-' CCR
GALLOP INTERNATIONAL: ASIC Obtains Interim Freezing Orders
MAC TELEMETRY: Second Creditors' Meeting Set for Nov. 14
OSHER BLUE: Second Creditors' Meeting Slated for Nov. 16
RESIMAC 2017-1: S&P Assigns Prelim BB (sf) Rating to Class E RMBS
THERMA TRUCK: Second Creditors' Meeting Set for Nov. 14
TRICO CONSTRUCTIONS: Ferrier Hodgson Appointed as Liquidators
C H I N A
CHINA HONGQIAO: Asks Court to Block Negative Research Reports
DANDONG PORT: Defaults on CNY1 Billion Corporate Bond
I N D I A
ADISHAKTI ALLOYS: ICRA Moves 'D' Rating to Not Cooperating
ADVANTAGE OVERSEAS: Ind-Ra Lowers Issuer Rating to 'BB'/Stable
ANDHRA FERRO: ICRA Moves D Rating to Not Cooperating Category
ANISHA ENTERPRISES: ICRA Moves B Rating to Not Cooperating
ANTONY WASTE: Ind-Ra Migrates B+ Issuer Rating to Non-Cooperating
COASTAL ENERGEN: ICRA Reaffirms D Rating on INR6113.79cr Loan
ENERGO ENGINEERING: ICRA Moves D Rating to Not Cooperating
EVERGREEN FARMHOUSE: Ind-Ra Migrates B+ Rating to Non-Cooperating
GANESH STEEL: Ind-Ra Assigns BB Issuer Rating, Outlook Stable
JANTA LAND: ICRA Lowers Rating on INR250cr Term Loan to 'D'
JEEVISHA FOODS: ICRA Moves B+ Rating to Not Cooperating Category
KAJAH TRADING: CRISIL Reaffirms B+ Rating on INR1.5MM Cash Loan
KAY ENN: CRISIL Assigns 'B' Rating to INR9MM Cash Loan
KS SOFTNET: ICRA Lowers Rating on INR25cr Loan to 'D'
LRC ABARANA: ICRA Moves B+ Rating to Not Cooperating Category
LUCKNOW HEALTHCITY: CRISIL Reaffirms B+ Rating on INR9.5MM Loan
M. J. INDUSTRIES: CRISIL Hikes Rating on INR7MM Cash Loan to B+
MID WEST BUILDERS: ICRA Moves B Rating to Not Cooperating
MMS STEEL: Ind-Ra Rates INR170MM Working Capital Loan 'BB'
NEELKANTH COAL: CRISIL Assigns B+ Rating to INR10MM Cash Loan
RELIANCE COMMUNICATIONS: Not Paying Interest on Bonds Under SDR
ROAR RESORT: CRISIL Assigns 'B' Rating to INR10MM Term Loan
S.K. HEIGHTS: ICRA Moves B+ Rating to Not Cooperating Category
SAI BHARATHI: Ind-Ra Affirms B+ Issuer Rating, Outlook Stable
SAMSON AND SONS: CRISIL Cuts Rating on INR14MM Project Loan to D
SCIENTIFICA TILES: CRISIL Assigns 'B' Rating to INR27.8MM Loan
SREE GURU: CRISIL Reaffirms B+ Rating on INR5MM Cash Loan
SREE GURU RAGHAVENDRA: CRISIL Reaffirms B+ INR5.64M Loan Rating
SUMMA REAL MEDIA: Ind-Ra Assigns BB Issuer Rating, Outlook Stable
SUSEE TRUCKS: ICRA Reaffirms 'B' Rating on INR5.0cr Cash Loan
SVE CASTINGS: ICRA Withdraws D Rating on INR8.50cr Loan
THANGAMMAN TEXTILES: CRISIL Assigns 'D' Rating to INR3.86MM Loan
TIRUPATI AGENCIES: CRISIL Reaffirms B- Rating on INR7MM Loan
TRIMEX INDUSTRIES: ICRA Moves D Rating to Not Cooperating
VM APPARELS: Ind-Ra Migrates B+ Issuer Rating to Non-Cooperating
N E W Z E A L A N D
PTT LIMITED: FMA Files Criminal Charges Against Steven Robertson
- - - - -
=================
A U S T R A L I A
=================
BEAM TECHNOLOGY: Second Creditors' Meeting Set for Nov. 14
----------------------------------------------------------
A second meeting of creditors in the proceedings of Beam
Technology Australia Pty. Ltd. has been set for Nov. 14, 2017, at
11:00 a.m., at the offices of Cor Cordis, One Wharf Lane, Level
20, 161 Sussex 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 Nov. 13, 2017, at 4:00 p.m.
Jason Tang and Andre Lakomy of Cor Cordis were appointed as
administrators of Beam Technology on Oct. 17, 2017.
CMK JOINERY: First Creditors' Meeting Set for Nov. 15
-----------------------------------------------------
A first meeting of the creditors in the proceedings of CMK
Joinery Australia Pty Ltd will be held at the offices of
Worrells Solvency & Forensic Accountants, Suite 1 Level 15, 9
Castlereagh Street, in Sydney, New South Wales, on Nov. 15, 2017,
at 2:30 p.m.
Nicholas Craig Malanos of Worrells Solvency & Forensic
Accountants were appointed as administrators of CMK Joinery on
Nov. 6, 2017.
COUNTRY CREDITS: Second Creditors' Meeting Set for Nov. 16
----------------------------------------------------------
A second meeting of creditors in the proceedings of Country
Credits Pty Ltd has been set for Nov. 16, 2017, at 10:00 a.m., at
the offices of Pearce & Heers, Level 12, 127 Creek Street, in
Brisbane, Queensland.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Nov. 15, 2017, at 2:00 p.m.
Mark William Pearce of Pearce & Heers was appointed as
administrator of Country Credits on Oct. 12, 2017.
EMECO HOLDINGS: S&P Alters Outlook to Stable & Affirms 'B-' CCR
---------------------------------------------------------------
S&P Global Ratings said that it had revised its rating outlook to
stable from negative on Emeco Holdings Ltd., an Australia-based
mining equipment rental company.
S&P said, "At the same time, we affirmed the 'B-' corporate
credit rating and issue rating on Emeco and its senior secured
debt, respectively. The recovery rating on the senior secured
debt issue remains at '4', reflecting our expectation of average
recovery of about 35% in the event of a payment default."
S&P revised the outlook to stable to reflect its increasing
confidence that Emeco's credit metrics would improve in fiscal
2018 due to increasing earnings from a recovery in trading
conditions in the mining equipment rental industry, and a full
year of earnings from Orionstone and Andy's Earthmovers (both of
them were merged with Emeco in March 2017).
Furthermore, Emeco's proposed acquisition of Force Equipment Pty
Ltd. (Force Equipment) will lift its revenue and earnings without
increasing its gross debt. That's because Emeco will raise AUD80
million of underwritten equity (of which AUD67 million under the
institutional entitlement offer was raised on Nov. 2, 2017) to
fully fund the acquisition of Force Equipment, including
transaction costs and general working capital. S&P expects
Emeco's funds from operations (FFO) to debt (including six
months' earnings contribution from Force Equipment) to increase
to the high teens in the year ending June 30, 2018. Its debt to
EBITDA is likely to reduce to the high 3x in fiscal 2018, from
3.5% and 7.5x respectively in fiscal 2017.
S&P said, "We believe industry conditions are bottoming out,
offering opportunities for Emeco to improve operating fleet
utilization and revenue. Commodity prices have recovered strongly
over the past six to 12 months, including prices of coal in which
Emeco has a significant exposure. Mining companies have modestly
increased capital expenditure and maintenance spend recently,
following a sharp reduction on capital spending during the recent
downturn. As a result, the mining equipment rental market has
tightened and could lead to an increase in equipment rental rates
as the market becomes more balanced.
"That said, the equipment rental market is fragmented with some
oversupply, and remains highly exposed to the cyclical mining
industry. We therefore expect the rate increase to be gradual
until significant investment in the mining sector returns.
"Nevertheless, we expect Emeco's revenue to increase materially
in fiscal 2018. In fiscal 2018, Orionstone and Andy's Earthmovers
will contribute the first full year of earnings to the group. The
integration of these two businesses is in line with Emeco's
expectation. We expect Emeco's EBITDA margin to increase slightly
to reflect cost efficiency and synergy benefits from the merger,
and an uptick in demand for rental equipment with improving
trading conditions. That said, Emeco's earnings remain sensitive
to commodity price cycles. Its credit metrics could deteriorate
materially if there is a material fall in commodity prices that
affect mine production and could lead to softer demand for
equipment."
The proposed acquisition of Force Equipment would further boost
Emeco's earnings and provide opportunities for synergy benefits.
In addition, the acquisition will expand Emeco's maintenance
services offering, and improve Emeco's customer and commodity
exposure diversification, in particular to gold projects. Post
the acquisition, Emeco will have a more balanced exposure across
the states, with increasing exposure to gold. Gold prices have
held up well compared with other commodities in 2015 and 2016.
The AUD80 million equity raising to fund the acquisition, in
S&P's view, has placed Emeco's capital structure on a more
sustainable footing. The structure provides some buffer to any
earnings pressure should improved trading conditions reverse.
Emeco targets a leverage ratio of 1.5x (net debt to operating
EBITDA) by fiscal 2020.
Emeco is the largest equipment rental company in Australia with
revenues of AUD205 million in fiscal 2017 and 760 machines plus
ancillary equipment at the end of fiscal 2017. During the fourth
quarter of 2017, Emeco's commodity exposure is 32% from thermal
coal, 18% from coking coal, 18% from gold, 16% from copper, 4%
from bauxite, 3% from civil works, 2% from iron ore, and 6% from
other commodities.
S&P said, "The stable outlook reflects our expectation that Emeco
would maintain adequate liquidity and increase its earnings due
to improving trading conditions and recent acquisitions. We
expect Emeco to generate FFO to debt in the high teens and debt
to EBITDA in the high 3x in 2018.
"We could lower the ratings if Emeco's liquidity position weakens
because of sustained negative free operating cash flows, such
that we consider the company's capital structure to be
unsustainable. This scenario could occur amid a reversal of
improved industry trading conditions in the equipment rental
industry, which could stem from a material fall in commodity
prices."
A higher rating is less likely while the principal amount of the
US$355.9 million notes issued by Emeco Pty Ltd. remains largely
unhedged.
GALLOP INTERNATIONAL: ASIC Obtains Interim Freezing Orders
----------------------------------------------------------
The Australian Securities and Investments Commission has obtained
interim injunctions in the Federal Court against Gallop
International Group Pty Ltd (GIG), Gallop Asset Management Pty
Ltd (GAM) and Mr Ming-Chien Wang, freezing money held in their
bank accounts and restraining them from carrying on a financial
services business in Australia without holding an Australian
Financial Services licence.
GIG and GAM are also required to deactivate the websites
www.gallopfx.com.au and www.gamfx.com. The websites promote
trading in forex, metals and contracts for difference.
ASIC believes that GIG, GAM and Wang are carrying on an
unlicensed financial services business. Neither GIG or GAM holds
an Australian Financial Services licence, and therefore are not
authorised to provide financial services in Australia.
The interim orders will remain in force until further order. The
proceedings have been listed for further directions on Nov. 23,
2017.
ASIC's investigation is continuing.
MAC TELEMETRY: Second Creditors' Meeting Set for Nov. 14
--------------------------------------------------------
A second meeting of creditors in the proceedings of Mac Telemetry
Pty Ltd and Mac Telemetry IP Pty Ltd has been set for Nov. 14,
2017, at 10:00 a.m., at the offices of KordaMentha, Level 5,
Chifley Tower, 2 Chifley Square, 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 Nov. 13, 2017, at 4:00 p.m.
Rahul Goyal and Scott Langdon of KordaMentha were appointed as
administrators of Mac Telemetry on Oct. 10, 2017.
OSHER BLUE: Second Creditors' Meeting Slated for Nov. 16
--------------------------------------------------------
A second meeting of creditors in the proceedings of Osher Blue
Pty Limited has been set for Nov. 16, 2017, at 10:30 a.m., at the
offices of CRS Insolvency Services, Level 5, 379 Kent 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 Nov. 15, 2017, at 5:00 p.m.
Anthony John Warner of CRS Insolvency Services was appointed as
administrator of Osher Blue on Oct. 13, 2017.
RESIMAC 2017-1: S&P Assigns Prelim BB (sf) Rating to Class E RMBS
-----------------------------------------------------------------
S&P Global Ratings assigned preliminary ratings to six classes of
prime and nonconforming residential mortgage-backed securities
(RMBS) to be issued by The New Zealand Guardian Trust Co. Ltd. as
trustee of the RESIMAC Versailles Trust - RESIMAC Versailles
Trust Series 2017-1.
The preliminary ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including the fact that this is a closed
portfolio, which means no further loans will be assigned to
the trust after the closing date.
-- S&P's view that the credit support is sufficient to withstand
the stresses it applies. This credit support comprises note
subordination, lenders' mortgage insurance on 6.6% of the
portfolio and excess spread (if any).
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including an amortizing
liquidity facility equal to 0.75% of the initial aggregate
amount of the notes, principal draws and a excess spread
reserve are sufficient under our stress assumptions to ensure
timely payment of interest on the rated notes.
-- The extraordinary expense reserve of NZ$150,000, funded at
transaction close and available to meet extraordinary
expenses. The reserve will be topped up via excess spread if
drawn.
-- The benefit of a fixed-to-floating interest-rate swap to be
provided by Westpac Banking Corp. and Bank of New Zealand to
hedge the mismatch between receipts from fixed-rate mortgage
loans and the variable-rate RMBS.
A copy of S&P Global Ratings' complete report for RESIMAC
Versailles Trust - RESIMAC Versailles Trust Series 2017-1 can be
found on RatingsDirect, S&P Global Ratings' Web-based credit
analysis system, at http://www.capitaliq.com.
PRELIMINARY RATINGS ASSIGNED
Class Rating Amount (mil. NZ$)
A1 AAA (sf) 175.000
A2 AAA (sf) 46.875
B AA (sf) 8.250
C A (sf) 7.500
D BBB (sf) 5.250
E BB (sf) 3.250
F NR 3.875
NR--Not rated.
THERMA TRUCK: Second Creditors' Meeting Set for Nov. 14
-------------------------------------------------------
A second meeting of creditors in the proceedings of Therma Truck
Pty Limited has been set for Nov. 14, 2017, at 2:30 p.m., at the
offices of Veritas Advisory at Level 5, 123 Pitt 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 Nov. 13, 2017, at 4:00 p.m.
David Iannuzzi and Steve Naidenov of Veritas Advisory were
appointed as administrators of Therma Truck on Oct. 10, 2017.
TRICO CONSTRUCTIONS: Ferrier Hodgson Appointed as Liquidators
-------------------------------------------------------------
Robyn Duggan and Morgan Kelly of Ferrier Hodgson were appointed
Liquidators of Trico Constructions Pty Ltd on Nov. 6, 2017.
"The Liquidators now control the Company and are assessing its
financial position. The Company is no longer trading and
consequently all contractor agreements have been terminated,"
Ferrier Hodgson said in a statement.
"The Liquidators will be writing to creditors shortly providing
further details of their appointment."
Trico Constructions Pty Ltd provides residential construction
services.
=========
C H I N A
=========
CHINA HONGQIAO: Asks Court to Block Negative Research Reports
-------------------------------------------------------------
Don Weinland at The Financial Times reports that China Hongqiao,
the world's largest aluminium maker and a target for short
sellers, has applied for an injunction to block negative reports
on the company published earlier this year by Emerson Analytics.
The FT relates that the attempt to remove reports circulating for
months was uncommon, people in the hedge fund industry said.
However, short-sellers have faced setbacks this year when taking
on Hong Kong-listed Chinese groups, highlighted by the ruling
against US-based Citron Research over a report on Chinese
property developer Evergrade, the FT says.
According to the FT, Hongqiao, which has an annual aluminium
capacity of 6.46m tonnes, has battled short-sellers for years
over claims it has not been straightforward with its financial
reporting.
The FT relates that this week Hongqiao said in a filing to the
stock exchange that it had applied for an injunction to block two
reports by Emerson that, among other things, claimed it had
inflated its profits by understating its energy costs. A hearing
will be held on November 27, according to the filing cited by the
FT.
The FT says companies often take short-sellers to court and seek
damages following reports that question their financial
reporting. However, the attempt to block reports that have been
published is a novel move, according to people familiar with the
industry.
"This is already widely circulated," said one person at a hedge
fund in Hong Kong, pointing out that a block on the reports would
do little to stop the spread of the information, the report
relays.
The FT notes that the original report from Emerson Analytics
early this year forced Hongqiao to suspend trading in March. Its
shares jumped more than 70 per cent last week when it resumed
trading after a seven-month suspension. Hongqiao closed up
slightly on Nov. 6 at HK$12.58, the FT discloses.
Several other short sellers have targeted Hongqiao in various
reports over the past two years, raising similar concerns, the FT
states. Analysts covering the company said the rise in its share
price was a response to the increase in valuation among its peers
during the time it was frozen.
"The valuation was much lower compared to its peers after being
frozen for seven months," the report quotes Kevin Guo, an analyst
at Guotai Junan Securities in Shenzhen, who downplayed the short
reports, as saying. "The company has clarified all of these
questions already."
Emerson Analytics has targeted several other Chinese groups with
short sell reports this year, the FT notes. The identity of the
people behind Emerson is not known. It its latest report it
stated that "we are determined to expose as much of the fraud in
the Chinese stock market as we can," the FT adds.
China Hongqiao Group Limited is a China-based investment holding
company principally engaged in the manufacturing and sales of
aluminum products. Its primary products include molten aluminum
alloy, aluminum alloy ingots, aluminum busbars and aluminum alloy
processing products. It operates principally in the People's
Republic of China (the PRC), Hong Kong, and overseas countries,
including the British Virgin Island (BVI), Indonesia and Cayman
Island. The Company is also engaged in the bauxite trading,
financial leasing and environmental protection and inspection
businesses through its subsidiaries.
As reported in the Troubled Company Reporter-Asia Pacific on
Oct. 2, 2017, S&P Global Ratings said that it has reviewed its
issue-level rating of China Hongqiao Group Ltd.'s senior
unsecured debt that was labeled as "under criteria observation"
(UCO) after publishing its revised issue ratings criteria,
"Reflecting Subordination Risk in Corporate Issue Ratings" on
Sept. 21, 2017. With S&P's criteria review complete, it is
removing the UCO designation from the rating and are lowering its
issue rating on China Hongqiao's US$300 million senior unsecured
debt to 'B-' from 'B'. The issue rating remains on CreditWatch
with negative implications, where it was placed on March 24,
2017.
DANDONG PORT: Defaults on CNY1 Billion Corporate Bond
-----------------------------------------------------
Sidney Leng at South China Morning Post reports that Dandong Port
Group - which manages the largest Chinese port trading with North
Korea - defaulted on a CNY1 billion (US$150.38 million) corporate
bond last week, after sluggish business hit profitability.
Nearly 90% of North Korea's foreign trade is with China, and at
least two-thirds of trade between North Korea and China goes
through border city Dandong, in Liaoning province, the report
discloses. The port city is a gateway for Chinese trade with
countries in Northeast Asia and has an annual throughput of 200
million tonnes. Official data does not reveal how much of that is
with North Korea, the report notes.
But relations between Beijing and Pyongyang have soured, with
China under pressure from countries including the United States
to do more to rein in North Korea's nuclear weapons ambitions,
the Post says. The port of Dandong has been particularly hard hit
by Beijing's move to ban imports of coal, textiles and seafood -
and cut off oil shipments to the isolated regime - in line with
UN Security Council sanctions, the report states.
Until the bans, one thriving business at the port was imports of
anthracite - a type of coal that burns with little flame and
smoke - from North Korea, the Post notes. The country became
China's biggest source of anthracite in 2013, beating Vietnam,
and the following year the coal became China's No 1 import from
North Korea.
Business had slowed after Beijing stopped North Korean boats
transporting coal from docking at the Dandong port at the end of
2015. China then halted all coal imports from North Korea in
August, the Post says.
The port group was founded in 2005 by four Hong Kong-based
companies, the Post discloses. It is indirectly controlled by
local firm China Rilin Construction Group. Rilin chairman Wang
Wenliang was one of 45 members expelled from the National
People's Congress, China's legislature, in a vote-buying scandal
last year.
In a disclosure to the Shanghai Stock Exchange on Oct. 30,
Dandong Port said it could not make the CNY1 billion principal on
a three-year bond that was issued with 5.86% interest in 2014 and
due on October 30, according to the Post.
The Post relates that the announcement caught many investors off
guard as the company had not put out any advance risk warnings
that it would default, as is required.
According to the Post, the company said in a half-year bond
report released in August that the bond was "normal" but did not
rule out the possibility of being unable to repay it as the
company's overall debt level remained high.
Some 76% of the company was financed by debt by the end of June,
according to the bond report. Of its total debt of CNY37.1
billion, close to half would be due within one year, the Post
says.
"As the port's economic situation weakens, throughput has also
fallen," the report, as cited by the Post, said. "At the same
time, our logistics business has declined, eroding our revenue."
In the first half, Dandong Port's revenue fell by 14.75% from a
year ago to CNY2.83 billion, the Post discloses. Its main
businesses - port handling, storage and logistics - all fared
worse in the first half than in the previous year.
Chinese rating agency United Ratings in June downgraded its
outlook on two bonds issued by Dandong Port from "stable" to
"negative," the Post discloses.
=========
I N D I A
=========
ADISHAKTI ALLOYS: ICRA Moves 'D' Rating to Not Cooperating
----------------------------------------------------------
ICRA has moved the long-term rating of the INR7.25-crore fund-
based cash-credit limit of Adishakti Alloys Private Limited to
'Issuer Not Cooperating' category. ICRA has also moved the short-
term rating of the INR14.45 crore non-fund based limits of the
company to 'Issuer Not Cooperating' category. The rating is now
denoted as "[ICRA]D ISSUER NOT COOPERATING."
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-limit- 7.25 [ICRA]D Reaffirmed; ISSUER
Cash-credit facility NOT COOPERATING; Rating
moved to the 'Issuer Not
Cooperating' category
Non-fund-based-limit 14.45 [ICRA]D Reaffirmed; ISSUER
NOT COOPERATING; Rating
moved to the 'Issuer Not
Cooperating' category
Rationale
The rating is based on no significant updated information on the
entity's performance since the time it was last rated in April,
2016. The lenders, investors and other market participants are
thus advised to exercise appropriate caution while using this
rating as the rating does not adequately reflect the credit risk
profile of the entity. The entity's credit profile may have
changed since the time it was last reviewed by ICRA; however, in
the absence of requisite information, ICRA is unable to take a
definitive rating action.
As part of its process and in accordance with its rating
agreement with AAPL, ICRA has been trying to seek information
from the entity so as to monitor its performance, but despite
repeated requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information and in
line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated
November 1, 2016, ICRA's Rating Committee has taken a rating view
based on the best available information.
Key rating drivers
Credit strengths
* Acceptable product quality: AAPL has received repeat orders
from its customers demonstrating its acceptable product quality.
Credit weaknesses
* Delay in debt servicing: AAPL has delayed its debt servicing on
bank loans availed by them.
* Significant deterioration in the financial risk profile of the
company during FY2016: The company has reported significant
losses during FY2016 leading to erosion of its tangible networth
during the year.
AAPL, incorporated in 1995, is engaged in manufacturing aluminium
alloy ingots and billets mostly from recycled aluminium scrap.
The company's manufacturing facility is located in West Bengal
and its products are used in power transmission, auto components
and other engineering units.
ADVANTAGE OVERSEAS: Ind-Ra Lowers Issuer Rating to 'BB'/Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Advantage
Overseas Private Limited's (AOPL) Long-Term Issuer Rating to 'IND
BB' from 'IND BBB-'. The Outlook is Stable. The instrument-wise
rating actions are:
-- INR0.285 mil. Fund-based working capital limits downgraded
with IND BB/Stable rating; and
-- INR70 mil. Non-fund-based working capital facilities
downgraded with IND A4+ rating.
KEY RATING DRIVERS
The downgrade reflects the higher-than-expected deterioration in
AOPL's operational metrics in FY17. The top line substantially
declined to INR15,133 billion in FY17 (FY16: INR988.35 billion).
This was because an increase in hedging cost resulted in the
shrinking of the already thin trading margins, making most of the
transaction uneconomical. Management's expectation of revenue for
FY17 was INR508.70 billion. AOPL registered revenue of INR59
billion for 1QFY18 (1QFY17: INR69 billion). However, EBITDA
margin (including interest income and hedging cost) improved to
1.2% in FY17 (FY16: 0.4%) mainly on account of an improvement in
the interest spread (interest income-hedging cost) to 39% (9%).
FY17 financials are provisional in nature.
AOPL faces immense competition - both domestically and
internationally - given low-entry barriers. AOPL's thin trading
margins reflect the low-value-additive nature of its business.
The company's revenues and EBIDTA margins depend on global
commodity prices, which are based on global demand-supply
dynamics.
The rating action further reflects the company's deteriorated
interest coverage ratio and liquidity in FY17. AOPL's interest
coverage (EBITDA/interest) fell to 1.34x (FY16: 6.7x) mainly on
account of a sharp increase in interest cost to INR1.36 billion
(INR0.566 billion), despite a substantial decrease in trading
activity. The increase in the interest cost was mainly on
account of a onetime payment of interest on a loan which was
stipulated to be paid at the time of maturity of loan. AOPL's use
of the bank lines was around 95% on average for the 12 months
ended August 2017. However, the leverage ratio remained
comfortable with gross debt/EBITDA at 0.63x in FY17 (FY16: 1.59x)
as the company's working capital borrowings reduced in proportion
to revenue reduction.
The ratings remain constrained by AOPL's concentrated revenue
profile. Although the company trades in a wide range of
agricultural products (around 44), it faces product concentration
risks, with soybean accounting for 71% of its FY17 revenue (FY16:
51%). Its top five customers accounted for more than 90% of the
turnover in FY17.
The ratings are supported by AOPL's strong network of 15 brokers
in Asia, Latin America and North America, through which it
sources commodities and sells them to end-customers spread across
the Middle East and Southeast Asia.
Moreover, AOPL's business model is low risk given that its
contracts are largely structured in a back-to-back manner,
thereby eliminating commodity risks. Also, the company deploys
prudent hedging policies minimising its forex exposure.
The ratings are further supported by AOPL's founders' experience
of over a decade in the agricultural commodities industry.
RATING SENSITIVITIES
Negative: Further deterioration in the operational or credit
profile could lead to a negative rating action.
Positive: A significant improvement in the credit metrics and
liquidity could lead to a positive rating action.
COMPANY PROFILE
AOPL was incorporated in 2004 but commenced operations in FY08.
It is engaged in the bulk trade of agro commodities such as soya,
rice, wheat and other allied products.
ANDHRA FERRO: ICRA Moves D Rating to Not Cooperating Category
-------------------------------------------------------------
ICRA has moved the ratings for the INR112.00 crore bank
facilities of Andhra Ferro Alloys Limited (AFAL) to the 'Issuer
Not Cooperating' category. The rating is now denoted as: "[ICRA]D
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based 45.00 [ICRA]D; ISSUER NOT COOPERATING;
Rating moved to the 'Issuer Not
Cooperating' category
Non Fund Based 25.00 [ICRA]D; ISSUER NOT COOPERATING;
Rating moved to the 'Issuer Not
Cooperating' category
Fund Based 8.50 [ICRA]D; ISSUER NOT COOPERATING;
Rating moved to the 'Issuer Not
Cooperating' category
Unallocated 33.50 [ICRA]D; ISSUER NOT COOPERATING;
Rating moved to the 'Issuer Not
Cooperating' category
Rationale
The rating is based on no updated information on the entity's
performance since the time it was last rated in March, 2016. The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating as the
rating does not adequately reflect the credit risk profile of the
entity. The entity's credit profile may have changed since the
time it was last reviewed by ICRA; however, in the absence of
requisite information, ICRA is unable to take a definitive rating
action.
As part of its process and in accordance with its rating
agreement with AFAL, ICRA has been trying to seek information
from the entity so as to monitor its performance, but despite
repeated requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information, and in
line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated
November 1, 2016, ICRA's Rating Committee has taken a rating view
based on the best available information.
Key rating drivers
Credit strengths
* Experienced promoters and established track record of the
company: The promoters have over three decades of experience in
the ferro alloy industry
* Reputed customer profile: The company's customer profile
includes established players such as Rashtriya Ispat Nigam
Limited (RINL) in the domestic market and exports to various
countries including South Korea, Thailand, Malaysia, Hong Kong,
Singapore etc.
* Diversified product portfolio: The company primarily exports
ferro chrome to various countries and supplies silico manganese
to customers in the domestic market mainly to RINL. Also, the
unit has the flexibility to change the product mix depending upon
market requirement.
Credit weaknesses
* High inventory days backed by bulk import of raw materials,
this exposes the company to raw material price fluctuations risk:
The company generally maintains an inventory of 180 days and
holds 90 days of inventory for domestic purchases. Its
Profitability is exposed to volatility in ferro chrome and silico
manganese price realizations as well as chromites and manganese
ore prices
* Significant project execution risk as the unit 2 expansion is
currently in civil works stage: Debt funded capital expenditure
is likely to adversely impact the capital structure and debt
coverage indicators
* Cyclical nature of ferro alloy industry: Cash flows are exposed
to the cyclicality in the steel industry, AFAL's profitability is
largely dependent on the Ferro Alloy prices in a particular year
as seen in the past
* Lack of captive raw material sources exposes the company to the
volatility in the raw material prices Major raw materials
required in the production process are Mn ore, Coke/Coal,
dolomite, and Quartz. Depending upon product and quality required
of the end-product, ore with Manganese (Mn) content ranging
between 25%-45% is sourced either from the domestic market or
imported.
* Tight liquidity position: This is evident from high utilization
of its working capital limits resulting from high inventory
levels; recent devolvement of LC resulted in overutilization of
working capital limits
Incorporated in 1986, Andhra Ferro Alloys Limited is engaged in
the production of ferro alloys. The company has two units - unit1
is located at Srinivasanagar, Pendurthi, Vizianagaram district
(installed capacity is 3.5 million volt ampere (MVA)) and unit 2
is located at Garbham, Vizianagaram district (installed capacity
of 15.5 MVA). The unit 1 was dismantled during February 2009 and
AFAL is setting up 11MVA capacity ferro alloy unit each at unit 1
and 2. The total cap-ex at unit 2 is INR26.34 crore funded by a
term loan of INR15.00 crore and is expected to be completed by
April 2016. The total capex at unit 1 is INR27.56 crore and was
proposed to be funded by term loan of INR17.00 crore; however the
company has deferred the construction of unit 1. AFAL is promoted
and managed by Mr. Brajendra Khandelwal who has over 25 years of
experience in the ferro alloy industry.
ANISHA ENTERPRISES: ICRA Moves B Rating to Not Cooperating
----------------------------------------------------------
ICRA has moved the ratings for the INR15.00-crore bank facilities
of Anisha Enterprises (AE) to the 'Issuer Not Cooperating'
category. The rating is now denoted as "[ICRA]B (Stable) ISSUER
NOT COOPERATING."
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Fund-based 15.00 [ICRA]B (Stable); ISSUER
NOT COOPERATING; Rating
moved to the 'Issuer not
cooperating' category
Rationale
As part of its process and in accordance with its rating
agreement with AE, ICRA has been trying to seek information from
the company so as to undertake a surveillance of the ratings, but
despite repeated requests by ICRA, the company's management has
remained non-cooperative. In the absence of requisite
information, ICRA's Rating Committee has taken a rating view
based on best available information. In line with SEBI's Circular
No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, the
company's rating is now denoted as: "[ICRA]B (Stable) ISSUER NOT
COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
Key rating drivers
Credit strengths
* Long track record of the promoters in the tobacco trading
business: The promoters have established track record with more
than five decades of experience in tobacco trading business
* Presence in major tobacco growing area of Andhra Pradesh: The
firm is situated in Ongole region of Andhra Pradesh, providing
easy availability of tobacco and ease in doing business
Credit weaknesses
* Small scale of operations: The scale of operations of the
company are constrained by small scale of operations with
revenues of INR4.61 crore in FY2015
* High working capital utilization: The working capital
utilization of the firm remained high owing to high inventory
levels.
Founded in 2014, as a partnership firm, Anisha Enterprises (AE)
is engaged in the tobacco trading and processing business. The
firm is promoted by Mr. Damacharla Janardhana Rao and Mrs.
Damacharla Naga Satya Latha, who have more than five decades of
experience in the tobacco trading business.
ANTONY WASTE: Ind-Ra Migrates B+ Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Antony Waste
Handling Cell Private Limited's Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will now appear as 'IND B+(ISSUER NOT COOPERATING)' on the
agency's website. The instrument-wise rating actions are
-- INR330 mil. Fund-based working capital limits migrated to
non-cooperating category with IND B+(ISSUER NOT
COOPERATING)/IND A4(ISSUER NOT COOPERATING) rating; and
-- INR330 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 18, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Antony Waste Handling Cell was incorporated on 17 January 2001.
The company executes solid waste management contracts of various
municipal corporations of major cities.
COASTAL ENERGEN: ICRA Reaffirms D Rating on INR6113.79cr Loan
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating at [ICRA]D for the
INR7728.99 crore (enhanced from INR7586.20 crore) bank facilities
and INR25.21 crore (earlier nil) unallocated limits of Coastal
Energen Private Limited. ICRA has also reaffirmed the short-term
rating of [ICRA]D for the INR40.00 crore (reduced from INR208.00
crore) company's bank facilities.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 6,113.79 [ICRA]D; Reaffirmed
Cash Credit 1,150.00 [ICRA]D; Reaffirmed
Short-term Non-
fund Based 40.00 [ICRA]D; Reaffirmed
Long-term Non-
fund Based 465.20 [ICRA]D; Reaffirmed
Unallocated limit 25.21 [ICRA]D; Reaffirmed
Rationale
In September 2016, ICRA had assigned the Default category ratings
to CEPL's bank facilities in view of the ongoing delays in debt
servicing. CEPL was unable to service its loans then because of a
stretched liquidity position owing to delays in receipt of
payments from Tamil Nadu Generation and Distribution Corporation
Limited (TANGEDCO), its key counterparty for power sales. Later,
the lenders of CEPL invoked the Strategic Debt Restructuring
(SDR) scheme as a resolution option with reference date of
December 30, 2016. As a result, the standstill clause now applies
to CEPL's debt-servicing obligations and will remain applicable
till June 2018. While one of CEPL's 600-MW thermal power
generation units is operational (and has a power purchase
agreement or PPA with TANGEDCO), the other unit of equivalent
capacity is yet to enter into a PPA with a buyer. Even though
CEPL does not have any scheduled debt-servicing obligations till
June 2018; in ICRA's view, it would be challenging for the
company to be able to enter into a PPA for its second 600-MW unit
before the standstill clause expires. This is due to the surplus
capacity scenario in the country at present and the likelihood of
subdued electricity demand growth. Further, CEPL's liquidity
profile remains stretched owing to significant delays in receipt
of payments for power sales made to TANGEDCO from the first 600-
MW unit of the imported coal-based power project. While the plant
load factor (PLF) for Unit-1 has remained low, ICRA notes that
the plant availability factor for the same has remained
satisfactory. This enables the company to bill capacity charges
to TANGEDCO as per the terms of the long-term PPA. Although the
company has pass through for exchange rate fluctuations in energy
charges as per the PPA terms, its tariff cost competitiveness
would remain exposed to fluctuations in international coal
prices.
Going forward, the ability of the company to service debt
obligations in a timely manner, secure a long-term PPA for Unit-2
and achieve satisfactory operational parameters will be the key
rating sensitivities.
Key rating drivers
Credit strengths
* Limited offtake risk for Unit-1: Presence of the long-term PPA
with TANGEDCO for the entire capacity of 600 MW.
Credit challenges
* Delays in signing PPA for Unit-2 led to delays in debt
servicing and invocation of SDR scheme: High offtake risk
associated with Unit-2 in the absence of any firm long-term PPA.
Delays in the signing of the PPA for 600 MW of Unit-2 has
resulted in delays in servicing debt obligations and caused the
lenders to invoke the SDR scheme with reference date of December
30, 2016. While the standstill clause applies on debt repayment
under the SDR up to June 2018, signing of a PPA within this date
is a challenge.
* High counterparty credit risk: Significant delays in
receivables from TANGEDCO (up to 120-150 days) for 600 MW of
Unit-1.
* Risks inherent in competitively bid tariff: Exposure to risks
inherent in competitively bid tariffs given the high capital
costs and the project's operations using imported coal.
* Margins exposed to fluctuations international coal prices:
While the company has pass through for exchange rate fluctuations
in energy charges as per the PPA terms, its tariff cost
competitiveness would remain exposed to variations in
international coal prices.
CEPL is a special purpose vehicle (SPV) promoted by Mr. Ahmed
Buhari (promoter of the Coal & Oil Group) for the development of
a 1200-MW imported coal-based thermal power plant at Tuticorin in
Tamil Nadu. The Coal & Oil Group is a Dubai-based energy
conglomerate that operates as an integrated fuel solution
provider with interests in coal trading, technical consultancy
for fuel sourcing, handling, shipping, logistics etc. The
flagship company of the Group is Coal & Oil Company DMCC (C&O).
The total project cost for CEPL of INR7,870 crore was funded
through debt-equity ratio of 80:20. Unit-1 of 600 MW commenced
operations from December 2014 and Unit-2 from January 2016.
ENERGO ENGINEERING: ICRA Moves D Rating to Not Cooperating
----------------------------------------------------------
ICRA has moved the rating for the INR1312.75 crore bank
facilities of Energo Engineering Projects Limited (EEPL) to the
'Issuer Not Cooperating' category. The rating is now denoted as
"[ICRA]D ISSUER NOT COOPERATING"
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loans 22.75 [ICRA]D ISSUER NOT COOPERATING
Rating moved to the 'Issuer Not
Cooperating' category
Fund Based Limits 140.0 [ICRA]D ISSUER NOT COOPERATING
Rating moved to the 'Issuer Not
Cooperating' category
Non Fund Based
Limits 1150.0 [ICRA]D ISSUER NOT COOPERATING
Rating moved to the 'Issuer Not
Cooperating' category
Rationale
The rating is based on limited or no updated information on the
entity's performance since the time it was last rated in January
2016. The lenders, investors and other market participants are
thus advised to exercise appropriate caution while using this
rating as the rating does not adequately reflect the credit risk
profile of the entity. The company's credit profile may have
changed since the time it was last reviewed by ICRA; however, in
the absence of requisite information, ICRA is unable to take a
definitive rating action.
As part of its process and in accordance with its rating
agreement with Energo Engineering Projects Limited, ICRA has been
trying to seek information from the company so as to monitor its
performance, but despite repeated requests by ICRA, the company's
management has remained non-cooperative. In the absence of
requisite information, and in line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's
Rating Committee has taken a rating view based on the best
available information.
Key rating drivers
Credit Strengths
* Long track record in providing Engineering Procurement:
Construction (EPC)/turnkey solutions of Balance of Plant (BOP)
requirements of Power Plants which includes coal handling, ash
handling, water systems, instrumentation, civil work etc
Credit Weaknesses
* Continued delays in debt servicing on account of the company's
stretched liquidity position
Incorporate as a sole proprietorship in 1987, EEPL is engaged in
providing EPC/ turnkey solutions of Balance of Plant (BOP)
requirements of Power Plants which includes coal handling, ash
handling, water systems, instrumentation, civil work etc. In BOP,
the company has focus on coal handling and ash handling. The
services include design, manufacture, fabrication, supply, site
construction, erection, commissioning and testing as well as
operations & maintenance on turnkey basis. The factory is located
at Coimbatore, Tamil Nadu on a land area of 400,000 sq. ft. with
manufacturing area enclosed in 150,000 sq. ft. EEPL also provides
consultancy services to power plants in the form of residual life
assessment studies, assessment of renovation and modernization
requirements and suggesting cost-effective method for improving
the efficiencies of the existing systems, besides energy audits
and independent performance testing. EEPL has a portfolio in EPC
contracting of more than 20,000 MW.
EVERGREEN FARMHOUSE: Ind-Ra Migrates B+ Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Evergreen
Farmhouse LLP's (EF) Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND B+(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating action is:
-- INR70 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
November 2, 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 2014, EF is a partnership firm that constructs
residential properties. Its registered office is in Jhansi
(Madhya Pradesh). Its project, Shree Ganesh Vihar, consists of 31
duplexes.
GANESH STEEL: Ind-Ra Assigns BB Issuer Rating, Outlook Stable
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Ganesh Steel &
Alloys Limited (GSAL) a Long-Term Issuer Rating of 'IND BB'. The
Outlook is Stable. The instrument-wise rating actions are:
-- INR70.00 mil. Fund-based working capital limits assigned with
IND BB/Stable rating; and
-- INR27.40 mil. Non-fund-based working capital limits assigned
with IND A4+ rating.
KEY RATING DRIVERS
GSAL's ratings reflect its moderate scale of operations, credit
metrics and liquidity position on account of low utilisation of
its actual production capacity. In FY17, the company achieved
revenue of INR650 million (FY16: INR503 million) interest
coverage (operating EBITDA/gross interest expense) of 3.9x
(6.5x), net leverage (adjusted net debt/operating EBITDAR) of
5.1x (4.9x), operating EBITDA margin of 2.8% (2.6%). The firm
utilised 70.4% of its fund-based facility for the 12 months ended
September 2017.
The credit metrics declined in FY17 due to an increase in
interest cost along with the increase in total debt. EBITDA
margin improved on account of a decline in operating expenses.
The ratings also factor in high customer concentration risk as
one of the company's customers accounts for 36.7% of its total
revenue.
However, the ratings benefits from the company's promoters' more
two decades experience in the steel industry.
RATING SENSITIVITIES
Positive: A substantial improvement in the scale of operations,
operating margin and net leverage will be positive for the
ratings.
Negative: Deterioration in the operating profitability leading to
deterioration in the credit metrics will be negative for the
ratings.
COMPANY PROFILE
GSAL was incorporated during 1995 as a public Limited company in
Kolkata, West Bengal. The entity primarily manufactures steel
ingots at its facility in Serampore, West Bengal. The company is
managed by three of its directors Mr. S.K. Nahata, Mr. N.M. Baid
and Mr. Pavitra Dudhoria.
JANTA LAND: ICRA Lowers Rating on INR250cr Term Loan to 'D'
-----------------------------------------------------------
ICRA has revised the long-term rating assigned to the INR250.0-
crore term loans of Janta Land Promoters Pvt Ltd. (JLPL) from
[ICRA]BBB (stable) to [ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 250.0 [ICRA]D; Revised from
[ICRA]BBB(Stable)
Rationale
The revision of JLPL's rating takes into account the
irregularities in debt servicing by the company on account of
stretched liquidity position owing to slowdown in booking and
collection coupled with continuing high project expenses in order
to complete the construction to improve saleability of the units
as well as to hand over the possession ahead of registration
under real estate regulatory authority (RERA) Act. The rating is
also constrained by exposure to market risk and funding risks, as
majority of the project expenses are to be met through customer
booking and collections, which have been impacted due to slowdown
in the real estate market. The rating continues to derive comfort
from long experience of JLPL's promoters in real estate market,
healthy execution across majority of the projects of the company
and its large & fully-paid-for land bank, which is favourably
located in proximity to new airport in Chandigarh and proposed IT
city in Mohali.
Key rating drivers
Credit strengths
* Long experience of promoters: Established track record in
developing real estate projects in Mohali and Ludhiana in the
state of Punjab
* Robust land bank: Large, fully-paid-for, land bank in Mohali
provides visibility of launches
* Favorable location: Projects in Mohali (Punjab) are
attractively located due to their close proximity to
international airport and under-implementation Information
Technology city
* Healthy execution: Execution across all the projects of the
company has been good
Credit weaknesses
* Irregularities in debt servicing: the company has delayed in
repayment to the banks due to stretched liquidity position
* Slowdown in real estate market and challenging regulatory
environment: Slowdown in real estate market, coupled with impact
of demonetisation, RERA & GST, have adversely impacted bookings
and cash flows
* Market Risk: Majority of the area in company's largest project,
Flacon View, is still unsold despite being launched more than
four years back and incurring considerable costs
* Financing Risk: Large part of the cost of 'Super Mega Project'
is to proposed to be funded through customer advances leading to
funding risks
Incorporated in 2003, Janta Land Promoters Private Limited
(earlier known as Janta Land Promoters Limited) is engaged in
commercial, industrial, retail and residential real estate
development in the cities of Mohali and Ludhiana in Punjab and
Kasauli in Himachal Pradesh. JLPL was promoted by its current
managing director, Mr. Kulwant Singh. The promoters started their
first venture in the form of a plotting project in Ludhiana. In
Mohali, the company is developing projects in sectors 90, 91, 94,
95, 82, 83 and 66A. Total area under development is more than 8
million sq ft.
JEEVISHA FOODS: ICRA Moves B+ Rating to Not Cooperating Category
----------------------------------------------------------------
ICRA has moved the long-term rating on the INR10.30-crore bank
facilities of Jeevisha Foods Private Limited to the 'Issuer Not
Co-operating' category. The long-term rating is now denoted as
"[ICRA]B+(stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based Limits 10.30 [ICRA]B+(stable); ISSUER NOT
COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
Rationale
The rating is based on no updated information on the company's
performance since the time it was last rated in April 2016. The
last rating exercise was based on detailed information. The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating as it
does not adequately reflect the credit risk profile of the
entity. The entity's credit profile may have changed since the
time it was last reviewed by ICRA. However, in the absence of
requisite information, ICRA is unable to take a definitive rating
action.
As a part of its process and in accordance with its rating
agreement with JFPL, ICRA has been seeking information from the
entity so as to monitor its performance. Despite repeated
requests by ICRA, the entity's management has remained non-
cooperative. In the absence of requisite information and in line
with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated
November 1, 2016, ICRA's Rating Committee has taken a rating view
based on the best available information.
Key rating drivers
Credit strengths
* Experienced promoters with long presence in the industry
* Presence in a major rice growing area results in easy
availability of paddy
Credit weaknesses
* Intense competition in the rice milling industry limits pricing
flexibility
* Agro-climatic risks such as adverse weather conditions that can
affect the availability of paddy
Jeevisha Foods Private Limited was incorporated in 2013 and is
engaged in milling of basmati rice. The manufacturing unit of the
firm is based in Kaithal (Haryana) with a milling capacity of 8
tonnes per hour (TPH) and has sortex machinery with a capacity of
8 TPH. The operations of the firm are actively managed by Mr.
Nikhil Chhabra.
KAJAH TRADING: CRISIL Reaffirms B+ Rating on INR1.5MM Cash Loan
---------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable/CRISIL A4' ratings on
the bank facilities of Kajah Trading Private Limited (KTPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit/
Overdraft facility 1.5 CRISIL B+/Stable (Reaffirmed)
Overdraft 5.0 CRISIL A4 (Reaffirmed)
The ratings continue to reflect the company's below-average
financial risk profile because of its modest scale and working
capital intensive operations, and susceptibility to changes in
government regulations. These weaknesses are partially offset by
the extensive experience of the promoters in the beedi industry,
and their funding support.
Analytical Approach
For arriving at its ratings, CRISIL has treated unsecured loans
extended to the company by its promoters as neither debt nor
equity, as the loans are expected to remain in the business over
the medium term.
Key Rating Drivers & Detailed Description
Weaknesses
* Below-average financial risk profile: Financial risk profile is
below average with networth at INR2.2 crore and gearing at 3.79
times as on March 31, 2017. The capital structure remains
aggressive. Debt protection metrics was average with interest
coverage of 1.6 times and NCATD of 0.05 times during fiscal 2017.
* Modest scale and working capital intensive operations: Small
scale is reflected in operating income of INR26.64 crore during
fiscal 2017. The industry is highly fragmented, with presence of
several small and medium-size industries, leading to intense
competition in the sector. Furthermore, gross current assets were
at 152 days, driven by inventory of 35 days, as on March 31,
2017.
* Susceptibility to volatility in raw material prices and changes
in regulations: The company is vulnerable to the risk of
unfavorable supply of raw materials tobacco and tendu patta, and
to volatility in their prices. Also, it is susceptible to
regulations imposed by the government from time to time regarding
the tobacco industry.
Strength
* Promoters' industry experience and funding support: The company
will benefit from its promoters' experience of more than 5
decades in the tobacco industry. Moreover, they have supported
operations through unsecured loans as and when required.
Outlook: Stable
CRISIL believes KTPL will continue to benefit from its promoters'
extensive industry experience and its established brands. The
outlook may be revised to 'Positive' if a significant and
sustainable increase in revenue and profitability results in
substantial rise in net cash accrual, leading to better
liquidity. The outlook may be revised to 'Negative' if the
company is adversely impacted by regulatory change, or if working
capital management weakens, or if the company undertakes large,
debt funded capital expenditure, leading to deterioration in
liquidity and capital structure.
KTPL was established in 1982 as a partnership firm, and was
reconstituted as a private limited company in 2001. It
manufactures beedis, which are sold in Maharashtra and Karnataka
under the Kajah brand. The company gets beedis manufactured on
jobwork basis from contractors in Maharashtra, and also procures
beedis from manufacturers in West Bengal and Odisha.
KAY ENN: CRISIL Assigns 'B' Rating to INR9MM Cash Loan
------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating on the
long-term bank facility of Kay Enn Trading (Kay).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 9 CRISIL B/Stable (Assigned)
The rating reflects a small scale of operations due to the
initial stage, and large working capital requirement. These
rating weaknesses are partially offset by an established brand,
and the extensive experience of the partners in the apparel
trading industry.
Key Rating Drivers & Detailed Description
Weaknesses:
* Small scale of operations: Revenue is expected to be modest at
INR18 crore for fiscal 2018 due to the initial stage of
operations. Moreover, revenue is concentrated in Kerala, although
the brand is established in the state.
* Large working capital requirement: Gross current assets are
estimated to have been high at over 322 days as on March 31,
2017, primarily led by large inventory because of the wide
product portfolio. However, the cash-based nature of sales and
credit from suppliers mitigate working capital intensity.
Strength:
* Extensive industry experience of the promoters: The six-decade
experience of the promoters, longstanding presence of the Kasmi
family spanning seven decades in the textile retail and wholesale
business, good brand recall in Kerala, and established
relationships with suppliers, should continue to support the
business risk profile.
Outlook: Stable
CRISIL believes Kay will continue to benefit from its established
presence in the retail textile industry, and extensive experience
of its partners. The outlook may be revised to 'Positive' if
there is a ramp up in revenue and sustenance of profitability, or
sizeable capital infusion, thus strengthening the financial risk
profile. The outlook may be revised to 'Negative', in case of a
substantial decline in revenue and profitability, a stretched
working capital cycle, any major debt-funded capital expenditure,
or withdrawal of capital by the partners, resulting in weakening
of the financial risk profile.
Kay, established by Mr K N Abdul Gafoor, commenced operations in
July 2016. The firm is a distributor and retailer of readymade
garments and fabrics.
KS SOFTNET: ICRA Lowers Rating on INR25cr Loan to 'D'
-----------------------------------------------------
ICRA has revised the long-term rating on the INR15.00 crore fund
based limit of KS Softnet Solutions Private Limited (KSSSPL) to
[ICRA]D from [ICRA]B-. ICRA has also revised the short-term
rating to [ICRA]D from [ICRA]A4 on the INR25.00 crore non-fund
based limit of KSSSPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based Limit 15.00 [ICRA]D; Revised from
[ICRA]B-
Non-Fund Based Limit 25.00 [ICRA]D; Revised from
[ICRA]A4
Rationale
The revision in rating factors in the recent delays in servicing
debt obligations because of a weak liquidity position, arising
out of a stretched receivable position and significant delays in
project completion. The bank limits also remains fully utilised.
Key rating drivers
Credit weaknesses
* Delay in debt servicing due to weak liquidity position
* Financial risk profile characterised by weak debt coverage
indicators and high working capital intensity: The debt profile
of the company largely consists of working capital short-term
loans. As on March 31, 2016, the gearing of the company stood at
1.31 times and the debt coverage indicators remained weak with
interest coverage ratio at 1.39 times and NCA/Total Debt at 8%.
The working capital intensity remains stretched because of the
longer receivable turnaround time. The company offers a credit
period of up to 60 days to it clients, while the same gets
stretched, resulting in higher debtor days that stood at 485 days
as on March 31, 2017.
* Significant delays in ongoing projects and cost over-runs: The
company undertakes contracts for construction and modernisation
of Interstate and International Border Check Posts. KSSSPL faces
significant delays in its ongoing projects because of delays in
site hand-over and various other issues regarding the recognition
and timely payment of incremental costs/ damages by Government
agencies.
KS Softnet Solutions Pvt. Ltd. (KSSSPL) was incorporated in 2002
by Mr. Dinesh Agrawal, and is engaged in developing interstate
and international check posts for Government entities. The
company started out as an authorised partner of Microsoft
Corporation (USA) for the distribution of software products in
Mumbai and adjoining regions, before diversifying into the
construction of integrated check posts (ICP) in 2006.
KSSSPL recorded a net profit of INR0.90 crore on an operating
income of INR51.66 crore for the financial year ended March 31,
2016, as against a net profit of INR0.42 crore on an operating
income of INR37.30 crore for the year ended March 31, 2015.
LRC ABARANA: ICRA Moves B+ Rating to Not Cooperating Category
-------------------------------------------------------------
ICRA has moved the rating for the INR15.00-crore bank facilities
of LRC Abarana Maaligai (LRC) to the 'Issuer Not Cooperating'
category. The rating is now denoted as "[ICRA]B+ (Stable) ISSUER
NOT COOPERATING"
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term-Fund-based 15.00 [ICRA]B+(Stable) ISSUER NOT
COOPERATING; Rating moved
to the 'Issuer Not
Cooperating' category
Rationale
The rating is based on no updated information on the company's
performance since the time it was last rated in April, 2016. The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating, as the
rating does not adequately reflect the credit risk profile of the
company. The company's credit profile may have changed since the
time it was last reviewed by ICRA; however, in the absence of
requisite information, ICRA is unable to take a definitive rating
action.
As part of its process and in accordance with its rating
agreement with LRC Abarana Maaligai, ICRA has been trying to seek
information from the company so as to monitor its performance,
but despite repeated requests by ICRA, the company's management
has remained non-cooperative. In the absence of requisite
information, and in line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's
Rating Committee has taken a rating view based on the best
available information.
Key rating drivers
Credit strengths
* Long industry experience of the proprietor: The proprietor of
the entity, Mr. C. Ravishankar, has extensive experience of
nearly five decades in jewellery retailing.
* Healthy growth in revenues: The operating income of the entity
witnessed healthy growth in FY2015 aided by opening of a new
showroom in March 2014.
Credit weaknesses
* Nominal profitability: The intense competition existing in the
gold and silver jewellery industry coupled with rapid expansion
by larger players keep the profit margins of the entity under
check. Further, the profitability is also vulnerable to
fluctuations in gold prices.
* Moderate financial profile: The financial profile of the entity
is characterised by stretched capital structure due to low net
worth position and high reliance on external debt for meeting
working capital requirements.
Established in 1958, LRC is a Hindu Undivided Family (HUF),
engaged in retailing of gold, silver, and diamond jewellery in
Attur, Salem (District), Tamil Nadu. The entity has two
showrooms, the one located at Bazaar Street of Attur with a 288
square feet showroom space and another located opposite to Attur
bus stand with a showroom space of 5,940 square feet. Mr. C
Ravishankar, the proprietor, has extensive experience of nearly
five decades in jewellery retailing and he handles the day-to-day
operations of the entity.
LUCKNOW HEALTHCITY: CRISIL Reaffirms B+ Rating on INR9.5MM Loan
---------------------------------------------------------------
CRISIL Ratings has reaffirmed its rating on the bank facilities
of Lucknow Healthcity Trauma Centre and Superspeciality Hospital
Private Limited (LHPL) at 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 9.5 CRISIL B+/Stable (Reaffirmed)
The rating reflects LHPL's modest scale as fiscal 2017 being the
first full year of operations, along with limited capacity and
exposure to geographic concentration in revenue. These weaknesses
are partially offset by the extensive experience of promoters in
the healthcare industry, along with revenue sharing model with
the top management.
Key Rating Drivers & Detailed Description
Weaknesses
* Geographic concentration in revenue: Operations are limited to
Lucknow (Uttar Pradesh), with patients primarily from around the
same region. Geographical concentration of the hospital's
customer base renders it vulnerable to the dynamics of a single
market. Furthermore, the hospital remains vulnerable to
competition from other government and private hospitals in the
region.
* Small scale due to limited capacity: Scale is modest, with
operating income at INR17.6 crore in fiscal 2017, the first full
year of operations. The company has significant upcoming
repayment obligations (expected at INR1.9 crore for fiscal 2018).
Adequate scale up of accrual (Rs 1.9 crore in fiscal 2017) to
support repayments and growth in operations will remain key
rating sensitivity factors.
Strengths
* Promoters' extensive experience in the healthcare field: Dr
Sandeep Kapoor has an experience of over 25 years in the
healthcare industry. Dr Sandeep Garg has experience of more than
20 years in Lucknow region as an interventional orthopaedic
physician at Sahara Hospital. Promoters' extensive experience has
helped LHPL to scale up revenue to INR17.6 crore in its first
full year of operations.
* Revenue sharing model with the top management and heads of
departments: LHPL follows a revenue sharing model with the top
management, while the remaining staff is on fixed payroll.
However, the revenue share to key management personnel is subject
to adequacy of accrual to meet debt obligations. This aids the
company in liquidity management in early years of operations
while also allowing the top management to participate in the
company's growth.
Outlook: Stable
CRISIL believes LHPL will continue to benefit over the medium
term from its promoters' extensive experience. The outlook may be
revised to 'Positive' in case of sustained occupancy rate and
more-than-expected net cash accrual, while maintaining its
capital structure. Conversely, the outlook may be revised to
'Negative' if deterioration in capital structure or a significant
drop in occupancy adversely impacts financial risk profile.
Incorporated in 2012 as a private limited company, LHPL, promoted
by a set of medical professionals led by Dr Sandeep Kapoor and Dr
Sandeep Garg, operates a 100 bed speciality hospital at Lucknow.
It provides primarily surgical care to patients across
orthopaedics, cardiology, urology, gastroenterology, internal
medicine, intensive care, medicine, neurology, and other
emergency services.
M. J. INDUSTRIES: CRISIL Hikes Rating on INR7MM Cash Loan to B+
---------------------------------------------------------------
CRISIL Ratings has upgraded its rating on the long-term bank
facilities of M. J. Industries (MJI) to 'CRISIL B+/Stable' from
'CRISIL B/Stable.'
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 7 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Proposed Long Term 1 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL B/Stable')
Term Loan 1.25 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects CRISIL's expectation of above-average
liquidity, aided by prudent working capital requirement reflected
by gross current asset of around 150 ' 160 days in past couple of
years and absence of any major capital expenditure (capex) plans.
Bank limit utilization averaged 46% for the 12 months through May
2017. Consequently, total outside liabilities to adjusted net
worth improved to 5.7 times as on March 31, 2017, from 9.5 times
as on March 31, 2015, and may decline further in the medium term.
The upgrade also reflects improvement in business risk profile,
with the operating income having grown at a compound annual rate
of 21% over the past five fiscals, to INR25.75 crore in fiscal
2017, and expected to sustain in the medium term.
Analytical Approach
Unsecured loans of Rs. 1.97 crore, as on March 31 2017, extended
by MJI's promoters, have been treated as neither debt nor equity.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations: Despite compounded annual growth
rate of 21% for past five fiscals, MJI has small scale of
operations with operating income of Rs. 25.75 growth and expected
to remain small owing to intense competition in highly fragmented
rice milling industry.
* Below-average financial risk profile: Financial risk profile is
weak, marked by high TOL/ANW ratio of 5.7 times as on March 31
2017, and low adjusted interest coverage ratio of 1.49 times for
fiscal 2017. The ratios are expected to remain at similar levels
over the medium term, with the small scale of operations and weak
profitability, leading to low accretion to reserves.
Strength
* Extensive experience of the partners: Longstanding presence of
the promoters, of over 15 years through other ventures in the
rice industry, and their healthy relationships with customers and
suppliers, will continue to support the business risk profile.
Outlook: Stable
CRISIL believes MJI will continue to benefit from the extensive
experience of its partners. The outlook may be revised to
'Positive' if a sizeable capital infusion, better working capital
management, or a ramp-up in scale of operations, strengthens
financial risk profile. The outlook may be revised to 'Negative'
if the financial risk profile weakens, most likely because of
significant increase in inventory and working capital debt,
decline in sales, or any large capex.
MJI is a partnership firm set up in 1998, by Mr Kewal Krishna, Mr
Pawan Kumar, and Mr Rakesh Kumar. The firm mills and processes
paddy into basmati rice.
MID WEST BUILDERS: ICRA Moves B Rating to Not Cooperating
---------------------------------------------------------
ICRA has moved the ratings for the INR8.00-crore bank facilities
of Mid West Builders Private Limited (MWBPL) to the 'Issuer Not
Cooperating' category. The rating is now denoted as:
"[ICRA]B(Stable) ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Fund- 8.0 [ICRA]B(Stable); ISSUER NOT
based-Term Loan COOPERATING; Rating moved
to the 'Issuer Not
Cooperating' category
Rationale
The rating is based on no information about the entity's
performance since the time it was last rated in April, 2016. The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating as the
same does not adequately reflect the credit risk profile of the
entity. The entity's credit profile may have changed since the
time it was last reviewed by ICRA. However, in the absence of
requisite information, ICRA is unable to take a definitive rating
action.
As a part of its process and in accordance with its rating
agreement with MWBPL, ICRA has been trying to seek information
from the entity to monitor its performance. Despite repeated
requests by ICRA, the entity's management has remained non-
cooperative. In the absence of requisite information, and in line
with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated
November 1, 2016, ICRA's Rating Committee has taken a rating view
based on the best available information.
Key rating drivers
Credit strength
* Significant experience of promoters in the real estate industry
Credit weaknesses
* Intense competition led to reduced bargaining power
* Vulnerability of sales to the real-estate demand and
competition
Vaishnovi Builders, promoted by Mr. V.V.S. Pratap, has been
engaged in developing real-estate projects in South India for
past two decades offering services in residential and commercial
segments. Mr. Pratap has started developing real estate projects
in Bangalore in the name of Mid West Builders Pvt Ltd in July,
2014.
MMS STEEL: Ind-Ra Rates INR170MM Working Capital Loan 'BB'
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated MMS Steel & Power
Pvt Ltd's (MSPPL) debt facilities as follows:
-- INR170 mil. Working capital facility* assigned with IND
BB/Stable rating
-- INR40 mil. Letter of credit assigned with IND BB/Stable
rating.
* INR2.5 million reduction every month from May 2017 to
March 2018. MSPPL also received a temporary working capital
sanction of INR7.5 million in July 2017 according to management.
KEY RATING DRIVERS
The rating is constrained by MSPPL's diminishing plant load
factor, fuel tie-up related disputes with Oil and Natural Gas
Commission (ONGC) at Nallur plant, and reduced operational
efficiencies at Nagaipatanam plant and cross company movements of
funds. The project has unresolved gas pricing issues with ONGC
for almost three years beginning November 2014, and this has led
to the grinding halt of the plant from then on. The management
expects gas supply from ONGC to resume by end-November 2017,
which is key for the sustenance of the ratings. The plant
observed a plant load factor of 28.52% in FY17, which was lower
than eight years' historical average of 53%.
The rating is also constrained by the absence of ring fencing of
cash flows. The company has extended loans to group companies and
other related parties for five years which amounted to INR334.99
million on 31 July 2017. This resulted in tight liquidity and the
project company to meet its core operations has resorted to
working capital funds and ad-hoc sanctions in working capital in
FY18. The absence of ring fencing of cash flow will elevate the
stress on liquidity and may lead to overutilisation of the cash
credit limit, if the cash diversion is not contained.
Ind-Ra expects revenue to improve after the project company
increases its total capacity to 32.32MW by adding a new 9MW
engine at the Nagaipattnam plant and resuming operations at the
Nallur plant. Although the company had abundant gas supply
historically (FY12-FY14), the regulated gas price mechanism and
availability of the fuel could mar the operational profile.
The rating is supported by MSPPL's comfortable receivables.
Brakes India Private Limited, which is the major off-taker of
power (74% of overall capacity) and one of the sponsors, and
other off-takers make payments within 25 days on an average.
Weighted average tariff was around INR5.5/kWh in FY17 and the
project's average debt service coverage ratio is around 1.2x in
Ind-Ra's base case estimates.
RATING SENSITIVITIES
Negative: Future developments that could, individually or
collectively, lead to a negative rating action include:
-- substantial delays in the commencement of the operations
at the Nallur plant and a further reduction in operational
efficiencies at the Nagapatinam facility;
-- elevated stress on the liquidity including risks stemming from
the diversion of funds to related parties or increased
counterparty risks; and
-- a reduction in average tariff and debt service coverage ratios
lower than the Ind-Ra's base case.
COMPANY PROFILE
MMSPL, sponsored by KVK Energy & Infrastructure Private Limited,
is an SPV incorporated to develop and operate power projects. The
company has 17.2MW natural gas-based power plants at Nagapattinam
and 6.12MW at Nallur in Tamil Nadu, and commenced operations on
Dec. 14, 2003. MMSPL also had a 1.5MW wind power plant which was
sold to Karur Sree Rama Trading Private Limited in June 2017.
NEELKANTH COAL: CRISIL Assigns B+ Rating to INR10MM Cash Loan
-------------------------------------------------------------
CRISIL Ratings has revoked the suspension of its rating on the
long-term bank facility of Neelkanth Coal Manufacturing Private
Limited (NCMPL) and assigned its 'CRISIL B+/Stable' rating to the
facility. CRISIL had suspended the ratings on October 18, 2016,
as NCMPL had not provided information required for a rating
review. The company has now shared the requisite information,
enabling CRISIL to assign the rating.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B+/Stable (Assigned;
Suspension Revoked)
The rating reflects modest scale and working capital-intensity in
operations, below average financial risk profile and its presence
in fragmented salt producing industry which is also susceptible
to vagaries of weather conditions. These weaknesses are partly
offset by the promoters' extensive entrepreneurial experience and
their funding support.
Analytical Approach
For arriving at the ratings, CRISIL has treated as neither debt
nor equity, preference share capital of INR2.24 crore and
unsecured loans of INR6 crore that NCMPL has received from the
promoters. That is because the preference share capital and loans
are expected to remain in the business over the medium term.
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale of operations and operating profitability: Over
the 3 fiscals through 2017 scale of operations remained modest at
INR29.5-31.5 crore, while operating profitability was average at
5.5-6.8%. Revenue and profitability are expected to remain modest
over the medium term.
* Working capital-intensive operations: Gross current assets were
high at 239 days as on March 31, 2017, driven by high receivable
and inventory of 154 days and 84 days, respectively. The
operations are expected to remain working capital intensive. Any
further elongation in working capital cycle may impact liquidity.
* Constrained financial risk profile: Small networth of INR2.59
crore, coupled with high gearing and total outside liability to
tangible networth ratio of 4.69 times and 12.33 times
respectively as on March 31, 2017 constrains financial risk
profile. Moreover, debt protection metrics are weak, with
interest coverage ratio and net cash accrual to total debt of
1.48 times and 0.05 time respectively as on March 31, 2017.
Strengths:
* Promoters' extensive entrepreneurial experience and established
relationships with customers and suppliers: NCMPL is part of the
Gandhidham-based Neelkanth group which was founded by Mr
Sadhabhai Kangad in 1968. The group has presence in several
businesses such as salt manufacturing, civil construction,
corrugated box manufacturing, water supply, transportation and
coke manufacturing. Benefits from the extensive entrepreneurial
experience of the current management - the Kangad and Sorathiya
families, and their established relationships with customers and
suppliers should continue to support business risk profile.
* Funding support from promoters: During fiscal 2017, the
promoters' extended unsecured loan of INR2.47 crore taking
overall unsecured loan to INR6 crore.
Outlook: Stable
CRISIL believes NCMPL will continue to benefit from the
promoters' extensive entrepreneurial experience and funding
support. The outlook may be revised to 'Positive' if revenue,
profitability and cash accrual improve substantially, supporting
working capital management and strengthening financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
low cash accrual, further elongation in working capital cycle, or
any large debt funded capital expenditure weakens financial risk
profile and liquidity.
Incorporated in December 2003, Neelkanth Coal Manufacturing Pvt.
Ltd. (NCMPL) is part of Gandhidham-based Neelkanth group. The
company's present management consists of Mr Arjan Kangad, Mr
Naran Sorathiya and their families. NCMPL was initially formed
for manufacturing of low ash meteorological coke. However, from
2012, it manufactures industrial salt. The manufacturing facility
at Gandhidham, Gujarat, has an installed capacity of over 1 lakh
tonne per annum.
Profit after tax (PAT) was INR0.26 crore on operating income of
INR31.27 crore for fiscal 2017, against PAT of INR0.01 crore on
operating income of INR31.35 crore for fiscal 2016.
RELIANCE COMMUNICATIONS: Not Paying Interest on Bonds Under SDR
---------------------------------------------------------------
Economic Times reports that Reliance Communications on Nov. 6
said that it is not making any payments of interest or principal
to its lenders and bondholders.
'For the time being, no payment of interest and/or principal is
being made to any lenders and/or bondholders of RCOM', said the
telco in a regulatory filing on Nov. 6, ET relays.
According to the report, the company said that it is in a
standstill period under a strategic debt restructuring program
that it has agreed to with lenders under which there is a
standstill on Rcom's payments of all loan obligations till
December 2018.
A media report said the interest payment of about $9.75 million
for Rcom's $300 million 6.50 percent notes maturing November 2020
was due on Nov. 6, ET relates. The missed payment will be a first
one on US dollar bond for the Anil Ambani owned operator, the
report states.
ET notes that the operator is going through strategic debt
restructuring (SDR). It has presented a fresh "zero write-off"
plan to its lenders, under which banks could convert some of its
debt and take a 51% stake in the telecom operator, the report
says. Banks could then raise funds by selling the telco's towers
and spectrum to potential buyers, including Reliance Jio, and
monetize real estate assets.
Of its over INR45,000 crore debt, the joint lenders forum (JLF)
could convert Rs 7,000 crore of debt into equity; raise INR17,000
crore through sale of assets such as telecom towers and spectrum
and another INR10,000 crore via sale of real estate, according to
ET.
ROAR RESORT: CRISIL Assigns 'B' Rating to INR10MM Term Loan
-----------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
long-term bank facilities of Roar Resort Private Limited (RRPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Term Loan 10 CRISIL B/Stable (Assigned)
The rating reflects exposure to risks of implementation,
stabilisation, and commensurate ramp-up in sales of the proposed
expansion project. The rating also factors in a below-average
financial risk profile, and nascent stage of operations leading
to low occupancy. These weaknesses are partially offset by the
favourable location of the resort, and benefits from tie-ups with
travel and tour planners and online portals for booking.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to risks of implementation, stabilisation, and
commensurate ramp-up in sales of the proposed expanded capacity:
Construction of the proposed addition of 34 rooms is yet to start
and the loan yet to be sanctioned. Construction is expected to
start by the end of fiscal 2018. Hence, there is exposure to
risks of implementation, stabilisation and commensurate ramp-up
in sales.
* Below-average financial risk profile: The gearing was high as
on March 31, 2017, on account of a small networth. Debt
protection metrics were moderate with interest coverage and net
cash accrual to total debt ratios of 9.88 times and 0.04 time,
respectively, in fiscal 2017.
* Nascent stage of operations leading to low occupancy: The
resort became operational only from April 2016. The occupancy
rate has remained low to average which has resulted in small
scale of operations with revenue of INR1.38 crore in fiscal 2017.
Strengths
* Locational advantage: The resort is located in Jim Corbett
National Park, Uttarakhand. The park attracts several leisure
travellers, thus providing customers for the resort.
* Tie-ups with travel and tour planners and online portals for
booking: The company has tie-ups with off-line travel and tour
planners and online portals such as Make My Trip, Yatra, and
Hotels.com, which could help in improving occupancy.
Outlook: Stable
CRISIL believes RRPL will benefit from the favourable location of
the resort. The outlook may be revised to 'Positive' in case of
timely stabilisation of operations at the expanded capacity,
along with higher-than-expected average room rates and occupancy,
resulting in a substantial increase in cash accrual and thus in a
better financial risk profile. The outlook may be revised to
'Negative' in case of delays in stabilisation of operations at
the expanded capacity, or lower-than-expected cash accrual on
account of low occupancy, or/and any debt-funded capital
expenditure, leading to deterioration in the financial risk
profile.
Incorporated in 2015, RRPL is promoted by Mr Raghav Gupta and Ms
Rupesh Gupta. The company is engaged in the hospitality business
and operates a resort (four-star category) in Jim Corbett
National Park. The resort started operations in April 2016.
Net profit is estimated at INR0.02 crore on net revenue of
INR1.38 crore for fiscal 2017.
S.K. HEIGHTS: ICRA Moves B+ Rating to Not Cooperating Category
--------------------------------------------------------------
ICRA has moved the ratings for the INR15.00 crore bank facilities
of S.K. Heights Private Limited to the 'Issuer Not Co-operating'
category. The rating is now denoted as: "[ICRA]B+ (Stable) ISSUER
NOT CO-OPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based-Term Loans 15.00 [ICRA]B+(Stable) ISSUER NOT
CO-OPERATING; Rating moved
to the 'Issuer Not Co-
operating' category
Rationale
As part of its process and in accordance with its rating
agreement with SKHPL, ICRA has been trying to seek information
from the firm so as to undertake a surveillance of the ratings,
but despite repeated requests by ICRA, the firm's management has
remained non-cooperative. In the absence of requisite
information, ICRA's Rating Committee has taken a rating view
based on best available information. In line with SEBI's Circular
No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, the
firm's rating is now denoted as: "[ICRA]B+ (stable) ISSUER NOT
COOPERATING". The lenders, investors and other market
participants may exercise appropriate caution while using this
rating, given that it is based on limited or no updated
information on the company's performance since the time it was
last rated.
Key rating drivers
Credit strengths
* Longstanding experience of the promoters in construction of
hotels, residential and commercial projects: The company was
incorporated in December 2009 as a private limited company under
the name of S.K. Heights Private Limited. The promoters have more
than 25 years experience in the construction business and are
also involved in hospitality and retail showroom business. The
promoters have an established track record of executing
residential and commercial projects in the past in Mumbai which
ensures adequate planning and execution capability of the Company
in completing the present project.
* Favorable location of the project in proximity to a well
established residential area of Dahisar: The project is located
at Dahisar (East), Mumbai near the Dahisar Check Naka. The
project is easily accessible from the Western Express Highway,
Dahisar and Borivili Railway Stations (~4.0 km and ~5.5 km from
the project location respectively), and International and
Domestic Airport which increases accessibility for the project.
The project also draws the advantage of its proximity to well-
developed social and physical infrastructure like malls, schools
and hospitals.
* 100% of the total promoter funding in place; bank funding has
also been tied up: With 100% of the promoter funding in place and
the bank funding tied up, the funding risk associated with the
project is reduced to a certain extent.
* Clear land title for the ongoing project; key regulatory
approvals in place
Credit weaknesses
* Exposure to selling risks for unsold portion of the ongoing
project: Till December 31, 2015, the company had tied-up sales
for 42% of the total saleable area (1.15 lakh sq.ft. of the total
2.74 lakh sq.ft. saleable area) at an average rate of INR6,303/
sq. ft. Going forward, the ability of the company to tie up the
sales for the un-booked units and realize timely
payments/advances from customers would remain critical from the
credit perspective.
* Around 71% of the balance project cost is to be met from
customer advances which are contingent on timing of bookings and
collections from customers: The project relies heavily on
customer advances which account for 61% of total estimated
project cost. The funding risk for the project remains
substantial as ~71% of balance project cost of INR59.95 crore is
to be funded by customer advances which are contingent on timely
bookings and collections from customers.
* Like other real estate players, the company is exposed to the
risk of slowdown in demand, falling property prices and inherent
cyclicality in the sector
* Competition from other ongoing projects from established
developers in the surrounding areas
Incorporated in December 2009, S.K. Heights Private Limited is a
Mumbai based developer currently undertaking the construction of
a residential project at Dahisar East, Mumbai called "Imperial
Heights".
The promoters Mr. Karim J. Maredia and Mr. Amirali J. Maredia
have more than 25 years experience in the construction business
and have interest in the real estate and the hospitality sector
and are partners and directors at various retail showrooms like
Nike, and hotels like Comfort Inn Heritage Hotel, Hotel Fariyas,
Hotel Sahil etc.
Key Financial Indicators
The firm has not recognised any sales in the last two fiscals.
The amount in Work-In-Progress (WIP) is majorly towards land
purchase and construction cost incurred for the ongoing project.
SAI BHARATHI: Ind-Ra Affirms B+ Issuer Rating, Outlook Stable
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Sai Bharathi
Homes' (SB Homes) Long-Term Issuer Rating at 'IND B+'. The
Outlook is Stable. The instrument-wise rating action is:
-- INR130 mil. Fund-based limit affirmed with IND B+/Stable
rating.
KEY RATING DRIVERS
The affirmation reflects completion of project, Capital Square
and receipt of occupancy certificate in August 2017. However,
saleability risks still exist as the firm sold only 38 flats of
its share of 106 flats at end-October 2017. Management plans to
sell the majority of the flats in FY18 and FY19 in a phased
manner to get the better pricing of ready-to-move units.
The ratings are constrained by the cash flow mismatch risks that
could arise if unit sales are lower than Ind-Ra's expectations,
as bank funding constitutes around 44% of the project cost.
The ratings continue to factor in the partnership structure of
the organisation.
However, the ratings continue to benefit from the project's
locational advantage as it is situated near the new capital city
of Amaravati in Andhra Pradesh. The ratings also remain
supported by the partners' operational track record of completing
five projects and experience of around a decade in the real
estate segment.
RATING SENSITIVITIES
Negative: Future developments that could stress cash flow for
timely debt service and lead to a negative rating action include:
- a substantial slowdown in sales
- additional debt to fund new projects
Positive: A substantial sale of housing units with timely receipt
of cash flow from customers, leading to stronger cash flow, could
lead to a positive rating action.
COMPANY PROFILE
SB Homes was set up in 2014. It is engaged in real estate
development involving construction and sale of multi-unit
residential apartments and commercial complexes in Guntur City
(Andhra Pradesh). The firm's current project Capital Square is a
residential housing project comprising 110 flats.
SAMSON AND SONS: CRISIL Cuts Rating on INR14MM Project Loan to D
----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Samson and
Sons Builders And Developers Private Limited (SSBDPL) for
obtaining information through letters and emails dated January
20, 2017, and February 10, 2017 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Project Loan 14 CRISIL D (Issuer Not
Cooperating; Downgraded
from 'CRISIL B/Stable')
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
CRISIL has downgraded its ratings on the bank facilities of
SSBDPL to 'CRISIL D' from 'CRISIL B/Stable'.
The downgrade reflects delays in servicing term debt because of
weak liquidity and cash flow mismatches.
The company is also susceptible to cyclicality in the real estate
industry. However, SSBDPL benefits from its promoters' extensive
experience.
Key Rating Drivers & Detailed Description
Weakness:
* Susceptibility to cyclicality in the real estate industry:
The real estate sector in India is cyclical and is marked by
volatile prices and a highly fragmented market structure.
Furthermore, the company is exposed to geographic concentration
in revenue as all its projects are located in Thiruvananthapuram
(Kerala). CRISIL believes SSBDPL will remain exposed to inherent
risks and cyclicality in the real estate sector over the medium
term.
Strength:
* Promoters' extensive experience: The promoters' family has
experience of over 10 years and established presence in the
residential real estate industry in Thiruvananthapuram which have
helped SSBDPL complete and sell projects within the stipulated
time.
Established in 2005 as a partnership between Mr John Jacob and Mr
Samuel Jacob and reconstituted as a private limited company in
2009, SSBDPL undertakes residential real estate development in
and around Trivandrum.
Net profit was INR2.23 crore on total revenue of INR30.5 crore in
fiscal 2015, vis-a-vis INR1.02 crore and INR33.2 crore,
respectively, in fiscal 2014.
SCIENTIFICA TILES: CRISIL Assigns 'B' Rating to INR27.8MM Loan
--------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
long-term bank facility of Scientifica Tiles LLP (STL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 27.8 CRISIL B/Stable (Assigned)
The rating reflects exposure to project implementation-related
risks and to timely stabilisation and commensurate ramp-up in
sales during initial phase. The rating also factors in expected
average financial risk profile because of debt-funded project.
These weaknesses are partially offset by the extensive business
experience of its promoters and their funding support, and
favorable location of plant ensuring easy availability of raw
material and labour.
Analytical Approach
For arriving at the rating, unsecured loans from promoters and
their relatives have been treated as neither debt nor equity as
these are expected to remain in business over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to risks related to timely project implementation and
stabilization: Manufacturing of glazed vitrified tiles is
expected to commence from February 2018. Timely implementation,
stabilisation, and commensurate ramp-up in sales during initial
phase will be critical and will hence be monitored closely.
* Average financial risk profile: Financial risk profile may
remain average on account of debt-funded capital expenditure;
project gearing is expected be in the 2.0-2.5 times range over
the medium term.
Strengths
* Extensive experience of promoters: The promoters have been
associated with Aland Ceramic Pvt Ltd and Ceramic Center for
around a decade, which will support STL's business risk profile
during initial phase of operations.
* Favourable location of plant: Manufacturing facility in Morbi,
India's ceramic hub, will ensure easy availability of raw
materials and labour.
Outlook: Stable
CRISIL believes STL will benefit over the medium term from the
extensive experience and funding support from its promoters and
strategic location of plant. The outlook may be revised to
'Positive' if timely implementation and stabilisation of project
lead to anticipated revenue, profitability, and cash accrual
during start-up phase. The outlook may be revised to 'Negative'
if delay in implementation or stabilisation of project leads to
lower revenue and cash accrual, or if stretch in working capital
cycle further weakens financial risk profile, especially
liquidity.
Set up in March 2017 as a partnership firm by Mr Mahendra Prabhu
Dalsaniya, Mr Hirenkumar Karshan Vadaviya, Mr Satishkumar Babulal
Bavarava, and seven other promoters, STL is establishing a
greenfield project in Morbi to manufacture glazed (digitally
printed) vitrified tiles. Commercial operations are likely
to begin from the first week of February 2018.
SREE GURU: CRISIL Reaffirms B+ Rating on INR5MM Cash Loan
---------------------------------------------------------
CRISIL Ratings has reaffirmed its rating on the long-term bank
facility of Sree Guru Raghavendra Cotton Ginning Factory (SGRCGF)
at 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect the firm's average financial risk
profile because of a small networth and high gearing, and
susceptibility of operating margin to intense competition in the
cotton ginning industry. These weaknesses are partially offset by
growing scale of operations and extensive experience of
promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Below-average financial risk profile: Networth was small at
INR1.6 crore and gearing high at 5.5 times, as on March 31, 2017.
Apart from a modest networth, limited accretion to reserves also
led to subdued profitability margins. This would continue to
constrain growth in networth, thereby limiting financial
flexibility to meet any exigency.
* Susceptibility to volatility in raw material prices and intense
competition: Since key raw material, cotton, accounts for 90% of
total production cost, margin will remain susceptible to the
highly volatile cotton prices. Furthermore, government
intervention (minimum support price and export ceilings) affects
cotton prices, putting operating margins of players under
pressure. Also, the cotton industry is highly fragmented because
of low entry barrier.
Strengths
* Extensive experience of promoters in cotton ginning industry
and established brand: The promoters have been in the cotton
ginning segment for more than three decades through group firms
(Sree Guru Raghavendra Cotton Ginning and Pressing Factory, Sree
Laxmi Venkatesh Ginning & Pressing Factory, Sree Guru Raghavendra
Ginning & Pressing Factory, and Sree Parimala Cotton Ginning &
Pressing Factory) in Beed, Maharashtra. This has enabled SGRCGF
to establish strong relationship with clients and suppliers. All
the group entities leverage each other's supplier and customer
bases in case of shortfall. The firms mainly cater to spinning
mills in Tamil Nadu and Karnataka.
Outlook: Stable
CRISIL believes SGRCGF will continue to benefit over the medium
term from the extensive experience of its promoters. The outlook
may be revised to 'Positive' in case of a substantial and
sustained improvement in financial risk profile or operating
profitability. The outlook may be revised to 'Negative' if a
sharp decline in revenue adversely affects cash accrual, or if
the firm undertakes a sizeable debt-funded capital expenditure
programme.
Established in 2013 as a partnership firm by Mr B Moulali and
family, SGRCGF operates a cotton ginning unit in Bellary,
Karnataka.
Profit after tax (PAT) and revenue are estimated at INR0.2 crore
and INR35.2 crore, respectively, for fiscal 2017; PAT was INR0.4
crore on revenue of INR50.4 crore in fiscal 2016.
SREE GURU RAGHAVENDRA: CRISIL Reaffirms B+ INR5.64M Loan Rating
---------------------------------------------------------------
CRISIL Ratings has reaffirmed its rating on the long-term bank
facilities of Sree Guru Raghavendra Cotton Ginning and Pressing
Factory (SGR) at 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5.64 CRISIL B+/Stable (Reaffirmed)
Term Loan 1.50 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect its average financial risk
profile because of small networth and high gearing, and
susceptibility of margins to volatility in cotton and cotton seed
prices. These weaknesses are partially offset by the extensive
experience of its promoters in the cotton ginning segment.
Key Rating Drivers & Detailed Description
Weaknesses
* Average financial risk profile: Networth was small at INR6.3
crore and gearing high at 2.65 times, as on March 31, 2017. Apart
from a modest networth, limited accretion to reserves also led to
subdued profitability margins.. This would continue to constrain
growth in networth, thereby limiting financial flexibility to
meet any exigency.
* Susceptibility of operating margin to volatility in cotton and
cotton seed prices: Since cotton purchases account for 90-93% of
total production cost, margin will remain susceptible to any
sharp volatility in cotton prices. However, to mitigate this, the
firm has reduced inventory to 20-25 days from historical levels
of 35-40 days, leading to a stable operating profitability of 3-
4% over the three years through fiscal 2017; against industry
average of 1.5-3%.
Strengths
* Extensive experience of promoters in cotton ginning industry
and established brand position: The promoters have been in the
cotton ginning segment for more than three decades through group
firms (Sree Guru Raghavendra Cotton Ginning Factory, Sree Laxmi
Venkatesh Ginning & Pressing Factory, Sree Guru Raghavendra
Ginning & Pressing Factory, and Sree Parimala Cotton Ginning &
Pressing Factory) in Beed, Maharashtra. This has enabled SGR to
establish strong relationship with clients and suppliers. All the
group entities leverage each other's supplier and customer bases
in case of shortfall. The firms mainly cater to spinning mills in
Tamil Nadu and Karnataka.
Outlook: Stable
CRISIL believes SGR will continue to benefit over the medium term
from its promoters' extensive experience. The outlook may be
revised to 'Positive' in case of a substantial and sustained
improvement in financial risk profile or operating margin. The
outlook may be revised to 'Negative' if sharp decline in revenue
results in low cash accrual, or the firm undertakes substantial
debt-funded capital expenditure programme.
Set up as a partnership concern in 1995SGR gins and presses
cotton at its facility in Bellary, Karnataka, which has 42
ginning machines. Pressing unit has capacity of around 300 bale
per day.
Profit after tax (PAT) and revenue are estimated at INR0.7 crore
and INR74.6 crore, respectively, for fiscal 2017; PAT was INR1.4
crore on revenue of INR91.8 crore in fiscal 2016.
SUMMA REAL MEDIA: Ind-Ra Assigns BB Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Summa Real Media
Private Limited (SRMPL) a Long-Term Issuer Rating of 'IND BB'.
The Outlook is Stable. The instrument-wise rating actions are:
-- INR70.96 mil. Term loan due on March 2024 assigned with IND
BB/Stable rating;
-- INR40 mil. Fund-based limit assigned with IND BB/Stable
rating; and
-- INR20 mil. Non-fund-based limit assigned with IND A4+ rating.
KEY RATING DRIVERS
The ratings reflect SRMPL's small scale of operations and
moderate credit metrics due to intense competition and raw
material (newsprint) price volatility. According to FY17
provisional financials, revenue grew to INR654.25 million (FY16:
INR617.22 million) driven by an increase in readership base and
advertising rate. EBITDA margin declined to 7.6% in FY17P (FY16:
8.6%) due to an increase in costs of newsprint.
Interest coverage (operating EBITDA/gross interest expense)
improved to 2.8x in FY17P (FY16: 2.7x) and net financial leverage
(total adjusted net debt/operating EBITDAR) to 2.5x (2.4x) due to
repayment of term loan and a decline in interest rate. Ind-Ra
expects the credit metrics to further improve in FY18 on account
of term loan repayment and an increase in revenue from digital
media backed by a rise in number of subscribers.
The ratings are constrained by the company's tight liquidity
position as reflected by 99% average maximum utilisation of fund-
based limits during the 12 months ended September 2017.
The ratings, however, benefit from increasing circulation of the
company's daily newspaper and established presence of the
promoters in Odisha through educational and health set ups.
RATING SENSITIVITIES
Negative: A decline in the overall credit profile will be
negative for the ratings.
Positive: A substantial improvement in revenue along with an
improvement in the credit metrics will be positive for the
ratings.
COMPANY PROFILE
Incorporated in 2010in Bhubaneswar, Odisha, SRMPL is a media
house that owns the leading newspaper of Odisha, Prameya and a
24x7 news channel named NEWS7.
SUSEE TRUCKS: ICRA Reaffirms 'B' Rating on INR5.0cr Cash Loan
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating at [ICRA]B assigned to
the INR5.00-crore (revised from INR6.00 crore) cash-credit
facility and INR1.00-crore unallocated facility of Susee Trucks
Private Limited. The outlook on the long-term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term: Cash
Credit 5.00 [ICRA]B(Stable) Reaffirmed
Long-term: Unallocated 1.00 [ICRA]B(Stable) Reaffirmed
Rationale
The rating is constrained by the weak financial profile of the
company, characterised by small scale of operations, limiting the
benefits of scale economies, and the inherent thin margins in the
automotive-dealership industry. The ratings also factor in the
low net worth, stretched capital structure and coverage
indicators of STPL. ICRA also considers the exposure of the
company's revenues to inherent cyclicality of the commercial
vehicle industry. However, the rating positively factors in the
long experience of the promoters in the industry and the
reputation of the 'Susee' brand in the auto-dealership space in
Tamil Nadu. The rating also factors in the demand outlook for
commercial vehicles in the near-to- medium term and the revenue
growth achieved by STPL over the past 15 months on account of
improved realisations due to sales of more number of high-value
models. The ratings also take into account the dominant market
share of Tata Motors Limited (TML) in the small commercial
vehicles segment (SCV) in the regions of Vellore, Kanchipuram,
and Thiruvannamalai districts and the company being the sole
authorised dealer for TML SCVs in these regions. Going forward,
the ability of the company to achieve the revenue growth targeted
while sustaining its profit margins and efficiently managing its
working capital cycle will be critical to generate strong cash
flows and hence improve its credit profile.
Key rating drivers
Credit strengths
* Long experience and reputation of the promoters in the auto-
dealership business in the region: The promoters have been
involved in the auto-dealership business for over two decades and
have been actively involved in operations of STPL and other group
entities. 'Susee' is a well known brand in the auto-dealership
space in Tamil Nadu.
* Sole authorised dealer for Tata Motors Limited in surrounding
districts: The company became sole authorised dealer for TML's
SCVs from 2006 in Vellore, Kanchipuram and Thiruvannamalai
districts. The company has three 3S (sales, spares, and service)
showrooms and four 1S (sales) showrooms across the three
districts.
Credit weaknesses
* Small scale of operations limits benefits of scale economies:
The current scale of STPL's operations remains small with
revenues of INR31.8 crore in FY2017, albeit a growth of 16.2%
over FY2016, which restricts the economies of scale.
* Weak financial profile characterised by thin margins, stretched
capitalisation and coverage indicators and weak cash flows: The
profitability remains thin, which is inherent to the nature of
the automotive-dealership business. The capital structure
remained stretched with net losses over the past years. This
resulted in low net worth and debt levels rose to fund the loss
incurred. The coverage indicators remained moderate with interest
coverage of 1.1 and total debt/OPBITDA of 9.6.
* STPL's sales are exposed to the inherent cyclicality of the
commercial vehicle segment: Being in the commercial vehicle
segment, the revenues are exposed to the inherent cyclicality in
demand in the domestic commercial-vehicles industry.
Incorporated in 2004, Susee Trucks Private Limited is the sole
authorised dealer for Tata Motors Limited's (TML; rated [ICRA]AA
(Stable)/[ICRA]A1+) small commercial vehicles (SCVs) in Vellore,
Thiruvannamalai and Kanchipuram districts of Tamil Nadu. The
company has three 3S (sales, spares, and service) showrooms in
Vellore, Kanchipuram, and Thiruvannamalai and four 1S (sales)
showrooms across the three districts with 120 employees as on
date. The 'Susee Group', started operations through trading of
pulses/grains, in the late 1930s. It was established by Mr.
Subramania Nadar and Ms. Seeniyammal. The group has five
subgroups: belonging to descendants of the promoters: and all
operate under the 'Susee' brand, but have no operational or
financial linkages. STPL belongs to one of the sub-groups and is
owned and managed by Mr. Soundararajan, son of the said
promoters, and Mr. Manivannan. Mr. Soundararajan and Mr.
Manivannan have interest in five other entities: two involved in
the auto-dealership business, one each in the FMCG, oven-sacks
manufacturing and education businesses.
According to audited financial statements, the company has
recorded an operating income of INR31.8 crore with net loss of
INR0.1 crore in FY2017 compared to an operating income of INR27.4
crore with a net loss of INR0.6 crore in FY2016.
SVE CASTINGS: ICRA Withdraws D Rating on INR8.50cr Loan
-------------------------------------------------------
ICRA withdraws the long-term rating outstanding of [ICRA]D on the
INR8.50-crore fund-based facility, the INR2.78-crore term-loans
and the INR5.32-crore unallocated limits of SVE Castings Private
Limited (SVECPL).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term-Fund-
based facilities 8.50 [ICRA]D; Rating withdrawn
Long-term-Term
Loans 2.78 [ICRA]D; Rating withdrawn
Long-term-Unallocated
Facilities 5.32 [ICRA]D; Rating withdrawn
Rationale
The ratings are withdrawn in accordance with ICRA's policy on
withdrawal and suspension, as desired by the company and based on
the no objection certificate provided by its banker.
SVECPL was established in 1997 to cater to the casting needs of
valve & pump manufacturing industries, petrochemical plants and
refineries projects. It is an established steel foundry located
at Bellary city, 300 km from Bangalore city, in Karnataka. The
company manufactures steel, alloy steel, special steel, stainless
steel and nickel based alloy graded castings as per International
Standards based on the customer requirements. The company is
capable of producing 2500 MT of castings per annum and can
produce maximum weight of 750 kg single casting. It has also
installed 1.50 MW wind mill units near Raichur, for captive power
generation.
THANGAMMAN TEXTILES: CRISIL Assigns 'D' Rating to INR3.86MM Loan
----------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL D/CRISIL D' ratings to
the bank facilities of Thangamman Textiles - Coimbatore(TT). The
ratings reflect delays in servicing debt due to weak liquidity.
The rating also factors modest scale of operation. This weakness
is partially offset the extensive experience of the proprietor in
the textile industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 3.86 CRISIL D (Assigned)
Bank Guarantee 0.39 CRISIL D (Assigned)
Cash Credit 2.75 CRISIL D (Assigned)
Key Rating Drivers & Detailed Description
Weakness
* Delay in meeting debt obligation due to weak liquidity:
The firm has delayed meeting its debt obligation because of weak
liquidity on account of mismanagement of fund flow.
* Modest scale of operations: TT's scale of operation had
remained modest around INR9 crore in fiscal 2017. This is mainly
on account on of highly competitive and fragmented industry.
Strengths
* Extensive experience of the proprietor: The proprietor has
extensive experience of over two decades in the textile industry.
This has helped to establish strong relationships with customers
and suppliers.
Incorporated in 2014, TT is engaged into manufacturing of yarns.
The day to day operations are managed by Mr Gopalkrishnan.
TIRUPATI AGENCIES: CRISIL Reaffirms B- Rating on INR7MM Loan
------------------------------------------------------------
CRISIL Ratings has reaffirmed its ratings on the bank facilities
of Tirupati Agencies Private Limited (TAPL) at 'CRISIL B-
/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee .6 CRISIL A4 (Reaffirmed)
Cash Credit 7.0 CRISIL B-/Stable (Reaffirmed)
The ratings continue to reflect TAPL's small scale of operations,
weak financial risk profile with modest networth and low debt
protection metrics, and large working capital requirement leading
to stretched liquidity. These weaknesses are partially offset by
the extensive experience of promoters in the roller bearing
trading business.
Key Rating Drivers & Detailed Description
Weakness
* Small scale: Small scale is reflected in operating income of
INR16 crore in fiscal 2017 on account of trading in odd size ball
bearing, which has limited market compared to regular size
bearing. Modest scale restricts benefits of economies of scale
and results in negligible bargaining power vis-a-vis suppliers
and customers. Moreover, geographical concentration in revenue is
high as the entire revenue comes from local markets of Kolkata
and Mumbai.
* Weak financial risk profile: Working capital-intensive
operations has led to high reliance on external borrowings. This,
along with modest networth base on account of small scale, has
resulted in high gearing (1.9 times as on March 31, 2017). High
capital charges also resulted in muted debt protection
metrics'net cash accrual to total debt and interest coverage
ratios were 0.02 time and 1.1 times, respectively, for fiscal
2017 (0.02 time and 1.0 time, respectively, for fiscal 2016).
* Working capital-intensive operations leading to stretched
liquidity: Gross current assets is estimated to have remained
high at 210 days in fiscal 2017 (222 days in fiscal 2016),
reflect working capital-intensive operations. Large working
capital requirement is primarily on account of large inventory of
odd size bearings for meeting unanticipated spot demands and to
allow up to 120 days of credit to customers. Large working
capital requirement has resulted in high dependence on bank
limits, which remained optimally utilised.
Strength
* Promoters' extensive experience: The promoters have been
engaged in the roller ball bearing trading business for over five
decades. This experience has helped the company establish strong
regional presence, healthy relations with suppliers and maintain
business risk profile.
Outlook: Stable
CRISIL believes TAPL will continue to benefit from the promoters'
extensive experience. The outlook may be revised to 'Positive' if
a substantial and sustained increase in scale and accrual, along
with improved working capital management, leading to an
improvement in the financial risk profile, particularly
liquidity. The outlook may be revised to 'Negative' if low cash
accrual, or further stretch in working capital management, or
large, debt-funded capital expenditure weakens the financial risk
profile.
TAPL, incorporated in 1981, trades in roller ball bearings of odd
sizes. The company currently has four warehouses, one in Kolkata
and the others in Mumbai. Operations are managed by the promoter-
director Mr Chandra Kant Khemka.
TRIMEX INDUSTRIES: ICRA Moves D Rating to Not Cooperating
---------------------------------------------------------
ICRA has also moved the ratings to the 'Issuer Not Cooperating'
category for bank facilities of Trimex Industries Private Limited
(TIPL). The ratings are now denoted as "[ICRA]D ISSUER NOT
COOPERATING."
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term loan facilities 10.00 [ICRA]D ISSUER NOT
COOPERATING; Rating moved
to the 'Issuer Not
Cooperating' category
Long term fund based 30.00 [ICRA]D ISSUER NOT
facilities COOPERATING; Rating moved
to the 'Issuer Not
Cooperating' category
Short term non-fund 20.00 [ICRA]D ISSUER NOT
based facility COOPERATING; Rating moved
to the 'Issuer Not
Cooperating' category
Rationale
The rating is based on no updated information on the entity's
performance since the time it was last rated in April, 2016. The
lenders, investors and other market participants are thus advised
to exercise appropriate caution while using this rating as the
rating does not adequately reflect the credit risk profile of the
entity. The entity's credit profile may have changed since the
time it was last reviewed by ICRA; however, in the absence of
requisite information, ICRA is unable to take a definitive rating
action. As part of its process and in accordance with its rating
agreement with TIPL, ICRA has been trying to seek information
from the entity so as to monitor its performance, but despite
repeated requests by ICRA, the entity's management has remained
non-cooperative. In the absence of requisite information, and in
line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated
November 1, 2016, ICRA's Rating Committee has taken a rating view
based on the best available information.
Key rating drivers
Credit strengths
* The experience of the promoters in the mineral export business
and their established relationships with key customers
Credit weaknesses
* There had been delay in the debt servicing due to weak
liquidity position
* The delay in servicing was due to delay in recovery of
outstanding receivables from major customers
Incorporated in 1984, TIPL is engaged in processing and trading
of minerals and mineral sands. The company procures materials
such as barite, rutile, feldspar, ilmenite, and iron ore from
state mining entities of Andhra Pradesh and Karnataka, processes
and exports them. TIPL has crushing units at Koduru, Andhra
Pradesh. In FY2015, the company entered into an agreement to
acquire a greenfield single superphosphate (SSP) fertilizer unit
in Rajasthan. TIPL is a part of the Trimex group, which has
interests in mining, sourcing, processing, and supplying of
industrial raw materials to diverse industries including oil well
drilling, ceramic, glass, construction, and fertilizer.
VM APPARELS: Ind-Ra Migrates B+ Issuer Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated VM Apparels Pvt.
Ltd's (VM) 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:
-- INR180 mil. Fund-based limits migrated to non-cooperating
category IND B+(ISSUER NOT COOPERATING) rating;
-- INR27.7 mil. Long-term loans migrated to non-cooperating
category with IND B+(ISSUER NOT COOPERATING) rating; and
-- INR20 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
December 22, 2014. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1995, VMAPL commenced its business operations in
FY11. The company exports readymade garments to the Middle East
and Latin America. Its manufacturing facility with an installed
capacity of 36,50,000 pieces per annum is located at Ludhiana,
Punjab.
====================
N E W Z E A L A N D
====================
PTT LIMITED: FMA Files Criminal Charges Against Steven Robertson
----------------------------------------------------------------
The Financial Markets Authority (FMA) has filed criminal charges
against Steven Robertson in the Auckland District Court under the
Crimes Act 1961.
Mr. Robertson faces a total of 47 charges relating to PTT Limited
and associated entities.
* 28 counts of theft by a person in a special relationship,
under section 220 of the Crimes Act 1961. This carries a
maximum penalty of 7 years imprisonment per charge.
* 11 counts of obtaining by deception under section 240 of
the Crimes Act 1961. This carries a maximum penalty of 7 years
imprisonment per charge.
* 8 counts of dishonestly taking or using document under section
228 of the Crimes Act 1961. This carries a maximum penalty of
7 years imprisonment per charge.
It is alleged Mr. Robertson misappropriated funds deposited by
clients who believed those funds were to be traded on their
behalf or were paid as consideration for the purported purchase
of shares in PTT Limited or an associated entity.
The FMA also alleges that some clients had funds withdrawn from
their credit card accounts without their authority and knowledge.
Karen Chang, FMA Head of Enforcement, said, "The FMA will monitor
and take enforcement action where it sees conduct on its
perimeter that could harm investors or damage the reputation of
New Zealand's financial markets."
Mr. Robertson was not an Authorised Financial Adviser or
otherwise authorised or licensed by the FMA but held himself out
as investing funds deposited with him by clients.
Asset Preservation Orders in connection with Steven Robertson,
PTT Limited and associated entities were sought and obtained in
August 2015 in light of concerns that investor funds may have
been at risk. PTT Limited and associated entities were placed in
liquidation in December 2015.
Mr. Robertson's first appearance is scheduled for Nov. 28, 2017.
*********
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 ***