/raid1/www/Hosts/bankrupt/TCRAP_Public/171206.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, December 6, 2017, Vol. 20, No. 242
Headlines
A U S T R A L I A
AMANO HOMES: Second Creditors' Meeting Set for Dec. 11
HUMMINGBIRD HOMES: First Creditors' Meeting Set for Dec. 13
MEGACORP GROUP: Second Creditors' Meeting Set for Dec. 12
RAVINA PROPERTY: Second Creditors' Meeting Set for Dec. 11
SMART ABS 2014-1US: Fitch Affirms BB Rating on Class E Notes
C H I N A
FUJIAN ZHANGLONG: Fitch Affirms BB+ Long-Term IDR; Outlook Stable
NANJING CO: Moody's Affirms ba2 Baseline Credit Assessment
SHANDONG SANXING: S&P Assigns 'BB+' CCR, Outlook Stable
H O N G K O N G
NOBLE GROUP: Star Gasoline Trader Sinenko Said to Join Gunvor
I N D I A
ADVENTURE PARK: CRISIL Assigns 'B' Rating to INR5MM Term Loan
AIRCEL CELLULAR: ICRA Cuts Rating on INR17,479cr Loan to 'D'
AIRCEL LIMITED: ICRA Lowers Rating on INR17,479cr Loan to 'D'
AIRCEL SMART: ICRA Cuts Rating on INR17,479cr Loan to 'D'
ANSALDOCALDAIE GB: ICRA Moves 'D' Rating to Not Cooperating
BASANTDEVI CHARITABLE: ICRA Cuts Rating on INR15cr Loan to D
BESTOVO FOODS: CRISIL Assigns 'B' Rating to INR6.7MM Term Loan
DECCAN EXTRUSIONS: CRISIL Assigns B+ Rating to INR6MM Cash Loan
DECIBELS ELECTRONICS: CRISIL Reaffirms B- Rating on INR1.5MM Loan
DISHNET WIRELESS: ICRA Lowers Rating on INR17,479cr Loan to 'D'
GEETASHREE PULSES: Ind-Ra Moves 'B' Rating to Non-Cooperating
GREAT INDIA: ICRA Withdraws 'B' Rating on INR12cr Cash Loan
IMPERIAL TUBES: ICRA Moves 'D' Rating to Not Cooperating
KALINGA BREEDING: ICRA Moves B Rating to Not Cooperating Category
M C ROLLER: CRISIL Assigns B+ Rating to INR12MM Cash Loan
MAKKAR TEXTILE: CRISIL Reaffirms B Rating on INR8.5MM Term Loan
N. PRAKASH: CRISIL Assigns B+ Rating to INR4.15MM LT Loan
ONWARD PLASTIC: CRISIL Assigns B+ Rating to INR8.23MM Term Loan
PATWA AUTOMOTIVE: CRISIL Cuts Rating on INR36MM Cash Loan to 'D'
PATWA MARKETING: CRISIL Lowers Rating on INR8MM Cash Loan to D
RAJA MOTORS: CRISIL Reaffirms B+ Rating on INR6.5MM Cash Loan
REAL DAIRY: CRISIL Reaffirms D Rating on INR18.5MM Term Loan
RELIANCE COMM: Fortuna Public Files Insolvency Process v. Firm
SANSHU GREEN: Ind-Ra Affirms BB Issuer Rating, Outlook Stable
SATYAM DEVELOPERS: Ind-Ra Assigns 'BB' LT Issuer Rating
SILVER SPRING: CRISIL Reaffirms B Rating on INR6.7MM Cash Loan
SRS THERMAX: CRISIL Reaffirms 'B' Rating on INR5MM Term Loan
TENKASI TIMBER: CRISIL Reaffirms 'B' Rating on INR1.25MM Loan
I N D O N E S I A
WIJAYA KARYA: Moody's Assigns Ba2 Corporate Family Rating
M A L A Y S I A
STONE MASTER: Net Loss Narrows to MYR1.81MM in Q4 Ended Sept. 30
M O N G O L I A
MONGOLIA: IFC Supports Insolvency Reform
S I N G A P O R E
JASON HOLDINGS: Bankruptcy Bid Against Directors Withdrawn
V I E T N A M
THAI BINH: Central Bank Probe Delay in Principal Repayment
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A U S T R A L I A
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AMANO HOMES: Second Creditors' Meeting Set for Dec. 11
------------------------------------------------------
A second meeting of creditors in the proceedings of Amano Homes
Pty Ltd has been set for Dec. 11, 2017, at 10:00 a.m. at the
offices of Cor Cordis, Mezzanine Level, BGC Centre, 28 The
Esplanade, in Perth, WA.
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 Dec. 8, 2017, at 4:00 p.m.
Dino Travaglini and Cliff Rocke of Cor Cordis were appointed as
administrators of Ravina Property on Nov. 6, 2017.
HUMMINGBIRD HOMES: First Creditors' Meeting Set for Dec. 13
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of
Hummingbird Homes (SA) Pty Ltd, trading as Hummingbird Homes,
will be held at the offices of BCR Advisory (SA) Pty Ltd,
Level 2,139 Frome Street, in Adelaide, SA, on Dec. 13, 2017, at
11:00 a.m.
Stephen Glen James of BCR Advisory was appointed as administrator
of Hummingbird Homes on Dec. 1, 2017.
MEGACORP GROUP: Second Creditors' Meeting Set for Dec. 12
---------------------------------------------------------
A second meeting of creditors in the proceedings of Megacorp
Group Pty Ltd has been set for Dec. 12, 2017, at 2:30 p.m. at
Symantec House, Level 5, 207 Kent Street, in Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Dec. 11, 2017, at 4:00 p.m.
Daniel Frisken and Mitchell Ball of BPS Recovery were appointed
as administrators of Megacorp Group on Nov. 8, 2017.
RAVINA PROPERTY: Second Creditors' Meeting Set for Dec. 11
----------------------------------------------------------
A second meeting of creditors in the proceedings of Ravina
Property Pty Ltd has been set for Dec. 11, 2017, at 12:00 p.m. at
the offices of Cor Cordis, Mezzanine Level, BGC Centre, 28 The
Esplanade, in Perth.
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 Dec. 8, 2017, at 4:00 p.m.
Dino Travaglini and Cliff Rocke of Cor Cordis were appointed as
administrators of Ravina Property on Nov. 6, 2017.
SMART ABS 2014-1US: Fitch Affirms BB Rating on Class E Notes
------------------------------------------------------------
Fitch Ratings has affirmed the ratings on 22 note tranches from
eight SMART automotive and equipment-backed transactions. The
transactions are securitisations of Australian automotive and
equipment loans originated by Macquarie Leasing Pty Limited. The
notes are issued by Perpetual Trustee Company Limited in its
capacity as trustee of the trust.
KEY RATING DRIVERS
The affirmation of the existing ratings reflects Fitch's view
that available credit enhancement is sufficient to support the
notes' current ratings and the agency's expectation of continued
benign economic conditions in Australia. The credit quality and
performance of the underlying assets in the collateral pool have
been below Fitch's base cases.
As per transaction data for the October 2017 reporting period,
30+ day delinquencies for all trusts, except SMART ABS Series
2014-2E Trust and SMART ABS Series 2014-4 Trust, were below
Fitch's 3Q17 Dinkum ABS Index of 1.4%. SMART ABS Series 2014-2E
Trust and SMART ABS Series 2014-4 Trust reported 30+ day arrears
of 1.6% and 1.8%, respectively. The higher level of arrears as a
portion of the total transaction outstanding is within Fitch's
expectations for highly seasoned transactions which have
amortised significantly.
Cumulative net losses, after sales and other recoveries, were
below 1.1% since closing for all trusts and have been below
Fitch's base-cases to date. Excess spread has been available to
cover any losses incurred to date.
With the exception of the SMART O Warehouse Trust, all
transactions have satisfied stepdown triggers and are paying
principal on a pro-rata basis. They feature paydown conditions
which ensure the trust continues paying pro-rata until the first
call option date, at 10% of the original balance of the
receivables. The SMART O Warehouse Trust is still within the
revolving period phase and is paying on a sequential basis
between the class A and class B notes.
Three transactions are exposed to foreign-currency risk in the
event that Libor (SMART ABS Series 2014-1US Trust and SMART ABS
Series 2015-3US Trust) and Euribor (SMART 2014-2E) rates reduce
below zero and the relevant trust has the obligation to make
additional payments to the currency swap provider. Excess spread
is likely to be sufficient to cover any payments payable by the
trust and as such, this risk has not adversely impacted any of
the transactions.
In accordance with Fitch criteria, the cash flow model was not
re-run for this rating action as the collateral pool has
performed within Fitch's expectations and there has been no
significant deviation of asset performance or a change in
transaction structure since closing.
RATING SENSITIVITIES
An upgrade to the rating of the notes below 'AAAsf' has not been
considered because it is limited by the transactions' lack of
performance triggers, which ensure there is no switch back to
sequential amortisation until the call option date.
Fitch considers the prospect of a downgrade as remote due to the
level of subordination and excess spread available to all rated
notes in the transaction. A significant and unexpected increase
in delinquencies, defaults and losses would be necessary before
any negative rating action would be contemplated.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset
pools and the transactions. There were no findings that were
material to this analysis. Fitch has not reviewed the results of
any third party assessment of the asset portfolio.
As part of its on-going monitoring, Fitch conducted a file review
of a small targeted sample of Macquarie Leasing's origination
files and found the information contained in the reviewed files
to be adequately consistent with the originator's policies and
practices and the other information provided to the agency about
the asset portfolio.
Overall, Fitch's assessment of the asset pool information relied
upon for the agency's rating analysis according to its applicable
rating methodologies indicates that it is adequately reliable.
SOURCES OF INFORMATION
The information below was used in the analysis:
Transaction performance data provided by Macquarie Leasing as at
the October 2017 payment date
Loan enforcement details provided by Macquarie Leasing as at the
October 2017 payment date
Data on note balances provided by Macquarie Leasing as at the
November 2017 payment date
The issuer has informed Fitch that not all relevant underlying
information used in the analysis of the rated notes is public.
The full list of rating actions is shown below:
SMART ABS Series 2014-1US Trust
USD24.6million Class A-4a notes affirmed at 'AAAsf'; Outlook
Stable
USD29.5 million Class A-4b notes affirmed at 'AAAsf'; Outlook
Stable
AUD1.8 million Class B notes affirmed at 'AAsf'; Outlook Stable
AUD3.2 million Class C notes affirmed at 'Asf'; Outlook Stable
AUD3.2 million Class D notes affirmed at 'BBBsf'; Outlook Stable
AUD2.9 million Class E notes affirmed at 'BBsf'; Outlook Stable
SMART ABS Series 2014-2E Trust
AUD76.5 million Class A-A notes affirmed at 'AAAsf'; Outlook
Stable
EUR30.7 million Class A-E notes affirmed at 'AAAsf'; Outlook
Stable
AUD5.4 million Class B notes affirmed at 'AAsf'; Outlook Stable
SMART ABS Series 2014-3PP Trust
AUD116.2 million Class A notes affirmed at 'AAAsf'; Outlook
Stable
AUD5.2 million Class B notes affirmed at 'AAsf'; Outlook Stable
SMART ABS Series 2014-4 Trust
AUD240.0 million Class A notes affirmed at 'AAAsf'; Outlook
Stable
AUD10.6 million Class B notes affirmed at 'AAsf'; Outlook Stable
SMART ABS Series 2015-1US Trust
AUD190.4 million Class A-4 notes affirmed at 'AAAsf'; Outlook
Stable
AUD6.8 million Class B notes affirmed at 'AAsf'; Outlook Stable
SMART ABS Series 2015-2 Trust
AUD252.8 million Class A notes affirmed at 'AAAsf'; Outlook
Stable
AUD11.2 million Class B notes affirmed at 'AAsf'; Outlook Stable
SMART ABS Series 2015-3US Trust
USD59.6 million Class A-3a notes affirmed at 'AAAsf'; Outlook
Stable
USD15.7 million Class A-3b notes affirmed at 'AAAsf'; Outlook
Stable
AUD181.0 million Class A-4 notes affirmed at 'AAAsf'; Outlook
Stable
AUD10.2 million Class B notes affirmed at 'AAsf'; Outlook Stable
SMART O Warehouse Trust
AUD500 million Class A notes affirmed at 'AAAsf'; Outlook Stable
=========
C H I N A
=========
FUJIAN ZHANGLONG: Fitch Affirms BB+ Long-Term IDR; Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Fujian Zhanglong Group Co., Ltd.'s
(Zhanglong) Long-Term Foreign- and Local-Currency Issuer Default
Ratings at 'BB+'. The Outlook is Stable.
At the same time, Fitch has affirmed the rating on its USD500
million senior unsecured notes at 'BB+'.
KEY RATING DRIVERS
Linked to Zhangzhou Municipality: The ratings of Zhanglong are
credit-linked to, but not equalised with, Fitch's internal
assessment of the creditworthiness of Zhangzhou Municipality in
China's Fujian Province. The link reflects strong government
control and oversight of the entity, mid-range assessment of the
entity's strategic importance to the municipality, integration
with the government budget and legal status. These factors result
in a high likelihood of extraordinary support, if needed, from
the municipality. Therefore, Zhanglong is classified as a credit-
linked public-sector entity under Fitch's criteria.
Zhangzhou's Creditworthiness: Zhangzhou's gross regional product
(GRP) has been expanding above the provincial and national rate.
Its per capita GRP for 2016 was CNY62,196, higher than the
national average of CNY53,980. Fiscal strength was partly offset
by a high debt burden relative to its economic size and fiscal
performance.
Strategic Importance - Mid-Range: Zhanglong continues to play an
important role in the city's daily operations and development. It
is the city's sewage treatment service provider, the major water
supplier to urban areas in the city, and a designated agency for
sourcing building materials for certain local-government-owned
housing and infrastructure projects. It also engages in
infrastructure construction and has participated in bridge and
expressway projects linking to Zhangzhou Municipality.
Integration - Mid-Range: Zhanglong's profitability relies heavily
on subsidies from the Zhangzhou municipal government. However,
these subsidies are modest compared with overall turnover.
Zhanglong received on average over CNY500 million per annum in
the past three years (around 5% of Zhanglong's revenue).
Legal Status - Mid-Range: As a limited liability company,
Zhanglong's legal status does not indicate automatic absorption
of all of its liabilities by Zhangzhou Municipality.
Control and Supervision - Stronger: Zhanglong's board of
directors is appointed by the government. Major projects and
investments require the government's approval. Zhanglong's
financing plan and debt levels are monitored by the government,
and the company is required to report its operational and
financial results to the government.
Standalone Profile - Weak: Zhanglong has a weak credit profile,
with increasing debt and profitability dependent on government
subsidies. Fitch believes the standalone credit profile will
continue to be weak in the medium term, driven by ongoing
infrastructure investments in Zhangzhou, and the thin
profitability of its trading business.
RATING SENSITIVITIES
Link with Municipality: A stronger or more explicit support
commitment from Zhangzhou Municipality, or an increased focus on
public-service provision and infrastructure construction may
trigger a positive action on Zhanglong's ratings. Significant
weakening of Zhanglong's strategic importance to the
municipality, dilution of the government's shareholding, and/or
reduced government support could result in a downgrade.
Creditworthiness of Municipality: An upgrade of Fitch's internal
credit view on Zhangzhou Municipality may trigger a positive
rating action. Negative rating action could derive from
deterioration in Zhangzhou Municipality's credit profile.
NANJING CO: Moody's Affirms ba2 Baseline Credit Assessment
----------------------------------------------------------
Moody's Investors Service has affirmed Bank of Nanjing Co.,
Ltd.'s (BoNJ) long-term/short-term deposit ratings at Baa3/P-3.
The bank's baseline credit assessment (BCA) and adjusted BCA are
affirmed at ba2. Its Counterparty Risk Assessment (CR Assessment)
is affirmed at Baa3(cr)/P-3(cr).
The outlook on all the ratings is changed to stable from
negative.
RATINGS RATIONALE
The affirmation of BoNJ's ba2 BCA is driven by (1) stabilization
of its asset quality since the second half of 2016, (2) expected
improvements in capital levels, based on its proposed private
placement, and (3) relatively stable liquidity profile over
years.
On the other hand, the bank's rapid loan growth in the previous
two years has exposed it to unseasoned risks. The bank's
liquidity management is challenged by its large exposure to
investments in loans and receivables and off-balance-sheet wealth
management products (WMPs). Its profitability will be strained by
increasing interbank funding costs and pressures on non-interest
incomes related to shadow banking products. Risks will also arise
as the bank refines its business models due to evolving
regulations on shadow banking products.
BoNJ's asset quality has stabilized since the second half of 2016
with a stabilizing non-performing loan (NPL) ratio and declining
special-mentioned (SML) loan and 90+ days delinquency loan
ratios. Moody's expects the trend will continue with stabilized
economic growth and improving corporate profits.
The bank's capital level is expected to improve based on its
proposed private placement. On August 1, 2017, the bank announced
its plan to raise no more than RMB14 billion in common equity
through a private placement. RMB14 billion is equivalent to
around 200 basis points of its RWA as of the end of September
2017.
BoNJ's liquidity profile has been stable over recent years. Its
market funds ratio is lower than most medium-sized banks,
benefitting from its growing deposit base. The bank also improved
its funding profile by cutting its reliance on short-term
liabilities in the first half of 2017.
On the other hand, the bank exhibited rapid loan growth in
previous years, with its compound annual growth rate in 2015 and
2016 at 38% and growth rate in the first three quarters of 2017
at 15%. Its rapid loan growth over the last two years in
particular has exposed it to unseasoned risks.
The bank has a large exposure to shadow banking products. At the
end of June 2017, its investments in loans and receivables
amounted to 21% of total assets and its off-balance-sheet WMPs
were equivalent to 27% of total assets. Its investment in loans
and receivables is an unseasoned portfolio and adds to the bank's
liquidity risk. There is also a duration mismatch for the assets
and liabilities of WMPs originated by the bank, which may become
a burden on its liquidity. That being said, the risk appears
manageable considering the high level of the bank's liquidity
resources.
Moody's also expects BoNJ's profitability will continue to be
pressured, as a result of higher funding costs than last year,
increasing competition for deposits and pressures on non-interest
incomes related to shadow banking products. The bank's return on
average assets was at 0.90% on annualized basis in the first
three quarters of 2017, declining from 0.98% in the first three
quarters of 2016.
The affirmation of BoNJ's Baa3/P-3 deposit ratings is based on
Moody's assumption of a high level of government support for the
bank in times of need.
Moody's assessment of support is based on the role that BoNJ
plays in the development of Nanjing city and Jiangsu Province,
and its market share in deposits in the city and the province. At
the same time, the total shareholding held by Nanjing state-owned
entities (SOEs) accounted for 30.6% of the bank's shares,
including 18.4% by entities wholly owned by the Nanjing
government.
WHAT COULD CHANGE THE RATING UP
The bank's BCA and deposit ratings could be upgraded if (1) its
asset quality (as measured by new problem loan formation) and
profitability (as measured by return on average assets) remain
resilient; (2) its capital position strengthens materially; (3)
its liquidity profile remains stable; and/or (4) its operating
environment, as measured by the Chinese banking system's Macro
Profile, improves.
WHAT COULD CHANGE THE RATING DOWN
BoNJ's BCA could experience downward pressure if the bank's (1)
solvency or liquidity indicators weaken while the bank brings its
shadow banking exposure in line with strengthened regulations;
(2) asset quality and profitability weaken materially; (3) fast
expansion leads to a weaker capital position; or (4) liquidity
conditions deteriorate, owing to an unexpected liquidity crunch
in China's interbank market or the impact of off-balance-sheet
WMPs.
In addition, given the two-notch uplift incorporated in the
bank's deposit ratings, any indication of reduced support from
the Nanjing city and Jiangsu provincial governments would be
negative.
The principal methodology used in these ratings was Banks
published in September 2017.
Bank of Nanjing Co., Ltd. is a Chinese bank headquartered in
Jiangsu Province, with assets totaling RMB1.14 trillion at the
end of September 2017.
SHANDONG SANXING: S&P Assigns 'BB+' CCR, Outlook Stable
-------------------------------------------------------
S&P Global Ratings said it has assigned its 'BB-' long-term
corporate credit rating to Shandong Sanxing Group Co. Ltd.
(Sanxing). The outlook is stable.
S&P also assigned its 'BB-' long-term issue rating to a proposed
issue of U.S. dollar-denominated senior unsecured notes that
Sanxing will unconditionally and irrevocably guarantee. Knight
Castle Investments Ltd., a special purpose entity, will issue the
notes. The ratings are subject to our review of the final
issuance documentation.
Sanxing is the largest corn oil manufacturer in China. The
company is also engaged in the production and distribution of
lightweight aluminum alloy products in China.
The ratings on Sanxing reflect the company's leading market
position in the corn oil industry in China, its good operating
efficiency, and some business diversity with rising profit
contributions from aluminum alloy products. These strengths are
tempered by the company's less-established market position in the
aluminum products industry, limited pricing power, and high debt
leverage due to fast capacity expansion to support aluminum alloy
production.
S&P said, "We expect Sanxing to maintain its leading market
position in China's corn oil industry over the next 12-24 months.
The company's extensive distribution network, increasing efforts
to build its brand, and direct management of major retailers in
higher-tier cities in China will continue to support its market
position. Sanxing accounts for about 60% of Chinese corn-oil
industry's total production volume. The company also owns the
leading brand of packaged corn oil products in China,
Changshouhua, which represents about 25% market share as of 2016.
However, we note that corn oil is a relatively small component of
the competitive edible oil market in China, compared with markets
such as the U.S.
"Good operating efficiency is a key competitive advantage of
Sanxing, in our view. Compared with other corn oil manufacturers,
Sanxing has lower production costs owing to higher oil yields and
better access to raw materials. The company's production plants
for corn oil are strategically located in major corn-producing
regions in China. In addition, the major raw material suppliers
for Sanxing's corn oil segment are also customers of the
company's corn processing machinery, which enhances the stability
of raw material supply."
Sanxing's fast expansion into the production of aluminum alloy
products since 2013 has been its major driver for growth and
business diversity. S&P said, "We expect the company to continue
to focus on high value-added and customized product segments, and
to gradually expand its customer base over the next two to three
years. Our base case assumes aluminum alloy products will account
for 20%-25% of Sanxing's gross profit over the next two to three
years, from about 20% in 2016. Meanwhile, the gross profit
contribution from corn oil will drop to below 60% during the
period, from about 65% in 2016."
S&P said, "Nevertheless, we believe that Sanxing will remain a
small player in the highly competitive aluminum industry in China
over the next two to three years. Compared with large aluminum
products manufacturers, Sanxing's operating track record is still
short and its scale is less established. In addition, the company
sources from a single supplier, Shandong Weiqiao Pioneering Group
Co. Ltd., for most of its needed molten aluminum, the key raw
material for aluminum alloy products. In our view, Sanxing's
weaker competitive position in the aluminum industry will
continue to constrain its overall business risk profile."
Sanxing's limited pricing power in both corn oil and aluminum
products also undermines its credit profile. Selling prices in
both product segments are volatile in China, and closely
correlated with commodity input costs. S&P said, "We believe
Sanxing will continue to be exposed to volatile input costs;
however, the company's strategic shift towards higher-end
products and cost-plus pricing for its aluminum products partly
mitigate the risks."
S&P said, "We anticipate the company's capacity expansion to
moderate and its debt leverage to come off peak levels over the
next 12-24 months. The aluminum alloy business is the major cause
of Sanxing's rising debt leverage over the past four years.
However, most of the company's planned capacity expansion has
been completed as of June 30, 2017. We assume capital expenditure
to fall to Chinese renminbi (RMB) 600 million-RMB700 million per
year in 2018-2019 and mainly be for small-scale capacity
expansion and maintenance. This compares with about RMB900
million in 2017 and RMB1.2 billion in 2016.
"We expect Sanxing to repay at least RMB1.2 billion in short-term
bank borrowings mainly in 2018, using net proceeds from proposed
notes issuance. In addition, the company will also gradually
reduce the external guarantees it provides to third-party
companies over the next 12-24 months. Our base case assumes the
balance of external guarantees will drop to RMB500 million-RMB600
million in 2018-2019, from about RMB697 million in 2017. These
underpin our forecast that Sanxing's debt-to-EBITDA ratio will
improve to 4.3x-4.7x in 2018 and 2019, from our estimate of 5.6x-
6.0x in 2017. Sanxing's debt leverage would temporarily breach
our downgrade trigger of 5.0x in 2017, mainly due to proposed
notes issuance in December 2017.
"We consider Sanxing's competitive position to be stronger than
peers with similar business risk assessments, given the company's
leading market position in the corn oil industry and larger
operating scale. We reflect this relative strength in our
positive assessment of Sanxing's comparable rating analysis
modifier.
"The stable outlook reflects our expectation that Sanxing will
maintain its leading market position in the corn oil industry in
China and grow its customer base and operating scale for the
aluminum alloy business over the next 12 months. We also expect
Sanxing to repay at least RMB1.2 billion in short-term bank
borrowings, moderate capacity expansion, and reduce external
guarantees, such that its debt-to-EBITDA ratio will improve to
4.3x-4.7x in 2018, from our estimate of 5.6x-6.0x in 2017.
"We could lower the rating if Sanxing's debt-to-EBITDA ratio
remains above 5.0x without signs of improvement. This could
happen if capital investment is more aggressive than our
anticipation, driven by continuous fast capacity expansion or
large acquisitions. This could also happen if the company's
operating cash flow turns negative over the next 12 months due to
intense competition, volatile raw material prices, or weakening
working capital management.
"In a less-likely scenario, we could also lower the rating if
Sanxing's liquidity position materially deteriorates due to a
rising reliance on short-term debt to fund capital investment,
weakening operating cash flows, or erosion of banking
relationships."
Ratings upside is limited over the next 12 months. S&P could
raise the rating if Sanxing: (1) materially enhances its
competitive position in the aluminum products industry and
improves profitability through optimizing its product mix; and
(2) lowers its debt-to-EBITDA ratio below 4.0x on a sustained
basis, while maintaining adequate liquidity.
================
H O N G K O N G
================
NOBLE GROUP: Star Gasoline Trader Sinenko Said to Join Gunvor
-------------------------------------------------------------
Bloomberg News reports that Gunvor Group Ltd. has wooed Noble
Group Ltd.'s star gasoline trader to join its expanding U.S.
operations as an exodus from the struggling Asian trading house
continues amid asset sales and a debt restructuring.
Dmitri Sinenko, one of Noble's top performing oil traders, has
agreed to join Gunvor's U.S. operations, according to people
familiar with the matter who asked not to be identified because
the hiring hasn't been announced, Bloomberg relays.
According to Bloomberg, Mr. Sinenko is widely seen by rivals as
one of the top U.S. gasoline traders, famous for taking large
positions on the Colonial Pipeline that links the refining
corridor in the Gulf of Mexico to the consumer markets of the
East Coast. The U.S. gasoline market is the world's largest,
accounting for roughly one in 10 barrels of oil consumed
worldwide.
Bloomberg says the hire is a major staffing coup for Gunvor as it
executes plans to expand its U.S. operations from about 30 to
around 50 employees by the end of the year. He was with Noble for
about a decade, according to his LinkedIn page, Bloomberg
discloses.
Bloomberg notes that several former Noble traders, including Rich
Brockmeyer who now heads Gunvor's U.S. gas trading, have joined
Gunvor's Stamford and Houston operations as it bulks up
operations in the Americas. Sinenko's move to Gunvor was first
reported by Opis.
Many key Noble Group executive contracts and claw-back provisions
were due to expire in early December, Bloomberg reported last
week.
As Noble and its creditors wrestle over a $3.5 billion debt
restructuring, the company that was once Asia's largest
commodities trading house agreed to sell its U.S. gas and power
unit to Swiss-based Mercuria Energy Group Ltd. and its U.S. oil-
liquids business to Vitol Group, according to Bloomberg.
Bloomberg says the most valuable asset in Noble Group's oil unit
is a long-term contract for shipping via the Colonial Pipeline,
the biggest conduit for moving fuel from the U.S. refining
centers of Texas and Louisiana to high-demand East Coast markets.
The company said in a 2015 presentation that it was the largest
non-refiner shipper on the Colonial pipeline.
Vitol valued Noble's long-term contract for shipping via the
Colonial Pipeline at $105 million, according to the agreement,
seen by Bloomberg. That makes it the largest component of the so-
called base purchase price, listed as $222 million.
Vitol has until Dec. 4 to give Noble Group a list of employees
whose services it intends to retain, and it may make an offer of
employment to them at its sole discretion, according to the
agreement cited by Bloomberg.
Noble shares have lost more than 90 percent of their value this
year as the struggling firm racked up more than $3 billion in
losses, Bloomberg notes. That was due, in part, to writedowns on
the value of some long-term commodities contracts that were at
the center of accounting criticisms leveled against the company
more than two years ago by the anonymous group Iceberg Research.
Noble has said it will cut staff to about 400 from 900 after it
completes the sales of its gas and power unit and oil business,
adds Bloomberg.
About Noble Group
Hong Kong-based Noble Group Limited (SGX:N21) --
http://www.thisisnoble.com/-- engages in supply of agricultural,
industrial and energy products. The Company supplies agricultural
and energy products, metals, minerals and ores. Agriculture
products include grains, oilseeds and sugar to palm oil, coffee,
and cocoa. Energy business includes coal, gas and liquid energy
products. In metals, minerals and ores (MMO), it supplies iron
ore, aluminum, special ores and alloys. The Company operates
nearly in 140 locations. It supplies growth demand markets in
Asia and Middle East. Alcoa World Alumina and Chemicals is the
subsidiary of this company.
As reported in the Troubled Company Reporter-Asia Pacific on
Nov. 22, 2017, Fitch Ratings downgraded Hong Kong-based
commodities trader Noble Group Limited's Long-Term Foreign-
Currency Issuer Default Rating (IDR), senior unsecured rating and
the ratings on all its outstanding senior unsecured notes to 'CC'
from 'CCC'. The Recovery Rating is 'RR4'. The downgrade follows
Noble's Nov. 15, 2017 announcement that it has commenced
discussions with stakeholders on its capital structure.
=========
I N D I A
=========
ADVENTURE PARK: CRISIL Assigns 'B' Rating to INR5MM Term Loan
-------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable' rating to the
long-term bank loan facilities of Adventure Park (APK). The
rating reflects the firm's exposure to risks related to
implementation and demand for the amusement park. The weakness is
partially offset by its proprietor's extensive experience in the
hospitality business.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Term Loan 5 CRISIL B/Stable
Key Rating Drivers & Detailed Description
Weakness
* Exposed to risks related to implementation and demand for the
amusement park: The firm is setting up an 'adventure' themed
amusement park near Coimbatore (Tamil Nadu). The project is
expected to be fully operational from March 2018. The firm is
exposed to risks related to implementation of the project and to
demand for their amusement park.
Strengths
* Extensive experience of the proprietor in the leisure and
hospitality business: The proprietor has been in leisure and
hospitality business for over a decade, and have an established
business network, which is expected to support the footfalls
during the initial period of operations.
Outlook: Stable
CRISIL believes APK will continue to benefit from its
proprietor's extensive experience in the hospitality business.
The outlook may be revised to 'Positive' if stabilisation of
operations, and healthy demand, lead to higher-than-expected
revenue and profitability. The outlook may be revised to
'Negative' if demand is lower than expected; or if the financial
risk profile, particularly liquidity, weakens due to larger-than-
expected debt-funded capital expenditure; or if cash accrual is
low.
Promoted by Mrs. Gayatri, APK is setting up an 'Adventure' themed
amusement park with adventure and water rides. The firm's
amusement park is being set up in a total area of 35 acres in
Coimbatore and is expected to commence operations from March
2018.
AIRCEL CELLULAR: ICRA Cuts Rating on INR17,479cr Loan to 'D'
------------------------------------------------------------
ICRA has revised the long-term rating of Aircel Cellular Limited
from [ICRA]BB-(Negative) to [ICRA]D for INR17,479 crore bank
lines. The rating continues to remain under the 'Issuer Not
Cooperating' category. The ratings are now denoted as "[ICRA]D
Issuer Not Cooperating".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based/Non- 17,479 Revised to [ICRA]D ISSUER NOT
Fund based limits COOPERATING from [ICRA]BB-
(Negative) ISSUER NOT
COOPERATING
The rating takes a consolidated view on the credit risk profiles
of Aircel Limited and its wholly-owned subsidiaries Aircel
Cellular Limited, Dishnet Wireless Limited and Aircel Smart Money
Limited. The four entities are together referred to as Aircel.
Rationale The rating revision factors in the delays in debt
servicing by the company based on public information. The rating
was already under 'Issuer Not Cooperating' category due to non
submission of monthly 'No Default Statement' ("NDS") by the
company. ICRA has been consistently following up with the company
however the management has remained non-cooperative.
Key rating drivers
Credit strengths
* Track record of operations: Aircel has established pan-India
operations in the mobile services segment (89.9 mn subscribers as
on July 31, 2017) with strong market presence in its four legacy
circles namely - Tamil Nadu, Assam, North East and Jammu &
Kashmir.
Credit weaknesses
* Delays in debt servicing: the company has delayed the servicing
of its debt liabilities as per public information.
* Stress in Telecom Industry: Aircel remains a relatively modest
player in many of its telecom circles and is exposed to
competitive challenges from the established players in these
circles. Persisting competitive pressures and weak pricing power
in the industry has impacted the revenue growth and
profitability.
* Sizeable debt level and weak cash flow generation: the company
has sizeable debt levels and weak debt protection indicators.
* Legal Challenges: The legal risks for the company remain high
given the uncertainties regarding the recent developments in the
ongoing investigations into acquisition of the company by MCB.
Aircel Limited, along with its subsidiaries Aircel Cellular
Limited and Dishnet Wireless Limited, is a telecom service
provider with a pan India presence. Aircel Limited was
incorporated in December 1994 as Srinivas Cellcom Limited and
started by offering services in the Tamil Nadu circle in April
1999. Over the years, it won licences and launched services in
all the 22 telecom circles in the country. Later in 2006, Maxis
Communications Berhad, Malaysia (Maxis), acquired majority stake
in the company. Maxis, through Global Communication Services
Holdings Ltd and Deccan Digital Networks Private Limited,
effectively has approximately 73.99% equity interest in Aircel
Limited. The balance equity is held by the Sindya Securities &
Investments Private Limited. Maxis also has a substantial
shareholding in Maxis Berhad, the leading telecommunication
operator in Malaysia. Aircel offers GSM-based 2G services in all
the 22 telecom circles and has also introduced 3G services in
select geographies. As of July 2017, the company's subscriber
base stood at 89.9 million with a subscriber market share of
7.6%.
AIRCEL LIMITED: ICRA Lowers Rating on INR17,479cr Loan to 'D'
-------------------------------------------------------------
ICRA has revised the long-term rating of Aircel Limited from
[ICRA]BB-(Negative) to [ICRA]D for INR17,479 crore bank lines.
The rating continues to remain under the 'Issuer Not Cooperating'
category. The ratings are now denoted as "[ICRA]D Issuer Not
Cooperating".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based/Non- 17,479 Revised to [ICRA]D ISSUER NOT
Fund based limits COOPERATING from [ICRA]BB-
(Negative) ISSUER NOT
COOPERATING
The rating takes a consolidated view on the credit risk profiles
of Aircel Limited and its wholly-owned subsidiaries Aircel
Cellular Limited, Dishnet Wireless Limited and Aircel Smart Money
Limited. The four entities are together referred to as Aircel.
Rationale The rating revision factors in the delays in debt
servicing by the company based on public information. The rating
was already under 'Issuer Not Cooperating' category due to non
submission of monthly 'No Default Statement' ("NDS") by the
company. ICRA has been consistently following up with the company
however the management has remained non-cooperative.
Key rating drivers
Credit strengths
* Track record of operations: Aircel has established pan-India
operations in the mobile services segment (89.9 mn subscribers as
on July 31, 2017) with strong market presence in its four legacy
circles namely - Tamil Nadu, Assam, North East and Jammu &
Kashmir.
Credit weaknesses
* Delays in debt servicing: the company has delayed the servicing
of its debt liabilities as per public information.
* Stress in Telecom Industry: Aircel remains a relatively modest
player in many of its telecom circles and is exposed to
competitive challenges from the established players in these
circles. Persisting competitive pressures and weak pricing power
in the industry has impacted the revenue growth and
profitability.
* Sizeable debt level and weak cash flow generation: the company
has sizeable debt levels and weak debt protection indicators.
* Legal Challenges: The legal risks for the company remain high
given the uncertainties regarding the recent developments in the
ongoing investigations into acquisition of the company by MCB.
Aircel Limited, along with its subsidiaries Aircel Cellular
Limited and Dishnet Wireless Limited, is a telecom service
provider with a pan India presence. Aircel Limited was
incorporated in December 1994 as Srinivas Cellcom Limited and
started by offering services in the Tamil Nadu circle in April
1999. Over the years, it won licences and launched services in
all the 22 telecom circles in the country. Later in 2006, Maxis
Communications Berhad, Malaysia (Maxis), acquired majority stake
in the company. Maxis, through Global Communication Services
Holdings Ltd and Deccan Digital Networks Private Limited,
effectively has approximately 73.99% equity interest in Aircel
Limited. The balance equity is held by the Sindya Securities &
Investments Private Limited. Maxis also has a substantial
shareholding in Maxis Berhad, the leading telecommunication
operator in Malaysia. Aircel offers GSM-based 2G services in all
the 22 telecom circles and has also introduced 3G services in
select geographies. As of July 2017, the company's subscriber
base stood at 89.9 million with a subscriber market share of
7.6%.
AIRCEL SMART: ICRA Cuts Rating on INR17,479cr Loan to 'D'
---------------------------------------------------------
ICRA has revised the long-term rating of Aircel Smart Money
Limited from [ICRA]BB-(Negative) to [ICRA]D for INR17,479 crore
bank lines. The rating continues to remain under the 'Issuer Not
Cooperating' category. The ratings are now denoted as "[ICRA]D
Issuer Not Cooperating".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based/Non- 17,479 Revised to [ICRA]D ISSUER NOT
Fund based limits COOPERATING from [ICRA]BB-
(Negative) ISSUER NOT
COOPERATING
The rating takes a consolidated view on the credit risk profiles
of Aircel Limited and its wholly-owned subsidiaries Aircel
Cellular Limited, Dishnet Wireless Limited and Aircel Smart Money
Limited. The four entities are together referred to as Aircel.
Rationale
The rating revision factors in the delays in debt servicing by
the company based on public information. The rating was already
under 'Issuer Not Cooperating' category due to non submission of
monthly 'No Default Statement' ("NDS") by the company. ICRA has
been consistently following up with the company however the
management has remained non-cooperative.
Key rating drivers
Credit strengths
* Track record of operations: Aircel has established pan-India
operations in the mobile services segment (89.9 mn subscribers as
on July 31, 2017) with strong market presence in its four legacy
circles namely - Tamil Nadu, Assam, North East and Jammu &
Kashmir.
Credit weaknesses
* Delays in debt servicing: the company has delayed the servicing
of its debt liabilities as per public information.
* Stress in Telecom Industry: Aircel remains a relatively modest
player in many of its telecom circles and is exposed to
competitive challenges from the established players in these
circles. Persisting competitive pressures and weak pricing power
in the industry has impacted the revenue growth and
profitability.
* Sizeable debt level and weak cash flow generation: the company
has sizeable debt levels and weak debt protection indicators.
* Legal Challenges: The legal risks for the company remain high
given the uncertainties regarding the recent developments in the
ongoing investigations into acquisition of the company by MCB.
Aircel Limited, along with its subsidiaries Aircel Cellular
Limited and Dishnet Wireless Limited, is a telecom service
provider with a pan India presence. Aircel Limited was
incorporated in December 1994 as Srinivas Cellcom Limited and
started by offering services in the Tamil Nadu circle in April
1999. Over the years, it won licences and launched services in
all the 22 telecom circles in the country. Later in 2006, Maxis
Communications Berhad, Malaysia (Maxis), acquired majority stake
in the company. Maxis, through Global Communication Services
Holdings Ltd and Deccan Digital Networks Private Limited,
effectively has approximately 73.99% equity interest in Aircel
Limited. The balance equity is held by the Sindya Securities &
Investments Private Limited. Maxis also has a substantial
shareholding in Maxis Berhad, the leading telecommunication
operator in Malaysia. Aircel offers GSM-based 2G services in all
the 22 telecom circles and has also introduced 3G services in
select geographies. As of July 2017, the company's subscriber
base stood at 89.9 million with a subscriber market share of
7.6%.
ANSALDOCALDAIE GB: ICRA Moves 'D' Rating to Not Cooperating
-----------------------------------------------------------
ICRA has moved the long term ratings for the bank facilities of
Ansaldocaldaie GB Engineering Private Limited to the 'Issuer Not
Cooperating' category. The rating is now denoted as "[ICRA]D
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term-Loan 15.80 [ICRA]D ISSUER NOT COOPERATING;
Facility Rating moved to the 'Issuer Not
Cooperating' category
Long Term-Fund 2.00 [ICRA]D ISSUER NOT COOPERATING;
Based Facility Rating moved to the 'Issuer Not
Cooperating' category
Long Term- 2.20 [ICRA]D ISSUER NOT COOPERATING;
Unallocated Rating moved to the 'Issuer Not
Cooperating' category
The rating takes into account continued delays in debt servicing
by the entity. As part of its process and in accordance with its
rating agreement with Ansaldocaldaie GB Engineering Private
Limited, ICRA has been trying to seek information from the entity
so as to monitor its performance, but despite repeated requests
by ICRA, the entity's management has remained non-cooperative. In
the absence of requisite information, and in line with SEBI's
Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016,
ICRA's Rating Committee has taken a rating view based on the best
available information.
Ansaldocaldaie GB Engineering Private Limited is engaged in the
manufacturing and fabrication of Boiler components mainly
pressure vessels for boilers, mainly high pressure boilers and
super-critical boilers. The company is a 50:50 Joint Venture
between Ansaldocaldaie Boilers India Private Limited (ABIPL) and
G B Engineering Enterprises Private Limited (GBEEPL). The
manufacturing facility is located in Pudukkudy village near
Trichy, Tamil Nadu.
BASANTDEVI CHARITABLE: ICRA Cuts Rating on INR15cr Loan to D
------------------------------------------------------------
ICRA has downgraded the rating to [ICRA]D from [ICRA]BB(Stable)
for the INR15.0-crore term loan facility of Basantdevi Charitable
Trust. The rating continues to remain under the 'Issuer Not
Cooperating' category. The rating is now denoted as "[ICRA]D
ISSUER NOT COOPERATING."
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-limit- 15.00 [ICRA]D ISSUER NOT
Term Loan COOPERATING; downgraded
from [ICRA]BB (Stable)
ISSUER NOT COOPERATING
Rationale
The rating downgrade follows the delay in debt servicing by BCT
to the lender, as confirmed by them to ICRA.The rating is based
on limited updated information on the entity's performance since
the time it was last rated in May, 2016. As part of its process
and in accordance with its rating agreement with BCT, 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 Nov. 1, 2016, ICRA's Rating
Committee has taken a rating view based on the best available
information.
Key rating drivers
Credit strengths
* Established track record of the trustee in the education
sector: The trustees of BCT have experience of over a decade in
successfully running educational institutions.
Credit weaknesses
* Delay in debt servicing: The trust has delayed in servicing its
debt obligations with Punjab National Bank.
Formed in 1991, Basantdevi Charitable Trust runs 6 educational
institutions under the flagship brand name 'MITS Group' in
Rayagada and Bhubaneswar in Odisha. The trust established its
first college named 'Majhighariani Institute of Technology &
Science (MITS)' in 1991. Over the years the trust has added
various courses under the same college and also five other
colleges/institutions.
BESTOVO FOODS: CRISIL Assigns 'B' Rating to INR6.7MM Term Loan
--------------------------------------------------------------
CRISIL Ratings has assigned its rating on the Long Term bank Loan
facility of Bestovo Foods Private Limited' (BFPL) at 'CRISIL
B/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 6.7 CRISIL B/Stable
Cash Credit 1.5 CRISIL B/Stable
Proposed Term Loan 1.8 CRISIL B/Stable
The ratings reflect the extensive experience of the promoters of
BFPL in the food processing industry. This strength is partially
offset by the below average financial risk profile, initial stage
of operations and susceptibility to off take risk and exposure to
risk of changes in regulations by client countries and stringent
quality norms.
Key Rating Drivers & Detailed Description
Weakness
* Initial stage of operations and susceptibility to off take
risk: The unit for manufacturing powdered eggs is expected to
commenced operations from January 2018. It could face initial
challenges especially in stabilization of operations and ramp up
of sales. Timely stabilization of capacities and commensurate
ramp up will remain key monitorables.
* Below-average financial risk profile: Networth is expected to
be modest at INR2 crore as on 31 March 2018, marked by initial
stage of operations. The capital structure is leveraged due to
debt-funded capital expenditure for setting up the manufacturing
unit.
* Exposure to risk of changes in regulations by client countries
and stringent quality norms: The industry faces risks arising
from regulatory changes in the client countries and the high
quality consciousness of clients. Adverse regulatory changes can
have an adverse impact on the profitability of the entire
industry. Food product imports are subject to high quality
standards in developed countries of the EU, the US, and Japan.
Any instance of rejection of a shipment by any single EU country
results in stringent inspection of all future consignments at all
EU ports, thereby impacting sales in the region.
Strengths
* Extensive experience of promoters in the industry: BFPL's
promoters' extensive industry experience has helped the company
start to establish itself in the highly competitive industry. The
promoter, Mr P Surendranath and Mr. Gopi Chand were involved in
another entity, Ovobel Foods Limited (Rated at CRISIL A4) which
manufactures egg powder and processes frozen eggs. Thus they have
previous experience in the same industry. This led to established
associations with suppliers and customers. The comfort is also
derived from committed need based fund support from them. CRISIL
believes that the extensive experience of BFPL's promoters in the
industry and their expertise will help the company maintain its
business risk profile over the medium term.
Outlook: Stable
CRISIL believes BFPL will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if quick ramp up in sales
leads to higher than expected accruals and better-than expected
financial risk profile during the initial phase. Conversely, the
outlook may be revised to 'Negative' if lower than expected
revenues or profitability, or large working capital requirements
leads to weakening of financial risk profile and liquidity.
Incorporated in August 2015, Bestovo Foods Private Limited, is
into manufacturing of powdered egg. The company, promoted by Mr.
P Surendranath who has over 15 years of industry experience.
DECCAN EXTRUSIONS: CRISIL Assigns B+ Rating to INR6MM Cash Loan
---------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating on the
long-term bank facilities of Deccan Extrusions Private Limited
(DEPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6 CRISIL B+/Stable
The rating reflects the extensive experience of the promoters in
the aluminum industry. These strengths are offset by moderate
financial risk profile because of high gearing and average debt
protection metrics and exposure to risks related to volatility in
raw material prices and to intense competition and working
capital intensive nature of operations.
Key Rating Drivers & Detailed Description
Weaknesses
* Moderate financial risk profile: Networth is estimated to be
small at INR1.5 crore and gearing high at 4 times, as on
March 31, 2017. Debt protection metrics are moderate, with
estimated interest coverage and net cash accrual to total debt
ratios estimated at 1.78 times and 0.13 time, respectively, in
fiscal 2017.
* Vulnerability to volatility in aluminium prices, and to intense
competition: Prices of key raw material, aluminium (accounts for
80% of total cost of sales), are highly volatile, which can
affect operating margin. Also, the aluminium extrusion industry
is intensely competitive due to low entry barrier and is hence
highly price-sensitive. Business risk profile will remain
constrained over the medium term due to intense competition.
* Working capital intensive nature of operations: Gross current
assets were at 296 days as on March 31, 2017. DEPL has high
inventory holding and receivable days to the tune of about three
to four months resulting in working capital intensive nature of
operations.
Strength
* Extensive experience of promoters: Presence of more than three
decades in the aluminium profiles segment has enabled the
promoters to establish strong relationship with major customers
and suppliers.
Outlook: Stable
CRISIL believes DEPL will continue to benefit over the medium
term from the extensive experience of its promoters. The outlook
may be revised to 'Positive' if a substantial increase in revenue
and profitability or significant capital infusion by promoter
while ensuring better working capital management leads to better
financial risk profile. The outlook may be revised to 'Negative'
if larger-than-expected debt-funded expansion or sharp decline in
revenue and profitability adversely affects financial risk
profile and working capital management.
Commenced commercial operations in 1989, DEPL manufactures
aluminium profiles. The product portfolio consists of various
aluminium profiles which are used as panels, channels and
verticals with their end usage in residential, construction,
transport, power, consumer goods and other industries. DEPL has
its manufacturing facility with an installed capacity of 5400
tonnes per month (TPM) at Pondicherry.
DECIBELS ELECTRONICS: CRISIL Reaffirms B- Rating on INR1.5MM Loan
-----------------------------------------------------------------
CRISIL Ratings has reaffirmed its ratings on the bank facilities
of Decibels Electronics Private Limited (DEPL) at 'CRISIL B-
/Stable/CRISIL A4.'
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1.5 CRISIL B-/Stable (Reaffirmed)
Letter of credit &
Bank Guarantee 3 CRISIL A4 (Reaffirmed)
Long Term Loan 1.1 CRISIL B-/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility .65 CRISIL B-/Stable (Reaffirmed)
CRISIL's ratings on the bank facilities of DEPL continue to
reflect a modest scale of operations in the highly competitive
electronics industry, large working capital requirement, and a
weak financial risk profile because of a small net worth, high
gearing, and weak debt protection metrics. These rating
weaknesses are partially offset by the extensive industry
experience of the company's promoters.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations in highly competitive electronics
industry: The company reported revenues of around INR4.5 Cr in
2016-17. The electronics industry is intensively competitive with
presence of large number of organized and unorganized players.
Intense completion prevents the small players from passing on any
increase in raw material cost to its customers.
* Large working capital requirements: DEPL's business is highly
working capital intensive, as reflected in gross current asset
(GCA) days of 241 days as on March 31, 2017; the GCA days have
been higher in the past. The high GCA days emanates from the
company's high receivables cycle of 110 days and inventory cycle
of 93 days.
* Weak financial risk profile: DEPL's financial risk profile is
marked by its small net-worth, high gearing and weak debt
protection metrics. Net worth and gearing was at INR2.1 Cr and
2.73 times as on 31 March 207 while debt protection metrics, net
cash accruals to total debt (NCATD) and interest coverage were
0.3 percentage and 0.9 times in 2016-17.
Strength
* Extensive industry experience of the promoters: The company is
promoted by Mr. B.S.Chakravarthy who has more than two decades of
similar industry experiences. Initially started as a trader for
electronic products, over the years he has developed healthy
relationship with various suppliers and customers.
Outlook: Stable
CRISIL believes DEPL will continue to benefit over the medium
term from the extensive industry experience of its promoters and
established relationship with customers. The outlook may be
revised to 'Positive' if there is a substantial and sustained
improvement in revenue and profitability margins, or considerable
increase in net worth on the back of sizeable equity infusion.
The outlook may be revised to 'Negative' in case of a steep
decline in profitability margins, or deterioration in the
company's capital structure caused most likely by large, debt-
funded capital expenditure or a stretched working capital cycle.
DEPL was incorporated in 1995 at Hyderabad, promoted by Mr B S
Chakravarthy and his associates, The Company manufactures
electronic products.
During fiscal 2017, the company provisionally reported a profit
after tax (PAT) of negative INR0.29 Crores on operating income of
INR4.54 Crores against PAT of negative INR0.81 Crores on
operating income of INR3.48 Crores in the previous fiscal.
DISHNET WIRELESS: ICRA Lowers Rating on INR17,479cr Loan to 'D'
---------------------------------------------------------------
ICRA has revised the long-term rating of Dishnet Wireless Limited
from [ICRA]BB-(Negative) to [ICRA]D for INR17,479 crore bank
lines. The rating continues to remain under the 'Issuer Not
Cooperating' category. The ratings are now denoted as "[ICRA]D
Issuer Not Cooperating".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based/Non- 17,479 Revised to [ICRA]D ISSUER NOT
Fund based limits COOPERATING from [ICRA]BB-
(Negative) ISSUER NOT
COOPERATING
The rating takes a consolidated view on the credit risk profiles
of Aircel Limited and its wholly-owned subsidiaries Aircel
Cellular Limited, Dishnet Wireless Limited and Aircel Smart Money
Limited. The four entities are together referred to as Aircel.
Rationale The rating revision factors in the delays in debt
servicing by the company based on public information. The rating
was already under 'Issuer Not Cooperating' category due to non
submission of monthly 'No Default Statement' ("NDS") by the
company. ICRA has been consistently following up with the company
however the management has remained non-cooperative.
Key rating drivers
Credit strengths
* Track record of operations: Aircel has established pan-India
operations in the mobile services segment (89.9 mn subscribers as
on July 31, 2017) with strong market presence in its four legacy
circles namely - Tamil Nadu, Assam, North East and Jammu &
Kashmir.
Credit weaknesses
* Delays in debt servicing: the company has delayed the servicing
of its debt liabilities as per public information.
* Stress in Telecom Industry: Aircel remains a relatively modest
player in many of its telecom circles and is exposed to
competitive challenges from the established players in these
circles. Persisting competitive pressures and weak pricing power
in the industry has impacted the revenue growth and
profitability.
* Sizeable debt level and weak cash flow generation: the company
has sizeable debt levels and weak debt protection indicators.
* Legal Challenges: The legal risks for the company remain high
given the uncertainties regarding the recent developments in the
ongoing investigations into acquisition of the company by MCB.
Aircel Limited, along with its subsidiaries Aircel Cellular
Limited and Dishnet Wireless Limited, is a telecom service
provider with a pan India presence. Aircel Limited was
incorporated in December 1994 as Srinivas Cellcom Limited and
started by offering services in the Tamil Nadu circle in April
1999. Over the years, it won licences and launched services in
all the 22 telecom circles in the country. Later in 2006, Maxis
Communications Berhad, Malaysia (Maxis), acquired majority stake
in the company. Maxis, through Global Communication Services
Holdings Ltd and Deccan Digital Networks Private Limited,
effectively has approximately 73.99% equity interest in Aircel
Limited. The balance equity is held by the Sindya Securities &
Investments Private Limited. Maxis also has a substantial
shareholding in Maxis Berhad, the leading telecommunication
operator in Malaysia. Aircel offers GSM-based 2G services in all
the 22 telecom circles and has also introduced 3G services in
select geographies. As of July 2017, the company's subscriber
base stood at 89.9 million with a subscriber market share of
7.6%.
GEETASHREE PULSES: Ind-Ra Moves 'B' Rating to Non-Cooperating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Geetashree
Pulses' 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:
-- INR100 mil. Fund-based limits migrated to non-Cooperating
category with IND B(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
November 9, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2013, Geetshree Pulses is a partnership firm
engaged in the trading of coriander seeds. The firm has its
registered office at Kumbhraj in Madhya Pradesh and is managed by
Mr Ram Kasat and family.
GREAT INDIA: ICRA Withdraws 'B' Rating on INR12cr Cash Loan
-----------------------------------------------------------
ICRA withdraws the long-term rating of [ICRA]B and short-term
rating of [ICRA]A4 assigned to the INR24.00-crore bank facilities
of Great India Steel Fabricators (GISF). The outlook on the long-
term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Fund- 12.00 [ICRA]B(stable) ISSUER NOT
Based-Cash credit CO-OPERATING, withdrawn
Long-term Fund- 7.31 [ICRA]B (stable) ISSUER NOT
Based-Term loans CO-OPERATING, withdrawn
Short-term Non 2.00 [ICRA]A4 ISSUER NOT CO-
fund-based OPERATING, withdrawn
Long-term/Short- 2.69 [ICRA]B(stable)/[ICRA]A4
term Unallocated ISSUER NOT CO-OPERATING,
withdrawn
Rationale
The rating is withdrawn in accordance with ICRA's policy on
withdrawal and as requested by the company.
Great India Steel Fabricators, established in 1972, is a
partnership firm promoted by Mehndiratta family of Yamunanagar
(Haryana). It is engaged in steel fabrication for power,
refinery, petrochemicals, thermal, metro rail, and infrastructure
projects.
IMPERIAL TUBES: ICRA Moves 'D' Rating to Not Cooperating
--------------------------------------------------------
ICRA has moved the rating for the INR60.00-crore bank facilities
of Imperial Tubes Private Limited (ITPL) to the 'Issuer Not
Cooperating' category. The rating is now denoted as: "[ICRA]D
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based Limit- 50.00 [ICRA]D ISSUER NOT COOPERATING;
Open Cash Credit Rating moved to the 'Issuer Not
Facility Cooperating' category
Non-Fund based 5.00 [ICRA]D ISSUER NOT COOPERATING;
Limit-Bank Rating moved to the 'Issuer Not
Guarantee Cooperating' category
Non-Fund based 5.00 [ICRA]D ISSUER NOT COOPERATING;
Limit-Inland Rating moved to the 'Issuer Not
Letter of Credit Cooperating' category
Rationale
The rating is based on no updated information on the entity's
performance since the time it was last rated in May, 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 ITPL, 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
Nov. 1, 2016, ICRA's Rating Committee has taken a rating view
based on the best available information.
Key rating drivers
Credit strengths
* Long experience of the promoters in steel tube manufacturing
business through other group company: Presence of experienced
promoters with established track record in steel tube
manufacturing business, which strengthens business prospects for
the company.
Credit weaknesses
* Weak financial profile characterized by the leveraged capital
structure and depressed level of coverage indicators: ITPL has a
Weak financial profile characterized by an aggressive capital
structure and depressed level of coverage indicators.
Incorporated in 1978, ITPL is currently engaged in the
manufacturing of electric resistance welded (ERW) black pipes
with an installed capacity of 120,000 metric tonnes per annum
(MTPA). The manufacturing facility of the company is located in
Howrah, West Bengal. The company is being managed by the two
directors Mr. Pratik Sharma and Mr. Manish Sharma, who had taken
over the business from the original promoters in December 2013.
The pipes manufactured by the company have varied applications
like irrigation, water supply, sewerage system, fabrication,
construction activity, idlers/ conveyors, water wells (casing
pipes) etc. and are sold under the brand name of 'Imperial'
KALINGA BREEDING: ICRA Moves B Rating to Not Cooperating Category
-----------------------------------------------------------------
ICRA has moved the ratings for the INR10.00 crore bank facilities
of Kalinga Breeding Farms Private Limited (KBFPL) to the 'Issuer
Not Cooperating' category. The rating is now denoted as:
"[ICRA]B(Stable)/[ICRA]A4 ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term-Fund Based 6.13 [ICRA]B(Stable) ISSUER NOT
COOPERATING; Rating moved
to the 'Issuer Not
Cooperating' category
Long Term/Short Term
Unallocated 3.87 [ICRA]B(Stable)/[ICRA]A4
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 September, 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 KBFPL, 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
Nov. 1, 2016, ICRA's Rating Committee has taken a rating view
based on the best available information.
Key rating drivers
Credit strengths
* Long experience of the promoters in poultry industry: The
promoters are engaged in the business of selling hatching eggs
and day-old chicks produced by breeding of parent chicks. The
company's plant is located at Chinna Kistapur Jagadevpur Medak
district, Telangana and has a capacity of 60,000 birds. The
company is managed by Mr. K.Surender Reddy and has more than two
decades of experience in poultry industry.
* Favorable demand outlook: The expectations of good monsoon,
crop output and increasing disposable income in the hands of the
consumer during FY2018 is expected to drive the demand for
poultry going forward.
Credit weaknesses
* Financial profile of the company characterised by weak capital
structure and debt-coverage indicators: The financial risk
profile of the company remained weak, characterised by gearing of
1.62 times and debt service coverage ratio of 0.84 times as on
March 31, 2016, interest coverage ratio of 2.09 times, and
NCA/Total Debt of 10.52% for FY2016. The working capital
intensity is high at 33% for FY2016 owing to high inventory
levels.
* Modest scale of operations: The operating income has increased
from Rs 4.75 crore in FY2014 to Rs 8.99 crore in FY2016 owing to
increased laying capacity. However, the scale of operations
continues to be modest in the intensely competitive poultry
industry.
* Susceptibility of margins to input feed price fluctuations:
With poultry feed forming ~75% of the production cost, the
margins are susceptible to price fluctuations of maize and soya,
which are the key raw materials for poultry feed.
* Vulnerability of business operations to the seasonal demand and
risks like disease outbreak: The revenues and margins of the
company remain susceptible to the cyclicality associated with the
poultry industry, and also remain exposed to the inherent risks
of disease outbreaks in the poultry industry.
Kalinga Breeding Farms Private Limited (KBFPL) was incorporated
in 2011 and is engaged in the business of selling hatching eggs
and day-old chicks produced by breeding of parent chicks procured
from Venkateshwara Hatcheries Pvt. Ltd. KBFPL operates through
facilities located in Chinna Kistapur Jagadevpur Medak district,
Telangana and has a capacity of 60,000 birds. The company began
commercial operations in October 2013 and is managed by Mr.
K.Surender Reddy who has more than two decades of experience in
the poultry industry.
M C ROLLER: CRISIL Assigns B+ Rating to INR12MM Cash Loan
---------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
long-term bank facility of M C Roller Flour Mills Pvt Ltd
(MCRFM).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 12 CRISIL B+/Stable
The rating reflects MCRFM's modest scale of operations in the
intensely competitive industry, and subdued financial risk
profile. These weaknesses are partially offset by the experience
of the promoters.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations and intense competition: Small scale
of operations, with revenue of INR71.61 crore in fiscal 2017,
amid intense competition limits pricing power with suppliers and
customers, thereby constraining profitability.
* Subdued financial risk profile: Networth has been modest at
INR2.44 crore as on March 31, 2017, while total outside
liabilities to tangible networth ratio and gearing were high at
over 5.10 times and 4.99 times, respectively. With continued
large working capital debt, gearing is expected to remain high
over the medium term. Interest coverage ratio was also muted at
1.4 times in fiscal 2017 due to low profitability.
Strengths
* Experience of promoters and their fund support: Benefits
derived from the promoters' experience and understanding of the
local market dynamics and healthy relations with suppliers and
customers should continue to support the business. They are also
likely to continue providing need-based funding support via
unsecured loans.
Outlook: Stable
CRISIL believes MCRFM will continue to benefit over the medium
term from the experience of the promoters. The outlook may be
revised to 'Positive' if substantial increase in revenue,
profitability, and cash accrual strengthens financial risk
profile. Conversely, the outlook may be revised to 'Negative' if
decline in revenue or profitability, or stretch in working
capital cycle weakens financial risk profile and liquidity.
MCRFM, incorporated in 1987, processes wheat into wheat flour,
maida, suji, and rawa. Its plant in Shahjahanpur, Uttar Pradesh,
has installed processing capacity of 60 tonne per day.
MAKKAR TEXTILE: CRISIL Reaffirms B Rating on INR8.5MM Term Loan
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Makkar
Textile Mills Private Limited (MTM) for obtaining information
through letters and emails dated October 6, 2017 and
November 7, 2017 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Term Loan 5.6 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Term Loan 8.5 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Makkar Textile Mills Private
Limited. This restricts CRISIL's ability to take a forward Makkar
Textile Mills Private Limited is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL BB' rating category or lower. Based on
the last available information, CRISIL has reaffirmed the rating
at 'CRISIL B/Stable'.
MTM, incorporated in 1994 and promoted by Mr Makkar, manufactures
shawls from acrylic, viscose, and polyester yarn. The company
also has a retail presence in the domestic market.
N. PRAKASH: CRISIL Assigns B+ Rating to INR4.15MM LT Loan
---------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
long-term bank facilities of N. Prakash.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility .85 CRISIL B+/Stable
Long Term Loan 4.15 CRISIL B+/Stable
Overdraft 1 CRISIL B+/Stable
The rating reflects healthy occupancy of the mens' hostel run by
the firm, healthy profitability, and extensive experience of the
promoter. These strengths are partly offset by the small scale of
operations, amidst intense competition and geographical
concentration in revenue.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations: High cost involved in expansion, and
low networth of around INR3.36 crores as on March 31, 2017, may
continue to keep the scale of operations small, in the medium
term.
* Geographical concentration and intense competition: The firm
derives its entire revenue from Bengaluru and bulk of the tenants
are from the IT sector. Any economic downturn in the sector, and
intense competition in the paying guest (PG) segment, could
adversely affect the business risk profile in the medium term.
Strengths
* Healthy occupancy and profitability: Occupancy was around 90%,
given the affordable terms, and should remain healthy in the
medium term, backed by sufficient demand for PG accommodation in
Bengaluru, and the firm's established market position. Supported
by its healthy occupancy, operating profitability was healthy at
around 48% for fiscal 2017.
* Extensive experience of the promoters: The decade-long
experience of the promoter in the hospitality industry, and his
strong understanding of business dynamics, should support the
business risk profile in the medium term.
Outlook: Stable
CRISIL believes N. Prakash will continue to benefit from the
extensive experience of its promoters. The outlook may be revised
to 'Positive' if healthy occupancy and larger-than-expected cash
accrual leads to improvement in liquidity. The outlook may be
revised to 'Negative' if substantially low occupancy or delay in
commencement of its upcoming new PG project lead to weak
liquidity.
ONWARD PLASTIC: CRISIL Assigns B+ Rating to INR8.23MM Term Loan
---------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating on the
long-term bank facilities of Onward Plastic Private Limited
(OPPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 8.23 CRISIL B+/Stable
Cash Credit 3.15 CRISIL B+/Stable
Proposed Cash
Credit Limit 0.62 CRISIL B+/Stable
The rating reflects small scale of operations, average financial
risk profile because of low networth and high gearing and weak
liquidity position. These weaknesses are partially offset by
experience of promoters and established relationships with
customers.
Analytical Approach
For arriving at the ratings, unsecured loans of INR5.5 crore from
the promoter and his friends and relatives have been treated as
neither debt nor equity, based on a specific undertaking from the
management to retain these loans in the business till the
currency of bank debt.
Key Rating Drivers & Detailed Description
Strengths
* Promoters' experience and established relationships with
stakeholders: Benefits from the promoters' experience of over a
decade where the company has been able to establish a diversified
clientele and developed strong relationship with key customers,
such as Castrol India Ltd, Reckitt Benckiser group, Safechem
Industries, Wipro Ltd, Emami group and McNroe Chemical Pvt Ltd.
Weakness
* Small scale of operations: Scale remains small, with revenue at
INR16.7 crore reported for fiscal 2017.
* Average financial risk profile: Networth was low at INR3.1
crore, resulting in an average financial risk profile with high
gearing of 3.46 times as on March 31, 2017. However, with
moderate operating profitability, the debt protection metrics are
comfortable as reflected in interest coverage ratio was 2.1 times
and net cash accrual to total debt ratio 0.6 time in fiscal 2017.
* Weak Liquidity Position: The liquidity profile is weak marked
by tightly match cash accruals against debt repayment obligation
and highly utilised bank limits. The liquidity is expected to
remain stretched over the medium term.
Outlook: Stable
CRISIL believes that OPPL will continue to benefit from the long-
standing presence of its promoters in the injection moulding
plastics business along with the established relationship with
its customers and suppliers. The outlook may be revised to
'Positive' if there is improvement in the financial risk profile,
due to higher-than-expected ramp up in scale of operations along
with improvement in operating margin or further equity infusion
by promoters. The outlook may be revised to 'Negative' if the
financial risk profile deteriorates, due to lower-than-expected
cash accrual, or large incremental working capital requirement or
any debt-funded capital expenditure.
Promoted by Mr Ramesh Parekh, OPPL began its operations in 2007.
Currently it is managed by Mr Kunal Praekh. The company
manufactures High-density Polyethylene (HDPE) bottle caps,
injection moulds, PET (Polyethylene terephthalate) bottle, PET
(Polyethylene terephthalate) jars, plastic containers, caps and
closures. The company is located in Kolkata, West Bengal and has
1 factory in Haridwar and 1 factory in Kolkata. Recently in
fiscal 2018, the company has set up another factory in Kolkata,
solely catering products for Castron India.
PATWA AUTOMOTIVE: CRISIL Cuts Rating on INR36MM Cash Loan to 'D'
----------------------------------------------------------------
CRISIL Ratings has downgraded its rating on the long-term bank
facilities of Patwa Automotive Private Limited (PAPL; part of the
Patwa Marketing group) to 'CRISIL D' from 'CRISIL BB-/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 36 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
Inventory Funding 9 CRISIL D (Downgraded from
Facility 'CRISIL BB-/Stable')
The downgrade reflects overutilisaltion in working capital
facility owing to weak liquidity caused by stretch working
capital cycle.
Analytical Approach
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of PAPL and Patwa Abhikaran Ratlam Pvt
Ltd (PARPL). The two companies, together referred to as the Patwa
Marketing group, have common promoters, management team, and
business.
Key Rating Drivers & Detailed Description
Strengths
* Promoters' extensive experience in the automobile dealership
business in Madhya Pradesh: The promoters' extensive industry
experience has helped the group develop healthy relationship with
Mahindra & Mahindra Ltd (M&M), which has translated into
dealerships in various regions of Madhya Pradesh, and to strong
revenue growth (Rs 364 crore in fiscal 2016).
* Support from promoters through unsecured loans: The promoters
have brought in funds in the form of unsecured loans (Rs 2.5
crore as on March 31, 2016) to support the group's working
capital management, and will extend support when required.
Weakness
* Exposure to intense competition: The Patwa Marketing group
generates more than 80 % of its revenue from the sale of
vehicles. The Indian passenger car industry is highly
competitive, and has several car manufacturers in various
segments. The small and mid-sized car segments dominate the
Indian automobile market. In India, automobile makers are
constantly introducing new models and variants. The success or
failure of new launches will determine the profitability of all
players in the value chain, including dealers.
* Below-average financial risk profile: Networth was modest, at
INR17.35 crore as on March 31, 2016. Debt-funded capital
expenditure
(capex) in the past few years resulted in high gearing of 4.98
times as on March 31, 2016, and subdued interest coverage ratio
of 1.22 times in fiscal 2016.
PARPL and PAPL were set up in 1989 and 2007, respectively, by Mr
Surendra Patwa, a Madhya Pradesh-based businessman. The group is
an authorised dealer of passenger vehicles and light commercial
vehicles of M&M in Madhya Pradesh. The companies are managed by
Mr Anil Sharma (CEO) with support from professionals. The group
also distributes polymer products.
For fiscal 2016, PARPL's profit after tax (PAT) was INR0.28 crore
and operating income was INR138.81 crore, against a PAT of
INR0.16 crore and operating income of INR98.98 crore in the
previous fiscal. PAPL's PAT was INR0.67 crore and operating
income was INR223.39 crore in fiscal 2016, against a PAT of
INR0.38 crore on an operating income of INR195.84 crore in the
previous fiscal.
PATWA MARKETING: CRISIL Lowers Rating on INR8MM Cash Loan to D
--------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank loan
facilities of Patwa Marketing Private Limited (PMPL) 'CRISIL D'
from 'CRISIL BB/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 8 CRISIL D (Downgraded from
'CRISIL BB/Stable')
The downgrade reflects overutilization in working capital
facility owing to weak liquidity caused by stretch working
capital cycle.
Key Rating Drivers & Detailed Description
Weakness
* Average financial risk profile: The financial risk profile will
remain average over the medium term, constrained by low accretion
to reserves.
* Large working capital requirement: In respect of the DCA
business of RIL, where only commission is booked as income, the
customer is billed for the gross amount. Hence, debtor days
appear inflated. Any delay in payments by its customers or any
delinquency in respect of receivables could have a significant
impact on profitability and cash flows. Since the group does not
get any credit from RIL, it is highly dependent on bank limits to
fund the remaining incremental working capital requirements.
Strength
* Established track record as a distributor of polymers for
Reliance Industries Ltd (RIL, rated 'CRISIL AAA/Stable/CRISIL
A1+'): One of the leading distributors in Madhya Pradesh, with
over 20 customers, the Patwa group has been associated with RIL
for more than 20 years. Its clientele include reputed companies
in and around Madhya Pradesh. Longstanding association with some
customers helps estimate the fluctuation in demand and understand
service requirements besides keeping a track of the customers'
credit record.
UANPL and PMPL were incorporated in 1989 and 1995, respectively,
and are promoted by Mr Surendra Patwa. The companies are del
credere agent (DCAs) for RIL's polymer products. PMPL is also a
carry and forwarding agent for Torrent Pharma Limited (TPL).
Registered office is in Indore. The promoter is also engaged in
automobile dealership through other entities.
RAJA MOTORS: CRISIL Reaffirms B+ Rating on INR6.5MM Cash Loan
-------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on
the long-term bank facilities of Raja Motors (Bathinda) (RMB).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6.5 CRISIL B+/Stable (Reaffirmed)
Overdraft 2 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 0.13 CRISIL B+/Stable (Reaffirmed)
Business risk profile has been stable, backed by the partners'
experience and healthy relationship with the principal, Hyundai
Motor India Ltd. (HMIL; rated 'CRISIL A1+'). However, revenue
fell in fiscal 2017 by around 7% to INR57.94 crore due to the
effect of demonetisation; it is expected to witness limited
growth in the near term owing to the impact of the goods and
service tax (GST). Operating margin is expected to remain low at
3.5-4% over the medium term owing to competition from dealers of
other auto manufacturers and limited pricing power with the
principal.
Low margin coupled with high dependency on external funding led
to below-average financial risk profile. Liquidity is constrained
on account of low cash accruals expected at INR0.5-0.6 crore,
though sufficient to repay yearly debt obligation of INR0.4
crore. Bank limit utilisation remained moderate, at around 89%
over the six months through September 2017. Liquidity is however
supported by instances of capital infusion by the partners (they
infused INR0.07 crore in fiscal 2017).
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations and intense competition: The firm
faces intense competition from dealers of other auto
manufacturers such as Maruti Suzuki India Ltd, Honda Cars India
Ltd, Tata Motors Ltd, Toyota Kirloskar Motor Ltd, and Skoda Auto
India Pvt Ltd. Resultantly, scale of operations remained modest,
with revenue of INR57.94 crore in fiscal 2017. Principals also
encourage more dealerships (thereby increasing competition) to
improve market penetration and sales. This has created the need
for differentiation and, hence, auto dealers have to refurbish
their dealership outfits and service centres regularly. All this
demands constant expenditure, which is significant given the
muted margins of these entities.
* Weak financial risk profile: Total outside liabilities to
tangible networth ratio has been moderate at 2.65 times as on
March 31, 2017, owing to modest networth of INR5.45 crore and
large working capital debt. The firm also availed of a loan worth
INR80 lakh in fiscal 2017 to fund its capital expenditure (capex)
towards installing new plant and machines. Owing to low margins
and high debt, the firm's debt protection measures have been weak
as reflected in interest coverage ratio and net cash accruals to
total debt (NCATD) estimated at 1.37 times and 0.07 times in
fiscal 2017. Financial risk profile is likely to remain weak over
the medium term owing to low profitability and high debt;
however, it may be partially supported by absence of any debt-
funded capex plan.
Strengths
* Established market position and experience of partners: The
firm has six automobile dealerships in Punjab, of which three are
for Bajaj Auto Ltd (BAL; rated 'CRISIL AAA/FAAA/Stable/CRISIL
A1+') at Sirsa, Bathinda and Abohar, and three of HMIL at Sirsa,
Bathinda and Fatehabad. The firm has a dealership of Mahindra and
Mahindra Ltd (M&M; rated 'CRISIL AAA/Stable/CRISIL A1+') under
AVC Motors (rated 'CRISIL B/Stable) and of Nissan Motor India Pvt
Ltd under AVC Motors (Nissan). Benefits derived from the
partners' experience of over two decades, healthy relations with
customers and suppliers, and strong market position in Haryana
and Punjab should continue to support the business.
Outlook: Stable
CRISIL believes RMB will continue to benefit over the medium term
from the established market position. The outlook may be revised
to 'Positive' if substantial increase in revenue, profitability,
leads to better than expected cash accruals and thus strengthens
financial risk profile. Conversely, the outlook may be revised to
'Negative' if decline in scale of operations and profitability,
or any large, debt-funded capex weakens financial risk profile.
RMB was set up in 2008 as a partnership between Mr Om Prakash
Makkar and his son, Mr Rajesh Kumar Makkar. It is the sole
authorised dealer for HMIL's passenger cars in Bhatinda.
REAL DAIRY: CRISIL Reaffirms D Rating on INR18.5MM Term Loan
------------------------------------------------------------
CRISIL Ratings has been consistently following up with Real Dairy
Industries Pvt Ltd (RDIPL) for obtaining information through
letters and emails dated September 19,2017 and November 06,2017
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
Term Loan 18.5 CRISIL D (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Real Dairy Industries Pvt Ltd.
This restricts CRISIL's ability to take a forward Real Dairy
Industries Pvt Ltd is consistent with 'Scenario 1' outlined in
the 'Framework for Assessing Consistency of Information with
CRISIL BB' rating category or lower. Based on the last available
information, CRISIL has reaffirmed the rating at 'CRISIL D'.
RDIPL, set up in 2011 by Mr Manojkumar Tupe, has a milk
processing unit to manufacture value-added products such as
skimmed milk powder and ghee. The company has its unit at
Baramati (Maharashtra).
RELIANCE COMM: Fortuna Public Files Insolvency Process v. Firm
--------------------------------------------------------------
Bhuma Shrivastava at Bloomberg News reports that a public-
relations firm became the latest company to ask an Indian
tribunal to place billionaire Anil Ambani-run Reliance
Communications Ltd. under insolvency proceedings after the
unprofitable mobile-phone operator failed to pay its dues.
Bloomberg relates that Fortuna Public Relations Pvt. placed its
request with the Mumbai bench of National Company Law Tribunal on
Dec. 4, saying Reliance Communications owes it INR4.3 million
($67,000). The NCLT plans to hear the case on Dec. 19.
According to Bloomberg, the public-relations firm joins a list of
creditors including China Development Bank, Manipal Technologies
Ltd. and the Indian unit of network-equipment maker Ericsson AB
seeking to compel repayment from a company controlled by the
brother of India's richest person.
Based in Mumbai, India, Reliance Communications Ltd (BOM:532712)
-- http://www.rcom.co.in/Rcom/personal/home/index.html-- is a
telecommunications service provider. The Company operates through
two segments: India Operations and Global Operations. India
operations segment comprises wireless telecommunications services
to retail customers through global system for mobile
communication (GSM) technology-based networks across India;
voice, long distance services and broadband access to enterprise
customers; managed Internet data center services, and direct-to-
home (DTH) business. Global operations comprise Carrier,
Enterprise and Consumer Business units. It provides carrier's
carrier voice, carrier's carrier bandwidth, enterprise data and
consumer voice services. The Company owns and operates Internet
protocol (IP) enabled connectivity infrastructure, comprising
over 280,000 kilometers of fiber optic cable systems in India,
the United States, Europe, Middle East and the Asia Pacific
region.
As reported in the Troubled Company Reporter-Asia Pacific on
Nov. 22, 2017, Moody's Investors Service has withdrawn Reliance
Communications Limited's (RCOM) Ca corporate family rating (CFR)
and its negative outlook. At the same time, Moody's has also
withdrawn the Ca rating on RCOM's senior secured notes.
On Nov. 6, 2017, RCOM announced that pursuant to the invocation
of Strategic Debt Restructuring (SDR) scheme by the lenders of
the company as per the Reserve Bank of India guidelines agreed in
June 2017, the company is under a debt standstill period until
December 2018, as it looks to complete a corporate and debt
restructuring. Accordingly, for the time being, no payment of
interest and/or principal is being made to any RCOM lenders
and/or bondholders.
SANSHU GREEN: Ind-Ra Affirms BB Issuer Rating, Outlook Stable
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Sanshu Green
Corn Private Limited's (SGCPL) Long-Term Issuer Rating at 'IND
BB'. The Outlook is Stable. The instrument-wise rating actions
are:
-- INR172.5 mil. Fund-based working capital limits affirmed with
IND BB/Stable/IND A4+ rating; and
-- INR4.7 mil. (reduced from INR7.7 mil.) Term loan due on March
2019 affirmed with IND BB/Stable rating.
KEY RATING DRIVERS
The affirmation reflects SGCPL's continued weak credit metrics
due to the company's presence in a highly competitive industry.
In FY17, net leverage (Ind-Ra-adjusted total net debt/operating
EBITDAR) was 7.4x (FY16: 7.3x) and interest coverage (operating
EBITDA/gross interest expense) was 1.6x (2.0x). The deterioration
in credit metrics was due to an increase in the short-term debt.
Moreover, EBITDA margin remained thin at 2.0% in FY17 (FY16:
2.2%) on account of the commoditised nature of the end product
and volatility in raw wheat prices.
The ratings continue to reflect risks associated with the
agricultural commodity processing business and the company's
tight liquidity. SGCPL fully utilised its cash credit limits
during the 12 months ended October 2017.
However, the ratings are supported by significant revenue growth
in FY17, driven by an increase in orders from existing customers,
albeit the scale of operations remains moderate. Revenue rose
40.8% yoy to INR1,274.8 million in FY17.
The ratings continue to be supported by the promoters' experience
of over five years in the agri-processing business and the
company's plant's location advantage. The facility is in
proximity to major wheat cultivating areas in Maharashtra and
Madhya Pradesh.
RATING SENSITIVITIES
Negative: Any decline in profitability leading to liquidity
stress and/or deterioration in the credit metrics will be
negative for the ratings.
Positive: Substantial growth in revenue and/or a rise in
profitability leading to an improvement in credit metrics on a
sustained basis will lead to a positive rating action.
COMPANY PROFILE
Incorporated in 2013, SGCPL procures raw wheat from
farmers/traders and processes it by cleaning and separating wheat
and husk, grading and maintaining the moisture at the desired
level, and packing the same at its plant in Chalisgaon,
Maharashtra. The site has a processing capacity of 200 tonnes per
day. The company is promoted by Mr Gaurav Kashyap. SGCPL booked
INR872.4 million in revenue for April-October 2017.
SATYAM DEVELOPERS: Ind-Ra Assigns 'BB' LT Issuer Rating
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Satyam
Developers Limited a Long-Term Issuer Rating of 'IND BB'. The
Outlook is Stable. The instrument-wise rating action is:
-- INR450 mil. Term loans due on November 2019-March 2021
assigned with IND BB/Stable rating
KEY RATING DRIVERS
The ratings reflect the moderate inventory risk faced by Satyam
Developers. The changes in regulatory environment such as
demonetisation and RERA (Real Estate Regulatory Authority) have
slowed down the sales of the company. Of the three (two
commercial and one residential) ongoing projects, the company has
completed construction and received all regulatory approvals for
only one and the other two projects are likely to be completed by
end-FY18. As of November 2017, the company had an unsold portion
of 48% of the overall built-up area in the three projects.
The company is also executing another affordable housing project
in extension to its existing project (Sarjan-I). The company has
acquired the land for the said project and construction
activities are to likely commence in 2HFY18. The estimated
project cost of INR351 million will be financed through term
loans of INR150 million and about INR100 million of equity and
advance receipts/unsecured loans from directors each. The company
expects to complete the project by FY20.
Additionally, the company has availed loans against its property
Satyam Corporate House. Since no revenues are generated from the
project, timely equity/unsecured loans infusion by the promoters
in case of delays in sales of existing units will be important
from credit perspective.
The ratings are supported by the promoters' extensive track
record of successfully completing projects in the Ahmedabad real
estate market. Till date, the company has executed 15 projects
which include both residential (affordable to premium) and
commercial projects, having an aggregate built up area of 2.8
million sf.
RATING SENSITIVITIES
Negative: A continued slowdown in the sales of existing units
and/or delays in project execution leading to a cash flow
shortfall for debt servicing will be negative for the ratings.
Positive: Accelerated sale of the existing units and/or timely
execution of the projects leading to strong cash flow visibility
will be positive for the ratings.
COMPANY PROFILE
Incorporated in 2000, Satyam Developers is engaged in the
construction of residential and commercial projects. As of
November 2017, the company has executed 15 projects, majority of
which are in the Ahmedabad district. The company is executing two
commercial projects and one residential project in Ahmedabad
district, which are likely to be executed by March 2020.
As on date, the company has executed 15 projects with a total
constructed area of 2.8 million sf. The majority of projects
executed by the company are residential (1,339 units) properties.
Additionally, the company has constructed two commercial
properties, of which one is used as a corporate office by Satyam
Developers.
SILVER SPRING: CRISIL Reaffirms B Rating on INR6.7MM Cash Loan
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Silver
Spring Spinners India Private Limited (SSSPL) for obtaining
information through letters and emails dated October 6, 2017 and
November 3, 2017 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee .15 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Cash Credit 6.75 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Letter of Credit 1.05 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
Proposed Long Term
Bank Loan Facility 2.05 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Rupee Term Loan 2.50 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Silver Spring Spinners India
Private Limited. This restricts CRISIL's ability to take a
forward looking view on the credit quality of the entity. CRISIL
believes that the information available for Silver Spring
Spinners India Private Limited is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL BB' rating category or lower. Based on
the last available information, CRISIL has reaffirmed the rating
at 'CRISIL B/Stable/CRISIL A4'.
SSSPL was incorporated in 1997 at Srivilliputhur in Tamil Nadu.
The company manufactures cotton yarn. It is managed by Mr.
Rajendran Sridhar and Ms. Menaka.
SRS THERMAX: CRISIL Reaffirms 'B' Rating on INR5MM Term Loan
------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B/Stable' rating on the
long-term bank facilities of SRS Thermax Limited (SRS).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2 CRISIL B/Stable (Reaffirmed)
Term Loan 5 CRISIL B/Stable (Reaffirmed)
The rating continues to reflect SRS's small scale of operations
in the intensely competitive textile industry, and below-average
financial risk profile. These weaknesses are partially offset by
the experience of the promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations and intense competition: Small scale
of operations, with revenue at INR10.35 crore in fiscal 2017,
amid intense competition limits pricing power with suppliers and
customers, thereby constraining profitability.
* Below-average financial risk profile: Networth has been modest
at INR3.4 crore as on March 31, 2017, while gearing was high at
2.05 times. Interest coverage and net cash accrual to total debt
ratios were weak at 1.1 times and 0.01 time, respectively, in
fiscal 2017.
Strength
* Experience of promoters: Benefits derived from the promoters'
experience, strong understanding of market dynamics, and healthy
relations with suppliers and customers should continue to support
the business.
Outlook: Stable
CRISIL believes SRS will continue to benefit from the experience
of the promoters. The outlook may be revised to 'Positive' if
substantial increase in scale of operations and profitability
strengthens financial risk profile and liquidity. Conversely, the
outlook may be revised to 'Negative' if large, debt-funded
capital expenditure, stretched working capital cycle, or low cash
accrual weakens financial risk profile and liquidity.
SRS was incorporated in April 2013 and is promoted by the
Gwalior-based Mr Jaidev Sharma and family. The company
manufactures corrugated boxes, partitions, plates and boards used
for industrial packaging. Its manufacturing facility is at
Gwalior. Operations are managed by the promoter-director, Mr
Jaidev Sharma.
TENKASI TIMBER: CRISIL Reaffirms 'B' Rating on INR1.25MM Loan
-------------------------------------------------------------
CRISIL Ratings has been consistently following up with Tenkasi
Timber and Saw Mill (TTSM) for obtaining information through
letters and emails dated October 06, 2017 and November 03,2017
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1.25 CRISIL B/Stable (Issuer Not
Cooperating; Rating
Reaffirmed)
Letter of Credit 5.75 CRISIL A4 (Issuer Not
Cooperating; Rating
Reaffirmed)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Tenkasi Timber and Saw Mill.
This restricts CRISIL's ability to take a forward Tenkasi Timber
and Saw Mill is consistent with 'Scenario 1' outlined in the
'Framework for Assessing Consistency of Information with CRISIL
BB' rating category or lower. Based on the last available
information, CRISIL has reaffirmed the rating at 'CRISIL
B/Stable/CRISIL A4'.
Set up in 2008 in Tamil Nadu by Mr. Syed Ali Badushah, TTSM
processes and trades in timber.
=================
I N D O N E S I A
=================
WIJAYA KARYA: Moody's Assigns Ba2 Corporate Family Rating
---------------------------------------------------------
Moody's Investors Service has assigned a first-time Ba2 corporate
family rating (CFR) to Wijaya Karya (Persero) Tbk. (P.T.) (WIKA).
The rating outlook is stable.
RATINGS RATIONALE
As a government-related issuer (GRI), WIKA's rating reflects a
combination of (1) its b1 baseline credit assessment (BCA), and
(2) a two-notch uplift based on Moody's expectation of a moderate
level of extraordinary support from the government of Indonesia
(Baa3 positive).
"WIKA's standalone credit profile reflects its leading market
position as one of the largest integrated construction companies
in Indonesia with an established track record of completing large
projects, and a strong order book which provides revenue and cash
flow visibility over the next few years," says Maisam Hasnain, a
Moody's Analyst.
WIKA's order book increased to IDR94.4 trillion in September 2017
from IDR38.3 trillion in 2013. Based on revenues of IDR22.2
trillion for the 12 months to September 2017, this represents an
order book to revenue ratio of around 4.3x, up from 3.2x in 2013.
Moody's expects WIKA's order book to revenue ratio to remain
around 4.0x through 2019 on the back of strong infrastructure
investment in the country.
WIKA has a diversified business profile with multiple revenue-
generating segments focused on engineering, procurement and
construction (EPC) for the civil & building infrastructure,
energy & industrial, and property & realty sectors. WIKA also
operates a segment producing construction materials such as pre-
cast concrete. The operational diversity between the various
business segments moderates earnings volatility, and supports the
company's credit profile.
The rating also reflects Moody's view that WIKA will benefit from
the Indonesian government's initiatives to accelerate
infrastructure development in the country. Infrastructure
spending allocation to the state budget has increased to 18.6% in
2017 from 8.7% in 2014. The 2018 state budget also calls for a 6%
year-on-year increase in infrastructure spending to around IDR410
trillion.
However, WIKA's standalone credit strength is constrained by the
inherent cyclicality in the construction industry. In addition,
earnings growth over the next two years will be driven by its
three largest projects -- the Jakarta to Bandung High Speed Rail,
Jakarta Light Rail Transit, and Balikpapan -- Samarinda Toll Road
-- which constitute around 29% of WIKA's order book as of
September 2017. As such, project delays or cost overruns could
adversely impact WIKA's credit profile.
Furthermore, the strong growth in new contracts in recent years
has corresponded with a weakening in WIKA's credit metrics given
the large up-front investment costs associated with some of these
projects.
For example, WIKA's leverage -- as measured by adjusted debt to
EBITDA -- increased to around 3.4x as of September 2017 from 1.7x
in 2013, while its order book increased to IDR94 trillion from
IDR38 trillion over the same period. In addition, the company has
generated negative cash from operations since 2016, given its
sizeable working capital requirements.
Moody's expects WIKA to maintain sizeable capital expenditure and
elevated investment needs over the next two years as it executes
its large projects. As such, Moody's expects WIKA's leverage will
increase moderately to around 4.0x through 2019, while continuing
to generate negative free cash flow.
"Moody's expectation of support from the Indonesian government
for WIKA stems from the close supervision over WIKA's operations
and budget, and WIKA's strategic role in achieving Indonesia's
infrastructure development objectives," adds Hasnain, also
Moody's lead analyst for WIKA.
The Indonesian government also holds a Series A Dwiwarna Share
which provides it special rights, including the right to approve
WIKA's board level personnel, corporate strategy and financial
policy decisions.
The rating outlook is stable, reflecting Moody's expectation that
WIKA will maintain its leading market position, with strong
project execution capabilities. It also reflects Moody's
expectation that the company's operating performance will remain
supported by its sizeable order book.
A rating upgrade is unlikely over the next 12-18 months given
WIKA's sizeable capital expenditure and investment requirements.
Over the longer term, positive momentum on its BCA could build if
WIKA successfully executes its business plan while maintaining a
disciplined approach to investments, with a sustained improvement
in its financial profile and a strong order book. However, an
improvement in the BCA or upgrade to the sovereign rating will
not automatically result in an upgrade of WIKA's rating.
Alternatively, WIKA's ratings could face downward pressure if:
(1) it bids aggressively to win new contracts, resulting in a
considerable deterioration in its financial profile; (2) it
experiences a substantial decline in new contracts wins; or (3)
it incurs large cost overruns and delays in its projects.
Credit metrics indicative of downward rating pressure include (1)
adjusted debt/EBITDA above 5.0x; and (2) adjusted EBITA/interest
expense below 2.0x on a sustained basis.
While unlikely given the positive outlook, a downgrade to the
Indonesian sovereign rating would result in a downgrade to WIKA's
rating. Furthermore, a reduction in the government's shareholding
level or perceived support could lead to a negative rating action
on WIKA.
The methodologies used in this rating were Construction Industry
published in March 2017, and Government-Related Issuers published
in August 2017.
Established in 1960, Wijaya Karya (Persero) Tbk. (P.T.) (WIKA) is
one of the largest EPC companies in Indonesia with revenues of
around IDR22.2 trillion for the 12 months to September 2017, and
an order book of IDR94.4 trillion as of September 2017.
Listed on the Indonesian Stock Exchange since 2007, WIKA is 65%
owned by the Government of Indonesia (Baa3 positive), with the
remaining 35% shares held by the public.
===============
M A L A Y S I A
===============
STONE MASTER: Net Loss Narrows to MYR1.81MM in Q4 Ended Sept. 30
----------------------------------------------------------------
The Sun Daily reports that Stone Master Corp Bhd, which went
through a boardroom tussle in May, saw its net loss for the
fourth quarter ended Sept. 30, 2017 narrow to MYR1.81 million
from MYR4.35 million a year ago due to cessation of the
operations of unprofitable S.P. Granite Sdn Bhd (SPG).
According to the report, Stone Master's revenue fell 18% to
MYR10.92 million in the fourth quarter compared with MYR13.35
million in the previous year's corresponding quarter, due to a
decrease in revenue from the conventional trading of building
materials resulted by the intensified price competition and
deferment of the projects due to the sluggish properties' market.
Recall that Stone Master's former managing director Datuk Koh Mui
Tee and ex-executive director Datuk Lee Hwa Cheng were removed
from its board, while eight new directors were appointed, after
the Kuala Lumpur High Court ruled that the EGM convened by its
executive director and single largest shareholder Datuk Karen Lee
Fong Yin was valid, the report says.
For the full year period, it saw a narrowed net loss of MYR4.26
million compared with MYR10.29 million a year ago; while revenue
dropped 24% to MYR55.08 million from MYR72.31 million in the
preceding year due to a decrease in revenue from the conventional
trading of building materials, the Sun Daily discloses.
The Sun Daily relates that Stone Master said it will continue to
take all reasonable steps and precautions to mitigate the impact
of rising costs and to identify market competitions in order to
enhance the revenue base and expand business opportunities, as
well as profitability.
"The company is negotiating with potential partners, possibly in
the form of joint venture, to revive the businesses of SPG, a
wholly-owned subsidiary with principal activities in
manufacturing and trading of marble and granite products, as well
as trading in ceramic tiles, sanitary wares and contract works,"
Stone Master said.
Barring unforeseen circumstances, the company believes that the
revival of the business operations of SPG would contribute
favorably to the profitability of the group, according to the Sun
Daily.
In addition, the company is also in the midst of formulating an
appropriate regularisation plan to come out of its PN17 status,
the report adds.
About Stone Master
Stone Master Corporation Berhad is a Malaysia-based company,
which is principally engaged in investment holding and the
provision of management services. The Company's subsidiaries
include S.P. Granite Sdn. Bhd., Rainbow Marble & Tiling Sdn.
Bhd., Stone Master Marketing Sdn. Bhd. and Stone Design House
Sdn. Bhd. S.P. Granite Sdn. Bhd. is engaged in manufacturing and
trading in marble, granite and ceramic tiles. Rainbow Marble &
Tiling Sdn. Bhd. is engaged in trading in marble, granite,
ceramic tiles and sanitary ware. Stone Master Marketing Sdn. Bhd.
is engaged in trading in marble, granite, sanitary ware and all
other related products. Stone Design House Sdn. Bhd. specializes
in the designing, architectural, interior designing works,
constructions designing and refurbishment works. Stone Master
(Malaysia) Sdn. Bhd. is the subsidiary of S.P. Granite Sdn. Bhd,
which is engaged in trading in marble, granite, ceramic tiles,
and sanitary ware and contract works.
Stone Master Corporation Berhad in December 2016 triggered the
prescribed criteria pursuant to Paragraph 8.04 and Paragraph 2.1
(e) of Practice Note 17 ("PN17") under the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad.
The PN17 criteria was triggered as the Auditors have expressed an
emphasis of matter on the Company's ability to continue as a
going concern in the Company's latest audited financial
statements for the financial year ended Sept. 30, 2015 which was
announced on Jan. 29, 2016 and based on the Company's fourth
quarterly results for the period ended Sept. 30, 2016, announced
on Nov. 30, 2016, the Company's shareholders' equity on a
consolidated basis is less than 50% of the Company's issued and
paid-up capital (excluding treasury shares).
===============
M O N G O L I A
===============
MONGOLIA: IFC Supports Insolvency Reform
----------------------------------------
The Financial reports that IFC, a member of the World Bank Group,
has signed a Memorandum of Understanding with the Ministry of
Justice and Home Affairs (MOJHA) of Mongolia to help reform the
country's bankruptcy framework. It further aims to improve access
to finance and ensure financial stability in the country by
strengthening the insolvency and debt collections system, the
report says.
The Financial relates that the reform is intended to enable the
Mongolian credit industry to manage debtor insolvencies and
collections in more effective, efficient and responsible ways. It
will strengthen a critical piece of financial infrastructure,
particularly for the financing of micro, small and medium
enterprises (MSMEs). It will also complement other areas of
reforms that are being undertaken by the government to drive
economic growth.
Going ahead, the project will focus on strengthening the legal
and regulatory framework by updating the current bankruptcy law,
the report says. In addition, it will develop capacities and
standards for Mongolian insolvency professionals and promote non-
judicial means of insolvency resolutions and improving debt
collection standards, according to IFC.
"Strengthening bankruptcy legislation and improving the debt
resolution system is one of the key elements of the government's
plan to modernize Mongolia's legal framework by 2020. A good
insolvency framework will facilitate the quick resolution of non-
performing assets in the banking industry, support
entrepreneurship and provide confidence to investors", the report
quotes Bayasgalan G., State Secretary of MOJHA, as saying. "With
IFC's help, we will be able to incorporate international best
practice in this reform and train a critical mass of insolvency
professionals".
"We are pleased to start this new initiative with our partner
MOJHA," said Tuyen D. Nguyen, IFC Resident Representative in
Mongolia. He added, "International experience suggests that
insolvency framework is a necessary foundation for the financial
markets to function efficiently and safely. Most importantly, it
will provide rules and standards for a quick resolution of the
overly indebted individuals and SMEs, and enable the creditors to
exit from problem loans in an orderly fashion."
This project in Mongolia is being supported by a Korea Trust Fund
in the World Bank Group, the Financial notes. According to the
report, IFC has successfully assisted dozens of financial
infrastructure reforms in emerging markets related to secured
transactions and movable asset finance development, credit
reporting system, and bankruptcy and debt collection framework.
The Financial says effective insolvency system helps to reduce
uncertainty and potential risks faced by lenders and investors
with predictable debt collection and recovery process. It also
supports entrepreneurship by giving the insolvent business
individuals reasonable exits and a fresh re-start, the report
adds.
=================
S I N G A P O R E
=================
JASON HOLDINGS: Bankruptcy Bid Against Directors Withdrawn
----------------------------------------------------------
Stephanie Luo at The Business Times reports that two directors of
Jason Holdings Limited had bankruptcy applications against them
withdrawn on Tuesday.
In a Singapore Exchange filing, the company said that during the
Court's hearing for the bankruptcy applications against executive
director Sim Choon Joo, and non-executive director Jason Sim Chon
Ang, the Court was informed by the lawyers acting for Australia
and New Zealand Banking Group Limited (ANZ) that ANZ has
"instructed" for them to withdraw both applications, the report
relates.
The Business Times relates that the Court then accordingly
granted ANZ's leave to withdraw the proceedings against the two
parties.
Last August, the Commercial Affairs Department was investigating
Mr. Jason Sim and the company's subsidiary, Jason Parquet
Specialist (Singapore), regarding a possible offence under the
penal code.
The Business Times had earlier reported that Mr. Jason Sim was
interviewed by Singapore's white collar crime investigator on
Aug. 1, 2016 and ordered to produce documents and information
from 2008 to 2016. His travel documents were impounded on Aug. 2,
2016.
A report by EY last May highlighted several potential breaches of
fiduciary duties in the management and administration of Jason
Parquet, the report states. According to the Business Times, EY's
findings included deposits and prepayments made by Jason Parquet
using trust receipts obtained from banks without underlying
goods, accounts receivable financing from different banks
obtained using progress claims with identical work values and
descriptions at different times, and an improper hire purchase
transaction involving a vehicle registered to Mr. Jason Sim's
spouse.
Shares of Jason Holdings are still suspended, the report notes.
On Dec. 5, Jason Holdings advised shareholders of the company and
potential investors to exercise caution when trading in the
shares of the company, and should consult their stockbrokers,
bank managers, solicitors, or other professional advisers if in
doubt of any action to take, The Business Times adds.
Jason Holdings Limited (SGX:513) operates through segments,
Projects and Distribution. The Company is engaged in the supply
and installation of timber flooring to its Projects customers,
which consists of main contractors and retail customers. The
Company is also involved in the sale of timber products and
flooring accessories to its Distribution customers. Jason Parquet
Specialist (Singapore) Pte Ltd (JPS) is the subsidiary of the
Company.
=============
V I E T N A M
=============
THAI BINH: Central Bank Probe Delay in Principal Repayment
----------------------------------------------------------
VietNamNet Bridge reports that the State Bank of Viet Nam (SBV)
office in the southern province of Dong Nai is investigating the
delay in repaying principal and interest by the Thai Binh
People's Credit Fund to 82 customers in Bien Hoa City's Tan Hoa
Ward.
According to the report, customers said they had deposited nearly
VND50 billion (US$2.2 million) but have not received interest
since the middle of last year and have also been unable to
withdraw their deposit.
Meanwhile, the director of the fund, Vu Cong Lien, reportedly
quit his job and is absconding, the report says.
VietNamNet Bridge says the case has opened authorities' eyes to
the need to carefully manage people's credit funds across the
country so that system does not collapse or many of them go
bankrupt.
Analysts said the most important measures include oversight and
inspection of their operations, the report relays.
The Viet Nam Association of People's Credit Funds said there are
more than 1,100 such funds with 1.8 million members and deposits
of VND88 trillion ($3.9 billion). Thus, potentially a lot of
people could be affected, the report says.
Employees of many of the funds said they are managed in a very
loose manner, according to the report.
To compete with banks, the funds always offer very high interest
rates to depositors, often 4-5 per cent higher than bank rates,
VietNamNet Bridge relates. The deposits are often lent to
individuals or organisations involved in high-risk sectors like
real estate.
But authorities responsible for overseeing the people's credit
funds said they are all now under the management of the SBV and
the Cooperative Bank of Viet Nam (Co-opBank), the report notes.
In addition, the Deposit Insurance of Viet Nam also has special
control over the funds.
The question is why, despite multiple agencies managing and
controlling the people's credit funds, such violations are
occurring so often, says VietNamNet Bridge.
Tran Quoc Tuan, director of the SBV office in Dong Nai Province,
said managers of funds that act dubiously clean up their balance
sheets ahead of audits by authorised agencies before again
lending money to high-risk sectors like real estate, notes the
report.
VietNamNet Bridge relates that an official from the SBV's
department for banking system safety supervision admitted that
management and oversight of people's credit funds remain poor.
So it is necessary to strengthen internal control and audit, and
ensure the funds comply with the laws on cooperatives, one of
which requires them to lend only to members, the report states.
Analysts said the model is appropriate for Vietnam and the funds
have proved to be really useful in rural areas, but they need to
be carefully controlled to ensure their effectiveness and safety,
the report relays.
VietNamNet Bridge adds that he central bank plans to restructure
the credit funds after first identifying weak ones. The weak
funds that cannot be improved will have their licenses withdrawn.
Besides, many new funds will also be set up in rural areas, the
report says.
*********
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 ***