/raid1/www/Hosts/bankrupt/TCRAP_Public/171227.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 27, 2017, Vol. 20, No. 256
Headlines
A U S T R A L I A
GREENWAY PLUMBING: First Creditors' Meeting Set for Jan. 5
GRIFFIN COAL: No Longer a Subsidiary of Lanco Group
MOSSGREEN PTY: First Creditors' Meeting Set for Jan. 4
VENUE 63: First Creditors' Meeting Set for Jan. 8
VERILUMA LTD: Jirsch Sutherland Appointed as New Administrators
WEXDEK FORMWORK: First Creditors' Meeting Set for Jan. 5
B A N G L A D E S H
EASTERN BANK: Moody's Affirms 'Ba3' LC Bank Deposit Rating
C H I N A
JIANGSU HANRUI: Fitch Rates US$110MM Notes BB+; On Watch Negative
LEECO: China Regulator Summons Founder Back to China
TUNGHSU VENUS: Notes Tap No Impact on Fitch's B+ Notes Rating
H O N G K O N G
CHINA FISHERY: Fitch Affirms & Withdraws D Long-Term IDR
I N D I A
3GR AGRO: CRISIL Assigns B+ Rating to INR15MM Cash Loan
A-1 COLD: CARE Assigns B+ Rating to INR5.55cr LT Loan
BHAVIN AGRI-INFRA: ICRA Moves B+ Rating to Not Cooperating
CADCHEM LABORATORIES: Ind-Ra Assigns BB- LongTerm Issuer Rating
CAPITAL ENTERPRISES: CARE Moves D Rating to Not Cooperating
CHANDIGARH ROLLER: CARE Withdraws B Rating on INR12cr LT Loan
D.P.M.K. FERTILIZERS: CRISIL Reaffirms B+ Rating on INR11.5M Loan
G.R. MULTIFLEX: CARE Moves D Rating to Not Cooperating Category
GANAPATI BUILDERS: CARE Assigns B+ Rating to INR8cr LT Loan
H N CONSTRUCTION: Ind-Ra Assigns BB+ Rating, Outlook Stable
HITRO ENERGY: CRISIL Moves B- Rating to Not Cooperating Category
JAG VIDHYA: CRISIL Moves D Rating to Not Cooperating Category
K.D. SINGH: CARE Assigns B+ Rating to INR15cr LT Loan
KAMSA STEEL: CARE Assigns B+ Rating to INR3.0cr LT Loan
KHUDIRAM COLD: CARE Assigns B+ Rating to INR12.27cr LT Loan
KRIDHAN INFRA: CRISIL Withdraws B- Rating on INR5.48cr Loan
MANGALDEEP SUPERSTRUCTURES: CARE Rates INR6.25cr LT Loan B+
MARKS ENTERPRISES: CRISIL Moves D Rating to Not Cooperating
MODERN OVERSEAS: CRISIL Moves 'D' Rating to Not Cooperating
NIRWANA HOTELS: ICRA Removes B Rating From Not Cooperating
ORCHID PHARMA: Aurobindo, Dr Reddy's Lab Bid for Business
PADMEY IMPEX: Ind-Ra Migrates D Issuer Rating to Non-Cooperating
PINCHA GRIHA: CRISIL Withdraws B+ Rating on INR13.56MM Term Loan
PRABHU CONSTRUCTIONS: Ind-Ra Moves BB Rating to Non-Cooperating
RABI ENGINEERING: CRISIL Lowers Rating on INR3MM Cash Loan to B
RADHA CASTING: CARE Moves B Rating to Not Cooperating Category
RR COTTONS: Ind-Ra Raises Issuer Rating to B+, Outlook Stable
SADHU SINGH: CRISIL Moves B+ Rating to Not Cooperating Category
SAMTEL COLOR: Lenders May Opt to Place Firm in Liquidation
SHAKTI BASMATI: CRISIL Moves Rating to Not Cooperating Category
SHREE KRISHNA: ICRA Moves B- Rating to Not Cooperating Category
SHREEJI SALES: CARE Assigns D Rating to INR5.49cr LT Loan
SRI DHARMA: CRISIL Moves B Rating to Not Cooperating Category
SRI SARVARAYA: ICRA Reaffirms B+ Rating on INR132cr Loan
VIKAS COTTON: CARE Reaffirms 'B' Rating on INR8.54cr LT Loan
S O U T H K O R E A
YOUBIT: Crypto Exchange Files for Bankruptcy After Hack
S R I L A N K A
DFCC BANK: Fitch Affirms B+ IDR & Changes Outlook to Stable
- - - - -
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A U S T R A L I A
=================
GREENWAY PLUMBING: First Creditors' Meeting Set for Jan. 5
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Greenway
Plumbing Pty Ltd will be held at Level 3, 65 York Street, in
Sydney, NSW, on Jan. 5, 2018, at 11:00 a.m.
Philip Raymond Hosking of HoskingHurst was appointed as
administrator of Greenway Plumbing on Dec. 21, 2017.
GRIFFIN COAL: No Longer a Subsidiary of Lanco Group
---------------------------------------------------
BloombergQuint reports that Griffin Coal Mine in Australia is no
longer a Lanco Group company as the ICICI Bank-led lenders took
over the pledged shares as a result of default of payment, a
senior official of the debt-ridden Indian infrastructure firm
said.
According to BloombergQuint, lenders of Lanco Resources
International Pte Ltd. (LRIPL), a Lanco Infratech subsidiary,
which owns Griffin Coal Mine, have earlier appointed PWC as
receiver and manager to look for an investor as the Aussie company
defaulted payment.
Lanco Infratech, through its Australian subsidiary, acquired
Griffin Coal Mining Company and Carpenter Mine Management for
AUD740 million in March 2011, the report recalls.
Though the transfer of shares was to have legal title on the
shares to the lenders, the beneficial interest continued to be
with the company, as part of "perfection" of security under the
Singapore laws, Lanco had earlier said, BloombergQuint relays.
BloombergQuint notes that the sale process of Griffin Coal in 2011
was overseen by Kodramentha as administrator of Carpenter Mine.
The Australian mine is continuously making cash losses ever since
its acquisition.
Production at the mine during financial year 2016-2017 was 2.50
million tonnes with sales of 2.45 million tones, the report
discloses. Production was less than optimal as the fall in
international coal prices did not economically justify exporting a
part of the production.
In 2015, Lanco alleged that Kordanentha misled the bidders by
withholding two reports suggesting the Griffin coal deposits were
smaller than disclosed first, according to BloombergQuint. Denying
Lanco's allegation, Kordamentha in turn made a counter allegation
that Lanco defaulted its installment to the tune of $150 million
for the mine.
According to BloombergQuint, Adi Babu said the issue has been
settled out of court as the Australian advisory and investment
firm agreed to pay about $10 million as expenses and also waive
$150 million payment instalment by Lanco.
"The case was settled. We were to pay $150 million (as part of the
settlement). We don't have to pay that amount. It was waived. The
advantage of the settlement will also go to the bank (lenders).
They have also agreed to pay about $10 million towards damages,"
BloombergQuint quotes Adi Babu as saying.
Lanco Infratech currently is under insolvency proceedings and on
Aug. 7, the National Company Law Tribunal (NCLT) suspending the
powers of the Board, appointed Savan Godiawala as Interim
Resolution Professional (IRP) as part of the Corporate Insolvency
Resolution Process (CIRP) for the company, BloombergQuint
discloses.
Based in Australia, The Griffin Coal Mining Company Pty Ltd --
http://www.griffincoal.com.au/-- is engaged in coal mining and
processing. Griffin Coal operates major mines in the Collie
area, approximately 220 kilometers south east of Perth. The
Company is producing more than three million tons of coal per
year. Griffin Coal has operations at Ewington Mine, Muja Mine
and Buckingham Mine.
MOSSGREEN PTY: First Creditors' Meeting Set for Jan. 4
------------------------------------------------------
A first meeting of the creditors in the proceedings of Mossgreen
Pty Ltd will be held at the offices of BDO, Tower 4, Level 18/727,
Collins St, in Docklands, Victoria, on Jan. 4, 2018, at
11:00 a.m.
James Michael White, Nicholas Martin and Andrew Sallway of BDO
were appointed as administrators of Mossgreen Pty on Dec. 21,
2017.
VENUE 63: First Creditors' Meeting Set for Jan. 8
-------------------------------------------------
A first meeting of the creditors in the proceedings of Venue 63
Pty Ltd will be held Worrells Solvency & Forensic Accountants,
Suite 1103, 147 Pirie Street, in Adelaide, on Jan. 8, 2018, at
11:00 a.m.
Nick Cooper and Dominic Cantone of Worrells Solvency were
appointed as administrators of Venue 63 on Dec. 24, 2017.
VERILUMA LTD: Jirsch Sutherland Appointed as New Administrators
---------------------------------------------------------------
Stockhead reports that Veriluma Ltd, currently under
administration, has said it will get on with the job of getting
back on its feet after a change in its administrators and
resignation of two key board members.
The company was put into voluntary administration under the
stewardship of Jamieson Louttit last month, but has since been
marred with shareholder frustration and unrest, Stockhead says.
Its AGM on November 28 was reportedly cut short after just two
minutes as Stockhead reporters were refused entry to the meeting
on arrival.
In the weeks since, the administrator Mr Louttit had put the
company's business and assets, including the listed shell, up for
sale only to retire from the position on Dec. 15, after a brief
spell in court, Stockhead says.
New administrators from Jirsch Sutherland were appointed in his
place and on Dec. 20 announced the resignation of directors
Richard Anstey and Laurence Hammond, according to Stockhead.
Stockhead relates that in a statement to market, the
administrators told shareholders they did not accept that the
resignations were valid, noting the following:
"We do not waive any of our rights as against the
directors/officers of the company. We do not accept that the
purported resignations are valid and we do not accept that any
liability of them as directors and/or officers of the company and
Veriluma Software has been affected in any way by the purported
resignations."
Chief executive Elizabeth Whitelock told Stockhead she was
confident the company would be reinstated to trade and get itself
out of administration.
"We will work with the new administrators to put up a deed of
company arrangement backed by the shareholders," Stockhead quotes
Ms. Whitelock as saying. "Not only do we have support from our
existing shareholder base, but we have other interested parties
who could become investors in the company and people who want to
work with us and do projects with the company."
The new administrators have put forward a new deadline for formal
offers and recapitalisation proposals by January 12, Stockhead
discloses.
WEXDEK FORMWORK: First Creditors' Meeting Set for Jan. 5
--------------------------------------------------------
A first meeting of the creditors in the proceedings of WEXDEK
Formwork Pty Limited will be held at the offices of TPH Advisory,
Lower Level, 133 Macquarie Street, in Sydney, NSW, on Jan. 5,
2018, at 11:00 a.m.
Tim Heesh of TPH Insolvency was appointed as administrator of
WEXDEK Formwork on Dec. 21, 2017.
===================
B A N G L A D E S H
===================
EASTERN BANK: Moody's Affirms 'Ba3' LC Bank Deposit Rating
----------------------------------------------------------
Moody's Investors Service has affirmed the long-term ratings of
the two banks that it rates in Bangladesh (Ba3 stable). The
affected banks are: (1) Eastern Bank Limited, and (2) The City
Bank Limited.
In particular, Moody's has affirmed the baseline credit
assessments (BCAs) and Adjusted BCAs of the two banks at b1. And,
Moody's has affirmed the counterparty risk assessments (CRAs) of
the two banks at Ba3(cr)/NP(cr).
The outlook on the ratings of the two banks, where applicable, are
maintained at stable.
At the same time, Moody's has changed Bangladesh's Macro Profile
to "Weak" from "Weak +". The lower Macro Profile was driven by
Moody's lowering of Bangladesh's institutional strength score to
"very low +" from "low". The "Weak" Macro Profile also captures
some inherent weaknesses in the structure of Bangladesh's banking
industry.
RATINGS RATIONALE
RATIONALE BEHIND THE CHANGE IN THE MACRO PROFILE
Moody's has changed Bangladesh's Macro Profile to "Weak" from
"Weak +" to account for a lower institutional strength score, as
well as some structural weaknesses in Bangladesh's banking
industry.
The institutional strength score has been lowered to "very low +"
from "low". The institutional strength of very low + reflects
Bangladesh's positioning according to the World Bank's Worldwide
Governance Indicators. In particular, Bangladesh ranks in the
bottom decile among Moody's-rated countries for both government
effectiveness and control of corruption.
Moody's also believes that the "Weak" Macro Profile more
appropriately reflects some structural weaknesses in the
Bangladesh banking industry. The structure of Bangladesh's banking
industry is very fragmented relative to the corporate sector,
which results in the banks facing a high concentration risk. In
addition, several non-banking corporates own meaningful stakes in
the banks, which increases the risk of corporate governance
issues.
Bangladesh's lower Macro Profile has had no impact on the BCAs of
the two Bangladesh banks that Moody's rates.
AFFIRMATION OF THE BANKS' BCAs, ADJUSTED BCAs, SUPPORTED RATINGS
AND CRAs
Moody's has affirmed the b1 BCAs and Adjusted BCAs of the two
banks. Moody's has also affirmed the local currency deposit
ratings for the two banks at Ba3, and the foreign currency
deposit ratings at B1.
For Eastern Bank Limited, its b1 BCA and adjusted BCA were
affirmed on Moody's expectation that its capital and profitability
will remain stable. Moody's affirmation also factors in the bank's
strong funding franchise, and Moody's expectation that the
liquidity profile of the bank will improve. Moody's says that
while the bank should see some deterioration in its asset quality
over the next 12 months, its asset quality profile should stay
consistent with its BCA of b1.
For The City Bank Limited, Moody's affirmed its b1 BCA and
adjusted BCA on Moody's expectation that its asset quality will
improve from current levels, while profitability and capital
levels remain stable. In addition, the bank's funding franchise
remains a key credit strength.
Moody's has also factored in a moderate level of systemic support
in the two banks' ratings. This approach is consistent with their
2%-3% market share of system assets. This level of systemic
support leads to a one notch uplift in their local currency
deposit ratings to Ba3. At the same time, the foreign currency
deposit ratings remain at B1, because Bangladesh's country ceiling
for foreign currency deposits is at B1.
Moody's affirmed the Counterparty Risk Assessments of the two
banks because of the respective affirmation of these banks'
Adjusted BCAs.
WHAT COULD MOVE THE RATINGS UP
Eastern Bank Limited
The BCA could be upgraded if there is a significant improvement in
the bank's asset quality and capital metrics.
The local currency deposit rating could be upgraded if the bank's
BCA is upgraded and Bangladesh's sovereign rating is upgraded.
The foreign currency deposit rating could be upgraded if
Bangladesh's country ceiling on foreign currency deposits is
upgraded.
The City Bank Limited
The BCA could be upgraded if there is a significant improvement in
the bank's asset quality and capital metrics.
The local currency deposit rating could be upgraded if the bank's
BCA is upgraded and Bangladesh's sovereign rating is upgraded.
The foreign currency deposit rating could be upgraded if
Bangladesh's country ceiling on foreign currency deposits is
upgraded.
WHAT COULD MOVE THE RATINGS DOWN
Eastern Bank Limited
The BCA could be downgraded if there is a significant
deterioration in the bank's asset quality. There could also be
downward pressure on the BCA if the bank pursues a more aggressive
liquidity management strategy.
The local currency deposit rating could be downgraded if the
bank's BCA is downgraded.
The foreign currency deposit rating could be downgraded if
Bangladesh's country ceiling for foreign currency deposits is
downgraded.
The City Bank Limited
The BCA could be downgraded if there is a significant
deterioration in the bank's asset quality.
The local currency deposit rating could be downgraded if the
bank's BCA is downgraded.
The foreign currency deposit rating could be downgraded if
Bangladesh's country ceiling on foreign currency deposits is
downgraded.
The principal methodology used in these ratings was Banks
published in September 2017.
Headquartered in Dhaka, Eastern Bank Limited's consolidated assets
totaled BDT206 billion (approximately $2.6 billion) at Dec. 31,
2016.
Headquartered in Dhaka, The City Bank Limited's consolidated
assets totaled BDT253 billion (approximately $3.2 billion) at
Dec. 31, 2016.
A summary of Eastern Bank's ratings are:
- Local currency long-term bank deposit rating affirmed at Ba3;
foreign currency long-term bank deposit rating affirmed at B1
- Local currency and foreign currency short-term bank deposit
ratings affirmed at NP
- Long term issuer ratings affirmed at Ba3
- Short-term issuer ratings affirmed at NP
- BCA and adjusted BCA affirmed at b1
- Counterparty risk assessment affirmed at Ba3(cr)/NP(cr)
- Outlook, where applicable, maintained at stable
A summary of City Bank's ratings are:
- Local currency long-term bank deposit rating affirmed at Ba3;
foreign currency long-term bank deposit rating affirmed at B1
- Local currency and foreign currency short-term bank deposit
ratings affirmed at NP
- Long-term issuer ratings affirmed at Ba3
- Short-term issuer ratings affirmed at NP
- BCA and adjusted BCA affirmed at b1
- Counterparty risk assessment affirmed at Ba3(cr)/NP(cr)
- Outlook, where applicable, maintained at stable
=========
C H I N A
=========
JIANGSU HANRUI: Fitch Rates US$110MM Notes BB+; On Watch Negative
-----------------------------------------------------------------
Fitch Ratings has assigned Jiangsu HanRui Investment Holding Co.,
Ltd.'s (HanRui, BB+/Rating Watch Negative) US$110 million 6.25%
senior secured notes due 2020 a final rating of 'BB+', on Rating
Watch Negative.
The notes are issued by HanRui Overseas Investment Co., Ltd. and
are unconditionally and irrevocably guaranteed by HanRui.
The offshore notes are rated at same level as HanRui's Issuer
Default Rating as they represent direct, unsubordinated,
unconditional and unsecured obligations of HanRui and shall at all
times rank pari passu with all other present and future unsecured
and unsubordinated obligations of HanRui. The proceeds will be
used to replenish working capital and for general corporate
purposes.
The final rating follows the receipt of documents confirmation to
information already received and is in line with the expected
rating assigned on December 20, 2017.
KEY RATING DRIVERS
Rating Watch on Exposure Draft: HanRui's IDR was placed on Rating
Watch Negative (RWN) following the publication of the Exposure
Draft: Government Related Entities Criteria (see "Fitch Publishes
Exposure Draft on Government Related Entities Criteria", dated 27
November 2017).
Linked to Zhenjiang Municipality: HanRui's ratings are credit-
linked with those of Zhenjiang municipality in China's Jiangsu
province. The link reflects strong oversight and supervision of
HanRui by the Zhenjiang government and the company's strategic
importance as the flagship local government funding vehicle (LGFV)
platform for public-sector construction in Zhenjiang New Area, a
national-level economic and technological development zone.
Zhenjiang's Creditworthiness: Zhenjiang's economy is backed by a
traditionally strong secondary industry and maintained strong
gross regional product (GRP) growth of 10.6% in 2016,
outperforming both Jiangsu and the national average. Zhenjiang
also has a favourable socio-economic profile, despite its smaller
economy, with GRP per capita that ranked fifth among Jiangsu's 13
municipalities. These strengths should mitigate the city's
moderately high contingent liabilities arising from its state-
owned entities.
Legal Status 'Mid-Range': HanRui is registered as a wholly state-
owned limited liability company under Chinese company law. The
attribute was assessed at Mid-Range, as HanRui's legal status does
not indicate automatic absorption of its liabilities by Zhenjiang
Municipality.
Control 'Stronger': The Zhenjiang State-Owned Assets Supervision
and Administration Commission (SASAC) is the sole and direct
shareholder of HanRui. HanRui's daily operations are supervised by
the Zhenjiang New Area Management Committee on behalf of Zhenjiang
SASAC. The government has no plan to dilute its shareholding in
HanRui.
Strategic Importance 'Stronger': HanRui is the flagship urban
development platform within the Zhenjiang New Area and is ranked
second in total assets among the city's directly controlled LGFVs.
For the first nine months of 2017, the Zhenjiang New Area
accounted for 15% of the city's GDP and 17% of the tax revenue.
Fitch believes Zhenjiang could see material consequences in the
event of a default of HanRui, considering the company's large
asset size and the economic importance of the Zhenjiang New Area.
Integration 'Stronger': HanRui has received consistent government
financial support, including subsidies and capital injections.
Annual subsidies have averaged 148% of the company's net profit
over the previous three years, demonstrating the government's
commitment in maintaining HanRui as a going concern. Fitch expects
continued government support to partly fund HanRui's capital
expenditure and debt servicing, considering its high strategic
importance.
Weak Standalone Profile: HanRui's financial profile is
characterised by large capital expenditure, negative free cash
flow and high leverage. Its weak standalone credit metrics are not
likely to see any significant improvement in the near term. Fitch
expects ongoing government financial support to mitigate this
risk, despite HanRui's infrastructure developments in Zhenjiang
New Area.
RATING SENSITIVITIES
Any rating action on HanRui's IDR will result in similar action on
the ratings of the proposed US dollar notes.
Exposure Draft: Fitch expects to resolve the RWN on HanRui's
ratings within the next six months from the publication of the
criteria.
Linkage with Municipality: A stronger or more explicit support
commitment from Zhenjiang municipality may trigger positive rating
action on HanRui. Significant changes to HanRui's strategic
importance, a diluted municipal shareholding or reduced explicit
and implicit municipality support could lead to a wider rating gap
between HanRui and Zhenjiang.
Municipality's Creditworthiness: An upgrade of Fitch's internal
credit view of Zhenjiang may trigger positive rating action on
HanRui. A weaker fiscal performance or higher municipality
indebtedness could lead to a lowering of Fitch's internal
assessment of Zhenjiang's creditworthiness and thus trigger
negative rating action on HanRui.
Fitch will monitor both the application of existing and any new
central government laws, regulations and directives that will
effectively prohibit or restrict support by the local and regional
governments to the entities, with a practical impact on the
entities' future ability to service their debts. Fitch interprets
such initiatives as being undertaken by the central government to
disentangle government-related entities (GREs) from public-sector
balance sheets, address indiscriminate GRE debt growth, and
encourage greater market discipline.
Depending on the degree of certainty and the extent of the
prohibition, the agency will take rating action which could result
in either a widening of the notching or the adoption of a bottom-
up ratings approach, possibly even to the extent of the removal of
all support expectations.
LEECO: China Regulator Summons Founder Back to China
---------------------------------------------------
Reuters reports that China's securities regulator has formally
ordered the founder of indebted tech conglomerate LeEco to return
to China and sort out a mounting debt pile linked to his firms,
ramping up pressure on the head of the embattled entertainment-to-
autos group.
The Beijing branch of the China Securities Regulatory Commission
(CSRC) said in a notice late on Dec. 25 that LeEco Chief Executive
Jia Yueting must return to China before Dec. 31 to "fulfil his
obligation" and protect investors' rights, Reuters says.
LeEco, an entertainment, electronics and electric vehicles group
founded by Jia, has struggled to pay its debts after rapid
expansion into multiple sectors sparked a cash crunch, a plunge in
the shares of a listed unit and led to multiple defaults,
according to Reuters.
Reuters relates that the watchdog said it had previously asked Jia
to return to China in September, but since then had not seen any
action taken by the LeEco founder to comply. It did not specify
where Jia was, although he has business interests in the United
States.
"Firms you control owe huge amounts to listed companies, which has
not yet been returned," the CSRC, as cited by Reuters, said. "This
behaviour seriously harms the legal rights of listed firms and the
personal interests of a wide range of investors."
A spokeswoman for LeEco's main listed unit Leshi said Jia's
personal behaviour would not have a major impact on the listed
company's overall operations and his ties with the firm were no
longer that close, Reuters relays. Jia stepped down as CEO of
Leshi in May, but remains the head of parent LeEco, the report
notes.
As reported in the Troubled Company Reporter-Asia Pacific on
July 6, 2017, The Financial Times said that a Chinese court has
frozen millions of dollars in assets belonging to embattled tech
conglomerate LeEco, dealing another blow to the company as it
struggles to stay afloat. The FT related that an order issued by
the court backed up a request by China Merchants Bank to freeze
CNY1.24 billion of assets from three LeEco subsidiaries as well
as the personal assets of LeEco founder Jia Yueting and his wife
Gan Wei, LeEco confirmed. The assets were frozen because of
missed interest payments on a loan taken out by LeEco's mobile
phone subsidiary, the company added.
China-based LeEco makes smartphones, entertainment platforms,
set-top boxes, and smart TVs.
TUNGHSU VENUS: Notes Tap No Impact on Fitch's B+ Notes Rating
-------------------------------------------------------------
Fitch Ratings says Tunghsu Venus Holdings Limited's proposed tap
of its existing USD350 million 7.0% senior notes due 2020 will not
affect the 'B+' rating on the notes.
The proposed and existing notes are guaranteed by Tunghsu Group
Co., Ltd. (B+/Stable) and will carry the same terms and
conditions. They are rated at the same level as Tunghsu's senior
unsecured rating because they constitute its direct and senior
unsecured obligations. The proceeds from the proposed notes will
be used to refinance debt.
Tunghsu's ratings are supported by its established, leading
position in the optoelectronic display industry, diversified
funding channels and a strong liquidity profile. Tunghsu's listed
affiliate, Dongxu Optoelectronic Technology Co Ltd (DXGD), is
China's largest glass substrate producer. Despite the low
shareholding of 18.13%, Tunghsu holds key patents for DXGD's
production, which is crucial in an industry with high
technological and capital barriers. DXGD is the only domestic
player manufacturing a complete set of equipment for both TFT-LCD
glass substrates and touch-screen glass, accounting for about 11%
of China's production volume of glass substrate for sizes up to G6
and 1.6% globally in 2016.
The ratings are constrained by the company's product and
geographical concentration, a short track record in segments that
are outside its main optoelectronic display business, higher
leverage to fund its expansion in the next three years, and
structural subordination. Two of Tunghsu's four key business
segments are operated through its listed affiliates, and Tunghsu's
access to its listed affiliates' cash is limited by their dividend
policies due to material minority interests. Therefore, Fitch have
taken a proportionate consolidated approach to evaluate Tunghsu's
financial profile.
================
H O N G K O N G
================
CHINA FISHERY: Fitch Affirms & Withdraws D Long-Term IDR
--------------------------------------------------------
Fitch Ratings has affirmed and withdrawn all its ratings for China
Fishery Group Limited. The ratings are:
China Fishery Group Limited
- Long-Term Issuer Default Rating (IDR) of 'D'
- Senior unsecured rating of 'C' with Recovery Rating of 'RR5'
CFG Investment S.A.C
- Rating on USD300 million senior notes guaranteed by China
Fishery of 'C' with Recovery Rating of 'RR5'
Fitch is withdrawing the ratings of China Fishery as China Fishery
has defaulted. Accordingly, Fitch will no longer provide ratings
or analytical coverage for China Fishery.
KEY RATING DRIVERS
Asset Sale Delayed: According to press reports, the sale of China
Fishery's Peruvian fishing operations, originally scheduled for
December, has been delayed. Fitch views China Fishery's Peruvian
anchovy fishing and processing operations as the most important
driver of earnings and value among China Fishery's subsidiaries.
Peruvian Operations Drive Recovery Rating: Fitch's Recovery Rating
of 'RR5' is mainly driven by the value of the Peruvian fishing
operations, which Fitch estimates based on 6x estimated steady
state EBITDA of USD100 million. In addition, Fitch have also
factored in USD120 million for the China Fishery fleet based on a
50% discount to the most recently disclosed net asset value, and a
10% haircut for administrative claims.
DERIVATION SUMMARY
Not applicable
KEY ASSUMPTIONS
Key assumptions are not applicable as the ratings have been
withdrawn.
RATING SENSITIVITIES
Rating sensitivities are not applicable as the ratings have been
withdrawn.
=========
I N D I A
=========
3GR AGRO: CRISIL Assigns B+ Rating to INR15MM Cash Loan
-------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
long-term bank facility of 3GR Agro LLP (3GR).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 15 CRISIL B+/Stable
The rating reflects low operating profitability and working
capital-intensive operations. These rating weaknesses are
partially offset by an average financial risk profile, extensive
experience of the partners in the agricultural products industry,
and their funding support.
Key Rating Drivers & Detailed Description
Weakness
* Low operating profitability: The margin is expected to remain
low at 3-4%due to limited value addition. Moreover, the margin
remains vulnerable to raw material price fluctuations.
* Working capital-intensive operations: Gross current assets are
expected to remain about 90 days. Operations are likely to remain
working capital intensive over the medium term.
Strengths
* Average financial risk profile: The networth and gearing are
expected to be around INR10 crore and 1.6 times, respectively, as
on March 31, 2018. The debt protection metrics are expected to be
strong with interest coverage ratio of 3-4 times and net cash
accrual to total debt ratio of 0.10-0.15 times in fiscal 2018. The
financial risk profile is expected to remain average over the
medium term.
* Extensive industry experience of the partners: The partners have
an experience of more than 2 decades in the agricultural products
industry. This has given them an understanding of the dynamics of
the local market, and resulted in an established relationship with
customers and suppliers and healthy orders in hand. This is likely
to result in sustained revenue growth over the medium term.
Outlook: Stable
CRISIL believes 3GR will continue to benefit from the extensive
industry experience of its partners. The outlook may be revised to
'Positive' in case of a considerable increase in the scale of
operations and profitability, leading to better-than-expected debt
protection metrics. The outlook may be revised to 'Negative', in
case of any further pressure on the financial risk profile,
particularly liquidity, due to higher-than-expected working
capital requirement, large debt funded capital expenditure, or
substantial withdrawal of capital.
Formed in 2016, 3GR is a part of the Goenka group, and is managed
by Mr Gopal Goenka and his son, Mr Rishi Goenka.. The partnership
firm processes almonds. It has a shell-cracking unit for almonds
in Jaipur.
A-1 COLD: CARE Assigns B+ Rating to INR5.55cr LT Loan
-----------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of A-1
Cold Storage Private Limited (ACSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 5.55 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of ACSPL is tempered by
the short track record of the company, project implementation risk
and stabilization of operations. However, the rating is
underpinned by the experience of the promoters for more than two
decades in agricultural industry, stable outlook of cold chain
industry and location advantage of the plant.
Going forward, ability of the company to complete the project
without any cost and time overrun and stabilize the operations and
generate the revenue and profit levels as envisaged are key rating
sensitivities.
Detailed Description of the key rating drivers
Key Rating Weaknesses
Short track record of the company: The company was incorporated
in the year 2015 and started its project activities in 2017. The
company is in the initial stages of operations and is expecting to
complete its ongoing project in November 2018 and start commercial
operations from December 2018. The level of project execution and
operations by the management of the company is yet to be seen.
Project implementation risk and stabilization of operations
The directors of the company are setting up the cold storage with
a total estimated cost of the project is INR8.92 crore which is to
be funded through a bank term loan of INR5.55 crore and rest of
the INR3.37 crore from promoter's fund. Till date, the company has
incurred INR0.77 crore for land registration and development
purpose. The commercial operations of the company are expected to
start from December 2018.
Key Rating Strengths
Experience of the promoters for more than two decade in
agricultural industry: ACSPL is promoted by Mrs. Duvvuru Varija
(Managing Director) and Mrs. Bollu Hymavathi (Director). The
directors are well qualified wherein Mrs. Duvvuru Varija, aged 67,
is a post graduate, having experience of 24 years in agricultural
business. The company is likely to get benefited by its qualified
and experienced promoters.
Location advantage of the plant: The plant location of the company
is located in horticultural crops growing area and having good
network with farmers and growers. There is abundant availability
of raw materials such as chillies, mango, tamarind etc. in the
proposed area of the district.
Stable outlook of cold chain industry: Growing annually at 28%,
the total value of cold chain industry in India is expected to
grow going forward driven by increased investments, modernization
of existing facilities, and establishment of new ventures via
private and government partnerships. India's cold chain industry
is still evolving, not well organized and operating below
capacity. The Indian cold chain market is highly fragmented with
more than 3,500 companies in the whole value system. Organized
players contribute only ~8%-10% of the cold chain industry market.
Cold stores are the major revenue contributors of the Indian Cold
Chain industry and are majorly used for storing potatoes. However,
the market is gradually getting organized and focus towards
multipurpose cold storages is rising.
A1 Cold Storage Private Limited (ACSPL) was incorporated in the
year 2015 with its registered office at Somajiguda, Hyderabad. The
promoters of the company are Mrs. Duvvuru Varija (Managing
Director) and Mrs. Bollu Hymavathi (Director). Both the directors
have experience for more than two decades in agricultural
business.
Presently, the company is establishing a cold storage plant at
Jadcherla village, Mahabubnagar District, Telangana with the total
project cost of INR8.92 crore which is to be funded through a bank
term loan of INR5.55 crore and balance of INR3.37 crore from
promoter's fund. Till date, the company has incurred INR0.77 crore
for land registration and development purpose. ACSPL is planning
to start its commercial operations from December 2018. The company
is expected to preserve fruits, vegetables and other agricultural
products like seeds post completion of cold storage plant.
BHAVIN AGRI-INFRA: ICRA Moves B+ Rating to Not Cooperating
----------------------------------------------------------
ICRA Ratings has moved the long term ratings for the bank
facilities of Bhavin Agri-Infra Private Limited (BAIPL) 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
---------- ----------- -------
Fund based limits 2.00 [ICRA]B+ (Stable) ISSUER NOT
COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
Non-fund based limits 14.00 [ICRA]A4 ISSUER NOT
COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
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. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Incorporated in 2007, BAIPL is promoted by the Jain family. The
company is a part of the Rajdhani Group which is into
manufacturing and retailing of agro products; the major operations
of the group are carried out in the flagship company Victoria
Foods Pvt Ltd (VFPL). BAIPL is engaged in processing of pulses
(Toor Daal, Chana Daal, Moong Daal, etc.) with its production
facility located at Jalgaon (Maharashtra) with an installed
capacity of 28,800 metric tonnes per annum. The company sells
processed pulses to agro distributors across India. Apart from
selling the pulses to various distributors, the company also
undertakes processing activity for VFPL on a job work basis. The
company procures raw pulses from the local market as well as
through imports.
CADCHEM LABORATORIES: Ind-Ra Assigns BB- LongTerm Issuer Rating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Cadchem
Laboratories Ltd (CLL) a Long-Term Issuer Rating of 'IND BB-'. The
Outlook is Stable. The instrument-wise rating actions are:
-- INR72.5 mil. Fund-based limit assigned with IND Cadchem
Laboratories rating;
-- INR25.57 mil. Term loan due on May 2023 asigned with IND BB-
/Stable rating;
-- INR32.5 mil. Non-fund-based working capital limit assigned
with IND A4+ rating.
KEY RATING DRIVERS
The ratings reflect CLL's small scale of operations and moderate
credit metrics. CLL's revenue increased at a CAGR of 14.77%
during FY15-FY17 due to a constant increase in the work orders.
Revenue was INR257 million in FY17 (FY16: INR236 million). In
FY17, the company's interest coverage (operating EBITDA/gross
interest expense) improved marginally to 1.9x (FY16: 1.7x) and net
leverage (Ind-Ra total adjusted net debt/operating EBITDA) to 4x
(4.2x) due to an improvement in the EBITDA margins. The EBITDA
margins improved to 11.4% in FY17 (FY16: 10.4%) on account of a
decrease in the overall material cost.
The ratings are constrained by the tight liquidity position of the
company, as indicated by the near full average peak utilisation of
its fund-based facilities during the 12 months ended November
2017. Tight liquidity can be attributed to an elongated working
capital cycle of 138 days in FY17 (FY16:149 days), as the company
had a long inventory holding period of 115 days (130 days) and
long debtor days of 104 days (120 days).
The ratings are, however, supported by over two decades of
experience of the promoters in the pharma industry.
RATING SENSITIVITIES
Positive: A significant improvement in the revenue while
maintaining the profitability will lead to a positive rating
action.
Negative: A deterioration in the profitability or liquidity
leading to a deterioration in the credit metrics will lead to a
negative rating action.
COMPANY PROFILE
Incorporated in 1985, CLL manufactures active pharmaceutical
ingredient at its 120MTPA unit in Chandigarh.
CAPITAL ENTERPRISES: CARE Moves D Rating to Not Cooperating
-----------------------------------------------------------
CARE has been seeking information from Capital Enterprises to
monitor the ratings vide e-mail communications/letters dated
June 20, 2017, Nov. 11, 2017, Nov. 27, 2017 and numerous phone
calls. However, despite CARE's repeated requests, the entity has
not provided the requisite information for monitoring the ratings.
In the absence of minimum information required for the purpose of
rating, CARE is unable to express opinion on the ratings. In line
with the extant SEBI guidelines CARE's rating on Capital
Enterprises' bank facilities will now be denoted as CARE D; ISSUER
NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facility 5.00 CARE D; ISSUER NOT
COOPERATING
Short term Bank
Facility 7.00 CARE D; ISSUER NOT
COOPERATING
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Capital Enterprises (CE) was established in 2000 as a
proprietorship entity by Mrs. Senbom Taipodia under the guidance
of Mr. Dayanand Thakur (Husband of Mrs. Senbom Taipodia) of
Arunachal Pradesh. Since inception; the entity has been engaged in
electrical, mechanical, infrastructural works and civil
construction in the state of Arunachal Pradesh. The day to day
affairs of the entity are looked after by Mrs. Senbom Taipodia
with adequate support from her husband Mr.Dayanand Thakur. Both
are having more than one and a half decade of experience in the
relevant line of business.
CHANDIGARH ROLLER: CARE Withdraws B Rating on INR12cr LT Loan
-------------------------------------------------------------
CARE Ratings has withdrawn the rating(s) assigned to the bank
facilities of Chandigarh Roller Flour Mills Private Limited with
immediate effect. The above action has been taken at the request
of Chandigarh Roller Flour Mills Private Limited and 'No Objection
Certificate' received from the bank(s) that have extended the
facilities rated by CARE
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 12.00 CARE B; Stable Withdrawn
Chandigarh Roller Flour Mills Private Limited (CRF) was
incorporated in 2011 as a private limited company and is currently
being managed by Mr. Vinod Mittal, Mr. Udit Mittal and Mrs. Kiran
Singal. The company was established with an aim to engage in
processing of wheat at its manufacturing facility located in
Banur, Punjab. The installed capacity at its manufacturing
facility is 150 tonnes per day (TPD). The commercial operations
commenced from June, 2017. The product line of CRF consists of
wheat flour, white flour, semolina and bran. CRF sells its
products to wholesalers and institutional clients all over India.
D.P.M.K. FERTILIZERS: CRISIL Reaffirms B+ Rating on INR11.5M Loan
-----------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable/CRISIL A4'
ratings on the bank facilities of D.P.M.K. Fertilizers Private
Limited (DPMK). The ratings continue to reflect the company's
large working capital requirement and subdued financial risk
profile. These weaknesses are partially offset by the extensive
experience of its promoters in the industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.5 CRISIL A4 (Reaffirmed)
Cash Credit 11.5 CRISIL B+/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weaknesses
* Subdued financial risk profile: As on March 31, 2017, networth
was high at INR6.31 crore and total outside liabilities to
tangible networth was high at 6.78 times (compared to 7.17 times a
year ago). With continued large working capital debt, gearing will
remain high over the medium term. Interest coverage ratio was
subdued at 1.7 times and net cash accrual to total debt ratio was
0.06 time, respectively, in fiscal 2017 due to low profitability.
* Large working capital requirements: Gross current assets were at
136 days as on March 31, 2017 (compared to 137 days a year ago)
driven by receivables of 93 days and inventory of 40-50 days,
leading to high dependence on payables and bank facilities to fund
working capital requirement.
Strengths
* Promoters' extensive experience and financial support: The
promoters' experience of over 25 years has helped the company
establish a clientele and supplier base in Chhattisgarh, Madhya
Pradesh, and Odisha, and scale up operations over the years. The
promoters have also supported fund requirement through unsecured
loans.
Outlook: Stable
CRISIL believes DPMK will continue to benefit from the promoters'
extensive industry experience. The outlook may be revised to
'Positive' if revenue and profitability improve, leading to higher
cash accrual, or if a significant capital infusion leads to
improvement in financial risk profile and liquidity. The outlook
may be revised to 'Negative' if lower-than-expected revenue or
profitability, or stretch in working capital cycle weakens the
financial risk profile, particularly liquidity.
DPMK was established as a proprietorship firm in 1990, and was
reconstituted as a private limited company with the current name
in 2009. The company is a distributor of organic and inorganic
fertilizers in Chhattisgarh, Madhya Pradesh, and Odisha. It is
managed by Mr Dwarika Gupta.
G.R. MULTIFLEX: CARE Moves D Rating to Not Cooperating Category
---------------------------------------------------------------
CARE Ratings has been seeking information from G. R. Multiflex
Packaging Private Ltd. (GRMPL) to monitor the rating vide e-mail
communications/letters dated June 20, 2017, October 10, 2017,
December 11, 2017 and numerous phone calls. However, despite
CARE's repeated requests, the company has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the publicly available information, which however, in CARE's
opinion is not sufficient to arrive at a fair rating. The rating
on GRMPL's bank facilities will now be denoted as CARE D; ISSUER
NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 12.00 CARE D; Issuer not
Facilities cooperating; Based on
best available information
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on August 09, 2017 the following were
the rating weaknesses and strengths; (updated for the information
available from lenders).
Key Rating Weaknesses:
Ongoing delays in debt servicing: There are ongoing delays in the
debt servicing of the company due to its stressed liquidity
position.
Kolkata based GRMPL was incorporated in July 2002 and currently
managed by Mr. Rabindra Kumar Jaiswal and Mrs. Prativa Jaiswal.
Since its inception, the company has been engaged in manufacturing
of flexible packaging materials such as polyester laminated rolls,
multilayer flexible films, oil print films, water printed films,
and bags and pouches. The company's manufacturing facility is
located in Kolkata with aggregated installed capacity of 1404
metric ton per annum.
GANAPATI BUILDERS: CARE Assigns B+ Rating to INR8cr LT Loan
-----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Ganapati Builders Limited (GBL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 8.00 CARE B+; Stable Assigned
Detailed Rationale& Key Rating Drivers
The rating assigned to the bank facilities of GBL is constrained
by small scale of operations with moderate profit margins, project
execution as well as funding risk, competition from similar type
of projects in the adjoining areas, geographical concentration
risk and cyclical nature of industry. The rating, however, derives
strength from the long track record of operations, experienced
promoters, satisfactory project execution capabilities and
comfortable capital structure and debt coverage indicators.
The ability to complete the ongoing projects as per project
schedule without any major cost overrun and ability to sell its
entire real estate properties will be the key ratings sensitivity.
Detailed description of the key rating drivers
Small scale of operations with moderate profit margins: The scale
of operations of the company remained small with total operating
income of INR9.40 crore with a PAT of INR0.76 crore in FY16.
Furthermore, the tangible net worth of the company also remained
low at INR0.64 crore as on March 31, 2016. The profit margins have
improved during last three years. The PBILDT margin improved
during last three years and the same remained moderate at 8.11% in
FY16. Furthermore, the PAT margin also improved during the
aforesaid period but the same remained moderate at 5.31% in FY16.
Project execution as well as funding risk: The company is
currently developing a single project at a project cost of
INR22.98 crore with total saleable area of 138388 square feet. GBL
has spent around INR4.00 crore till May 31, 2017 out of total
project cost of INR22.98 crore on the aforesaid project. Since the
project is into initial stage of operations, the company is
exposed to the execution risk for the projects under development.
Furthermore, considering rising commodity prices and labour
shortage along with subdued economic scenario, risk related to the
timely construction of the balance projects cannot be ignored.
Furthermore, the debt portion of the project is yet to be tied up
and thus project funding risk exists.
Geographical concentration risk with operations confined to
Orissa: GBL's operations are restricted to Orissa since inception
indicating high geographical concentration risk. Accordingly, any
change in the policy of the government might affect the operations
of the company directly. However, the promoters are well versed
with the local real estate market and its dynamics which partly
mitigates the risk associated with the completion of the projects.
Competition from similar type of projects in the adjoining areas:
Real estate, while being one of the largest sectors of the
economy, is regional and fragmented in nature. In recent times,
many new real estate projects have been launched in Bhubaneswar,
by organized and unorganized players due to the surge in property
prices coupled with low entry barriers which has led to high
competition in real estate market. However, due to established
brand presence in the area the company is able to surge in the
growth of its revenue during FY16.
Key Rating Strengths
Long track record of operations and experienced promoters: GBL is
into real estate development business in the state of Orissa since
1995 and thus has a long track record of 22 years. The promoters
Mr. Santosh Kumar Agarwal, Mr. Anand Agarwal and Mr. Krishna Kumar
Agarwal have more than two decades of experience in real estate
business. Further, the promoters are well supported by a team of
experienced professionals.
Satisfactory project execution capabilities: GBL has executed
various real estate projects in the state of Orissa in the segment
of residential as well as commercial complex. Since its inception,
the company has executed various real estate projects and thus has
satisfactory track record of execution of real estate projects.
Comfortable capital structure and debt coverage indicators: The
capital structure of the company comprises of equity capital only
as on March 31, 2016. Thus the capital structure and debt coverage
indicators were comfortable in FY16. However, the company has
proposed to take term loan for funding its ongoing real estate
project and thus going ahead the capital structure is expected to
deteriorate.
Odhisa based GBL was incorporated on March 29, 1995 and it is
currently managed by Mr. Santosh Agarwal, Mr. Anand Agarwal and
Mr. Krishna Kumar Agarwal. Since its incorporation, the company
has been engaged in development of commercial and residential real
estate projects. In past, the company has developed various real
estate projects in the state of Odhisa namely Ganapati Villa,
Ganapati residency, Ganapati Market Complex, New Ganapati Villa,
KRP Residency Block A. The company gives construction activities
of its projects to contractor and it focus mainly on marketing
aspects. The promoters have satisfactory business experience of
more than two decades in real estate industry.
H N CONSTRUCTION: Ind-Ra Assigns BB+ Rating, Outlook Stable
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned H N Construction
Private Limited (HNCPL) a Long-Term Issuer Rating of 'IND BB+'.
The Outlook is Stable. The instrument-wise rating actions are:
-- INR50 mil. Fund-based limits assigned with IND BB+/Stable
rating; and
-- INR250 mil. Non-fund-based limits assigned with IND A4+
rating.
KEY RATING DRIVERS
The ratings reflect HNCPL's small scale of operations and moderate
credit metrics. Revenue was almost flat at INR606 million in FY17
(FY16: INR601 million) owing to slow execution of work orders. In
FY17, interest coverage (operating EBITDA/gross interest expense)
was 5.4x (FY16: 9.2x) and net financial leverage (total adjusted
net debt/operating EBITDAR) was 3.1x (4.9x), with operating margin
moderate at 6.9% (4.8%). The deterioration in interest coverage
was due to a higher increase in interest costs than that in
EBITDA, while the improvement in net financial leverage was
primarily driven by a fall in debt due to the repayment of a long-
term borrowing. The rise in operating margin was driven by a
decline in the cost of raw material consumed.
The ratings also reflect HNCPL's higher dependency on a single
customer, Steel Authority of India Limited ('IND AA-'/Negative),
for its work orders, given the customer represented 85.16% of the
unexecuted order book of INR3,100 million as on 30 November 2017.
The order book will be executed in the medium term, providing
strong revenue visibility.
The ratings, however, are supported from HNCPL's strong liquidity,
indicated by an average utilisation of working capital limits of
about 27% for the 12 months ended November 2017. Its working
capital cycle was comfortable at negative 58 days in FY17 (FY16:
negative 33 days).
RATING SENSITIVITIES
Negative: Any decline in revenue and operating margin leading to
any deterioration in the credit metrics will be negative for the
ratings.
Positive: Any increase in revenue and operating margin, along with
the diversification of customer base, while maintaining the credit
metrics at the existing levels will be positive for the ratings.
COMPANY PROFILE
Incorporated in September 2007, HNCPL executes turnkey projects
for steel plants engaged in civil, mechanical and electrical works
related to various equipment and structures, mainly in Bokaro
Steel City, Jharkhand.
HITRO ENERGY: CRISIL Moves B- Rating to Not Cooperating Category
----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Hitro
Energy Solutions (HES) for obtaining information through letters
and emails dated September 14, 2017 and October 26, 2017 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1.5 CRISIL B-/Stable (Issuer Not
Cooperating; Rating Migrated)
Proposed Long Term 0.5 CRISIL B-/Stable (Issuer Not
Bank Loan Facility Cooperating; Rating Migrated)
Working Capital 6.0 CRISIL B-/Stable (Issuer Not
Term Loan Cooperating; Rating Migrated)
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 Hitro Energy Solutions which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Hitro Energy Solutions is consistent with 'Scenario 1' outlined in
the 'Framework for Assessing Consistency of Information with
CRISIL BB' rating category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Hitro Energy Solutions to 'CRISIL B-/Stable Issuer
not cooperating'.
HES is a proprietary concern incorporated on January 28, 2014. The
firm is based in Chennai and is engaged in providing complete
indoor and outdoor lighting solutions for professional
applications. HES is the energy partner for Thorn lighting, and
provides services to commercial, retail, healthcare, hospitality,
and industrial segments. The firm's daily operations are managed
by Mr. Rangachari.
JAG VIDHYA: CRISIL Moves D Rating to Not Cooperating Category
-------------------------------------------------------------
CRISIL Ratings has been consistently following up with Jag Vidhya
and Sons Resorts and Hotels Llp (JVS) for obtaining information
through letters and emails dated September 14, 2017 and
October 26, 2017 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 0.5 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Proposed Long Term 1.0 CRISIL D (Issuer Not
Bank Loan Facility Cooperating; Rating Migrated)
Term Loan 12.5 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
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 Jag Vidhya and Sons Resorts and
Hotels Llp which restricts CRISIL's ability to take a forward
looking view on the entity's credit quality. CRISIL believes
information available on Jag Vidhya and Sons Resorts and Hotels
Llp is consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Jag Vidhya and Sons Resorts and Hotels Llp to
'CRISIL D Issuer not cooperating'.
JVS, established in January 2014, is promoted and managed by Mr
Babjyot Singh Khanduja and his brother Mr Gurpreet Singh Khanduja.
In February 2014, the firm acquired a hotel property in Nagpur,
Maharashtra, rebranded it as Heritage Embassy, and commenced
operations in August 14. A three-star property, the hotel provides
boarding and lodging facilities, and has a restaurant-cum-bar, a
banquet hall, and an open air lawn.
K.D. SINGH: CARE Assigns B+ Rating to INR15cr LT Loan
-----------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of K. D.
Singh Poultries Private Limited (KPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 15.00 CARE B+; Stable Assigned
Detailed Rationale and key rating drivers
The rating assigned to the bank facilities of KPPL is constrained
by small scale of operations with low profit margins,
susceptibility of profitability to volatility in egg prices,
vulnerability to outbreaks of flu and other diseases, moderate
capital structure with weak debt coverage indicators and inherent
risk associated with poultry industry coupled with high
competition from local players. The rating, however, derives
strength from its experienced promoters with satisfactory track
record of operations and satisfactory demand outlook for the
poultry sector.
Going forward, the ability of the company to grow its scale of
operations and improve its profitability margins with efficient
management of its working capital shall be the key rating
sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operations with low profit margins: KPPL is a small
player in trading of eggs with a total operating income of
INR44.19 crore with a PAT of INR0.05 crore in FY17. However the
company has achieved the turnover of around INR75.00 crore in
H1FY18 as maintained by the management. The profit margins of the
company also remained low marked by operating margin of 0.88% and
PAT margin of 0.12% in FY17.
Susceptibility of profitability to volatility in egg prices: KPPL
trades eggs, prices of which have been volatile in the past. Egg
prices are sensitive to market dynamics and controlled by NECC
(National Egg Co-ordination Committee). So the company has low
pricing power. The average price as per NECC during FY16 was at
INR3.39 per egg and INR3.69 per egg during FY17.
Vulnerability to outbreaks of flu and other diseases: Intermittent
outbreaks of bird flu have affected poultry and poultry products
export since 2006. These avian flu outbreaks in the past have led
to a drastic fall in demand followed by crash in poultry and egg
prices. A ban on exports could lead to products being piled up
leading to an excess supply situation thereby causing a sharp fall
in end product prices. Such scenario is expected to have an impact
on the company's revenues as well as profitability. In the past,
during such bird flu outbreaks, the company's sale of egg has also
been affected to an extent. However, the high level of safety
standards like high temperature pasteurisation and high quality
processing at the company's unit reduces any major impact on the
company's revenues during such outbreaks.
Moderate capital structure with weak debt coverage indicators: The
capital structure of KPPL remained moderate marked by overall
gearing of 1.20x as on March 31, 2017. Furthermore, debt coverage
indicators also remained weak marked by 1.59x (FY16: 1.98x) and
total debt to GCA of 88.53x (21.90x in FY16) in FY17.
Inherent risk associated with poultry industry coupled with high
competition from local players: Poultry industry is driven by
regional demand and supply because of transportation constraints
and perishable nature of the products. Low capital intensity and
low entry barriers facilitate easy entry of players leading to a
large unorganized sector. Poultry industry is also vulnerable to
outbreaks of diseases, like bird flu, extreme weather conditions
and contamination by pathogens. The outbreak of bird flu leads to
a fall in demand and consequent sharp crash in the egg prices.
Diseases can also impact production of healthy chicks. The
inherent industry risk will, however, continue to be a constraint
for players in the poultry industry.
Key Rating Strengths
Experienced promoters & satisfactory track record of operations:
KPPL has commenced operations since 2007 and thus has satisfactory
track record of operations of around 10 years. The key promoter
Mr. Kapil Deo Singh has more than three decades of experience in
the same line of business, looks after the day to day operations
of the company. He is supported by the other promoter Mr. Rajesh
Kumar Singh who also has over two decades of experience in the
same industry. The promoters are well assisted by a team of
experienced professionals.
Satisfactory demand outlook for the poultry sector: As per
Agricultural and Processed Food Products Export Development
Authority (APEDA), poultry is one of the fastest growing segments
of the agricultural sector in India. Currently, India is the
world's fifth largest egg producer and the eighteenth largest
producer of broilers. The potential in the poultry sector is
increasing due to a combination of factors - growth in per capita
income, growing urban population and falling poultry prices. Also
poultry meat is the fastest growing component of global meat
demand, and India, one of the world's fastest growing countries is
experiencing a rapid growth in its poultry sector.
Ranchi-based, KPPL incorporated in September 2007, was promoted by
the Singh family of Ranchi, Jharkhand with Mr. Kapil Dev Singh
being the main promoter. KPPL is engaged in trading of eggs.
KAMSA STEEL: CARE Assigns B+ Rating to INR3.0cr LT Loan
-------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Kamsa
Steel Private Limited (KSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facility 3.00 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of KSPL is constrained
by its small scale of operations, susceptibility to volatility in
raw material prices leading to low profitability margins, working
capital intensive nature of business, intense competition due to
fragmented nature of industry, sluggish growth in user industries
and cyclicality in the industry. The rating, however, derives
strength from the experienced promoters with long track record of
operations, strategic location of the plant and satisfactory
leverage ratios with satisfactory debt protection metrics.
The ability of the company to increase its scale of operations
with improvement in profit margins and effective management of
working capital will be the key ratings sensitivities.
Detailed description of the key rating drivers
Key Rating Strengths
Experienced promoters with long track record of operations: KSPL
is managed by Mr. Manoj Kumar Sharma (Promoter and MD) and Mr.
Pawan Kumar Kadwashra (Director) having about two decades of
experience in the steel industry and looks after the production
function of the company. Further, the company started its
operation since 1999 and accordingly has a satisfactory track
record of operation of almost two decades.
Strategic location of the plant: KSPL's plant is located at
Jamshedpur, Jharkhand which is in the vicinity of steel
manufacturing companies of Jharkhand, from where KSPL procures its
raw materials. The proximity to the raw material sources reduces
the transportation cost to the company.
Satisfactory leverage ratios with satisfactory debt protection
metrics: The leverage ratios of the company were satisfactory with
debt equity ratio and overall gearing ratio being 0.26x and 0.96x,
respectively, as on March 31, 2017. The interest coverage ratio
although deteriorated marginally in FY17 over FY16 however, the
same being comfortable at 2.06x in FY17.
Key Rating Weaknesses
Small size of operations: KSPL is a relatively small player in
iron and steel industry having total operating income and PAT of
INR15.18 crore and 0.11 crore in FY17. The total capital employed
was also low at around INR5.65 crore as on March 31, 2017. During
7MFY18, the company has achieved total operating income of
INR11.81crore.Small scale of operations with low net worth base
limits the credit risk profile of the company in an adverse
scenario.
Susceptibility to volatility in raw material prices leading to low
profitability margin: KSPL does not have its captive mine and also
it does not have any long-term tie-up for supply of raw materials
with any company. Since, the raw material is the major cost driver
(comprising around 64% of FY17total operating income), prices of
which are volatile in nature, the profitability of the company is
susceptible to fluctuation in raw material prices exposing it to
price volatility risk. Such fluctuations in the raw material
prices led to pressure on profitability margins resulting in low
profit margins for the company during past years.
Working capital intensive nature of business: KSPL being a
manufacturer of MS Ingots is engaged in a working capital
intensive nature of business marked by 96% utilization of cash
credit limit during the 12 months ended October, 2017.
Intense competition due to fragmented nature of the industry:
KSPL is engaged in the manufacturing of MS. Ingots, which is
primarily dominated by large players and characterized by high
fragmentation and competition due to the presence of numerous
players in India owing to relatively low entry barriers. High
competitive pressure limits the pricing flexibility of the
industry participants which induces pressure on profitability.
Sluggish growth in user industries and cyclicality in the
industry: The fortunes of companies like KSPL from the iron &
steel industry are heavily dependent on the automotive,
engineering and infrastructure industries. Steel consumption and,
in turn, production mainly depends upon the economic activities in
the country. Construction and infrastructure sectors drive the
consumption of steel. Slowdown in these sectors may lead to
decline in demand of steel. Furthermore, all these industries are
susceptible to economic scenarios and are cyclical in nature.
Kamsa Steel Private Limited (KSPL) was incorporated in May, 1999
by Mr. Manoj Kumar Sharma and Mr. Pawan Kumar Kadwashra.The
company is engaged in manufacturing of MS Ingots with its factory
located at Plot No.M-44(P), 4th Phase, Adityapur Industrial Area,
Gamharia, Jamshedpur- 832108. It has a current installed capacity
of 7200 MTPA (approx).
Mr. Manoj Kumar Sharma (aged, 43 years) and Mr. Pawan Kumar
Kadwashra (aged, 45 years) having more than two decades of
experience in the same line of industry, looks after the day to
day operations of the company and they are ably supported by a
team of team of experienced professionals.
KHUDIRAM COLD: CARE Assigns B+ Rating to INR12.27cr LT Loan
-----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Khudiram Cold Storage Private Limited (KCSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 12.27 CARE B+; Stable Assigned
Short-term Bank
Facilities 0.10 CARE A4 Assigned
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of KCSPL are
constrained by its small scale of operation, regulated nature of
business, seasonality of business with susceptibility to vagaries
of nature, risk of delinquency in loans extended to farmers,
working capital intensive nature of operations resulting in high
leverage ratios and competition from other players. The aforesaid
constraints are partially offset by long track record of operation
and experienced promoters and proximity to potato growing area.
Ability of the company to grow its scale of operations, maintain
profitability margins would be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operation: KCSPL is a relatively small player in
the cold storage industry marked by its total operating income of
INR4.06 crore (over INR2.01 crore in FY15)with a PAT of INR0.05
crore (over INR0.09 in FY15) in FY16. Further, the net worth base
also remains low at INR4.49 crore (over INR2.41 crore in FY15) as
on March 31, 2016. However, the total operating income has
witnessed asignificant increase of around 102% in FY16 due to
increase in storage capacity of cold storage and more demand.
During FY17 (Prov.), the company has booked turnover of INR4.0
crore as maintained by the management.
Regulated nature of business: In West Bengal, the basic rental
rate for cold storage operations is regulated by the state
government through West Bengal State Marketing Board. The rent of
these cold storages is decided by taking into account political
considerations, not economic viability. Due to severe government
intervention, the cold storage facility providers cannot enhance
rental charge commensurate with increased power tariff and labour
charge.
Seasonality of business with susceptibility to vagaries of nature:
KCSPL's operation is seasonal in nature as potato is a winter
season crop with its harvesting period commencing in March. The
loading of potatoes in cold storages begins by the end of February
and lasts till March. Additionally, with potatoes having a
perceivable life of around eight months in the cold storage,
farmers liquidate their stock from the cold storage by end of
season i.e., generally in the month of November. The unit remains
non-operational during the period from December to January.
Furthermore, lower agricultural output may have an adverse impact
on the rental collections as the cold storage units collect rent
on the basis of quantity stored and the production of potato is
highly dependent on vagaries of nature.
Risk of delinquency in loans extended to farmers: Against the
pledge of cold storage receipts, KCSPL provides interest bearing
advances to the farmers & traders. Before the closure of the
season in November, the farmers & traders are required to clear
their outstanding dues with the interest. In view of this, there
exists a risk of delinquency in loans extended, in case of
downward correction in potato or other stored goods prices, as all
such goods are agro commodities.
Working capital intensive nature of business resulting in high
leverage ratios: KCSPL extend loans to farmers and traders against
receipts of stock of potatoes and thus the operations of the
company remained working capital intensive in nature. Accordingly
the utilization of the fund based limit remained on the higher
side at 70% during last 12 months ended August 31, 2017.The
capital structure of the company remained leveraged marked by debt
equity of 0.98x and overall gearing of 2.75x as on March 31, 2016.
The debt equity ratio declined as on March 31, 2016 due to
increase in debt on account of capacity expansion. Furthermore,
the overall gearing also deteriorated as on
March 31, 2016 owing to higher utilization of fund based limit and
the same remained high at2.75x as on March 31, 2016.
Competition from other local players: In spite of being capital
intensive, the entry barrier for new cold storage is low, backed
by capital subsidy schemes of the government. As a result, the
potato storage business in the region has become competitive,
forcing cold storage owners to lure farmers by providing them
interest bearing advances against stored potatoes which augments
the business risk profile of the companies involved in the trade.
Key Rating Strengths
Long track record of operations and experienced promoters: The
Company is into cold storage business since 2004 and thus has long
track record of operations of around 13years. Furthermore the key
promoters, Mr. Nimai Chandra Manna(aged about 55 years), and Mr.
Dilip Kumar Manna (aged about 55 years) has more than two decades
of experience in cold storage industry, looks after the overall
management of the company. He is supported by other directors Mr.
Ashim Kumar Manna (aged about 45 years) and Mr. L. C. Manna (aged
about 40 years) who also has around a decade of experience in this
line of business. The promoters are supported by a team of
experienced professionals.
Proximity to potato growing area: KCSPL's storage facility is
located at Midnapore, West Bengal which is one of the major potato
growing regions of the state. The favorable location of the
storage unit, in close proximity to the leading potato growing
areas provides it with a wide catchment and making it suitable for
the farmers in terms of transportation and connectivity.
Khudiram Cold Storage Private Limited (KCSPL)was established as a
private limited company in 2004. However, the company commenced
commercial operation in 2006. KCSPL is owned by the Midnapore
(West Bengal) based Manna family having extensive experience of a
decade in cold storage industry and over two decades in potato
trading. Since its inception, the company provides cold storage
services for potatoes. The cold storage unit of the company is
located at Midnapore, West Bengal with aggregated storage capacity
of 3.5 Lakh quintal per annum.
Mr. Nimai Chandra Manna(aged about 55 years), and Mr. Dilip Kumar
Manna (aged about 55 years) has more than two decades of
experience in cold storage industry, looks after the overall
management of the company. He is supported by other directors Mr.
Ashim Kumar Manna (aged about 45 years) and Mr. L. C. Manna (aged
about 40 years) who also has around a decade of experience in this
line of business.The promoters are supported by a team of
experienced professionals.
KRIDHAN INFRA: CRISIL Withdraws B- Rating on INR5.48cr Loan
-----------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of Kridhan Infra Solutions
Private Limited (KISPL) to 'CRISIL B-/Stable/CRISIL A4' and
withdrawn. However, the management has subsequently started
sharing requisite information, necessary for carrying out
comprehensive review of the rating. Consequently, CRISIL is
migrating the ratings on bank facilities of KISPL from 'CRISIL B-
/Stable/CRISIL A4/Issuer Not Cooperating to 'CRISIL B-
/Stable/CRISIL A4' and has withdrawn the same at the company's
request and based on the no objection certificate received from
the banker. The rating action is in-line with CRISIL's policy on
withdrawal of bank loan ratings.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 4 CRISIL B-/Stable (Migrated
from 'CRISIL B-/Stable'
Issuer Not Cooperating and
Rating Withdrawal)
Letter of Credit 2 CRISIL A4 (Migrated from
'CRISIL A4' Issuer Not
Cooperating and Rating
Withdrawal)
Proposed Long Term 5.48 CRISIL B-/Stable (Migrated
Bank Loan Facility from 'CRISIL B-/Stable'
Issuer Not Cooperating and
Rating Withdrawal)
Term Loan 1.02 CRISIL B-/Stable (Migrated
from 'CRISIL B-/Stable'
Issuer Not Cooperating and
Rating Withdrawal)
Analytical Approach
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of KISPL and its parent, Kridhan Infra Ltd
(KIL). This is because the companies, together referred to as the
Kridhan group, have significant operational and financial
linkages.
KIL (formerly, Readymade Steel India Ltd) was established in 2006
as a joint venture by Mr Anil Agrawal (25% share); Bengaluru-based
Krishna Triveni Ltd (25% share); and CSC Holdings Ltd (50% share),
a leading Singapore-based geotechnical engineering company. In
2007, Mr Agrawal acquired the stake of the other partners, and
inducted Ms Krishna Devi Agrawal, his mother, as a shareholder in
KIL.
KISPL, a wholly owned subsidiary of KIL, was incorporated in 2011.
It manufactures and trades in couplers and thermo-mechanically
treated bars.
MANGALDEEP SUPERSTRUCTURES: CARE Rates INR6.25cr LT Loan B+
-----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Mangaldeep Superstructures Private Limited (MSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 6.25 CARE B+; Stable Assigned
Short-term Bank
Facilities 3.50 CARE A4; Assigned
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of MSPL are primarily
constrained on account of its modest scale of operations with
financial risk profile marked by leveraged capital structure and
stressed liquidity position in the highly competitive government
civil construction segment.
The ratings, however, favorably take into account the experienced
promoters in the construction industry coupled with moderate order
book position.
The ability of the firm to increase its scale of operations by
securing more contracts along with speedy execution of the same
with better management of working capital would be the key rating
sensitivities.
Detailed description of the key rating drivers
Key Rating Weakness
Modest scale of operations with financial risk profile marked by
leveraged capital structure and stressed liquidity position: TOI
of MSPL has shown a declining trend over the past three financial
years ended FY17 mainly due to lower orders received from client.
The profitability margins of the company stood moderate with
PBILDT and PAT margin stood at 14.19% and 0.14% respectively. The
capital structure of the company stood leveraged with an overall
gearing of 2.86 times as on March 31, 2017. The liquidity position
of the company stood moderately stressed with full utilization of
its working capital bank borrowings in last twelve month ended
October, 2017. Further, the company recognizes revenue from
private companies according to the stage of completion of
contracts, i.e. revenue is attributed to the proportion of work
completed.
High competitive intensity in the government civil construction
segment: The construction industry is highly fragmented in nature
with presence of large number of unorganized players and a few
large organized players coupled with the tender driven nature of
construction contracts poses huge competition and puts pressure on
the profitability margins of the players.
Key Rating Strengths
Experienced promoters in the construction industry coupled with
moderate order book position: Overall operations of MSPL are
managed by Mr. R.S.Lodha, director, Chartered Accountant by
qualification, who has experience of more than two decades in the
civil construction industry. Mr. Atul Bhansali and Mr. D.S Lodha,
Directors, have two decades and a seven-year of experience
respectively in the industry and looks after the administration
function and project related affairs at construction sites
respectively of the company. As on October 30, 2017, MSPL has an
order book position of INR68.42 crore with three projects in hand
reflecting moderate order book position.
Jodhpur based (Rajasthan) Mangaldeep Superstructures Private
Limited (MSPL) was originally incorporated in 2000 in the name of
Indian Craft Gallery Com Private Limited (ICGPL). However, it
started its operations since 2013 and subsequently changed the
name of company to its current name, MSPL. The company is
registered as an "AA class" approved contractor from Rajasthan
Housing Board (RHB) in May 2014. MSPL executes contracts for both
private and government players. Also, the Company is engaged in
trading of the construction material which includes Bajri, Cement,
Iron rods, etc and also supplies to its group companies, engaged
in the real estate business.
MARKS ENTERPRISES: CRISIL Moves D Rating to Not Cooperating
-----------------------------------------------------------
CRISIL Ratings has been consistently following up with Marks
Enterprises Private Limited (MEPL) for obtaining information
through letters and emails dated September 12, 2017 and
October 25, 2017 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Letter of Credit 7.75 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
'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 Marks Enterprises Private
Limited which restricts CRISIL's ability to take a forward looking
view on the entity's credit quality. CRISIL believes information
available on Marks Enterprises Private Limited is consistent with
'Scenario 1' outlined in the 'Framework for Assessing Consistency
of Information with CRISIL BB Rating category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Marks Enterprises Private Limited to CRISIL D
/CRISIL D Issuer not cooperating'.
MEPL, incorporated in 2011 and promoted by Mr Somnath Harjai,
trades in yarn and metal (such as aluminium scrap, ingots, and
billets).
MODERN OVERSEAS: CRISIL Moves 'D' Rating to Not Cooperating
-----------------------------------------------------------
CRISIL Ratings has been consistently following up with Modern
Overseas Private Limited (MOPL) for obtaining information through
letters and emails dated September 14, 2017 and October 26, 2017
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 12.5 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
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 Modern Overseas Private Limited
which restricts CRISIL's ability to take a forward looking view on
the entity's credit quality. CRISIL believes information available
on Modern Overseas Private Limited is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL BB' rating category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Modern Overseas Private Limited to 'CRISIL D Issuer
not cooperating'.
MOPL trades in buffaloes, and is promoted by the Qureshi family,
which has over three decades' experience in the industry.
Operations are managed by Mr. Naeem Qureshi and Mr. Saleem
Qureshi.
NIRWANA HOTELS: ICRA Removes B Rating From Not Cooperating
----------------------------------------------------------
ICRA Ratings has removed its earlier rating of [ICRA]B (Stable)
from the 'ISSUER NOT COOPERATING' category as Nirwana Hotels and
Resorts Private Limited has now submitted its 'No Default
Statement' ("NDS") which validates that the company is regular in
meeting its debt servicing obligations. The company's rating was
moved to the 'ISSUER NOT COOPERATING' category in November 2017.
The current rating derives comfort from the favorable location of
the resort, located close to several heritage sites in Hassan and
within easy reach from nearby cities, which supports its business
prospects. Furthermore, the rating takes into account the
longstanding experience of the promoters in the hospitality
industry, and strong brand presence by virtue of the company tying
up with national and international travel agencies and online
portals.
ORCHID PHARMA: Aurobindo, Dr Reddy's Lab Bid for Business
---------------------------------------------------------
The Economic Times reports that Aurobindo Pharma Ltd. and Dr
Reddy's Laboratories Ltd. are emerging as the frontrunners to buy
out bankrupt Orchid Pharma Ltd. as they seek to expand their
capacities.
ET relates that a key player in injectibles and active
pharmaceutical ingredients (API) in its heyday, Orchid has
received interest from 7-8 companies including international
private equity funds and stressed asset buyout firms, people
familiar with the development said. Aurobindo Pharma and Dr
Reddy's, both based in Hyderabad, did not respond to emails
seeking responses on the matter, the report notes.
"Several parties have submitted their interest. We have received
bids from a few local pharma companies as well, who we believe
could be a right fit for the company," said a person involved with
the matter who did not wish to be identified, ET relays. "Things
will become clearer when we receive binding bids and hopefully at
good valuations."
Lakshmi Vilas Bank referred Chennai-based Orchid Pharma to the
National Company Law Tribunal for defaulting on repayments to the
tune of INR50 crore, ET notes. The company owes more than INR3,500
crore to a group of lenders led by the State Bank of India. It was
on the Reserve Bank of India's second list of 28 defaulters that
had to be referred to the NCLT before December 31 if no resolution
was found by December 13, ET discloses.
According to the report, the resolution professional appointed for
Orchid Pharma, Sripatham Ramkumar, called for expressions of
interest last month from potential investors after the NCLT
Chennai bench ordered initiation of the insolvency process against
the debt-laden firm in August. ET says the last date for
submitting expressions of interest was set as December 1, after
which the process of submitting non-binding and binding agreements
would start.
ET reported in October that Orchid had attracted interest from
both private equity funds and strategic domestic companies and the
likes of KKR, the distressed asset platform of Piramal Enterprises
& Bain Capital and pharma giant Lupin.
"The assets are good. Orchid Pharma has two API manufacturing
facilities in India and three formulation manufacturing sites in
India. These are all approved by the US Food & Drug
Administration, the UK's Medicines and Healthcare Products
Regulatory Agency and other regulators and agencies. All these
demonstrate the potential of these plants," ET quotes another
person familiar with the transaction as saying.
Orchid Pharma, once a leader in injectibles and manufacturing of
some APIs, has been facing a financial crisis with lenders and
investors approaching legal fora for a remedy. It was brought
under the corporate debt restructuring scheme, initiated during
2013, for the revival of its operations, ET discloses.
Orchid Pharma Limited is an integrated pharmaceutical company with
presence in bulk drug manufacturing, formulations and drug
discovery. Orchid commenced its operations as a cephalosporin
Active Pharmaceutical Ingredient (API) manufacturer and largely
remained so till 2004 before moving to formulations.
PADMEY IMPEX: Ind-Ra Migrates D Issuer Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Padmey Impex
Private Limited's Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise,
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND D(ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR100 mil. Fund-based limits (Long -term/Short-term)
migrated to non-cooperating category with IND D(ISSUER NOT
COOPERATING) rating;
-- INR80 mil. Non-fund-based limits (Short-term) migrated to
non-cooperating category with IND D(ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Feb. 29, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 2008, Padmey Impex Private Limited manufactures
plastic bags at its unit in Daman (Maharashtra).
PINCHA GRIHA: CRISIL Withdraws B+ Rating on INR13.56MM Term Loan
----------------------------------------------------------------
CRISIL Ratings has been consistently following up with Pincha
Griha Nirmaan Private Limited (PGNPL) for obtaining information
through letters and emails dated November 14, 2017, among others,
apart from telephonic communication. However, the issuer remains
non-cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 13.56 CRISIL B+/Stable (Issuer Not
Cooperating; Rating
Withdrawal)
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 PGNPL. 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 the
firm is consistent with 'Scenario 1' outlined in the 'Framework
for Assessing Consistency of Information' corresponding to CRISIL
BB rating category or lower. Based on the last available
information, the rating on bank facilities of PGNPL continues to
be 'CRISIL B+/Stable; Issuer not cooperating'.
CRISIL has withdrawn its rating on the bank facilities of PGNPL at
the company's request and receipt of no dues certificate from
Syndicate Bank. The rating action is in line with CRISIL's policy
on withdrawal of its bank loan ratings.
PGNPL, incorporated in 2007, is a part of Gujarat-based Someshwar
group, operating in real estate industry. It is constructing a
commercial building - Someshwar Textile Market on Ring Road in
Surat. Mr Abhishek S Rathi and Mr Jaydayal Ladha are the
directors.
PRABHU CONSTRUCTIONS: Ind-Ra Moves BB Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Prabhu
Constructions' (PC) Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise,
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are:
-- INR20 mil. Fund-based working capital limit migrated to non-
cooperating category with IND BB(ISSUER NOT COOPERATING)/IND
A4+(ISSUER NOT COOPERATING) rating; and
-- INR35 mil. Non-fund-based working capital limit migrated to
non-cooperating category with IND A4+(ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
Dec. 16, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1986, PC works as civil construction contractor for
various reputed clients such as Uttar Pradesh Public Works
Department, Lucknow Development Authority and Uttar Pradesh
Rajkiya Nirman Nigam Ltd. The company is focused primarily on road
and building projects, and sewerage works.
RABI ENGINEERING: CRISIL Lowers Rating on INR3MM Cash Loan to B
---------------------------------------------------------------
CRISIL Ratings has downgraded its long-term rating on the bank
facilities of Rabi Engineering Works Private Limited (REWPL) to
'CRISIL B/Stable' from 'CRISIL B+/Stable' and reaffirmed its
short-term rating at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 5 CRISIL A4 (Reaffirmed)
Cash Credit 3 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Proposed Cash 1 CRISIL B/Stable (Downgraded
Credit Limit from 'CRISIL B+/Stable')
The downgrade reflects increase in the working capital cycle as
indicated by gross current assets (GCAs) of 429 days as on
March 31, 2017, increased from 291 days as on March 31, 2016.
Receivables increased to 242 days as on March 31, 2017, from 85
days a year earlier, resulting in bank lines being fully utilised.
The rating also takes into account deterioration in the business
risk profile marked by decline in operating margin from 5.8% in
fiscal 2016 to 4.3% in fiscal 2017. With increase in the prices of
the raw material zinc, sustenance of operating margin will remain
a key moniterable factor over the medium term.
The ratings continue to reflect modest scale and working capital
intensity in operations. These rating strengths are partially
offset by extensive industry experience of the promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: The scale of operation remain modest
with operating income being at INR14.18 crore for fiscal 2017.
* Working capital intensity in operations: Operations of the
company continue to remain working capital intensive as reflected
in high GCAs of 429 days as on March 31, 2017.
Strengths
* Extensive industry experience of the promoters: The promoters,
given their experience of over two decades, have established
relationships with large customers, such as Bharat Heavy
Electricals Ltd (BHEL), ABB India Ltd, Crompton Greaves Ltd, and
Larsen & Toubro Ltd (L&T), ensuring steady demand for its
products. Furthermore, the promoters have also developed an
industry insight and cordial relations with suppliers enabling
credit period for purchases made and hence supporting the working
capital requirement.
Outlook: Stable
CRISIL believes REWPL will maintain a stable business risk
profile, backed by the promoters' extensive experience. The
outlook may be revised to 'Positive' if there is a substantial and
sustained increase in operating income and accrual, along with
improved working capital management, while maintaining stable
capital structure. The outlook maybe revised to 'Negative' if
operating margin or topline declines, or financial risk profile
weakens because of large debt-funded capital expenditure (capex),
or if stretch in working capital cycle leads to pressure on
liquidity.
Set up as a proprietorship firm in 1994 and converted into a
private limited company in fiscal 2012, REWPL manufactures cable
trays, sub-station structures, and transmission line towers for
power generation and distribution companies, and other power
equipment companies. Mr Tapan Kumar Sen (who also manages
operations) and his wife are the directors of the company.
RADHA CASTING: CARE Moves B Rating to Not Cooperating Category
-------------------------------------------------------------
CARE Ratings has been seeking information from Radha Casting &
Metalik Private Limited (RCMPL) to monitor the ratings vide
letters/e-mails communications dated June 20, 2017, October 04,
2017, November 04, 2017 and numerous phone calls. However, despite
CARE's repeated requests, the company has not provided the
requiste information for monitoring the ratings. In line with the
extant SEBI guidelines CARE's rating on RCMPL's bank facilities
will now be denoted CARE B; ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 4.00 CARE B; Issuer not
Facilities cooperating; Based on
best available information
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on December 29, 2016 the following were
the rating weaknesses and strengths; (updated for the information
available from MCA).
Key Rating Weaknesses:
Small scale of operations: The size of operations of the company
remained small marked by total operating income of INR46.87 crore
with a PAT of INR0.14 crore in FY17. Furthermore, the total
capital employed was also low at INR18.01 crore as on March 31,
2017.
Lack of backward integration vis-Ö-vis volatility in raw material
prices: The degree of backward integration defines the ability of
the company to minimize price volatility risk and withstand
cyclical downturns generally witnessed in the steel industry.
Since, raw material constituting of ingots, billets etc. is the
major cost driver for RCMPL. RCMPL does not have any backward
integration for its raw materials and procures the same from
outside, exposing the company to price volatility risk. As a
result, RCMPL remains exposed to the volatility in raw material
prices and it has to absorb adverse fluctuations in prices that
might occur from the time of material procurement to dispatch as
raw material prices remains volatile over the years.
Intense competition due to fragmented nature of industry: RCMPL is
engaged in the manufacturing of MS Ingots, which is primarily
dominated by large players and characterized by high fragmentation
and competition due to presence of numerous players in India owing
to relatively low entry barriers. Hence, the players in the
industry do not have much pricing power which induced pressures on
profitability.
Working capital intensive nature of business: RCMPL business,
being manufacturer of non alloys steel ingot, is working capital
intensive. The average utilisation of working capital remained
moderately on the higher side at around 70% during last 12 month
ended in Nov., 2017.
Key Rating Strengths:
Experienced Promoters: The key promoters Mr. Dhananjay Kumar & Mr.
Pawanjay Kumar have an experience of more tha a decade in iron and
steel industry. The day-to-day operations of the company are
looked after by bothe the promoters.
Proximity to raw material sources: RCMPL plant is located at
Ramgarh in Jharkhand, which is in proximity to the steel and
mining areas of West Bengal, Jharkhand and Odisha. Hence, its
presence in the steel and mining region results in benefits
derived from a lower logistic expenditure (both on transportation
and storage), easy availability and procurement of raw materials
at effective prices.
Comfortable capital structure and debt coverage indicators: The
capital structure of the company remained comfortable marked by
debt equity and overall gearing ratios of 0.22x and 0.69x
respectively as on March 31, 2017. The debt coverage indicators
also remained comfortable marked by interest coverage and total
debt to GCA of 2.55x and 8.39x, respectively, in FY17.
RCMPL was incorporated in June 2006, was promoted by brothers Mr.
Dhananjay Kumar and Mr. Pawanjay Kumar of Jharkhand. The company
had initially set up a pig iron plant (installed capacity 15000
metric tonnes per annum: MTPA) at Ramgarh, Jharkhand and commenced
commercial operation in the year 2008. But, later on, in May 2011,
the company was forced to shut down its pig iron plant due to iron
ore scarcity owing to iron ore mining related issues leading to
rising raw material cost and weak demand. Since, February 2012,
the company had started manufacturing Mild Steel (MS) Ingots with
installed capacity of 15, 000 MTPA at its existing plant.
RR COTTONS: Ind-Ra Raises Issuer Rating to B+, Outlook Stable
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded RR Cottons' (RRC)
Long-Term Issuer Rating to 'IND B+' from 'IND B'. The Outlook is
Stable. The instrument-wise rating actions are:
-- INR27.2 mil. (reduced from INR30.0 mil.) Term loan facilities
due on May 2023 upgraded with IND B+/Stable rating; and
-- INR150 mil. Fund-based working capital facilities long-term
rating upgraded; short-term rating affirmed with IND
B+/Stable/IND A4 rating.
KEY RATING DRIVERS
The upgrade reflects the stabilisation of operations and
generation of revenue in line with Ind-Ra's expectations. RRC's
project timely commenced in November 2016 in line with the project
cost of INR95 million, which was funded in a debt/equity ratio of
1:3. In FY17, revenue was INR558 million and EBITDA margin was
1.46%. RRC booked INR469.1 million in revenue for April-November
2017.
The ratings continue to be supported by the promoters' three
decades of experience in cotton ginning and pressing.
The ratings, however, are constrained by weak credit metrics and
tight liquidity. In FY17, net leverage (total adjusted net
debt/operating EBITDAR) was 28.6x and EBITDA interest cover
(operating EBITDA/gross interest expense) was 1.2x in FY17. Ind-Ra
expects a scheduled term loan repayment in FY18 to lead to an
improvement in the credit metrics in the medium term. Its average
utilisation of the working capital limits was 92% for the 12
months ended November 2017.
RATING SENSITIVITIES
Negative: Any decline in revenue and profitability resulting in
any significant deterioration in the credit metrics on a sustained
basis will be negative for the ratings.
Positive: A significant increase in revenue and profitability
leading to an improvement in the credit metrics on a sustained
basis would be positive for the ratings.
COMPANY PROFILE
Formed in July 2016, RRC (based in Adilabad, Andhra Pradesh) is
engaged in the ginning and pressing of cotton bales and cotton
seed oil.
SADHU SINGH: CRISIL Moves B+ Rating to Not Cooperating Category
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Sadhu Singh
Gurdip Singh (SSGS; part of Mahant group) for obtaining
information through letters and emails dated September 14, 2017
and October 26, 2017 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Migrated)
Packing Credit 2 CRISIL A4 (Issuer Not
Cooperating; Rating Migrated)
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 Sadhu Singh Gurdip Singh which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Sadhu Singh Gurdip Singh is consistent with 'Scenario 1' outlined
in the 'Framework for Assessing Consistency of Information with
CRISIL BB' rating category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Sadhu Singh Gurdip Singh to 'CRISIL B+/Stable/CRISIL
A4 Issuer not cooperating'.
For arriving at the ratings, CRISIL has now combined the business
and financial risk profiles of SSGS and Mahant Overseas ('CRISIL
B+/Stable'). This is because the two companies, together referred
as the Mahant group, have a common management, are engaged in
similar businesses, and have strong business linkages. The
analytical approach has been modified, following the management's
efforts to increase synergies between these two firms.
The Mahant group mills, processes, and sells basmati rice in the
domestic and overseas markets under the Sadhu brand. The group
comprises two firms, Sadhu Singh Gurdip Singh and Mahant overseas,
set up in 1955 and 1999, respectively by Khajinder Singh and his
family members, as partnership firms.
SAMTEL COLOR: Lenders May Opt to Place Firm in Liquidation
----------------------------------------------------------
The Economic Times reports that Samtel Color, once the darling of
stock-market investors, is facing liquidation with no immediate
resolution package possible, two people familiar with the recovery
proceedings said.
Hobbled with technology that experts believe impedes Samtel's
chances of a commercial revival, the company may be mothballed
soon to help the lenders and creditors recover what they can from
the skeleton of a firm that manufactured picture tubes used in
colour-television sets, ET says. Rivals with cutting-edge
technology, such as Dixon, have stolen a march over Samtel, making
the New Delhi-based company uncompetitive in a fast-changing
market, according to the report.
A consortium of lenders, including Punjab National Bank, Edelweiss
Asset Reconstruction Company (ARC), Union Bank of India, Canara
Bank and HDFC Bank, is nearly unanimous that it does not gain much
by pushing a revival package, ET notes. ICICI Bank, too, had
credit exposure earlier.
"Technology obsolescence has hit the company and there is no
possibility of a revival of that business," the report quotes
Sanjay Gupta, Partner at AAA Insolvency Professionals, as saying.
"The company may be pushed to liquidation by the lenders as there
is no investor interest. We are trying to monetise the company's
immovable assets to repay some debt to lenders."
According to ET, creditors have submitted claims for about
INR1,300 crore after the company was admitted for insolvency
proceedings in the National Company Law Tribunal's (NCLT) Delhi
chapter in September this year. The dedicated bankruptcy court
appointed Sanjay Gupta as the resolution professional (RP), who is
supposed to run the company's day-to-day operations during the
legal proceedings, ET discloses.
ET adds that the company chairman seems still hopeful about the
company's revival, which looks remote, according to others
involved in the process.
"It is expected that all the assets of Samtel Color Limited will
be monetized and the liabilities appropriately settled," the
report quotes Satish Kaura, Chairman, Samtel Group, as saying.
"The RP is in the process of preparing a resolution plan for
approval of various authorities."
The company had plants in four places, with these locations in
Ghaziabad, Kota, and Himachal Pradesh collectively offering a land
bank of about 90 acres. Efforts are on to sell those land-parcels
to real-estate developers, according to ET.
Samtel Color Limited was in the Board for Industrial and Financial
Reconstruction (BIFR) for more than four years under provisions of
the Sick Industrial Companies (Special Provisions) Act, 1985
(SICA), the report notes.
Recently, at the instance of Punjab National Bank, one of the
lenders, Samtel Color Limited was referred to NCLT, said the
chairman, adds ET.
SHAKTI BASMATI: CRISIL Moves Rating to Not Cooperating Category
---------------------------------------------------------------
CRISIL Ratings has been consistently following up with Shakti
Basmati Rice Private Limited (SBRPL) for obtaining information
through letters and emails dated September 14, 2017 and
October 26, 2017 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 67 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Foreign Exchange 0.52 CRISIL D(Issuer Not
Forward Cooperating; Rating Migrated)
Term Loan 0.48 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
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 Shakti Basmati Rice Private
Limited which restricts CRISIL's ability to take a forward looking
view on the entity's credit quality. CRISIL believes information
available on Shakti Basmati Rice Private Limited is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' rating category or
lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Shakti Basmati Rice Private Limited to 'CRISIL
D/CRISIL D Issuer not cooperating'.
Incorporated in 2011, SBRPL is promoted by Mr. Shyam Lal Gupta and
family. It mills, processes, and sells basmati rice in the
domestic and export markets.
SHREE KRISHNA: ICRA Moves B- Rating to Not Cooperating Category
---------------------------------------------------------------
ICRA Ratings has moved the long term rating for the bank
facilities of Shree Krishna Rice Mills (SKRM) to the 'Issuer Not
Cooperating' category. The rating is now denoted as "[ICRA]B-
(Stable) ISSUER NOT COOPERATING."
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund Based 15.00 [ICRA]B- (Stable) ISSUER
NOT COOPERATING; Rating
moved to the 'Issuer Not
Cooperating' category
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. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Shree Krishna Rice Mills (SKRM) is a partnership firm, was set up
in 2010 by Mr. Ravi Gupta, Mr. Krishan Chand and Mrs.Urmila Gupta.
SKRM is engaged in processing and export of basmati rice to
countries in the Middle East. It has a plant at Karnal (Haryana)
which has a milling capacity of 6 tonnes per hour.
SHREEJI SALES: CARE Assigns D Rating to INR5.49cr LT Loan
---------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Shreeji
Sales Corporation (SSC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 5.49 CARE D Assigned
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of SSC are primarily
constrained on account of on-going delays in debt servicing due to
weak liquidity position.
Establishing a clear track record of timely servicing its debt
obligations would remain the key rating sensitivity
Detailed description of the key rating drivers
Key rating weaknesses
On-going delays in debt servicing: There are on-going delays in
debt servicing in repayment of principle and interest amount due
to weak liquidity position
SSC was established as proprietorship firm in 2012 by Mr Bharat
Shah. SSC was established for trading of di-calcium phosphate and
mono-calcium phosphate. SSC is undertaking project of
manufacturing di-calcium phosphate and mono-calcium phosphate from
raw phosphate instead of trading with total project cost of
INR4.64 crore. The plant will be located at Vadodara (Gujarat)
with area of 1 lakh sq. ft. with proposed installed capacity of
300 tonnes per month.
During 8MFY18 (Provisional), SSC has achieved a TOI of INR1.50
crore approximately.
SRI DHARMA: CRISIL Moves B Rating to Not Cooperating Category
-------------------------------------------------------------
CRISIL Ratings has been consistently following up with Sri Dharma
Spinners Private Limited (SDSPL) for obtaining information through
letters and emails dated September 14, 2017 and October 26, 2017
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.3 CRISIL A4 (Issuer Not
Cooperating; Rating Migrated)
Cash Credit 3.75 CRISIL B/Stable (Issuer Not
Cooperating; Rating Migrated)
Letter of Credit 1.00 CRISIL A4 (Issuer Not
Cooperating; Rating Migrated)
Term Loan 1.63 CRISIL B/Stable (Issuer Not
Cooperating; Rating Migrated)
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 Sri Dharma Spinners Private
Limited which restricts CRISIL's ability to take a forward looking
view on the entity's credit quality. CRISIL believes information
available on Sri Dharma Spinners Private Limited is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' rating category or
lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Sri Dharma Spinners Private Limited to 'CRISIL
B/Stable/CRISIL A4 Issuer not cooperating'.
Incorporated in June 1999 and promoted by Mr. P.D Ramaraja, SDSPL
operates a spinning unit in Rajapalyam, Tamil Nadu, which began
operations in July 2001. The company manufactures cone yarn and
hank yarn.
SRI SARVARAYA: ICRA Reaffirms B+ Rating on INR132cr Loan
--------------------------------------------------------
ICRA Ratings has reaffirmed the long-term rating of [ICRA]B+ to
the INR82.95-crore term loan, INR132.00-crore fund-based
facilities and INR7.39-crore unallocated limits of Sri Sarvaraya
Sugars Limited. ICRA has also reaffirmed the long-term rating of
MB+ to the INR5.00-crore fixed deposit programme of SSSL. The
outlook on the long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Term Loan 82.95 [ICRA]B+(Stable); Reaffirmed
Fund-based Limits 132.00 [ICRA]B+(Stable); Reaffirmed
Unallocated Limits 7.39 [ICRA]B+(Stable); Reaffirmed
Fixed Deposit Programme 5.00 MB+(Stable); Reaffirmed
Rationale
The ratings reaffirmation remains constrained by the relatively
stretched liquidity profile of the company due to high working
capital requirements of the sugar division and high funding
requirements of the bottling division due to regular maintenance
costs incurred on RGB (returnable glass bottles) and coolers. The
ratings further remain tempered by the exposure of the sugar unit
to agro-climatic risks which has impacted sugarcane availability
during FY2017 and resulted in subdued performance of the sugar
division and thereby impacted the overall profitability during the
year. ICRA also notes that a cost overrun of INR25 crore in the
new bottling unit setup in Gopalapuram (due to incremental quality
standards required by Coca Cola India Limited) resulted in
additional pressure on the company's cash flows during FY2017. The
ratings further remain constrained by the seasonality associated
with the sales within the bottling unit and the exposure of
beverages industry to regulatory risks from changes in government
policies.
The ratings, however, continue to favorably factor in the
diversified operations of the company with presence of bottling
unit along with a sugar division which in turn is fully forward
integrated; and the stable business model of the company in the
beverages division due to exclusive franchise agreement with Coca-
Cola India Private Limited for three districts of Andhra
Pradesh/Telangana. Further, the ratings also consider the
extensive experience of the promoters in the sugar and beverages
industries.
Outlook: Stable
ICRA believes Sri Sarvaraya Sugars will continue to benefit from
the stable business model in the bottling division and its
franchisee status with Coca Cola India Limited. However, managing
funding requirements through timely and adequate movement of
monetary resources between the sugar and bottling divisions will
be crucial. The outlook may be revised to 'Positive' if
substantial growth in revenue and profitability, and better
working capital management, strengthens the financial risk
profile. The outlook may be revised to 'Negative' if cash accrual
is lower than expected, or if any major capital expenditure, or
stretch in the working capital cycle, weakens liquidity.
Key rating drivers
Credit strengths
* Experience of promoters in Sugars and Beverages Industry:
Incorporated in 1965 as a sugar cane crushing unit, SSSL has over
six decades of track record in the sugar industry. The promoters
have a rich experience in the sugar and bottling segments and this
has aided the company in establishing long relationships with
customers and suppliers.
* Diversified operational profile: SSSL's sugar operations are
fully forward integrated with a cogeneration unit of 12.65 MW and
distillery unit of 52 KLPD which provides cushion to profitability
during sugar downturn. Furthermore, around 50-60% of the output of
the sugar unit is consumed captively in the company's bottling
division.
* Association with Coca-Cola India Private Limited as a franchisee
bottler: SSSL's association with established market leader Coca
Cola India Private Limited with sole distribution rights across
three major districts in Andhra Pradesh (East Godavari and West
Godavari) and Telangana (Khammam District) results in a stable
revenue in-flow for the company.
Credit weaknesses
* Sugar operations exposed to raw material availability risks: The
company's sugar unit is exposed to raw material availability risks
given that cane availability remains vulnerable to agro-climatic
conditions as well as the crop-profile in the region. The company
has been facing constraints with sourcing of cane in the last two
years as the farmers in Andhra Pradesh have shifted to cultivation
of other commercial crops.
* Stretched liquidity position due to high funding requirements in
the sugar and bottling divisions: High maintenance capital
expenditure requirements in the bottling division coupled with
high working capital requirements in the sugar division has
resulted in a stretched liquidity position for the company as
depicted by the high working capital utilisation levels.
* Beverages sales remain exposed to seasonality and regulatory
policies: A major portion of SSSL's bottling sales are booked in
the peak summer months of March to June and expose the division's
revenues to a certain amount of seasonality in addition to
mandating inventory holding. Furthermore, the beverage sales also
remain exposed to regulatory risks from changes in government
policies.
Sri Sarvaraya Sugars Limited was incorporated in the year 1956 by
Mr. SBPBK Satyanarayana Rao. The company operates an integrated
sugar plant with a crushing unit of 4000 TCD capacity located in
Chelluru district in Andhra Pradesh. The company also operates a
bottling division with units at four locations namely Vemagiri,
Gopalapuram, Kesavaram and Sathupally in Andhra Pradesh/Telangana
and is a franchisee bottler for Coca Cola India Private Limited.
In FY2017, the company reported a net profit of INR11.85 crore on
an operating income of INR473.65 crore, as compared to a net
profit of INR26.92 crore on an operating income of INR487.12 crore
in the previous year.
VIKAS COTTON: CARE Reaffirms 'B' Rating on INR8.54cr LT Loan
------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Vikas Cotton Industries Private Limited (VCIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 8.54 CARE B; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of VCIPL continues to
remain constrained on account of its moderate scale of operations,
thin profit margins, moderately leveraged capital structure, weak
debt coverage indicators and working capital intensive nature of
operations during FY17 (refers to the period April 1 to March 31).
The rating is further constrained on account of susceptibility of
its profit margins to cotton price fluctuations, exposure to
adverse changes in the government regulations along with its
presence in highly fragmented and seasonal cotton industry with
limited value addition.
The rating, however, continues to derive benefit from the vast
experience of promoters in the cotton ginning and pressing
business and strategic location in the cotton-producing belt of
Gujarat.
The ability of the VCIPL to increase its scale of operations along
with an improvement in its profit margins and efficient management
ofits working capital would remain the key rating sensitivities.
Further, improvement in solvency position and debt protection
metrics would also remain crucial.
Detailed description of the key rating drivers
Key Rating Weaknesses
Moderate scale of operations and thin profit margins: Total
operating income (TOI) of the company increased by 27% y-o-y to
INR53.24 crore during FY17 from INR41.85 crore in FY16. Operating
profits increased by around 22.59% y-o-y to INR1.21crore during
FY17 and the net profits remained at INR0.13crore in FY17. Overall
the profit margins remained thin.
Moderately leveraged capital structure and weak debt coverage
indicators: Capital structure of the company remained moderately
leveraged marked by overall gearing of 1.85 times as on March 31,
2017 as against 1.81 times as on March 31, 2016. Debt coverage
indicators of the company remained weak marked by total debt to
GCA of 26.84 years as on March 31, 2017 as against 26.41 years as
on March 31, 2016, owing to an increase in the level of total
debt, while the interest coverage ratio stood at 1.51 times during
FY17.
Working capital intensive nature of operations: Liquidity position
of the company remained moderate marked by current ratio of 1.28
times as on March 31, 2017. Operating cycle of the company
remained moderate at 64 days during FY17 while average utilization
of working capital borrowings remained high at 80% during past 12
months ended November, 2017.
Susceptibility of operating margin to cotton price fluctuation and
presence in a fragmented and seasonal cotton industry with limited
value addition along with exposure to adverse changes in the
government: The profitability of VCIPL is exposed to fluctuations
in raw cotton, which being an agricultural commodity is subject to
the vagaries of monsoon.
VCIPL operates in an industry characterized by high fragmentation
and intense competition on account of presence of a large number
of small and medium-scale units due to minimal technological and
financial investment requirement. Furthermore, due to limited
value addition, players present in this segment operate at a very
low bargaining power against its customers as well as suppliers.
Furthermore, the cotton supply and prices in India are highly
regulated by the government through Minimum Support Price (MSP)
and export regulations.
Key Rating Strengths
Experienced promoters in cotton ginning business: VCIPL is
promoted mainly by Mr Bhavin Patel who has an experience of about
10 years in the cotton ginning business through various business
ventures. Mr Bhavin Patel looks after overall operations and
management of the company.
Strategically located within the cotton-producing belt of Gujarat
VCIPL's manufacturing facilities are located in Mehsana district
of Gujarat which is the largest producer of raw cotton in India.
It enjoys benefits in terms of lower logistics expenditure, easy
availability of raw material, labour, water and power connection.
Incorporated in the year 2005, VCIPL is promoted by two promoters
Mr Bhavinkumar Patel and Ms Palakben Patel. VCIPL is engaged into
the business of cotton ginning, pressing, seed crushing with an
installed capacity of 350 cotton bales per day as on March 31,
2017 at its facilities located at Mehsana-Gujarat.
====================
S O U T H K O R E A
====================
YOUBIT: Crypto Exchange Files for Bankruptcy After Hack
-------------------------------------------------------
Todd White and Kyungjin Yoo at Bloomberg News report that
cryptocurrency dealer Youbit became a casualty of hackers.
Bloomberg relates that the South Korean exchange closed and
entered bankruptcy proceedings after a cyberattack on Dec. 20, its
owner, Yapian, said in a statement on Dec. 19. About 17 percent of
total assets were lost. The heist follows a previous "accident" in
April, after which Yapian said it encouraged clients to keep their
tokens in a safer form, according to Bloomberg.
Bloomberg notes that Korea has emerged as a sort of ground zero
for the global crypto-mania. So many Koreans have embraced bitcoin
that the prime minister recently warned that cryptocurrencies
might corrupt the nation's youth. Bloomberg says the craze has
spread so far that, in Korea, bitcoin is trading at a premium over
prevailing international rates.
There were no additional losses, as other coins were in the cold
wallet," Yapian said, Bloomberg relays. While it suspended coin
and cash deposit and withdrawals as of 2:00 p.m. Dec. 20, it said
about 75 percent of assets could be safely withdrawn by clients,
Bloomberg relates.
According to Bloomberg, South Korea finance ministry official Ko
Kwanghee said in telephone interview on Dec. 20 that the
government is not taking any "countermeasures," noting regulators'
warnings over such speculation.
A hot wallet is an internet-connected account that potentially can
be accessed by hackers, the report discloses. That's why many
people keep their cryptocurrency holdings in cold wallets --
typically, physical devices disconnected from the web that can be
plugged into a computer when needed.
================
S R I L A N K A
================
DFCC BANK: Fitch Affirms B+ IDR & Changes Outlook to Stable
-----------------------------------------------------------
Fitch Ratings has revised the Outlook on DFCC Bank PLC (DFCC) to
Stable from Negative and has affirmed the Long-Term Issuer Default
Ratings (IDR) of the following Sri Lanka-based banks:
- National Savings Bank (NSB) at 'B+'; Outlook Stable
- Bank of Ceylon (BOC) at 'B+'; Outlook Stable
- DFCC at 'B+'; Outlook revised to Stable from Negative
Fitch has also affirmed the National Long-Term Ratings of the
following banks:
- NSB at 'AAA(lka)'; Outlook Stable
- BOC at 'AA+(lka)'; Outlook Stable
- DFCC at 'AA-(lka)'; Outlook revised to Stable from Negative
- People's Bank (Sri Lanka) (People's Bank) at 'AA+(lka)';
Outlook Stable
- Commercial Bank of Ceylon PLC (CB) at 'AA(lka)'; Outlook
Stable
- Hatton National Bank PLC (HNB) at 'AA-(lka)'; Outlook Stable
- National Development Bank PLC (NDB) at 'A+(lka); Outlook
Stable
- Sampath Bank PLC (Sampath) at 'A+(lka)'; Outlook Negative
- Seylan Bank PLC (Seylan) at 'A-(lka)'; Outlook Stable
The rating action follows Fitch's periodic review of the large
bank peer group.
KEY RATING DRIVERS
IDRS, NATIONAL RATINGS AND SENIOR DEBT
Fitch has maintained the negative outlook on Sri Lanka's banking
sector, as Fitch expect challenging operating conditions to
persist into 2018. The sector outlook is sensitive to trends in
the operating environment. Bank credit profiles should broadly
remain intact, but there could be modest pressure on the ratings
of some banks if sufficient loss-absorption buffers are not
maintained.
Capitalisation remains a key issue facing the sector. There was
some capital raising among banks in 2017 and Fitch expects this to
continue into 2018. Sri Lankan banks are required to phase in
higher capital buffers to meet Basel III regulations that come
into effect on 1 January 2019. In addition, Fitch believes there
could be a significant impact on banks' capitalisation through the
adoption of Sri Lanka Financial Reporting Standards (SLFRS) 9 in
2018, although the effect of this on regulatory capital ratios
could be spread out.
Banks with Long-Term Ratings Driven by Sovereign Support
The IDRs and National Long-Term Ratings of NSB and BOC and the
National Long-Term Rating of People's Bank reflect Fitch's
expectation of extraordinary support from the sovereign
(B+/Stable).
Fitch believes state support for NSB stems from its policy mandate
of mobilising retail savings and investing them in government
securities. The NSB Act contains an explicit deposit guarantee and
Fitch is of the view that the authorities would support, in case
of need, the bank's depositors and its senior unsecured creditors
to maintain confidence and systemic stability. Fitch has not
assigned a Viability Rating to NSB as it is a policy bank.
Fitch expects support for BOC and People's Bank to stem from their
high systemic importance, quasi-sovereign status, role as key
lenders to the government and full state-ownership.
BOC's Viability Rating reflects its thin capitalisation that is
counterbalanced by a strong domestic funding franchise. Fitch
considers state support as BOC's primary rating driver, even
though its Viability Rating is at the same level as its Support
Rating Floor.
The US dollar senior unsecured notes issued by NSB and BOC are
rated at the same level as the banks' Long-Term Foreign-Currency
IDRs, as the notes rank equally with other senior unsecured
obligations. The notes have a Recovery Rating of 'RR4'.
Banks with Long-Term Ratings Driven by Intrinsic Strength
The National Long-Term Rating of CB reflects its modest risk
appetite, strong funding profile, solid franchise and stable
performance.
CB raised equity of LKR10 billion that has bolstered its
capitalisation ahead of the full implementation of Basel III. Loan
expansion increased in 2016 and 2015, but Fitch does not expect
the bank to sustain a similar increase in loans despite the
increase in capital. CB has maintained a high share of current and
savings deposits, which is a funding strength. Loan/ deposits has
increased alongside the increase in lending, but is below that of
peers.
The bank has expanded its international presence in the Maldives
and Myanmar in addition to its operations in Bangladesh. The
ratings reflect Fitch's expectation that these non-domestic
operations should remain small and that CB's broader credit
profile remains primarily linked to the domestic market.
The National Long-Term Rating of HNB reflects its strong domestic
franchise as Sri Lanka's fourth-largest commercial bank, its
stronger capitalisation following a LKR14 billion equity infusion
and its healthy financial performance albeit asset quality
deterioration. This is counterbalanced by a higher risk appetite
relative to better-rated peers.
HNB's high risk appetite stems from rapid balance sheet expansion
in the past into segments that are more susceptible to
deteriorating economic conditions. This has pressured its funding,
liquidity and asset quality metrics. Fitch believes that HNB's
liquidity and funding pressure could ease in the medium term
alongside the expected moderation in loan growth and increased
focus on deposit growth. HNB's loan/deposit ratio improved to 91%
at end 3Q17, from 96% at end-2016.
HNB's asset quality metrics deteriorated at end-3Q17 due to a
sharp increase in non-performing loans (NPL). Its reported NPL
ratio increased to 2.6%, from 1.8% at end 2016, having improved
from 2.4% at end-2015. Fitch expects asset quality pressures to
persist in 2018 as operating conditions remain challenging.
The Outlook revision on DFCC's IDR to Stable from Negative
reflects Fitch view that adverse effects on the bank's credit
profile from increasing risks in the domestic operating
environment have reduced. The Outlook revision on DFCC's National
Long-Term Rating to Stable from Negative reflects Fitch
expectation that DFCC should maintain higher capital ratios
against similarly rated peers despite medium-term moderation
alongside the bank's expansion.
DFCC's Viability Rating and National Long-Term Rating capture its
developing commercial banking franchise and still-high
capitalisation relative to the peers.
DFCC's US dollar notes are rated at the same level as its Long-
Term Foreign-Currency IDR. The notes have a Recovery Rating of
'RR4'.
NDB's ratings reflect its sustained satisfactory asset quality but
lower capitalisation relative to better-rated peers.
NDB's reported gross NPL ratio of 1.96% compares well against that
of peers at end-3Q17. The corporate customer segment continues to
dominate its loan book, but the bank has been focusing on
increasing its exposure to the SME and retail customer segments.
Fitch believes that although this could help correct structural
imbalances that result in a thin net-interest margin (NIM),
increasing exposure to customer segments that Fitch sees as being
riskier and loan book seasoning could pressure asset quality if
not managed well.
Fitch expects NDB to sustain a strong growth trajectory to expand
its franchise. This, alongside higher minimum capital requirements
upon the full implementation of Basel III and possible impact of
SLFRS 9, could pressure capitalisation in the absence of a capital
injection.
Sampath's National Long-Term Rating reflects its lower
capitalisation and higher risk appetite relative to peers, which
counterbalances its expanding franchise, improving profitability
and satisfactory asset quality.
The affirmation of the National Long-Term Rating factors in
Fitch's expectation that the bank is in the process of shoring up
capitalisation to meet the tighter requirements of 10.0% Tier 1
and 14.0% total capital ratios by 1 January 2019. The bank's
regulatory Tier 1 and total capital ratios were 8.5% and 11.9%,
respectively, at end-September 2017. Sampath raised LKR7.6 billion
via a rights issue in December 2017, which should allow the bank
to meet the intermediate regulatory minimum Tier 1 requirement of
8.875% by end-2017. The bank announced a further LKR12.5 billion
rights issue for 2018 as part of its medium-term capital plan
However, the Negative Outlook reflects Fitch's view that Sampath
could find it challenging to improve its capitalisation if it
fails to successfully execute its medium-term capital plan while
maintaining high loan growth of over 20.0% which Fitch expect for
2018 to 2020. Sampath's gross loan growth of 18.2% in 9M17
continues to outpace the industry's 11.9% growth (Sampath 2016:
22.1%, industry 2016: 17.5%) and Fitch expects this trend to
continue alongside the bank's pursuit of market share.
Fitch assesses Seylan's National Long-Term Rating as driven by
intrinsic financial strength, although this is at the same level
as its support-driven rating. Fitch believes the bank's standalone
profile has improved in the past few years and is stable, as
reflected by its modest franchise, improving profitability and
satisfactory capital level. However, these strengths are
counterbalanced by the bank's still-weak but improving asset
quality.
Fitch sees downside risk to Seylan's rating to be limited by the
expectation of state support. Fitch believe state support would be
forthcoming due to the state shareholding that came about in the
aftermath of the crisis the bank faced in December 2008 and higher
share of banking-sector deposits relative to some peers. Seylan
has a lower support-driven rating relative to larger systemically
important banks due to its smaller market share.
HNB's, DFCC's and Seylan's Sri Lanka rupee-denominated senior debt
is rated at the same level as their National Long-Term Ratings, as
the debentures rank equally with other senior unsecured
obligations.
SUPPORT RATING AND SUPPORT RATING FLOOR
The Support Ratings and Support Rating Floors of NSB and BOC
reflect the state's ability and propensity to provide support to
the banks given their high importance to the state and high
systemic importance.
The Support Rating and Support Rating Floor of privately-owned
DFCC reflect its relative lower systemic importance, in Fitch's
view.
SUBORDINATED DEBT
The old-style Basel II Sri Lanka rupee-denominated subordinated
debt of BOC, CB, HNB, DFCC, NDB, Sampath and Seylan and the Basel
III compliant Tier II Sri Lanka rupee-denominated subordinated
debt of BOC, Sampath and Seylan are rated one notch below their
National Long-Term Ratings to reflect the subordination to senior
unsecured creditors. The Basel III compliant debentures include a
non-viability trigger upon the occurrence of a trigger event, as
determined by the Monetary Board of Sri Lanka
RATING SENSITIVITIES
IDRS, NATIONAL RATINGS AND SENIOR DEBT
Banks with Long-Term Ratings Driven by Sovereign Support
Any change in Sri Lanka's sovereign rating or the perception of
state support to NSB, BOC, and People's Bank could result in a
change in their IDRs and National Ratings.
A reduced expectation of state support through, for instance, the
removal of preferential support extended to NSB or a substantial
change in its policy role or deviation from mandated core
activities, indicating its reduced importance to the government,
could result in a downgrade of NSB's ratings.
A downgrade of BOC's IDR would most likely result from the
sovereign's weakened ability to support the bank, manifested
through a lower sovereign rating. Visible demonstration of
preferential support for BOC and People's Bank in the form of an
explicit guarantee may be instrumental to an upgrade of their
National Long-Term Ratings.
BOC's Viability Rating may come under pressure if there is a
continued decline in capitalisation through a surge in lending or
high dividends. Further deterioration in the operating
environment, reflected in a deterioration of BOC's key credit
metrics, could negatively affect its Viability Rating.
NSB's and BOC's senior debt ratings are sensitive to changes in
the banks' Long-Term IDRs. The Recovery Ratings on the two banks'
notes are sensitive to Fitch's assessment of potential recoveries
for creditors in case of default or non-performance.
Banks with Long-Term Ratings Driven by Intrinsic Strength
Enhanced loss absorption buffers against operating environment-
related risks could be positive for CB's National Long-Term
Rating. The bank's ratings could be downgraded if its ability to
withstand cyclical asset quality deterioration declines due to
lower earnings and capitalisation. In addition, deterioration in
its deposit franchise and deviation from its moderate risk
appetite, both viewed by Fitch as key factors that differentiate
CB from its lower-rated peers, would be negative.
An upgrade of HNB's National Long-Term Rating is contingent on the
bank achieving sustained improvements in its financial profile,
particularly in its funding, and a moderation of its risk
appetite. A rating downgrade could result from a significant
increase in risk-taking and operating environment-related risks
that could materially weaken capital buffers.
DFCC's IDRs and National Long-Term Rating could be downgraded if
there is a significant deterioration in its capitalisation,
particularly if its asset quality were to considerably weaken.
Fitch sees limited upside for the bank's ratings due to its weaker
franchise relative to better-rated peers. The Recovery Rating on
DFCC's notes is sensitive to Fitch's assessment of potential
recoveries for creditors in case of default or non-performance.
NDB's National Long-Term Rating may be downgraded if the bank
cannot sustain its capitalisation at a level commensurate with its
risk profile. Conversely, a notable improvement in its capital
buffer would be positive for its ratings.
Fitch would downgrade Sampath's rating if the bank is unable to
maintain capital buffers commensurate with its risk profile and
operating environment-related risks over the medium term. Fitch
would revise the Outlook to Stable if the bank successfully
implements its capital-enhancement plan to improve its capital
profile.
A downgrade of Seylan's rating could result from a reassessment of
state support and large reversal in recent asset quality
improvements, together with a weakening financial profile. An
upgrade of Seylan's rating would be contingent on further
improvements in its standalone profile through better asset
quality and a financial profile similar to higher-rated peers.
The assigned senior debt ratings will move in tandem with the
banks' National Long-Term Rating.
SUPPORT RATING AND SUPPORT RATING FLOOR
Lower propensity of the state to support systemically important
banks could result in a downgrade in the assigned Support Ratings
and Support Rating Floors, but Fitch sees this to be unlikely in
the medium-term. A change in the sovereign's ratings could also
lead to a change in the banks' Support Ratings and Support Rating
Floors.
SUBORDINATED DEBT
The banks' subordinated debt ratings will move in tandem with the
banks' National Long-Term Ratings.
The rating actions are:
National Savings Bank:
Long-Term Foreign-Currency IDR affirmed at 'B+'; Stable Outlook
Long-Term Local Currency IDR affirmed at 'B+'; Stable Outlook
Short-Term Foreign-Currency IDR affirmed at 'B'
National Long-Term Rating affirmed at 'AAA(lka)'; Stable Outlook
Support Rating affirmed at '4'
Support Rating Floor affirmed at 'B+'
US dollar senior unsecured notes affirmed at 'B+'; Recovery
Rating at 'RR4'
Bank of Ceylon:
Long-Term Foreign-Currency IDR affirmed at 'B+'; Stable Outlook
Long-Term Local-Currency IDR affirmed at 'B+'; Stable Outlook
Short-Term Foreign-Currency IDR affirmed at 'B'
National Long-Term Rating affirmed at 'AA+(lka)'; Stable Outlook
Viability Rating affirmed at 'b+'
Support Rating affirmed at '4'
Support Rating Floor affirmed at 'B+'
US dollar senior unsecured notes affirmed at 'B+'; Recovery
Rating at 'RR4'
Basel II compliant Sri Lanka rupee-denominated subordinated
debentures affirmed at 'AA(lka)'
Proposed Basel III compliant Sri Lanka rupee-denominated
subordinated debentures affirmed at 'AA(lka)'
DFCC Bank PLC:
Long-Term Foreign-Currency IDR affirmed at 'B+'; Outlook revised
to Stable from Negative
Long-Term Local-Currency IDR affirmed at 'B+'; Outlook revised to
Stable from Negative
Short-Term Foreign-Currency IDR affirmed at 'B'
National Long-Term Rating affirmed at 'AA-(lka)'; Outlook revised
to Stable from Negative
Viability Rating affirmed at 'b+'
Support Rating affirmed at '5'
Support Rating Floor affirmed at 'B-'
US dollar senior unsecured notes affirmed at 'B+'; Recovery
Rating at 'RR4'
Sri Lanka rupee-denominated senior unsecured debentures affirmed
at 'AA-(lka)'
Basel II compliant Sri Lanka rupee-denominated subordinated
debentures affirmed at 'A+(lka)'
People's Bank (Sri Lanka):
National Long-Term Rating affirmed at 'AA+(lka)'; Outlook Stable
Commercial Bank of Ceylon PLC:
National Long-Term Rating affirmed at 'AA(lka)'; Stable Outlook
Basel II compliant outstanding subordinated debentures affirmed
at 'AA-(lka)'
Hatton National Bank PLC:
National Long-Term Rating affirmed at 'AA-(lka)'; Stable Outlook
Sri Lanka rupee-denominated senior unsecured debentures affirmed
at 'AA-(lka)'
Basel II compliant outstanding subordinated debentures affirmed
at 'A+(lka)'
National Development Bank PLC:
National Long-Term Rating affirmed at 'A+(lka)'; Stable Outlook
Basel II compliant subordinated debentures affirmed at 'A(lka)'
Sampath Bank PLC:
National Long-Term Rating affirmed at 'A+(lka)'; Negative Outlook
Basel II compliant outstanding subordinated debentures affirmed
at 'A(lka)'
Basel III compliant Sri Lanka rupee-denominated subordinated
debentures affirmed at 'A(lka)'
Seylan Bank PLC:
National Long-Term Rating affirmed at 'A-(lka)'; Stable Outlook
Sri Lanka rupee-denominated senior unsecured debentures affirmed
at 'A-(lka)'
Basel II compliant subordinated debentures affirmed at
'BBB+(lka)'
Proposed Basel III compliant Sri Lanka rupee-denominated
subordinated debentures affirmed at 'BBB+(EXP)(lka)'
*********
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 ***