/raid1/www/Hosts/bankrupt/TCRAP_Public/180321.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, March 21, 2018, Vol. 21, No. 057
Headlines
A U S T R A L I A
AUTOTECHNICS PTY: First Creditors' Meeting Set for March 26
HOFBRAEUHAUS PTY: First Creditors' Meeting Set for March 29
MS VIVIAN: First Creditors' Meeting Slated for March 29
SOCA NOMINEES: First Creditors' Meeting Set for March 29
SURFSTITCH GROUP: Administrators Back Alceon Offer
TER TRANSPORT: First Creditors' Meeting Set for March 28
VASP GROUP: First Creditors' Meeting Scheduled for March 28
WAREHOUSE1: Customers Won't Get Refunds, Liquidators Confirmed
C H I N A
BLUEFOCUS COMM: Fitch Affirms B+ IDR, Alters Outlook to Negative
TONGCHUANGJIUDING INVESTMENT: S&P Puts 'BB/B' ICRs on Watch Dev.
XINYUAN REAL ESTATE: Fitch Rates US$200MM Senior Notes 'B'
* CHINA: Corporate Bankruptcy Cases Up 68.4% in 2017
H O N G K O N G
NEXTEER AUTOMOTIVE: Moody's Withdraws Ba1 Corp. Family Rating
NOBLE GROUP: Races to Get Buy-in on Debt Restructuring
I N D I A
AEROC SPACE: ICRA Assigns 'B' Rating to INR12.82cr Bank Loan
ANJANI COTTON: CARE Moves B+ Rating to Not Cooperating Category
BAMBINO PASTA: Ind-Ra Moves BB Issuer Rating to Non-Cooperating
BINANI INDUSTRIES: Fights Bain-Backed Plan With $1.1BB Offer
BSES YAMUNA: Ind-Ra Assigns BB LT Issuer Rating, Outlook Stable
DABRA AGRO: Ind-Ra Migrates B+ Issuer Rating to Non-Cooperating
HANUNG TOYS: PNB Drags Firm to Bankruptcy Courts
JANTA RICE: ICRA Moves B Rating to Not Cooperating Category
KBR AGRO: ICRA Moves 'B' Rating to Not Cooperating Category
KHEDUT COTEX: ICRA B Rating Remains in Not Cooperating Category
MS ENGINEERING: ICRA Keeps B+ Rating in Not Cooperating Category
MAHADEVI SILK: CARE Assigns B+ Rating to INR10cr LT Loan
MAHAKALI CHANDRAPUR: ICRA Cuts Rating on INR5.61cr Loan to D
MDA MINERAL: Ind-Ra Assigns BB- Rating to INR50MM Limits
MK ROY: Ind-Ra Affirms BB LT Issuer Rating, Outlook Stable
NARENDRA EMPORIS: ICRA Keeps B+ Rating in Not Cooperating Cat.
NILSHIKHAA INFRAA: Ind-Ra Affirms BB+ LT Rating, Outlook Stable
PERFECT METACRAFT: ICRA Keeps B in Not Cooperating Category
RADHEGOVINDKRIPA DEV: CARE Cuts Rating on INR61.57cr Loan to D
RANGE CERAMIC: ICRA Keeps B Rating in Not Cooperating Category
RV REALTY: CARE Migrates D Rating to Not Cooperating Category
SESHSAYI FOODS: Ind-Ra Migrates BB+ LT Rating to Non-Cooperating
SHREE GANESH: ICRA Removes B Rating From Not Cooperating Category
SHREE SECO: CARE Hikes Rating on INR0.72cr LT Loan to B-
SIDDHRAJ INFRABUILD: ICRA Keeps B in Not Cooperating Category
SIXTH ENERGY: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable
SRI PAVITHRA: CARE Moves B Rating to Not Cooperating Category
SUJANA UNIVERSAL: CARE Moves D Rating to Not Cooperating Category
TARA CHAND: ICRA Lowers Rating on INR150cr Loan to D
TIRUPATI NIRYAT: Ind-Ra Withdraws 'BB' Long Term Issuer Rating
VEDBHUMI BUILDERS: CARE Moves D Rating to Not Cooperating Cat.
VERSATILE ALUCAST: ICRA Withdraws D Rating on INR8cr Term Loan
VIJAY TEXTILES: Ind-Ra Raises Long Term Issuer Rating to 'B'
WEBFIL LIMITED: ICRA Keeps C+ Rating in Not Cooperating Category
WEST INN: CARE Moves B+ Rating to Not Cooperating Category
WHITEFIELD SPINTEX: ICRA Keeps B in Not Cooperating Category
I N D O N E S I A
CIMB NIAGA: Fitch Affirms 'bb' Viability Rating
M O N G O L I A
MONGOLIAN MORTGAGE: Moody's Assigns B3 Long-Term FC Issuer Rating
N E W Z E A L A N D
PINNACLE LIFE: A.M. Best Affirms 'B(fair)' Fin. Strength Rating
QUEST INSURANCE: A.M. Best Affirms 'B(fair)' Fin. Strength Rating
S I N G A P O R E
ANWELL TECHNOLOGIES: To Wind Up Operations and Delist From SGX
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A U S T R A L I A
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AUTOTECHNICS PTY: First Creditors' Meeting Set for March 26
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of
Autotechnics Pty Ltd will be held at the offices of SM Solvency
Accountants, Level 8/490 Upper Edward Street, in Spring Hill,
Queensland, on March 26, 2018, at 11:30 a.m.
Brendan Nixon of SM Solvency was appointed as administrator of
Autotechnics Pty on March 16, 2018.
HOFBRAEUHAUS PTY: First Creditors' Meeting Set for March 29
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of
Hofbraeuhaus Pty Ltd will be held at the offices of Jones Partners
Insolvency & Business Recovery, Level 13, 189 Kent Street, in
Sydney, NSW, on March 29, 2018, at 2:30 p.m.
Michael Gregory Jones of Jones Partners was appointed as
administrator of Hofbraeuhaus Pty on March 19, 2018.
MS VIVIAN: First Creditors' Meeting Slated for March 29
-------------------------------------------------------
A first meeting of the creditors in the proceedings of MS Vivian
Pty. Limited will be held at the offices of Worrells Solvency &
Forensic Accountants, Level 2, AMP Building 1 Hobart Place, in
Canberra, ACT, on March 29, 2018, at 1:30 p.m.
Stephen John Hundy of Worrells Solvency was appointed as
administrator of MS Vivian on March 19, 2018.
SOCA NOMINEES: First Creditors' Meeting Set for March 29
--------------------------------------------------------
A first meeting of the creditors in the proceedings of Soca
Nominees Pty Limited will be held at the offices of Jones Partners
Insolvency & Business Recovery, Level 13, 189 Kent Street, in
Sydney, NSW, on March 29, 2018, at 3:00 p.m.
Michael Gregory Jones of Jones Partners was appointed as
administrator of Soca Nominees on March 19, 2018.
SURFSTITCH GROUP: Administrators Back Alceon Offer
--------------------------------------------------
Sue Mitchell at The Australian Financial Review reports that
Alceon Group said it has no intention of changing the culture of
hip online surf and skate wear retailer SurfStitch if creditors
approve a merger with EziBuy, which sells clothing and homewares
to middle-aged women.
According to the report, Alceon director Richard Facioni said
under a deed of company arrangement proposal announced on
March 19, SurfStitch and EziBuy would become part of the same
ownership structure but would be run independently and maintain
their cultural identities.
"They're two very different businesses with very different target
customers," Mr. Facioni told The Australian Financial Review.
"There's no intention to merge the two businesses in to one-
EziBuy has its customers and products and SurfStitch has its
(customers and products)," he said.
"The only commonality is they're both online retail businesses and
so we'd be looking to the backend opportunities to improve both
businesses and get synergies but keep the two brands and
businesses quite distinct."
The report says SurfStitch creditors will meet on April 4 to
consider whether to accept the EziBuy proposal or a rival DOCA
proposed by SurfStitch non-executive director Abigail Cheadle and
backed by general manager Justin Hillberg and co-founder Lex
Pedersen.
In their long-awaited report to creditors, SurfStitch's
administrators - John Park, Quentin Olde and Joseph Hansell of FTI
Consulting - recommended creditors approve the EziBuy DOCA, saying
it would deliver the best overall return to creditors and had low
execution risk, according to the report.
The Australian Financial Review relates that the administrators
found that SurfStitch Group and SurfStitch Holdings were solvent
at the time of their appointment, but one or more directors may
have broken the law and engaged in market misconduct and
potentially insider trading.
Under the EziBuy proposal backed by Alceon, which also owns womens
wear retailer Noni B, SurfStitch Group and SurfStitch Holdings
shareholders and employees would be paid in full in six to eight
weeks, the report says.
The Australian Financial Review notes that class action creditors
would receive a cash dividend between AUD3.4 million and AUD4.3
million and convertible notes which would convert to shares in
EziBuy valued at between AUD6 million and AUD20 million, while
current SurfStitch shareholders would receive a convertible note
that would convert to shares in EziBuy worth between AUD1.5
million and AUD5 million.
These shares would be issued at the time of a "liquidity event"
such as an IPO or trade sale of EziBuy, whichs sells mainly
clothing, sleepwear and lingerie for mature-aged women through
catalogues and online, the report relays.
Under the Cheadle proposal, SurfStitch Group shares would relist
on the Australian stock exchange, employees and ordinary creditors
would be paid in full in six to eight weeks and class action
creditors would receive shares in SurfStitch worth between AUD3.8
million and AUD6.1 million, the report states. Current SurfStitch
shareholders would emerge with 47.85 per cent of the relisted
group worth between AUD6.2 million and AUD9.7 million.
About SurfStitch Group
Founded in 2007, SurfStitch Group Limited --
https://www.surfstitch.com/ -- is fashion & surf store based in
Australia. It primarily engages in online retail, and online
advertising and publication activities. The Company provides
action sports brands primarily for teens and young adults through
its Websites, SurfStitch.com, Surfdome.com, and SWELL.com. It
also operates Magicseaweed, a user generated surf content network
that provides forecasting and live reporting of approximately
4,000 beaches worldwide; Stab, an online surf publishing network;
and Garage that produces and digitally distributes action and
sports long form files and TV content.
The Company was placed in administration in August 2017, after
being burdened with shareholder class actions, operating losses,
and a collapse of its share price. John Park, Quentin Olde and
Joseph Hansell of FTI Consulting were appointed as administrators
to the Company on August 24.
TER TRANSPORT: First Creditors' Meeting Set for March 28
--------------------------------------------------------
A first meeting of the creditors in the proceedings of TER
Transport Pty Ltd will be held at the offices of Hall Chadwick
Paspalis Business Centre, Level 1, 48-50 Smith Street, in Darwin,
NT, on March 28, 2018, at 10:00 a.m.
Blair Pleash and Kathleen Vouris of Hall Chadwick were appointed
as administrators of TER Transport on March 16, 2018.
VASP GROUP: First Creditors' Meeting Scheduled for March 28
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of VASP Group
Pty Limited will be held at Unit 5, 18 Lexington Drive, in Bella
Vista, NSW, on March 28, 2018, at 9:00 a.m.
Stephen Wesley Hathway of Helm Advisory was appointed as
administrator of VASP Group on March 16, 2018.
WAREHOUSE1: Customers Won't Get Refunds, Liquidators Confirmed
--------------------------------------------------------------
CRN reports that liquidators have confirmed that customers who
ordered products from failed reseller Warehouse1 won't receive
refunds for purchases they haven't received.
Melbourne-based Warehouse1 sank into liquidation on Feb. 20 with
AUD3.8 million in claimed debts. Among those debts was AUD1.2
million to unsecured creditors, including AUD683,000 owed in
customer refunds, CRN discloses.
CRN says liquidators SV Partners are yet to indicate the
likelihood of a return to unsecured creditors. The most recent
liquidators report estimated the realisable value of Warehouse1's
assets at just under AUD200,000.
Instead, the liquidator has recommended that customers who are
affected contact their credit card company to dispute the
transaction if goods are defective or haven't been received, the
report says.
According to CRN, SV Partners also noted that customers that paid
for their goods via direct debit would rank as unsecured
creditors, and any return is still dependent on the recoveries
after selling off Warehouse1's assets.
Customers have since taken to online forums with complaints that
they have not received their orders, or are still waiting on a
refund, CRN says. The liquidators noted that customers could lodge
a claim against the company for any losses sustained.
CRN relates that Warehouse1 also has secured debts in the millions
with the likes of Ingram Micro, Dicker Data, Synnex, Commonwealth
Bank, Bluechip Infotech and Multimedia Technology.
Warehouse1 operated an online retail store and brick-and-mortar
location in Melbourne for four years before going under, CRN
notes. Warehouse1's website and social media pages have been
removed since the liquidation began.
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C H I N A
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BLUEFOCUS COMM: Fitch Affirms B+ IDR, Alters Outlook to Negative
----------------------------------------------------------------
Fitch Ratings has revised the Outlook on China-based BlueFocus
Communication Group Co. Ltd. to Negative from Stable, and affirmed
the Long-Term Foreign- and Local-Currency Issuer Default Ratings
(IDRs) at 'B+'. The agency has also affirmed the expected rating
of 'B+(EXP)' with a Recovery Rating of 'RR4' on wholly-owned Blue
Skyline Communication Limited's proposed notes, which will be
unconditionally and irrevocably guaranteed by BlueFocus.
The Negative Outlook reflects Fitch's expectation of weaker than
previously envisaged profitability and cash generation, slower
deleveraging to achieve the company's target of debt/EBITDA of
under 4x, and uncertainties over sourcing attractive cash-
generative acquisitions to replace a deal with Cogint that was
terminated.
KEY RATING DRIVERS
Weaker-Than-Expected Profitability: Fitch now believe the
improvement in profitability that Fitch had assumed would come
from increasing programmatic buying revenue and cost savings from
centralised media buying would be more modest and delayed. The
company also faces a disintermediation threat. BlueFocus's 2017
profitability was weaker than Fitch expectations despite its
stronger market position in China's marketing communications
services sector. The company has yet to release its full financial
results for 2017 but based on a summary published on 27 February
2018, its 2H17 profitability was depressed, although Fitch think
some non-recurrent exceptional items may have distorted the
results to an extent.
Volatile Profitability and Cash Generation: The high volatility in
the company's profitability and operating cash generation are
weighing on the ratings. Greater certainty on a deleveraging path
based on stronger EBITDA and positive post-dividend free cash flow
is needed to restore a 'B+'/Stable rating. Fitch believe the
company's measures to restore profitability, which were
implemented in 4Q17, will lead to a rebound in profitability in
2018. The company issued a positive statement in late January 2018
to say its 1Q18 net profit may rise 61%-86% yoy to CNY130 million-
150 million. However, Fitch believe sustained EBITDA momentum as
well as stronger operating cash generation from managing its
working capital may be needed to achieve management's target of
debt/EBITDA of under 4x.
Termination of Cogint Deal: The termination of the deal to combine
BlueFocus's business with Cogint is a credit negative. The
proposed transaction would have boosted BlueFocus's EBITDA and
strengthened the company's overseas businesses with the addition
of a solid clientele and stronger skills in data and analytics.
The transaction was terminated as the deal was not approved by the
Committee on Foreign Investment in the US. The increased
regulatory scrutiny may hamper prospects of acquiring US targets.
Fitch believe the company will continue to seek acquisition
opportunities elsewhere. Acquisitions that do not sufficiently
contribute to the company's cash generation can add to delays in
improving BlueFocus's financial profile.
DERIVATION SUMMARY
BlueFocus's weaker financial profile is weighing on its ratings
despite the company's stronger market position in China's
marketing communications services sector and the steady growth of
domestic advertising services. Greater competition in China's
agency business and migration to lower-margin digital advertising
and outbound business may continue to constrain any improvement in
the company's profitability and operating cash flow generation,
which have remained volatile in the past three years. The
company's smaller scale and diversity, and weaker profitability
account for rating differentials of greater than one category with
leading global advertising holding companies with investment-grade
ratings, such as WPP plc (BBB+/Stable) and Interpublic Group of
Companies, Inc. (BBB/Positive).
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Fitch Rating Case for the Issuer
- revenue CAGR of 20% in 2017-2020, driven by mobile and social
advertising in China and potential overseas acquisitions
- EBITDA margin declining to below 6% in 2017 before a modest
recovery in 2018-2020, driven by cost-saving measures and
continued growth in digital advertising revenue
- annual capex of CNY200 million-290 million in 2017-2020
- dividend payout ratio of 10% in 2017-2020
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Fitch may revise the Negative Outlook back to Stable if the
negative guidelines set out below are not triggered.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Substantial weakening of the market positions of its key
products and services
- Significant M&A that negatively affect the operations or the
business profile
- Operating EBITDA margin sustained below 7.0%
- FFO adjusted leverage sustained above 5.5x
- FFO fixed-charge coverage sustained below 3.0x
LIQUIDITY
Tighter Liquidity: Fitch expects BlueFocus's liquidity to become
increasingly tight if it continues to delay the issuance of the
proposed US dollar notes. BlueFocus had readily available cash of
about CNY2 billion at end-September 2017, compared with its short-
term bank borrowings of CNY1.6 billion. However, Fitch expects
BlueFocus's operating cash flow to be neutral to negative in 2018
due to continued investment in working capital. In addition, its
CNY400 million 6.0% notes will likely be due in September 2018 as
bondholders have an option to request for redemption on the second
anniversary. BlueFocus may also continue to acquire remaining
stakes in subsidiaries, depending on its liquidity. Fitch would
not rule out the company needing to liquidate part of its CNY1.7
billion available-for-sale investments to raise its liquidity
headroom.
TONGCHUANGJIUDING INVESTMENT: S&P Puts 'BB/B' ICRs on Watch Dev.
----------------------------------------------------------------
S&P Global Ratings placed its 'BB' long-term and 'B' short-term
issuer credit ratings on China-based Tongchuangjiuding Investment
Management Group Co. Ltd. (Jiuding Group) on CreditWatch with
developing implication. S&P also placed its 'BB' long-term issue
rating on the senior unsecured debt the company guarantees on
CreditWatch with developing implications.
S&P said, "We placed the ratings on CreditWatch to reflect
significant uncertainty relating to Jiuding Group's business and
financial risk profile following the company's proposed divestment
of its securities operations.
"The CreditWatch placement also reflects our view that the
possible shakeup of Jiuding Group's key operations, together with
a regulatory inquiry, necessitates a revisit to our assessment of
Jiuding Group's management and governance."
Jiuding Group announced on Feb. 1, 2018, that its brokerage arm
Jiu Zhou Securities Co. Ltd. (JZ Securities) will issue 790
million new shares to Shandong Hi-speed Investment Holding Ltd.
Jiuding Group's shareholding in JZ Securities will fall to about
72% after the share placement, from about 87% now, subject to the
regulator's approval. Shandong Hi-speed has also expressed its
intention to take controlling stake in JZ Securities.
Jiuding Group also announced several related-party transactions on
Feb. 6, 2018. These include the transfer of its shares in several
wholly owned subsidiaries into a controlled listed company for
free. The National Equities Exchange and Quotations, where Jiuding
Group is listed, has issued two letters of inquiry to the company
seeking clarity on its asset pricing practice and corporate
governance procedures.
The intended sale of JZ Securities could significantly change
Jiuding Group's business and financial risk profile. We have
derived our ratings on Jiuding Group by looking into the company's
three key business segments: (1) the controlled brokerage arm JZ
Securities; (2) the wholly owned FTLife Insurance Co. Ltd.; and
(3) the rest of the group's entities, including the holding
company and other nonregulated businesses, which largely deal in
private equity investment management and proprietary investment.
With Jiuding Group's possible divestment of its securities
operations, S&P expects the company to make substantial changes to
its business strategy. Such a move could expose Jiuding Group to
escalated business risks. The divestment could also generate
significant cash windfall. The impact of these developments on
Jiuding Group's credit profile will depend on the company's
updated business strategy, capital expenditure plan, and
effectiveness of corporate governance.
S&P said, "We expect to resolve the CreditWatch placement in the
next three months following our meeting with Jiuding Group
management and our assessment of the impact of the recent
developments on the company's business and financial risk profile.
"We will seek more information from management on the following
key issues: (1) the company's business strategies, including plans
on domestic and overseas mergers and acquisitions; (2) its
financial policy regarding debt repayment and debt raising; (3)
its management and governance policy, including its updated policy
framework; and (4) its liquidity management practice.
"We could lower the ratings on Jiuding Group if we believe that:
(1) the changes in the company's strategy, such as the intended
sale of the securities operations, could significantly undermine
the company's business position or lead to a more aggressive
financial risk profile despite the one-off cash windfall; or (2)
the company's corporate governance and internal controls have
significant gaps.
"We could raise the ratings if the divestment of JZ Securities
materializes and: (1) it significantly improves Jiuding Group's
financial risk profile through debt paydowns; (2) it has a limited
impact on Jiuding Group's business competitiveness and stability;
and (3) Jiuding Group's corporate governance and internal controls
remain largely effective.
"We may affirm the ratings if we assess that the proposed
restructuring and related party transactions have a neutral or
insignificant impact on the Jiuding Group's credit profile."
XINYUAN REAL ESTATE: Fitch Rates US$200MM Senior Notes 'B'
----------------------------------------------------------
Fitch Ratings has assigned Xinyuan Real Estate Co., Ltd.'s
(B/Stable) US$200 million 9.875% senior notes due 2020 a final
rating of 'B' and a Recovery Rating of 'RR4'.
The notes are rated at the same level as Xinyuan's senior
unsecured rating because they constitute its direct and senior
unsecured obligations. The assignment of final rating follows the
receipt of documents conforming to information already received.
The final rating is in line with the expected rating assigned on
March 12, 2018.
The Chinese homebuilder's ratings are supported by strong
contracted sales and Fitch's expectation of moderate margin
recovery. The ratings are constrained by its small land bank, high
leverage driven by land replenishment needs and tight, but
sustainable, liquidity.
KEY RATING DRIVERS
Solid Contracted Sales: Xinyuan's contracted sales increased 40%
yoy to US$2.5 billion in 2017. The strong growth was driven by
robust market sentiment in its core tier 2 cities and satellite
cities around tier 1 cities, namely Zhengzhou, Jinan, Suzhou and
Kunshan. Tier 2 cities contributed over 80% of contracted sales in
2017.
Small Land Bank Constrains Ratings: Xinyuan's total sellable gross
floor area increased to 4.9 million square metres (sq m) in 2017,
from 2.2 million sq m at end-2016. Its land bank will last for
three years based on 2017 sales. Xinyuan pays advance deposits to
local government and industry partners to secure a large part of
its land bank, excluding the usual public auctions. This strategy
creates uncertainty about its land acquisitions and is a
constraint on the company's sales growth.
Land Replenishment Pressures Leverage: Xinyuan has accelerated
acquisitions after not purchasing any new land in 2015. It
announced CNY3.6 billion in acquisitions of sites in China and the
US in 2016, with cash outlay of around CNY2.6 billion after
considering returned land deposits and prepayments for certain
land parcels. With its low land bank and fast asset-churn model,
Xinyuan's need to replenish its land bank will continue to
pressure leverage. This is made worse by surging land prices in
higher-tier Chinese cities amid fierce competition and a moderate
acquisition pace.
Margin Recovery Sustainable: Fitch expects Xinyuan's gross margin
to continue improving in 2017-2018, with the average selling price
(ASP) maintaining a rising trend. Xinyuan's contracted sales ASP
of USD1,794 per sq m in 4Q17 was also higher than the USD1,566 per
sq m in 4Q16 and USD1,616 per sq m in 3Q17. The higher ASPs have
also helped its gross margin to improve to 23.1% in 2017, from
22.9% in 2016.
The homebuilder's EBITDA margin is likely to improve faster than
the gross margin, as selling, general and administration (SG&A)
costs rose by a slower 18% yoy in 2017, compared with the 40%
increase in contracted sales, suggesting that operational costs
are under control. Xinyuan's SG&A costs will also be spread over a
wider base, boosting its EBITDA margin, as its 2017 revenue of
USD2.0 billion catches up with its contracted sales of USD2.5
billion. However, Xinyuan's gross margin improvement could be
jeopardised from 2018 if land acquisition costs sprint ahead of
the rising ASP.
DERIVATION SUMMARY
Xinyuan's rating is supported by its solid sales and constrained
by its tight liquidity and small land bank. Xinyuan has a larger
scale, measured by EBITDA, more contract sales and higher leverage
compared with 'B' rated Chinese property peers, such as Redco
Properties Group Ltd (B/Stable). Xinyuan has more stable
profitability and lower leverage than 'B-' peers, such as Jingrui
Holdings Limited (B-/Negative).
KEY ASSUMPTIONS
Fitch's key assumptions within Fitch rating case for the issuer
include:
- Contracted sales gross floor area increasing by 40%-50% in
2016 and 5% in 2017-2018 due to improved churn in tier 1 and 2
cities.
- ASP of contracted sales increasing by around 5% between 2016
and 2018 due to price increases in tier 1 and 2 cities.
- Moderate acquisition pace with the ratio of cash land premium
paid to contracted sales at 40%-45% in 2016-2018.
- Construction cost per sq m declining to around USD650-700 in
2016-2018, due to cheaper construction costs in tier 2 cities.
- SG&A costs as a percentage of contracted sales to gradually
decrease to between 12% and 13%, as Xinyuan plans to cut
internal costs.
RATING SENSITIVITIES
Developments that may, individually or collectively, lead to
negative rating action include:
- Net debt/adjusted inventory rising above 60% on a sustained
basis (2017: 55%).
- Contracted sales/total debt falling below 0.6x on a sustained
basis (2017: 0.7x).
- EBITDA margin falling below 15% on a sustained basis.
Developments that may, individually or collectively, lead to
positive rating action include:
- Significant increase in scale, as reflected by contracted
sales exceeding CNY15 billion.
- Net debt/adjusted inventory below 40% for a sustained period.
- Contracted sales/total debt improving to above 1.0x for a
sustained period.
- EBITDA margin improving to above 20% for a sustained period.
LIQUIDITY
Tight but Sustainable Liquidity: The company's liquidity position
has worsened slightly, with a ratio of cash/short-term debt of 78%
at end-2017 (end-2016: 102%). Xinyuan's total cash of USD1.5
billion and undrawn credit facilities of USD1.1 billion should be
sufficient to cover its short-term borrowings of USD1.9 billion,
although the liquidity position will depend on the pace of land
acquisition. Active fundraising in the onshore bond market has
alleviated Xinyuan's refinancing pressure.
* CHINA: Corporate Bankruptcy Cases Up 68.4% in 2017
----------------------------------------------------
Xinhua News Agency reports that Chinese courts received 9,542 new
cases concerning corporate bankruptcy in 2017, an increase of 68.4
percent compared with the previous year, the Supreme People's
Court (SPC) said.
During the same period, 6,257 corporate bankruptcy cases were
concluded by the courts, up 73.7 percent year on year, the SPC
said, Xinhua relays.
Xinhua relates that the SPC has required courts nationwide to
accept any bankruptcy petition and issue written confirmation in
an effort to facilitate market-orientated bankruptcy and boost
high-quality economic growth, it said.
According to the report, Liu Guixiang with the SPC said bankruptcy
reorganization has helped companies that were facing bankruptcy
but still had value and hoped to reemerge, while bankruptcy
liquidation helped weed out "zombie enterprises," or unprofitable
firms burdened with debt, mismanagement or overcapacity.
By the end of 2017, 97 courts had established liquidation and
bankruptcy tribunals to facilitate the trial and settlement of
bankruptcy cases. In early 2015, only five courts in China had
such tribunals, Xinhua discloses.
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H O N G K O N G
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NEXTEER AUTOMOTIVE: Moody's Withdraws Ba1 Corp. Family Rating
-------------------------------------------------------------
Moody's Investors Service has assigned a Baa3 issuer rating to
Nexteer Automotive Group Limited. At the same time, Moody's has
withdrawn the company's Ba1 corporate family rating (CFR).
Moody's has also upgraded to Baa3 from Ba1 the senior unsecured
debt rating on the bonds issued by Nexteer.
The ratings outlook is stable.
RATINGS RATIONALE
"The ratings upgrade reflects Nexteer's track record of improving
its credit and business profiles, as well as Moody's expectation
that these improvements can be sustained due to its solid market
position in steering and prudent financial management," says
Gerwin Ho, a Moody's Vice President and Senior Analyst.
Despite Moody's expectation of slower global auto sales growth in
2018 and 2019 versus 2017, Nexteer's revenue should grow about 3%-
4% year-on-year over the next two years, after growing 1% year-on-
year in 2017 to reach USD3.9 billion.
The company's order to delivery backlog - which measured USD24
billion at the end of 2017 - provides visibility on its revenue
over the next 12-18 months.
The Electric Power Steering (EPS) business - which made up 64% of
Nexteer's revenue in 2017 - will continue to propel sales growth
over the next two years, because of gains in market share and the
increasing penetration of EPS in developing auto markets, such as
China (A1 stable) and Brazil (Ba2 negative).
At the same time, Moody's expects Nexteer's profitability - as
measured by its adjusted EBITA margin - to further improve to
about 10.5%-11.0% over the next two years. The company's growth in
scale and increased contributions from the higher margin EPS
business have improved its adjusted EBITA margin from 3.9% in
2013.
Nexteer also has a track record of deleveraging, with adjusted
debt falling to about USD549 million at the end of 2017 from a
high of USD784 million at the end of 2014. During the same period,
adjusted EBITDA rose to about USD510 million from USD267 million.
Accordingly, its debt leverage - as measured by adjusted
debt/EBITDA - fell to about 1.1x at the end of 2017 from 2.9x at
the end of 2014.
While Moody's expects the company's debt leverage to rise slightly
to about 1.2x-1.4x over the next two years because of its
investments, this level of leverage remains strong for its ratings
level and provides a buffer for the company's investment needs and
against the cyclical nature of the automotive industry and
potential trade policy risks.
"Nexteer's growth in scale is accompanied by improved
diversification in its customer base and geographic exposures,"
says Ho who is also Moody's Lead Analyst for Nexteer.
Nexteer reduced its revenue concentration in General Motors
Company (GM, Baa3 stable) and subsidiaries to 43% in 2017 from 54%
in 2013 by expanding its customer base, especially in China.
In addition, it has shown a lower level of geographic
concentration, with revenue from North America declining to 65% in
2017 from 71% in 2013. Its exposure to the fast-growing China
market also rose to 20% from 11% during the same period. Moody's
expects that Nexteer's revenue exposure to China will trend
towards 25% over the next 2-3 years.
Nexteer's rating also benefits from its 32% effective stake
ownership by Aviation Industry Corporation of China (AVIC), which
provides Nexteer with customer introductions, business partnership
introductions and the facilitation of funding access.
AVIC has a track record of providing financial support, as
demonstrated by its guarantee on 51% of Nexteer's loan from The
Export-Import Bank of China (A1 stable).
Nexteer's liquidity position is strong, as reflected in its cash
to short-term debt coverage of about 7.8x at December 31, 2017 and
net cash position as of the same date.
Nexteer's rating reflects: (1) strong barriers to entry; (2) the
company's track record and global footprint; (3) the good growth
of its EPS product; and (4) Moody's expectation that Nexteer will
maintain its sound credit metrics.
On the other hand, Nexteer's rating is constrained by its: (1)
concentration in terms of customer revenue; and (2) developing
scale and geographic concentration.
The stable outlook on the ratings reflects Moody's expectation
that Nexteer will maintain its relationships with its key auto
manufacturer clients and strong market position, and that it will
continue to show prudent financial discipline.
Upward pressure on the ratings could emerge if Nexteer: (1)
further improves its business profile by decreasing its customer
and geographic concentration and expanding its business scale,
while sustaining its strong credit metrics, including
profitability - as measured by its EBITA margins - and leverage;
and (2) maintains its prudent financial policy, with low leverage,
good liquidity, and disciplined capital expenditures and
acquisitions.
The ratings could come under downward pressure if Nexteer: (1)
exhibits a decline in EBITA margins and a rise in debt leverage -
as measured by its debt/EBITDA - to above 1.5-2.0x on a sustained
basis; (2) demonstrates lower customer and geographic diversity
and fails to expand its scale; or (3) pursues an aggressive
financial policy that leads to a deterioration of its credit
metrics.
The principal methodology used in these ratings was Global
Automotive Supplier Industry published in June 2016.
Headquartered in Auburn Hills, Michigan, and listed on the Hong
Kong Stock Exchange in October 2013, Nexteer Automotive Group
Limited manufactures steering and driveline systems. The company
had 24 manufacturing plants across North and South America, Europe
and Asia at the end of 2017.
At December 31, 2017, Nexteer was 67%-owned by Pacific Century
Motors, Inc., which was in turn 51%-owned by AVIC Automotive
Systems Holding Co., Ltd. (AVIC Auto), and 49% owned by Beijing E-
Town International Automotive Investment & Management Co. Ltd.;
with the latter controlled by Beijing's municipal government.
AVIC Auto is 93% owned by Aviation Industry Corporation of China,
a Chinese central government-owned enterprise.
NOBLE GROUP: Races to Get Buy-in on Debt Restructuring
------------------------------------------------------
Bloomberg News reports that Noble Group is racing against time to
garner enough votes for a debt restructuring plan after its
decision not to pay a US$379 million (S$500 million) bond due
March 20 sets it on course for its first note default.
The report says Noble's shares plunged on March 19 as investors
weighed the consequences of the trader's decision not to pay the
2018 notes. The stock sank 19 per cent to 11.1 cents, the lowest
since 1999. Its 2018 and 2022 bonds were largely unchanged.
According to Bloomberg, the failure to make payment will prompt an
"event of default" under the terms of its bond documents. The
company has opted for non-payment to preserve assets "for the
benefit of all stakeholders during the implementation of the
proposed restructuring", it said in a filing on March 16.
Bloomberg relates that the move will likely trigger payouts on
credit default swap contracts tied to Noble and cross defaults on
its other debts too, according to law firm Eversheds Sutherland.
The report notes that the upcoming default is the latest
development in a closely watched drama that began in 2015 when
then-unknown Iceberg Research started publishing critiques of the
Hong Kong-based trading house's accounting.
Now a shadow of its former self after being battered by trading
losses and massive writedowns, Noble is working on a US$3.5
billion restructuring deal to ensure survival. A default could set
in motion legal proceedings against the trader.
"If there are enough 2018 holders who have not signed up to the
restructuring support agreement or some form of soft forbearance
arrangement with the company, there is a risk that some of them
could collectively take action against Noble in court to push for
payment," the report quotes Mr. Brayan Lai, Singapore-based
analyst at credit research firm Bondcritic, as saying.
Under the bond documents, the trustee has the discretion to
institute legal proceedings against Noble upon default, but would
normally do so only if it is indemnified by noteholders against
its anticipated costs and associated risks in taking such action,
according to Mr. Kingsley Ong, a Hong Kong-based partner at
Eversheds Sutherland, who specialises in debt restructuring and
credit derivatives, Bloomberg relays.
The trustee for the 2018 bond is DB Trustees (Hong Kong), the
report discloses citing the bond document. Ms. Amy Chang,
spokesman for Deutsche Bank in Hong Kong, said the lender has no
comment on whether any action will be taken, the report adds.
Bloomberg adds that Mr. Ong said in a written interview: "It's
uncertain if the trustee will take such enforcement action (or be
asked by any noteholders to take such action), in view of Noble's
current restructuring proposal."
Technically, though, the trustee could commence insolvency
proceedings in the courts in the event of default, which could
derail Noble's plan to have the workout done outside of the
courts, he said, Bloomberg relays.
In the same announcement, Noble also said it would not pay a
coupon due on March 9 on US$750 million of bonds maturing in March
2022. While it has a 30-day grace period on the coupon, there is
no such window on the 2018 bond maturity, according to the
prospectuses. The markets had not priced in much chance it will
pay the 2018 notes, according to Bloomberg.
Bloomberg recalls that Noble last week inked a binding pact with a
senior creditor group holding 46 per cent of its senior debt, and
is seeking more to sign on to the deal to meet the 75 per cent
threshold by value and 50 per cent by number of creditors.
A default on its debt could have significant consequences for
Noble if it prompts trading counterparties to walk away from
contracts. According to Bloomberg, Noble chairman Paul Brough
told investors last month that it was "important from a customer
and supplier perspective that we are seen to be compliant with our
borrowing obligations".
"If they default, in theory they can still operate as normal but
some customers may have clauses which they can exercise and stop
trading with them," Bloomberg quotes Ms. Annisa Lee, head of Asia
ex-Japan flow credit analysis at Nomura International (HK), as
saying.
=========
I N D I A
=========
AEROC SPACE: ICRA Assigns 'B' Rating to INR12.82cr Bank Loan
------------------------------------------------------------
ICRA Ratings has assigned a long-term rating of [ICRA]B to the
INR12.82 crore bank guarantee limits and INR0.18 crore unallocated
limits of Aeroc Space Technologies Pvt. Ltd. The outlook on the
long-term rating is 'Stable'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Bank guarantee 12.82 [ICRA]B (Stable); Assigned
Unallocated limits 0.18 [ICRA]B (Stable); Assigned
Rationale
The assigned rating is constrained by the small scale of operation
in the defence components manufacturing industry with revenue of
INR0.49 crore in FY2017; limited experience of the company in
delivering polymer compaction system (PCS) with the company having
order for supply of PCS from Terminal Ballistic Research
Laboratory (TBRL); and high client concentration risk with only 2
clients contributing to the total revenues in FY2017. The rating
however positively factors in experience of the management in
doing job work for customers who in turn supply to government
defence agencies; strong order book position of INR37.67 crore for
delivery of PCS in FY2020; and favorable demand outlook given the
government focus on defence sector reflected from increase in
budget allocation and thrust on the indigenization of the defence
production.
Outlook: Stable
The stable outlook reflects ICRA belief that ASTPL scale will
continue to be low at around INR1 crore till FY2019 and the
revenue from PCS delivery will be booked in FY2020. The outlook
may be revised to 'Positive' if substantial growth in revenue and
profitability strengthens the financial risk profile. The outlook
may be revised to 'Negative' if any delay in delivering PCS which
adversely impacts the financial risk profile.
Key rating drivers
Credit strengths
Experienced promoters in the aerospace components manufacturing
industry: Aeroc Space Technologies Private Limited (ASTPL) was
incorporated in 2009 by Mr. M. Sreerama Murthy and Mr. A.P. Mithun
Kumar Reddy. The promoters have long experience in the
manufacturing of aerospace, and defence components leading to
established relationship with customers and suppliers.
Favorable demand outlook for aerospace and defence sector: With
government focus on defence sector as reflected by increased
budget allocation and thrust on the indigenisation of the defence
production, the number of orders from government are expected to
increase with government's intent to source from the local
companies for defence projects.
Credit challenges
Small scale of operations with revenues of INR0.49 crore in
FY2017: The company revenues are low with revenues ranged between
INR0.06 crore and INR1.43 crore due to low order book and job
works income. The firm caters to manufacturing companies who
supply to government agencies like ISRO, DRDO (Department of
Defence Research & Development), BDL (Bharat Dynamics Ltd), BEML
(Bharat Earth Movers Ltd) and HAL (Hindustan Aeronautics Ltd).
Limited experience of the company in delivering Polymer Compaction
System (PCS): Terminal Ballistics Research Laboratory (TBRL)
floated a tender for design, fabrication, supply installation and
commissioning of Polymer Compaction System (PCS) and the company
won the order for supply of PCS system for a value of INR37.67
crore. The work is to be completed in 28 months by August 2019.
It's the first direct order from a government agency for ASTPL and
the company has limited experience in manufacturing of PCS
however, tie ups with foreign suppliers who have requisite
technology mitigates the risk largely.
High client concentration risk: The client concentration risk is
high with 2 clients contributing to the total revenue in FY2017;
further, the high client concentration risk is expected to
continue in the medium term with the company having order from
TBRL for delivery of PCS alone.
Low net-worth levels due to accumulated losses: The net worth
stands at INR0.45 crore as on March 31, 2017 owing to past
accumulated losses. The net margins have improved to 3.55% in
FY2017 from loss in FY2016 owing to increased job works and
interest income.
Aeroc Space Technologies Pvt. Ltd. (ASTPL) is incorporated in 2009
and is involved in the manufacturing of high precision components
and assemblies which cater to the needs of aerospace component
manufacturing companies who in turn supply their products to ISRO,
DRDO, BDL, BEML, Midhani and HAL etc. ASTPL is equipped with tool
room machines, CNC production machines, production general
machines and host specialized facilities for task like, metalizing
equipment (PTA), welding (Arc, MIG, TIG), short peening and vibro
finishing.
ANJANI COTTON: CARE Moves B+ Rating to Not Cooperating Category
---------------------------------------------------------------
CARE Ratings has been seeking information from Anjani Cotton
Industries to monitor the rating(s) vide e-mail communications/
letters dated February 12, 2018, February 5, 2018, January 18,
2018, January 5, 2018, January 3, 2018, December 21, 2017,
December 11, 2017, December 5, 2017, November 10, 2017, October
27, 2017, October 16, 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 rating. In line with the extant
SEBI guidelines CARE's rating on Anjani Cotton Industries's bank
facilities will now be denoted as CARE B+; ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 20.12 CARE B+; ISSUER NOT COOPERATING
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on October 28, 2016, the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Declining scale of operations with thin profitability and moderate
leverage position: Total operating income (TOI) of ACI has shown a
declining trend marked by decline of 37.6% in TOI in FY16 over
FY15. Its scale of operations remained at INR97.93 crore in FY16
with a PBILDT and PAT of 2.20% and 0.29% respectively. The
solvency position had remained moderate marked by overall gearing
of 1.56 times as on March 31, 2016 marginally deteriorate from
1.35 times as on March 31, 2015.
Working capital intensive nature of operation with moderate
liquidity profile: The liquidity position of ACI is moderate
marked by high working capital limit utilization and moderate
liquidity ratio i.e. current ratio and quick ratio of 1.51 times
and 0.56 times as on March 31, 2016. During FY16, the operating
cycle has deteriorated and remained elongated at 70 days as
against 37 days during FY15.
Presence in highly fragmented cotton ginning industry and
susceptible to fluctuations in cotton prices: Cotton ginning
business involves very limited value addition and is highly
dominated by small and medium scale units resulting in highly
fragmented nature of industry. Also, cotton prices in India are
regulated through fixation of Minimum Support Price (MSP) by the
government. Further, price of raw cotton is highly volatile in
nature and depends upon factors like area under production, yield
for the year.
Seasonal procurement resulting in working capital intensive nature
of operations: Cotton being an agro commodity is seasonal in
nature, where sowing season is normally during March to July
and harvesting season is during November to February every year.
Also the cotton ginners usually have to procure raw cotton in bulk
to bargain better discount from the suppliers. Hence, there is
significant requirement for working capital funds especially
during the peak season towards stocking of inventory.
Key Rating Strengths
Extensive experience of promoters in cotton ginning and pressing
business: Started in 1999, ACI has established track record in
cotton industry. ACI is managed by four partners, Mr Rajeshkumar
Ghodasara, Mr. Ashvin Kasundra and other two partners i.e. Mr.
Kirti Ghodasara and Mr. Piyush Saradava. All are holding healthy
experience in the same line of business.
Proximity to cotton-producing region of Gujarat: Raw cotton is the
key input required for ginning & pressing activities. ACI's plant
is located in the cotton growing region which is the largest
producer of raw cotton in India. Due to its proximity to the
cotton-growing region of Gujarat, raw cotton is readily available
at lower logistic expenditure.
Wankaner, Gujarat-based Anjani Cotton Industries (ACI) was setup
in 1999 as partnership firm and is currently managed by four
partners. The firm is engaged in cotton ginning and pressing
business with 60 ginning and 1 pressing machine. It has installed
capacity of 19,950 Metric Tonne (MT) of cotton bales and 34,900 MT
of cotton seeds as on March 31, 2016 at its sole manufacturing
plant located at Wankaner, Gujarat.
BAMBINO PASTA: Ind-Ra Moves BB Issuer Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Bambino Pasta
Food Industries Private Limited's (BPFIPL) 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 as
follows:
-- INR316.5 mil.Term loan migrated to Non-Cooperating Category
with IND BB(ISSUER NOT COOPERATING) rating;
-- INR200 mil.Fund-based working capital limits migrated to
Non-Cooperating Category with IND BB(ISSUER NOT COOPERATING)/
IND A4+(ISSUER NOT COOPERATING) ratings; and
-- INR30 mil.Non-fund-based working capital limits migrated to
Non-Cooperating Category with IND A4+(ISSUER NOT
COOPERATING)rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
December 30, 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 2000, BPFIPL sells pasta products. The company
changed its name from MLR Industries Private Limited in January
2016. It has a 3,000kg/hour pasta plant at Bibinagar near
Hyderabad, Andhra Pradesh. BPFIPL is promoted by M Kishan Rao and
his son M Subramanyam is the managing director.
BINANI INDUSTRIES: Fights Bain-Backed Plan With $1.1BB Offer
------------------------------------------------------------
Bloomberg News reports that UltraTech Cement Ltd. has signed an
"in-principle" pact with Binani Industries Ltd. to buy its
holdings of a distressed unit as India's largest cement maker
attempts to beat out a Bain-backed consortium, which earlier made
the winning bid in ongoing bankruptcy proceedings.
UltraTech, controlled by billionaire Kumar Mangalam Birla, said it
had agreed to pay 72.7 billion rupees ($1.1 billion) for a 98.43
percent stake in Binani Cement Ltd. "subject to termination of"
the insolvency proceedings that are underway, Bloomberg relates
citing an exchange filing. The Dalmia Bharat Ltd. group, backed by
Bain Capital Credit and Ajay Piramal's Piramal Enterprises Ltd.,
had secured support for a panel of creditors for its resolution
plan last week, the report says.
According to Bloomberg, the latest missive in the fight for
Binani's cement assets will test India's fledgling bankruptcy code
and set a standard for whether counteroffers for a distressed
asset can be considered even after a court-appointed insolvency
professional has closed the bidding process and backed one of the
bidders. The Kolkata bench of the National Company Law Tribunal
will next hear the case on March 22, Bloomberg says.
"If bankers agree to this, they will be jeopardizing the entire
process of IBC as they have many other assets to liquidate,"
Bloomberg quotes Anil Singhvi, chairman of Ican Investment
Advisors Pvt. and former managing director of Ambuja Cements Ltd.,
as saying referring to the new law. "Everyone in hindsight will
think of putting higher bids," said Singhvi, who was part of a
separate bidding consortium for Binani.
India's policy makers are attempting to use its newly-minted
bankruptcy code and courts to resolve about $210 billion in
stressed loans that are weighing on banks and crimping lending
growth, Bloomberg notes. The central bank has directed lenders to
restructure the borrowings of all companies within 180 days of
default or take steps to recover the dues through the insolvency
route.
UltraTech's board has agreed to issue a "letter of comfort" to
Binani Industries, which controls the distressed firm, and this
can be used as support to terminate insolvency proceedings, the
exchange filing, as cited by Bloomberg, said.
"The promoters of Binani Industries can no longer take decisions
on behalf of its subsidiary," Arjun Gupta, a corporate insolvency
lawyer with Nishith Desai Associates said, referring to a local
term for the company's majority owners, Bloomberg relays. Any
direct line of communication between the owners of the defaulting
company and one of the bidders "goes against the spirit and scope
of the code," Gupta said, adding that Dalmia's bid, which has
creditors' approval, should be honored unless set aside in line
with the law.
Bloomberg notes that the disclosure creates uncertainty about the
fate of the Dalmia-led consortium's bid of about 63.5 billion
rupees, including the offer of a 20 percent stake in Binani Cement
to lenders.
Binani Industries Limited engages in the business of logistic
management services and trading in shares and securities. The
Company is engaged in the business of providing logistics
solutions, media, publication services, trading in shares and
securities and trading and export of goods and management support
services. The Company's segments include Zinc & by products,
Cement and Glass Fibre & its Products. Its geographical segments
include India and Out of India. Its Binani Cement is a
manufacturer of cement with a manufacturing capacity of 11.25
million tons per annum with an integrated plant in India and
China, and grinding units in Dubai. The Company's product
portfolio includes Ordinary Portland Cement (OPC), Pozzolona
Portland Cement (PPC) and Ground granulated blast-furnace slag
(GGBFS). Binani Cement has its sales network in India, the United
Arab Emirates, the United Kingdom, Sudan, South Africa, Tanzania
and Namibia.
BSES YAMUNA: Ind-Ra Assigns BB LT Issuer Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned BSES Yamuna Power
Limited (BYPL) a Long-Term Issuer Rating of 'IND BB'. The Outlook
is Stable. The instrument-wise rating actions are as follows:
-- INR5.8 mil.Term loan due on January 2020 assigned with
IND BB/Stable rating;
-- INR2 mil.Fund-based limits assigned with IND BB/Stable/IND
A4+ rating; and
-- INR2.9 mil.Non-fund-based limits assigned with IND
BB/Stable/IND A4+ rating.
KEY RATING DRIVERS
Favorable Regulatory Changes: The ratings factor in the favorable
regulatory order received during August 2017, in which Delhi
Electricity Regulatory Commission (DERC) increased the fixed
charge recovery across consumer categories and allowed higher
operations and maintenance expenses and a window of automatic
power purchase cost adjustment charges, and sharing of savings on
the overachievement of loss targets between consumers and BYPL.
DERC has allowed actual cost of debt to the extent of 14%, unlike
earlier when allowance was to the extent of 10.25%. DERC has also
continued with a regulatory asset (RA) recovery surcharge of 8%.
The positive developments mentioned above would help in improving
the annual revenue requirement and making the current tariff
structure cost reflective. This would lead to the non-creation of
further RAs other than the carrying cost being booked by BYPL on
the existing RAs.
Gross RA Recovery to Continue: Ind-Ra expects the gross RA
recovery to continue in FY18 due to likely better operating
efficiencies (lower transmission and distribution losses,
maintenance of power purchase cost, reallocation of power purchase
agreements resulting in cost savings), continuity of the 8%
regulatory surcharge, volume growth and an increase in tariff.
Ind-Ra expects BYPL's gross margin (net realizations less power
purchase cost) to improve to about INR2.0/kWh at FYE18 from about
INR1.8/kWh at FYE17. On a gross basis, BYPL recovered INR5.7
billion in FY17 (FY16: INR6.1 billion) and is likely to recover
about INR5 billion in FY18, though Ind-Ra expects higher volumes
and higher gross margins. Gross RA recovery will decline due to
higher approved operations and maintenance expenses resulting in
higher approved annual revenue requirement. However, BYPL would
see RA addition on a net basis, as it would continue to book
interest on RAs, which would be higher than the gross RAs
recovered. BYPL's net RAs increased by about INR2 billion in FY17
(FY16: INR1.8 billion) and are likely to increase by the same
amount in FY18. Gross RA recovery could be lower in case of lower-
than-expected volume growth or a higher-than-expected power
purchase cost.
Lower AT&C Losses: BYPL reduced aggregate technical and commercial
(AT&C) losses to 12.7% at FYE17 (FYE16: 15.96%; FYE12: 22.07%)
through improvements in billing, collection, and transmission and
distribution losses, thus reducing the gap between targeted and
actual losses. The reduction helped the company in increasing
sales volume by about 7.7% yoy in FY17, with input volume growth
at 3.9% yoy during the period. Also, the reduction was in line
with the approved level for FY17 by DERC, thus reducing
disallowances. BYPL expects to undertake INR3 billion-4 billion of
capex annually for network upgrade, strengthening and expansion.
In addition, it expects to reduce AT&C losses further to 11.0% by
FYE18.
Large Creditors Outstanding: BYPL prioritized debt repayments over
creditor payments from the operating cash flows. As a result,
BYPL's external borrowings reduced to INR16.5 billion in FY17
(FY16: INR20.9 billion; FY15: INR28.2 billion). On the other hand,
BYPL's creditors outstanding stood at INR66.0 billion at FYE17
(FYE16: INR62.1 billion), including INR20.2 billion (INR14
billion) as late payment surcharge. The majority of creditors are
Delhi government-owned generators and transmission entities and
carry a late payment surcharge. Creditor build-up is likely to
continue in FY18 as BYPL continues to make part payments to Delhi
power generation companies/transmission entities. However, Ind-Ra
expects that with an improvement in cash flows, BYPL would make
complete payments of current bills in FY19. BYPL is looking to
reduce its overdue creditors by using surplus cash flows after
meeting operating expenses. For the incremental capex, BYPL
proposes to borrow to the extent of 70% of the capex.
Lower Approved RA: BYPL booked RAs of INR75 billion at FYE16 and
INR77 billion at FYE17. However, DERC recognized and approved the
recovery of RAs to the tune of INR26.6 billion for FY16. Although
Appellate Tribunal for Electricity has approved nearly INR21
billion of the company's claims, it is yet to be reflected in the
tariffs fully, as DERC has to allow the same in the tariff orders.
In the latest tariff order, DERC has approved an additional RA of
INR4.32 billion from the approved orders. Ind-Ra expects DERC to
recognize the orders over time to protect consumers from any
tariff shock. Most likely, the RA recovery would be gradual
through an RA surcharge and operating cash flows. However, any
disallowance by DERC of the RAs booked would result in lower cash
flows than expected by Ind-Ra available to BYPL in the long term.
BYPL has approached the Supreme Court of India and the matter is
sub judice. The RA build-up was largely attributable to cost
under-recovery during FY12-FY15.
RATING SENSITIVITIES
Negative: A higher-than-expected power purchase cost leading to a
fresh gross RA creation, a lower-than-expected gross RA recovery,
higher-than-expected net adjusted leverage, and/or an unfavorable
settlement through regulatory/legal processes leading to the
worsening of the liquidity profile would be negative for the
ratings.
Positive: A favorable settlement through regulatory/legal
processes leading to a continued recovery of outstanding gross RAs
over a finite period and the non-creation of fresh gross RAs
and/or lower-than-expected net adjusted leverage while improving
the liquidity profile would be positive for the ratings.
COMPANY PROFILE
BYPL was incorporated in July 2001 upon the privatization of
unbundled entities of erstwhile Delhi Vidyut Board. The company's
license area spans 200 square kilometers. The company is 51%-owned
by Reliance Infrastructure Limited ('IND A'/Rating Watch
Evolving), while the balance 49% is owned by the government of
National Capital Territory of Delhi through Delhi Power Company
Ltd.
DABRA AGRO: Ind-Ra Migrates B+ Issuer Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Dabra Agro Pvt.
Ltd.'s (DAPL) Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND B+(ISSUER NOT COOPERATING)' on the agency's
website. The instrument-wise rating actions are as follows.
-- INR112.5 mil.Fund-based limits migrated to Non-Cooperating
Category with IND B+(ISSUER NOT COOPERATING) rating; and
-- INR31.36 mil. Term loan due on December 2021 migrated to Non-
Cooperating CategoryIND B+(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 16, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
DAPL set up a rice processing unit in Dabra, Madhya Pradesh, which
has been operational since FY14. Prior to this, the company was
engaged in the trading of food grains and paddy.
HANUNG TOYS: PNB Drags Firm to Bankruptcy Courts
------------------------------------------------
The Economic Times reports that Punjab National Bank (PNB) is
taking Hanung Toys & Textiles to the bankruptcy courts for unpaid
loans totaling INR2,600 crore.
According to the report, PNB-led consortium of lenders
collectively loaned the amount to the toy maker, which was in debt
restructuring for about INR1,800 crore three years ago.
"The bank has already proposed to depute a Delhi-based resolution
professional for the case and will move NCLT within a week or
two," said one of the two executives aware of the move, the report
relays.
There are about 15 lenders to the company, the report notes.
The Economic Times says the corporate debt restructuring plan
crafted three-years ago failed to take off as Ashok Bansal,
chairman and managing director of the company, could not bring in
his share of equity at INR82 crore. That led to an increase in
outstanding dues to INR2,600 crore.
The report relates that Reserve Bank of India has scrapped all
such debt restructuring schemes, mandating a time-bound resolution
of bad loans failing which the borrower must be taken to the
dedicated insolvency resolution courts.
The company's production units comprise facilities to make toys,
home furnishings and textiles in Roorkee, Bhiwandi and Noida. The
toys manufacturing units were set up in the Noida Special Economic
Zone.
Hanung Toys & Textiles is an NCR-based soft toys and home
furnishing company.
JANTA RICE: ICRA Moves B Rating to Not Cooperating Category
-----------------------------------------------------------
ICRA Ratings has moved the long-term ratings for the bank
facilities of Janta Rice Mills (JRM) to the 'Issuer Not
Cooperating' category. The rating is now denoted as
"[ICRA]B(Stable) ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-Term Fund 9.50 [ICRA]B (Stable) ISSUER NOT
based/Cash COOPERATING; Rating moved to
Credit the 'Issuer Not Cooperating'
Category
Long-Term Fund 2.50 [ICRA]B (Stable) ISSUER NOT
based/Warehousing COOPERATING; Rating moved to
Receipt Finance the 'Issuer Not Cooperating'
Category
Term loan 1.00 [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/dated/
limited 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.
JRM is a partnership firm established in 1978. It is primarily
involved in milling of basmati and non-basmati rice to produce raw
and boiled rice. JRM's milling unit is located in Nissing,
District Karnal, Haryana, in close proximity to the local grain
market. The firm has a milling capacity of 2 tonnes/hour and a
sorting capacity of 4 tonnes/hour.
KBR AGRO: ICRA Moves 'B' Rating to Not Cooperating Category
-----------------------------------------------------------
ICRA Ratings has moved the long-term rating of the bank facilities
of KBR Agro Industries (KBR) 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- 8.00 [ICRA]B (Stable) ISSUER NOT
Cash Credit COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
Fund based- 2.00 [ICRA]B (Stable) ISSUER NOT
Term Loan COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
ICRA has been seeking information from the entity so as to monitor
its performance. Despite repeated requests by ICRA, the entity's
management has remained non-cooperative. The current rating action
has been taken by ICRA on the basis of the best
available/dated/limited information on the issuers' performance.
Accordingly, the lenders, investors and other market participants
are advised to exercise appropriate caution while using this
rating as it may not adequately reflect the credit risk profile of
the entity.
Established in October 2013, KBR is a partnership firm with Mr.
Bhagwan Dass Singla, Mr. Krishan Murari and Mrs Adesh Singla as
partners. The firm is involved in the milling, processing and
trading of Basmati and non-Basmati rice. KBR's plant is located at
Jundla near Karnal (Haryana).
KHEDUT COTEX: ICRA B Rating Remains in Not Cooperating Category
---------------------------------------------------------------
ICRA Ratings said the rating of INR8.77 crore bank facilities of
Khedut Cotex Pvt. Ltd. (KCPL) continues to remain under 'Issuer
Not Cooperating' category. The rating is now denoted as
"[ICRA]B(stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 6.00 [ICRA]B (stable); ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Fund based- 2.77 [ICRA]B (stable); ISSUER NOT
Term Loan COOPERATING; Rating continues
to remain under '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 2015 as a private limited company, Khedut Cotex
Private Limited (KCPL) is engaged in ginning and pressing of raw
cotton. The company's manufacturing unit, located at Jafrabad,
Amreli, is equipped with 48 ginning machines and 1 pressing
machine with an intake capacity of 216 MT per day (considering 22
hours of operations per day). The commercial operations commenced
in February 2016. The promoters have extensive experience in
cotton industry.
MS ENGINEERING: ICRA Keeps B+ Rating in Not Cooperating Category
----------------------------------------------------------------
ICRA Ratings said the long-term rating for the INR6.50 crore cash-
credit facility of M/S. M. S. Engineering continues to remain
under 'Issuer Not Cooperating' category. The rating is now denoted
as "[ICRA]B+(Stable) ISSUER NOT COOPERATING". ICRA had earlier
moved the rating of MSE to the 'ISSUER NOT COOPERATING' category
due to non-submission of monthly 'No Default Statement' ("NDS") by
the entity.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 6.50 [ICRA]B+ (Stable) ISSUER NOT
Cash Credit COOPERATING; Rating continues
to remain under '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/dated/
limited 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.
Established in 1984 as a partnership firm, M/S. M. S. Engineering
(MSE) is promoted and managed by Mr. Debabrata Das and Mr.
Satyabrata Das. MSE construct, repairs and maintains roads and
bridges. The firm undertakes projects for Government departments
like the Public Works Department (PWD) and the Pradhan Mantri Gram
Sadak Yojana (PMGSY) of West Bengal and companies like Indian Oil
Corporation Limited, Haldia Petrochemicals Limited etc. It is
recognised as a Class-I Government contractor by the government
departments in West Bengal.
MAHADEVI SILK: CARE Assigns B+ Rating to INR10cr LT Loan
--------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Mahadevi Silk and Sarees, Textiles and Garments (MSSTG), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facility 10.00 CARE B+: Stable Assigned
Detailed Rationale& Key Rating Drivers
The rating assigned to the bank facilities of MSSTG is tempered by
short track record and small scale of operations, leveraged
capital structure and weak debt coverage indicators, working
capital intensive nature of operations, highly fragmented industry
with intense competition from large number of players and
constitution of entity as a partnership firm with inherent risk of
withdrawal of capital. The rating, however, derive benefit from
experienced partners, satisfactory profitability margins and
stable outlook for textile retail business. Going forward, ability
of the firm to increase its scale of operations, improve its
profitability margins in competitive environment and improve its
capital structure and debt coverage indicators while managing its
working capital efficiently are the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Short track record and small scale of operations: The firm has a
track record of close to two years since the firm was established
in 2016. However, the firm started its commercial operations
during February 2017. However, the total operating income (TOI) in
the two months of operations stood at INR2.89 crore in FY17 with
satisfactory net worth of INR3.85 crore as on March 31, 2017 as
compared to other peers in the industry.
Leveraged capital structure and weak debt coverage indicators: The
capital structure of the firm marked by debt equity and overall
gearing ratio remained leveraged at 2.50x and 3.26x respectively
as on March 31, 2017 due to debt funded capital expenditure and
utilization of working capital to manage business operations. The
debt profile of the firm as on March 31, 2017 includes term loans
(48%), working capital bank borrowings (23%) and unsecured loans
(23%) to meet working capital requirements. The debt coverage
indicators of the firm marked by total debt/GCA and interest
coverage remained weak at 408.04x and 1.23x respectively as on
March 31, 2017 due to low cash accruals coupled with low operating
profit.
Working capital intensive nature of operations: The operations of
the firm are working capital intensive since the firm is engaged
in the retailing of textiles and readymade garments. The firm
normally holds more inventories in hand up to 3-4 months in order
to meet customer demand on time. Furthermore, the firm makes the
payment to its suppliers within 30 days due to low bargaining
power and receives the payment from its on cash basis like through
cheque and card payments. The average utilization of working
capital limit for the last 12 month ended i.e.,
January 31, 2017 was around 95 per cent.
Highly fragmented industry with intense competition from large
number of player: Indian Textile Industry is highly fragmented in
nature with several organized and unorganized players. High
dependence on cotton sector, Lower productivity, Unfavorable Labor
overcome. The biggest challenge facing the Indian textile industry
is competition from the other low cost neighboring countries which
attract more business from the international market because of
lower production costs, ease in doing business and easier trade
routes, according to an industry expert.
Constitution of the entity as a partnership firm with inherent
risk of withdrawal of capital: MSSTG, being a partnership firm, is
exposed to inherent risk of the partner's capital being withdrawn
at time of personal contingency and firm being dissolved upon the
death/retirement/insolvency of the partners. Moreover, partnership
firm business has restricted avenues to raise capital which could
prove a hindrance to its growth.
Key Rating Strengths
Experienced partners: MSSTG was promoted by Mr. Santosh G. Shet
and his family members. Mr. Santosh G. Shet is a B.A. qualified
graduate. He is the Managing Partner of the firm who takes care of
day to day operations. All the other partners Ms. Surekha G. Shet,
Mr. Ganesh G. Shet and Ms. Vidya M. Shet are qualified graduates.
Although they have limited experience in the textile industry
around close to two years since inception of the firm, they have
more than one decade of experience in the Jewellery industy. The
operations of the firm are also supported by experienced executive
team. Through their experience in the industry, they have
established healthy relationship with suppliers and of clients.
Satisfactory profitability margins: The profitability margins of
the firm marked by PBILDT and PAT margins remained satisfactory at
9.06% and 1.06% respectively due to higher margin clothes and
garments sold resulted in absorption of financial expenses and
depreciation provisions.
Stable outlook of retail textile business: Indian retail industry
has emerged as one of the most dynamic and fast-paced industries
due to the entry of several new players. It accounts for over 10
per cent of the country's Gross Domestic Product (GDP) and around
8 per cent of the employment. India is the world's fifth-largest
global destination in the retail space.
Indian retails industry has immense potential as India has the
second largest population with affluent middle class, rapid
urbanization and solid growth of internet.
India's retail market is expected to increase by 60 per cent to
reach US$ 1.1 trillion by 2020, on the back of factors like
rising incomes and life style changes by middle class and
increased digital connectivity. While the overall retail market is
expected to grow at 12 per cent per annum, modern trade would
expand twice as fast at 20 per cent per annum and traditional
trade at 10 per cent.
Karnataka based Mahadevi Silk and Sarees Textile and Garments
(MSSTG) was established in 2016 and started its commercial
operations from February 2017. MSSTG was promoted by Mr. Santosh
G. Shet and their family members. The firm is mainly engaged in
trading of textile and readymade garments. The firm purchases
Fabric and Readymade garments from the suppliers located in
Karnataka, Tamil Nadu, Mumbai, Ahmadabad, Varanasi, Gujarat and
Kolkata and sells the products to retail customers located in
Hubli. The firm owns their shopping mall in the name of "Mahadevi
Silk and Sarees, Textile and Garments" in the Hubli, Karnataka.
MAHAKALI CHANDRAPUR: ICRA Cuts Rating on INR5.61cr Loan to D
------------------------------------------------------------
ICRA Ratings has downgraded the long-term and short-term ratings
assigned to the INR10.00 crore bank limits of Mahakali Chandrapur
Polytex Private Limited from [ICRA]C and [ICRA]A4 to [ICRA]D.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 5.61 [ICRA]D; Downgraded from
[ICRA]C
Unallocated limit 4.39 [ICRA]D; Downgraded from
[ICRA]C/[ICRA]A4
Rationale
The downgrade of ratings takes into consideration the delay in
debt servicing in the past six months due to the company's
deteriorating liquidity position. The ratings also consider the
weak financial profile of the company, which is characterised by
thin profitability, weak debt protection metrics and leveraged
capital structure. ICRA also notes MCPL's high sectoral
concentration risk, since almost the entire revenue is generated
from the cement industry. The ratings also take into account the
highly fragmented nature of the packaging industry, characterised
by a large number of players, limited product differentiation,
which in turn leads to intense competition and keeps margins under
check. The ratings are also constrained by the vulnerability of
MCPL's profitability to adverse fluctuations in raw material
prices which are subject to volatility in crude oil prices.
However, the ratings continue to favorably factor in the extensive
experience of the promoters in the cement industry and its reputed
client profile, which minimises counter-party risks to an extent.
Key rating drivers
Credit strengths
* Experienced promoters and key management personnel with a long
track record: MCPPL's promoters, Mr. Madhusudan Rungta and Mr.
Ravindra Jain have been associated with the cement industry for
over two decades. Their extensive experience has helped the
company forge strong ties with its customers, which are majorly
cement manufacturers.
* Reputed client base; repeat orders from them: MCPPL's client
profile includes reputed names like Ambuja Cements, Ultratech
Cement, ACC Limited, which minimises counter-party risks to a
large extent. Proximity of MCPPL's plant to the client's
facilities have resulted in repeat orders in the last three years.
Credit challenges
* Delay in debt servicing in the last six months: The term loan
repayment has been irregular with delays in the last six months,
due to deterioration in the company's liquidity position, arising
out of low accruals and full utilisation of its working capital
facility from bank of INR2.00 crore.
* Stretched financial risk profile characterised by thin
profitability, weak debt protection metrics and leveraged capital
structure: Owing to a low net-worth base, the company funds its
working capital requirements largely by availing external
borrowings, resulting in a TOL/TNW of 109.32 times as on
March 31, 2017. Consequently, MCPPL's capital structure remained
highly leveraged with the gearing at 87.81 times as on March 31,
2017. Furthermore, the company's profitability remained thin,
leading to weak debt protection metrics as indicated by Total
Debt/OPBDITA of 5.13 times as on March 31, 2017.
* High sectoral concentration risks arising from revenues
generated mainly from the cement industry: The client base of the
company primarily comprises cement manufacturing companies against
whom MCPL has limited pricing flexibility. It also exposes the
company to high sectoral concentration risks.
* Profitability susceptible to movements in the prices of raw
materials, which are crude oil derivatives: The prices of the
company's key raw material, poly propylene (PP) granules are
derived from the volatile crude oil prices. Since the company
procures inventory in anticipation of demand, its margins remain
vulnerable to raw material price volatility.
* High level of competition among domestic and international
players due to high fragmentation and limited entry barriers in
the woven sacks industry: The Indian woven fabric industry is
characterised by high fragmentation and competitive intensity,
mainly because of many small and medium scale players owing to the
low capital intensity and technical complexity. This results in
intense competition and pricing pressures, leading to moderate
profitability for the companies operating in this industry.
Mahakali Chandrapur Polytex Private Limited was incorporated in
2013 and started its operations from FY2015. The company has its
registered office and manufacturing facility in Chandrapur
(Maharashtra). It manufactures High Density Polyethylene
(HDPE)/Poly Propylene (PP) multi color fabric and woven sacks
(non-laminated). The key products include PP Woven sacks, PP Woven
Fabric, Industrial woven fabric, PP Woven valve type bags, PP
woven gusseted bags. The company has an installed capacity of 3000
MTPA per annum to manufacture HDPE/PP woven fabric. The PP and
HDPE woven fabric rolls range between 40 GSM to 120 GSM (grams per
square meter)3. MCPL primarily caters to various players in the
cement industry which includes reputed names like Ambuja Cement
Limited, Ultratech Cement Limited.
MDA MINERAL: Ind-Ra Assigns BB- Rating to INR50MM Limits
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned MDA Mineral Dhatu
(AP) Private Limited (MDA) a Long-Term Issuer Rating of 'IND BB-'.
The Outlook is Stable. The instrument-wise rating action is given
below:
-- INR50 mil.Fund-based limits assigned with IND BB-/Stable/
IND A4+ rating.
KEY RATING DRIVERS
The ratings reflect MDA's small scale of operations due to a short
operating record and presence in the highly cyclical Ferro-alloy
industry. Revenue declined to INR406 million in FY17 (FY16: INR459
million) owing to a lower number of orders received and executed.
The ratings also reflect the company's weak metrics because of
high debt levels, although the operations turned profitable in
FY17. EBITDA margins increased to 12.8% in FY17 (FY16: negative
3.6%) because of higher sales realization/ton, resulting in net
financial leverage (adjusted net debt/operating EBITDAR) reducing
to 5.1x (negative 15.6x) and gross interest coverage (operating
EBITDA/gross interest expense) increasing to 6.4x (negative 1.5x).
Ind-Ra expects the profitability to reduce to 7%-8% in the near
term with higher input costs, thus impacting the credit metrics.
However, the negative likely impact has already been factored into
the ratings.
The ratings are constrained by customer concentration risk as over
70% of the revenue comes from a single customer.
However, the ratings are supported by the company's comfortable
liquidity position as reflected by around 11% of average maximum
utilization of the working capital limits during the 12 months
ended February 2018.
The ratings are also supported by the company's promoter's over 10
years of experience in the Ferro-alloy and steel sectors.
RATING SENSITIVITIES
Positive: A substantial improvement in the revenue, EBITDA margins
and thus overall credit metrics will be positive for the ratings.
Negative: Any decline in the revenue, profitability and thus
overall credit metrics will be negative for the ratings.
COMPANY PROFILE
MDA was incorporated in May 2010. The company started its
commercial operations from August 2013. It has a 6MVA (5MW) Ferro-
alloy electric furnace unit in Vizianagaram, Andhra Pradesh. The
company is a manufacturer of high carbon Ferro manganese, Ferro
silicon and silicon manganese.
MK ROY: Ind-Ra Affirms BB LT Issuer Rating, Outlook Stable
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed M.K. Roy & Bros
Projects Private Limited's (MKRBPL) Long-Term Issuer Rating at
'IND BB'. The Outlook is Stable. The instrument-wise rating
actions are as follows:
-- INR81.5 mil.Fund-based working capital limit affirmed with
IND BB/Stable rating; and
-- INR75 mil.Non-fund-based working capital limit affirmed with
IND A4+ rating.
KEY RATING DRIVERS
The affirmation reflects MKRBPL's continued small scale of
operations and modest credit metrics on account of limited
counterparties. In FY17, revenue grew marginally to INR459.08
million (FY16: INR441.93 million) owing to higher order execution.
EBITDA margin expanded to 9.7% in FY17 (FY16: 8.8%) on the back of
higher margin ordered, and lower selling distribution and other
expenses. As of January 2018, the company achieved revenue of
INR379.6 million and had an order book of INR1,577 million to be
completed by FY19.
Interest coverage (operating EBITDA/gross interest expense)
improved to 3.8x in FY17 (FY16: 2.7x) on account of an increase in
absolute EBITDA and lower interest expense. Despite the
improvement in the absolute EBITDA, net financial leverage (total
adjusted debt/operating EBITDAR) deteriorated to 2.1x in FY17
(FY16: 1.8x) due to an increase in total debt to fund working
capital and capex requirement.
The ratings are further constrained by the company's tight
liquidity profile as reflected by 95% average utilization of the
working capital limits during the 12 months ended February 2018.
However, the ratings remain supported by the promoters' three
decades of experience in the fabrication and construction of
petroleum products' storage facilities and the company's
established clientele, which includes large public sector
undertakings such as Indian Oil Corporation Limited ('IND
AAA'/Stable) and Hindustan Petroleum Corporation Limited ('IND
AAA'/Stable).
RATING SENSITIVITIES
Positive: A positive rating action may result from a substantial
improvement in the scale of operations resulting from timely
execution of contracts along with maintaining the credit metrics.
Negative: A negative rating action may result from a decline in
the scale of operations along with deterioration in the credit
metrics.
COMPANY PROFILE
MKRBPL was established as a proprietorship firm M K Roy & Bros by
Mr. Mihir Kumar Roy in 1983. In 1994, the entity was converted
into a partnership firm and in 2000 was converted into a private
limited company. The company is engaged in the supply,
fabrication, erection, welding, testing and commissioning of mild
steel high pressure petroleum, and edible oil storage tanks and
pipelines used for the storage and distribution of petroleum
products, mainly petrol and diesel.
NARENDRA EMPORIS: ICRA Keeps B+ Rating in Not Cooperating Cat.
--------------------------------------------------------------
ICRA Ratings said the ratings of INR15.00 crore bank facilities of
Narendra Emporis limited (erstwhile Narendra Cotton Ginning &
Pressing Company Private Limited) (NEL) continue to remain under
'Issuer Not Cooperating' category. The rating is now denoted as
"[ICRA]B+ (Stable) / A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Line of Credit 15.00 [ICRA]B+ (Stable); ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Cash Credit (15.00) [ICRA]B+ (Stable); ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Packing Credit (10.00) [ICRA]A4; ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Inland/Foreign (3.50) [ICRA]A4; ISSUER NOT
Letter of Credit COOPERATING; Rating continues
to remain under '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/dated/limited 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.
Narendra Emporis Limited (NEL) (erstwhile, Narendra Cotton Ginning
& Pressing Company Private Limited) was incorporated in 1997. The
company was initially set up as a ginning and pressing unit for
processing raw cotton into bales. Later in 2007-08, the company
undertook expansion through forward integration into spinning of
yarn (open ended), equipped with six spinning machines with 1,728
rotors. From FY2015, the company also diversified into ring spun
carded cotton yarn manufacturing with installation of 13 spinning
machines and three attachments with 16,704 spindles. The
manufacturing unit of the company is located at Rajkot, which is
in proximity to cotton growing farmers, resulting in easy access
to raw material.
NILSHIKHAA INFRAA: Ind-Ra Affirms BB+ LT Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Nilshikhaa Infraa
India Limited's (NIIL) Long-Term Issuer Rating at 'IND BB+'. The
Outlook is Stable. The instruments-wise rating actions are as
follows:
-- INR50 mil. (increased from INR40 mil.)Fund-based limits
affirmed with IND BB+/Stable rating; and
-- INR340 mil. (increased from INR250 mil.)Non-fund-based limits
affirmed with IND A4+ rating.
KEY RATING DRIVERS
The affirmation reflects NIIL's continued modest scale of
operations as indicated by revenue of INR913 million in FY17
(FY16: INR817 million). The growth in revenue was on account of
higher order execution. As of March 2018, the company had an order
book of INR949.7 million to be executed by FY19. EBITDA margin
expanded to 5.2% in FY17 (FY16: 4.9%) owing to a decrease in raw
material procurement cost.
The ratings are also constrained by the company's tight liquidity
position as reflected by 96% average maximum utilization of its
working capital limits during the 12 months ended February 2018.
However, the ratings remain supported by NIIL's comfortable credit
metrics despite the deterioration in interest coverage (operating
EBITDA/gross interest expense) to 2.47x (FY16: 7.55x) and net
leverage (total adjusted net debt/operating EBITDAR) to 1.5x
(0.6x). The deterioration in the credit metrics was owing to a
rise in debt for funding the company's higher working capital
requirement.
RATING SENSITIVITIES
Negative: Deterioration in the scale of operations along with
deterioration in the liquidity profile may lead to a negative
rating action.
Positive: Improvement in the scale of operations while maintaining
the credit metrics will lead to a positive rating action.
COMPANY PROFILE
Incorporated in 2013 as a partnership firm, NIIL was converted
into a closely held limited company in 2016. The company
undertakes engineering, procurement and construction contracts for
rural electrification. Its registered office is situated in
Indore, Madhya Pradesh. Arvind Kumar Tripathi, G.P Sahoo, Jagdish
Kumar and Shivananda are the promoters.
PERFECT METACRAFT: ICRA Keeps B in Not Cooperating Category
-----------------------------------------------------------
ICRA Ratings said the ratings of INR20.35 crore bank facilities of
Perfect Metacraft LLP (PML) continue to remain under 'Issuer Not
Cooperating' category. The rating is now denoted as "[ICRA]B
(Stable) / A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 5.00 [ICRA]B (Stable); ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Term Loan 15.35 [ICRA]B (Stable); ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Letter of Credit (8.25) [ICRA]A4; ISSUER NOT
COOPERATING; Rating continues
to remain under '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/dated/limited 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.
Established in August 2013, Perfect Metacraft LLP (PML) is setting
up a green field project to manufacture sanitary ware and door
hardware products. . Presently, the manufacturing facility is
undergoing land levelling process and the expected month of
commencement of commercial operation is July 2017. The firm has a
proposed installed capacity of 43,00,000 units of products per
annum. The firm is promoted by the Shah family who is also engaged
in manufacturing of bicycle tube valves, faucets, faucet handles
and door locks business which pertains to the same line of
business as the proposed project. Partners are associated with
Perfect Industries, Perfect Auto Industries, A.K. Industries and
Perfect Metacraft.
RADHEGOVINDKRIPA DEV: CARE Cuts Rating on INR61.57cr Loan to D
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Radhegovindkripa Developers Private Limited (RDPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 61.57 CARE D Revised from CARE BB;
Facilities Stable
Rating Rationale
The revision in the rating assigned to the bank facilities of RDPL
is primarily on account of on-going delays in debt servicing owing
to its stressed liquidity position.
Detailed description of key rating drivers
Key Rating Weaknesses
Delays in debt servicing: The company has been irregular in
servicing its debt obligations due to its stressed liquidity
position. The company has completed its hotel project and
commenced operations from October 29, 2016. The company has not
been able to generate adequate cash accruals to repay its debt
obligations.
RDPL has developed 135 rooms luxury resort property which is being
marketed by USA based Marriott International under the brand of
"Jaisalmer Marriott Resort and Spa". The hotel has 1 indoor
restaurant, a roof top restaurant, 3 event rooms for business
meetings/conferences and modern facilities including a swimming
pool, a gymnasium, spa, conferencing facilities, kids club and
extensive parking space. The hotel commenced partial operations
(90 rooms) of hotel property from October 29, 2016 and full
operations from November 10, 2016.
RANGE CERAMIC: ICRA Keeps B Rating in Not Cooperating Category
--------------------------------------------------------------
ICRA Ratings said the ratings of INR17.35 crore bank facilities of
Range Ceramic Private Limited (RCPL) continue to remain under
'Issuer Not Cooperating' category. The rating is now denoted as
"[ICRA]B (Stable)/[ICRA]A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 6.00 [ICRA]B (Stable); ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Term Loan 8.95 [ICRA]B (Stable); ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Bank Guarantee 2.40 [ICRA]A4; ISSUER NOT
COOPERATING; Rating continues
to remain under '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/dated/limited 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 2013, Range Ceramic Private Limited (RCPL) is
engaged in manufacturing of digitally printed wall tiles of three
sizes 12"x12", 12"x24" and 12"x36" with the current set of
machineries and production facilities. The manufacturing plant of
the company is located in Morbi, Gujarat. The plant has an
installed capacity of 45,000 MTPA of digitally printed ceramic
glazed tiles.
RV REALTY: CARE Migrates D Rating to Not Cooperating Category
-------------------------------------------------------------
CARE has been seeking information from RV Realty to monitor the
rating vide e-mail communications/letters dated February 1, 2018,
January 9, 2018, January 5, 2018 and numerous phone calls.
However, despite CARE's repeated requests, the entity has not
provided the requisite information for monitoring the rating. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the publicly available information which however,
in CARE's opinion is not sufficient to arrive at a fair rating..
The ratings of RV Realty bank facilities will now be denoted as
CARE D; ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 9.50 CARE D; Issuer not cooperating,
Facilities 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.
The rating assigned to the bank facilities of RV Realty (RVR) take
in to account the delay in servicing of debt obligations by the
firm.
Detailed description of the key rating drivers
At the time of last rating on July 12, 2017 the following were the
rating weaknesses
Key Rating Weakness
Delay in debt servicing obligations: As per the interaction with
the banker, the account has been classified as NPA on account of
overdrawals in cash credit facility and delay in repayment of
interest obligation.
RV Realty is a special purpose vehicle (SPV) formed as a
partnership entity between the Pune based Vastushodh Group and the
Pune based Reelicon Group. The Reelicon group is a Pune based real
estate engaged mainly in the construction of residential projects.
The firm was promoted by 3 entrepreneurs in 1998, Mr. Anil
Salunke, Mr. Milind Jadhav and Mr. Dhananjay Nimbalkar each having
15 years of experience.
SESHSAYI FOODS: Ind-Ra Migrates BB+ LT Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Seshsayi Foods
Pvt Ltd.'s (Seshsayi) 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 as follows:
-- INR300 mil.Fund-based working capital limits migrated to
Non-Cooperating Category with IND BB+(ISSUER NOT COOPERATING)
/IND A4+(ISSUER NOT COOPERATING) ratings;
-- INR171.1 mil. Term loan due on February 2017-February 2022
Migrated to Non-Cooperating Category with IND BB+(ISSUER NOT
COOPERATING ) rating; and
-- INR7.8 mil.Non-fund-based working capital limits migrated to
Non-Cooperating Category with IND A4+(ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 6, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1981, Seshsayi is promoted by M Kishan Rao. The
company has a 35 tons per day vermicelli manufacturing unit in
Bhandara, Maharashtra and a 300 tons per day wheat flour mill in
Indore, Madhya Pradesh. Seshsayi sells its products under the
Bambino brand.
SHREE GANESH: ICRA Removes B Rating From Not Cooperating Category
-----------------------------------------------------------------
ICRA Ratings has reaffirmed the long-term rating of [ICRA]B to the
INR11.30 crore (enhanced from INR8.00 crore) fund-based facilities
of Shree Ganesh Cotton Industries-Rajkot. The outlook on the long-
term rating is Stable. ICRA has also removed the rating from
Issuer not cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 1.27 [ICRA]B(Stable); Reaffirmed,
Term Loan Removed from 'issuer Non-
cooperating' category
Fund based- 10.00 [ICRA]B(Stable); Reaffirmed,
Cash Credit Removed from 'issuer Non-
cooperating' category
Unallocated 0.03 [ICRA]B(Stable); Reaffirmed,
Removed from 'issuer Non-
cooperating' category
Rationale
The rating reaffirmation continues to remain constrained by weak
financial profile characterised by very thin profitability, high
working capital and weak coverage indicators. The rating also
factors in the vulnerability of the firm's profitability to any
fluctuations in raw material prices in the inherently low value-
added ginning business and further remained constrained by stiff
competition due to fragmented industry structure with presence of
numerous small and unorganised players, which pressurises the
margins. ICRA also notes the potential adverse impact on the net
worth and the gearing levels in case of substantial withdrawal
from capital accounts.
The assigned rating however, continues to favourably factor in the
extensive experience of the partners in the cotton industry and
proximity of the firm's manufacturing plant to raw materials,
easing procurement.
Outlook: Stable
ICRA believes SGCI will continue to benefit from the past
experience of its partners in the cotton industry. The outlook may
be revised to 'Positive' if firm achieves substantial improvement
in profitability indicators or stable capital structure or better
working capital management that strengthens the overall financial
risk profile. The outlook may be revised to 'Negative' if firm
reports substantial de-growth in scale and profitability leading
to inadequate net cash accruals to repay the debt obligations or
any debt funded capital expenditure or capital withdrawal leading
to deterioration in capital structure which may weaken the overall
liquidity position of the firm.
Key rating drivers
Credit strengths
Experience of partner in the cotton industry: SGCI was established
in 2015 by the partners having extensive experience through their
association in other entity in the cotton business.
Location specific advantage: The firm benefits in terms of lower
transportation cost and easy access to quality raw material, due
to its proximity to raw material suppliers.
Credit challenges
Weak financial risk profile: The operating income of the firm
witnessed a de-growth of ~5% in FY2017 to INR99.95 crore from
INR105.25 crore in FY2016 due to decline in sales volume. The
profitability margins continued to remain thin at 1.44% at
operating level and 0.44% at net level in FY2017 due to low value
added nature of business and high interest cost respectively. The
total debt increased from INR6.15 crore as on March 31, 2016 to
INR10.36 crore as on March 31, 2017 due to high working capital
requirement. The firm witnessed infusion of capital to the tune of
INR4.40 crore in FY2017 which led to improvement in gearing to
0.77 times as on March 31, 2017 as compared to 4.23 times as on
March 31, 2016. The coverage indicators continued to remain weak
with TD/OPBDIT of 4.28 times and DSCR of 1.63 times in FY2017.
Though working capital intensity stood moderate at 11% in FY2017,
the inventory holding and payables increased in FY2017 as compared
to FY2016.
Profitability remains vulnerable to agro-climatic condition and
regulatory changes: The cotton ginning business is low value
additive in nature and the profit margins are also exposed to
fluctuations in the raw material (raw cotton) prices, which depend
upon various factors like seasonality, climatic conditions,
international demand and supply situation, export policy, etc.
Further, it is also exposed to the regulatory risks with regards
to the Minimum Support Price (MSP), which is set by the
Government.
Intense competition and fragmented industry: The firm faces stiff
competition from other small and unorganised players in the
industry, which limits its bargaining power with customers and
suppliers and hence, exerts pressure on its margins.
Adverse impact on net-worth: SGCI, being a partnership firm, is
exposed to adverse capital structure risk in case of substantial
withdrawal from its capital accounts.
Established in 2015, Shree Ganesh Cotton Industries- Rajkot is
involved in the business of raw cotton ginning and pressing to
produce cotton bales and cotton seeds and also cottonseed crushing
to produce cottonseed oil and cottonseed oilcake. The
manufacturing facility, located at Rajkot in Gujarat, is equipped
with 36 ginning machines and one pressing machine with an
installed capacity of 180 bales per day. The firm also has 8
expellers for carrying out the crushing activities. The partners
of the firm have extensive experience in the cotton industry
through their association with companies in the similar line of
business.
SHREE SECO: CARE Hikes Rating on INR0.72cr LT Loan to B-
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Shree Seco Private Limited (SSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 0.72 CARE B-; Stable Revised from
Facilities CARE C
Long-term/Short 6.50 CARE B-; Stable/ CARE A4
term Bank Long term rating revised from
Facilities CARE C; Stable and Short term
Rating reaffirmed
Detailed Rationale & Key rating Drivers
The revision in the long-term rating of Shree Seco Private Limited
(SSPL) takes into account improvement in scale of operations with
registering of net profit and positive GCA in 9MFY18. The ratings,
however, continue to remain constrained due to negative net-worth
base, stressed liquidity position, susceptibility of profit to
volatile raw material prices and intense competition in the
fragmented edible oil industry coupled with seasonal nature of
operations.
The ratings, however, continue to factor in the wide experience of
the promoters with established track record of operations of
around two decades in edible oil business and proximity to raw
material source. Improvement in the overall financial risk
profile in light of the competitive nature of industry is the key
rating sensitivity.
Detailed description of the key rating drivers
Key Rating Weakness
Improvement in Total Operating Income as well as registering of
net profit and cash profit in 9MFY18: During FY17, TOI of the firm
has significantly declined over FY16 and stood modest at INR44.97
crore. Further, it continued to incur net loss and cash losses in
last three financial year ended FY17. However, as per provisional
result of 9MFY18, it has registered TOI of INR53.82 crore with net
profit and cash profit of INR 0.11 crore and 0.54 crore
respectively.
Negative net-worth base, weak solvency position and stressed
liquidity position: Due to continuous net loss in last four
financial years ended FY17, the net-worth base of the company
eroded and remain negative as on March 31, 2017. Due to negative
net-worth base as well as continuous cash losses, the solvency
position stood weak. Further, the liquidity position of the
company remained stressed as reflected by low current ratio at
0.65 times as on March 31, 2017 and full utilization of working
capital bank borrowings.
High fragmentation and competition among domestic participants due
to low entry barriers within edible oils and threat from cheap
imports: The Indian edible oil industry is highly fragmented with
large number of players operating in organized and unorganized
market attributable to low entry barriers such as low capital and
low technical requirements of the business and a liberal policy
regime (SSI reservation for traditional oilseeds (only solvent
extraction) and sales tax incentives by various state
governments).
Seasonal nature of operations with easy availability of close
substitutes: SSPL uses mustard seeds as well as cakes as the key
raw material for the extraction process, which are agricultural
commodity, prices to a certain extent are affected by various
factors like monsoon during the year, area under cultivation,
global pricing scenario (linked to global demand supply) and
government policies leading to volatility in the same.
Key Rating Strengths
Wide experience of the promoters in the edible oil extraction
industry: Mr Saroj Khemka, key promoter, has an experience of
around two decades in the mustard oil business. Prior to edible
oil business, he was associated with the manufacturing of tin
containers in SSPL.
Jaipur (Rajasthan) based Shree Seco Private Limited (SSPL),
formerly known as Shree Containers Private Limited, was
incorporated in 1971 by Mr Saroj Khemka and Mr Ramesh Khemka. SSPL
is mainly engaged in the extraction and refining of mustard oil
from mustard/rapeseed seeds at its manufacturing facility located
at Jaipur. Further, the company also manufactures tin containers,
which is used for captive consumption. SSPL sells edible oil under
the brand name Mangal and Tulsi in the retail market.
SIDDHRAJ INFRABUILD: ICRA Keeps B in Not Cooperating Category
-------------------------------------------------------------
ICRA Ratings said the ratings of INR6.82 crore bank facilities of
Siddhraj Infrabuild Pvt. Ltd. (SIPL) continue to remain under
'Issuer Not Cooperating' category. The rating is now denoted as
"[ICRA]B (Stable) / A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Overdraft 2.50 [ICRA]B (Stable); ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Term Loan 3.00 [ICRA]B (Stable); ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Bank Guarantee 1.32 [ICRA]A4; ISSUER NOT
COOPERATING; Rating continues
to remain under '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/dated/limited 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 July 2012, Siddhraj Infrabuild Pvt. Ltd. (SIPL) is
promoted and managed by Mr. Raju Odedara. The company is involved
in earthwork-related activities, which include excavation work,
supply of sand and laying pipelines. The company has been awarded
"Class B" category contractor status. Earlier in 2003, a
partnership firm was established in the name of "Raj Construction"
wherein the business related to material handling as well as earth
work-related activities were carried out. However, later in 2012
this partnership firm was merged in the newly incorporated company
i.e. SIPL. The company is based out of Ranavav in the Porbandar
district of Gujarat.
The promoter i.e. Mr. Raju Odedara has over 20 years of experience
in this line of business through his association with three other
group concerns - namely Raj Transport, Krishna Service and Jayraj
Enterprise which are also involved in earthwork-related business.
All of these are partnership firms wherein Mr. Raju Odedara is a
partner.
SIXTH ENERGY: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Sixth Energy
Technologies Private Limited's (SETPL) Long-Term Issuer Rating at
'IND BB+'. The Outlook is Stable. The instrument-wise rating
actions are:
-- INR60 mil.Fund-based working capital limits affirmed with
IND BB+/Stable rating; and
-- INR39 mil.Packing credit affirmed with IND BB+/Stable rating.
KEY RATING DRIVERS
The affirmation reflects SETPL's continued small scale of
operations, modest credit metrics and working capital intensive
nature of business due to growing competition in remote management
solutions. Revenue declined to INR254 million in FY17 (FY16:
INR305 million) on account of lower orders from the banking sector
owing to the government's November 2016 demonetization drive.
SETPL recorded 9MFY18 revenue of INR117 million. As of February
2018, the company had INR100 million orders in hand, to be
executed by end-March 2018.
EBITDA margins remained volatile at 15.0%-19.9% over FY14-FY17 on
account of the nature of the orders. EBITDA margins improved to
16.9% in FY17 (FY16: 15.7%) due to an increase in high margin
orders. Despite the increase in the margins, interest coverage
(operating EBITDA/gross interest expense) deteriorated to 3.9x in
FY17 (FY16: 5.7x) and financial leverage (total adjusted
debt/operating EBITDAR) to 2.3x (2.1x) owing to the decline in the
revenue.
The ratings also remain constrained by SETPL's tight liquidity
position with 95.2% average utilization of its fund-based limits
during the 12 months ended February 2018. Net working capital
cycle remained elongated, although improved to 267 days in FY17
(FY16: 279 days) due to a decrease in debtor days to 114 days (144
days). Inventory holding period increased to 167 days in FY17
(FY16: 150 days) owing to time taken for executing telecom-related
projects, as well as high inventory of semi-finished materials
resulting from a long gestation period for the confirmation of
orders from the date of installation of the equipment.
However, the ratings remain supported by the directors' over a
decade-long experience in the field of machine data technology.
RATING SENSITIVITIES
Positive: A substantial increase in the revenue while maintaining
the operating profitability and credit metrics could be positive
for the ratings.
Negative: A decline in the operating profitability or a further
elongation of the net working capital cycle, leading to
deterioration in the credit metrics could be negative for the
ratings.
COMPANY PROFILE
Incorporated in 2003, Bangalore-based SETPL provides end-to-end
remote management solution for data centers, businesses, banks and
telecom sectors, and enterprise infrastructures. The company
remotely monitors and manages power and cooling equipment in the
telecom towers (base station controller, base transceiver
stations), telecom switching centers (mobile switching center),
data centers, industrial locations, enterprise buildings, and off-
grid and grid-tie renewable energy power stations.
SRI PAVITHRA: CARE Moves B Rating to Not Cooperating Category
-------------------------------------------------------------
CARE has been seeking information from Sri Pavithra Cotton Mills
Private Limited (SPCPL) to monitor the rating vide email
communications/ letters dated January 22, 2018, January 24, 2018,
February 15, 2018, February 21, 2018 and numerous phone calls.
However, despite our repeated requests, the firm has not provided
the requisite information for monitoring the rating.. In the
absence of minimum information required for the purpose of rating,
CARE is unable to express opinion on the rating. In line with the
extant SEBI guidelines CARE's rating Sri Pavithra Cotton Mills
Private Limited bank facilities will now be denoted as CARE B;
Stable; ISSUER NOT COOPERATING*; ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 16.45 CARE B; Issuer Not Cooperating;
Facilities 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 January 6, 2017, the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Fluctuating and thin profit margins along with susceptibility of
profit margins to the volatile raw material and yarn price
movement: Though there was a year-on-year increase in the TOI, the
PBILDT margins of the firm remained thin and fluctuating during
FY14-FY16 (Prov.) between 3%-4% on back of fluctuations in the
volume of sales and realizations of yarn price movements.
Financial risk profile characterized by low net worth base,
leveraged capital structure and weak debt coverage indicators:
Despite the moderate operational track record, the company has
small scale of operations marked by low net worth base of INR 3.82
crore as on March 31, 2016 (Provisional) and TOI of INR30.06 crore
in FY16 (Provisional). The company had a moderate capital
structure and debt protection metrics over the last three
financial years ended March 31, 2016. Debt equity ratio
deteriorated from 0.29xas on March 31, 2015 to 2.05x as on
March 31, 2016 on back of increase in the long term debt due to
the availment of new term loan from Religare Finvest Limited for
INR6.74 crore for managing its operations. The overall gearing
ratio marginally declined from 1.63x as on March 31, 2015 to 2.05x
as on March 31, 2016 due to high debt levels. The debt protection
metrics of the company was weak marked by TD/GCA of 30.24x in FY16
(Prov.) as against 25.17x in FY15 (Prov.) due to increase in the
total debt by 31% in FY16 over FY15. The interest coverage ratio
declined marginally and stood at 1.32x in FY16 (Prov.) as compared
to 1.38x in FY15 on back of increase in the interest costs
associated with the availment of new term loan.
Working capital intensive nature of operations: On purchases,
SPCMPL avails 10-15 days credit from its suppliers while it
provides 15-30 days credit for its customers. The company is
required to keep raw material inventory for about 85-100 days to
cater the immediate requirements of the customers while finished
goods inventory is stocked for upto 20 days. With moderate average
collection and average inventory period, the operating cycle stood
moderate to 90 days in FY16 as compared to 87 days in FY15.
Future capex wherein financial closure is yet to be achieved: The
company has proposed to increase the installed capacity with the
addition of 17,136 spindles. The proposed project is to be funded
by the bank borrowings INR2.60 crore and the remaining by equity
share capital. Financial closure is yet to be achieved and the
same is under appraisal with the bank. The expected commercial
production of the additional capacity is scheduled to be
operational from April 2017.
Key Rating Strengths
Moderate operational track record of the company and experience of
the promoters in the textile industry for more than two decades:
Established in 2006, the firm has moderate operational track
record of 10 years in the textile industry. Mr. Karunakaran,
Managing director and the promoter of SPCMPL, has more than 20
years of experience in the textile industry. Prior to the
establishment of the company in 2006, he was a managing partner of
'Pavithra Textiles' and was engaged in manufacture of yarn in
Coimbatore, Tamil Nadu.
Mrs. Shanmugapriya Karunakaran has around 18 years of experience
in the textile industry and she has been associated with SPCMPL
since its inception. The company is likely to be benefited by the
long experience of the directors. The company's stake is closely
held by the promoter and his family.
Established relationship with the customers and suppliers: With
the long operational track record, the company has established a
long standing relationship with its suppliers and customers. The
key clients have been associated with SPCMPL since inception and
they provide repeat orders to the company. Cotton, being the major
raw material, is purchased from Shri Annapurna Ginning Factory,
Dhamnod, Lalka Ginning and Pressing Private Limited, Mumbai, Ruchi
Cotton, etc. The other ancillary raw materials are purchased from
the local market. The clientele base of SPCMPL includes National
Handloom Development Corporation, Coimbatore, Tiurpati Polycot,
Delhi, A.G.P Yarns, Delhi and Shree Swami Samarth Corporation,
Malegaon, etc.
Healthy growth in revenues during the review period: The total
operating income (TOI) of the firm grew at a CAGR of 20.07% during
the period of FY14-FY16 (Prov.) on back of increase in the
production capacity and the number of orders received. In FY15,
the TOI has grown by 22% over FY14 and stood at INR25.54 crore. In
FY16 (Prov.), the firm achieved TOI of INR30.06 crore with a PAT
of INR0.13 crore. The company also has moderate order book
position of INR20 lakh as on December 30, 2016 which is expected
to be completed in January 2017.
Sri Pavithra Cotton Mills Private Limited (SPCMPL) was established
in 1994 as a partnership firm under the name 'Pavithra Textiles'
promoted by Mr. Karunakaran in Coimbatore, Tamil Nadu. The firm is
engaged in the manufacturing of yarn with the installed capacity
of 9,000 spindles. In February 2006, the partnership firm was
reconstituted into the private limited company and the present
directors of the company are Mr. Karunakaran and Mrs.
Shanmugapriya (w/o Mr.Karunakaran).
The company has expanded its operations gradually over the years
and currently has installed capacity of 9,072 spindles with the
production capacity of ~9.50 lakh kgs of yarn/month. The company
has its registered office and manufacturing facility located in
Coimbatore, Tamil Nadu.
SUJANA UNIVERSAL: CARE Moves D Rating to Not Cooperating Category
-----------------------------------------------------------------
CARE has been seeking for information from Sujana Universal
Industries Limited to monitor the ratings vide e-mail
communications dated June 21, 2017, July 6, 2017 and
November 16, 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 Sujana Universal Industries Limited's bank facilities will now
be denoted as CARE D; ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 475.97 CARE D; Issuer not Cooperating
Short-term Bank
Facilities 363.00 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 rating.
Detailed description of the key rating drivers
At the time of last rating on December 23, 2016, the following
were the rating strengths and weaknesses (Updated for the
information available from stock exchange).
Key Rating Weaknesses
Stretched liquidity position with ongoing delays in debt
servicing: During FY17, liquidity position of the company
continued to remain stretched on account of slower realization
from debtors. Given the slow realization of debtors has resulted
in stretched liquidity position of the company leading to ongoing
delays in meeting debt obligation.
Sujana Universal Industries Limited (SUIL) was incorporated in
August 1986 and is a part of the Sujana Group. The company is
engaged mainly in trading and processing of steel products and
also derives income from manufacture and sale of steel bearings,
electrical appliances and castings.
SUIL is promoted by Mr. Y.S. Chowdhary who has more than 23 years
of experience in manufacturing and trading of steel products. The
group has diversified business activities with its presence in
construction & structural steel, power transmission & telecom
towers and allied services, energy (generation, distribution,
green energy consulting and manufacture of energy saving LEDs),
basic and urban infrastructure development, precision engineering
components, domestic appliances and international trade.
TARA CHAND: ICRA Lowers Rating on INR150cr Loan to D
----------------------------------------------------
ICRA Ratings has revised the long-term rating from [ICRA]BB to
[ICRA]D for the INR150.00-crore fund-based limits of Tara Chand
Rice Mills Pvt. Ltd. ICRA has also moved the rating to the 'Issuer
Not Cooperating' category. The rating is now denoted as "[ICRA]D
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 150.00 [ICRA]D ISSUER NOT COOPERATING;
revised from [ICRA]BB(Stable)
and moved to '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, despite
the downgrade.
Rationale:
The revision in rating is on account of overutilisation of cash
credit limits for more than 30 days owing to the stretched
liquidity position of the company. ICRA takes note of weak
financial profile as reflected by highly leveraged capital
structure and stretched debt coverage indicators. ICRA, however,
takes note of the extensive experience of the promoters in the
rice industry.
Going forward, the company's ability to improve its liquidity
position and service its debt in a timely manner will be the key
rating sensitivity.
Key rating drivers:
Credit strengths
Promoter's extensive experience in rice industry provides edge
over competitors: The promoters and their family members have been
involved in the business of rice milling from more than two
decades. The long track record helps the company to add customers
and provides it with an edge over its competitors.
Credit challenges
Stretched liquidity position resulted in delays in debt servicing:
There have been overutilisation of cash credit limits for more
than 30 days owing to the stretched liquidity position of the
company.
Intense competition in rice milling business exerts pressure on
margins: The rice industry is a highly competitive one due to low
entry barriers and a large number of unorganised as well as
established players. The industry has some reputed players who
have well established brand presence in the organised as well as
unorganised sectors. Given the low capex and low technical
complexity of the work, the entry barriers have remained low,
resulting in a large number of small-to-medium scale enterprises.
This exerts pressure on the margins of the company.
TCRM took over Tara Chand Rice Mills on September 5, 2013, along
with all its assets and liabilities. The company is primarily
involved in milling basmati rice. TCRM's milling unit is based at
Nissing in Karnal, Haryana and is close to the local grain market.
The company also exports rice to countries such as Saudi Arabia
and Dubai.
TCRM reported a net profit of INR5.90 crore on an OI of INR735.36
crore in FY2017 compared with a net profit of INR5.45 crore on an
OI of INR581.55 crore in the previous year.
TIRUPATI NIRYAT: Ind-Ra Withdraws 'BB' Long Term Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Tirupati Niryat
Private Limited's Long-Term Issuer Rating of 'IND BB'. The Outlook
was Stable. The instrument-wise rating actions are as follows:
-- INR100 mil. Fund-based limits withdrawn and the rating is
withdrawn; and
-- INR70 mil. Non-fund-based limitswithdrawn and the rating is
withdrawn;
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the ratings as the bank
loans have been repaid in full.
COMPANY PROFILE
Tirupati Niryat is engaged in the trading of jute. Also, it has a
commercial property through which generates rental income.
VEDBHUMI BUILDERS: CARE Moves D Rating to Not Cooperating Cat.
--------------------------------------------------------------
CARE has been seeking information from Vedbhumi Builders and
Developers Private Limited to monitor the rating vide email
communications/letters dated February 10, 2018, February 8, 2018,
February 6, 2018,February 1, 2018, January 9, 2018 and numerous
phone calls. However, despite CARE's repeated requests, the
company has not provided the requisite information for monitoring
the rating. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the publicly available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. The ratings of Vedbhumi Builders and
Developers Private Limited bank facilities will now be denoted as
CARE D; ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 38.94 CARE D; Issuer not cooperating,
Facilities 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.
The rating assigned to the bank facilities of Vedbhumi Builders
and Developers Private Limited (VBPL) factors in the delay in
servicing of debt obligations by the company. Establishing a clear
track record of timely debt servicing is the key rating
sensitivity.
Detailed description of the key rating drivers
At the time of last rating on May 17, 2017 the following were the
rating weaknesses
Key Rating Weakness
Delay in debt servicing obligations: As per the interaction with
the banker, the account has been classified as NPA on account of
overdrawals in cash credit facility and delay in repayment of
interest obligation.
Vedbhumi Builders & Developers Private Limited (VBDPL) was
incorporated in 2005 by Mr. Yogesh Chawda & Mr. Vijay Pawar. The
promoters have been involved in the development of residential and
commercial projects in the city of Nagpur and its catchment areas
since over a decade. VBDPL, in past, has developed one
residential/commercial project 'Bhumi Arcade' which was completed
in June, 2012. The project was residential cum commercial project
comprising of 21 apartments and 25 commercial units with a total
salable area of 69,379 sq.ft and the same has been completely sold
off. Promoters in their individual capacities have executed 11
projects with total saleable area of 18,58,175sq.ft.
VERSATILE ALUCAST: ICRA Withdraws D Rating on INR8cr Term Loan
--------------------------------------------------------------
ICRA Ratings has withdrawn the long-term rating of [ICRA]D ISSUER
NOT CO-OPERATING assigned to the INR11.10-crore fund-based
facilities of Versatile Alucast Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 8.00 [ICRA]D ISSUER NOT COOPERATING;
Term Loan Withdrawn
Fund based- 3.10 [ICRA]D ISSUER NOT COOPERATING;
Cash Credit Withdrawn
Rationale
The ratings are withdrawn in accordance with ICRA's policy on
withdrawal and suspension and as desired by the company.
Incorporated in 2011, Versatile Alucast Private Limited (VAPL) has
been formed to manufacture and supply aluminium die casting. The
promoters have setup Greenfield aluminium casting facility
(pressure die casting) in Kolhapur with an installed capacity of
1,300 MTPA. The company also has in-house machining facility.
VIJAY TEXTILES: Ind-Ra Raises Long Term Issuer Rating to 'B'
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Vijay Textiles
Ltd.'s (VTL) Long-Term Issuer Rating to 'IND B' from 'IND D'. The
Outlook is Stable. The instrument-wise rating actions are given
below:
-- INR665.7 mil.Fund-based working capital limits upgraded with
IND B/Stable/IND A4 rating;
-- INR520.2 mil. (reduced from INR688 mil.) Term loans due on
December-2021 upgraded with IND B/Stable rating; and
-- INR10 mil. Non-fund-based working capital limits upgraded
with IND B/Stable/IND A4 rating.
KEY RATING DRIVERS
The upgrade reflects VTL's timely debt servicing for the five
months ended February 2018 aided by INR230 million cash infused by
promoters in the form of an unsecured loan in 9MFY18.
However, the company's liquidity position remained tight as it
continued to report negative cash flow from operations owing to a
high interest cost and an elongated working capital cycle (FY17:
865 days; FY16: 827 days). The company has high inventory
requirement in its retail showrooms. VTL's utilization of the cash
credit limits was close to 100% during the five months ended
February 2018.
The ratings remain constrained by VTL's weak credit metrics with
net leverage (Ind-Ra adjusted net debt/operating EBITDAR) of 6.4x
in FY17 (FY16: 6.2x) and EBITDA interest coverage of 1.5x (1.4x).
The ratings also continue to factor in high competition in the
home textiles business.
However, the ratings continue to benefit from VTL's more than two
decades of experience in the home textiles business. The company
has a strong retail presence with a wide distribution network
across India and has five showrooms in Hyderabad.
RATING SENSITIVITIES
Negative: Any further deterioration in the liquidity position
could be negative for the ratings.
Positive: An improvement in the liquidity position will be
positive for the ratings.
COMPANY PROFILE
Incorporated in 1990, VTL has a 15 million meters per annum home
textile printing and embroidery facility in Mahbubnagar district
near Hyderabad. VTL is a public limited company, listed on the
Bombay Stock Exchange.
According to 9MFY18 provisional financials, revenue was INR771.01
million, EBITDA was INR223.8 million and interest coverage was
1.59x.
WEBFIL LIMITED: ICRA Keeps C+ Rating in Not Cooperating Category
----------------------------------------------------------------
ICRA Ratings said the long-term and short-term rating for the
INR13.68-crore bank facilities of Webfil Limited continues to
remain under 'Issuer Not Cooperating' category. The rating is now
denoted as "[ICRA]C+/[ICRA]A4 ISSUER NOT COOPERATING". ICRA had
earlier moved the ratings of WL to the 'ISSUER NOT COOPERATING'
category due to non-submission of monthly 'No Default Statement'
("NDS") by the entity.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based- 3.38 [ICRA]C+ ISSUER NOT COOPERATING;
Cash Credit Rating continues to remain under
'Issuer Not Cooperating'
category
Non-Fund based- 5.40 [ICRA]C+ /[ICRA]A4 ISSUER NOT
Letter of Credit COOPERATING; Rating continues to
remain under 'Issuer Not
Cooperating' category
Non-Fund based- 4.90 [ICRA]C+/[ICRA]A4 ISSUER NOT
Bank Guarantee COOPERATING; Rating continues to
remain under '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/dated/
limited 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.
WL was incorporated in 1979 as a joint venture company of West
Bengal Infrastructure Development Corporation Limited and the
Andrew Yule group. The company manufactures tungsten filament
wires used in luminaries and digital products, which in turn is
primarily used in communication and surveillance services.
WEST INN: CARE Moves B+ Rating to Not Cooperating Category
-------------------------------------------------------------
CARE has been seeking information from West Inn Limited to monitor
the rating(s) vide e-mail communications/letters dated
February 22, 2018, February 12, 2018, January 18, 2018,
January 3, 2018, December 5, 2017, November 10, 2017, October 27,
2017, October 16, 2017 and numerous phone calls. However, despite
CARE's repeated requests, the company has not provided the
requisite information for monitoring the ratings. In the absence
of minimum information required for the purpose of rating, CARE is
unable to express opinion on the rating. In line with the extant
SEBI guidelines CARE's rating on West Inn Limited's bank
facilities will now be denoted as CARE B+; Stable; ISSUER NOT
COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 25.00 CARE B+; Stable; Issuer Not
Facilities Cooperating
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 January 23, 2017, the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Recently concluded demerger: WIL had filed for demerger of the
company wherein the demerger scheme contained transfer of hotel
Radisson Blu-Ahmedabad owned by it to Rising Hotels Limited. Post
demerger, Khurana family retains the majority shares of West Inn
limited managing Fortune Landmark while Galani family owns Rising
Hotels Limited managing Radisson Blu.
Cyclical and competitive nature of hotel industry: Hospitality
industry is cyclical in nature and remains susceptible to the
economic downturns. Ahmedabad primarily attracts business class
tourists being the leading business hub of Gujarat and development
of the industrial areas located in the vicinity such as Kalol,
Sanand, Dahej, etc. WIL faces competition from established hotels
like "The Grand Bhagwati", "Pride", etc. and new properties like
"Mariott", "Hyatt", etc.
Financial risk profile marked by moderate total operating income
with operating loss and leveraged capital structure: WIL's TOI has
remained largely stable over the time owing to stable occupancy
ratios and average room rates.
In absolute terms, TOI for FY16 was INR13.41 crore as against
INR14.03 crore in FY15. During FY16, WIL's PBILDT declined from
INR1.42 crore in FY15 to negative INR0.61 crore. WIL is operating
with a levered capital structure; The overall gearing as on March
31, 2016 stood at 2.66x as against 1.36x as on March 31, 2015.
Key Rating Strengths
Experienced and resourceful promoters: Mr Vikram Khurana is
associated with West Inn Limited since its incorporation along
with Galani family being the co-promoters of the company. He has
more than two decades of experience in various businesses.
Positioning of hotel property in premium segment with recently
completed renovation and central location in the city of Ahmedabad
WIL's property is managed by Fortune Park Hotels Limited (FPHL).
FPHL is a "Welcome Group" company which is a hospitality
management division of ITC Limited and operates more than 71
properties and 5632 rooms spread across India
WIL was incorporated in 1993, to operate in the hospitality
business by Galani and Khurana families. WIL owns a five star
business class hotel at Ahmedabad with around 95 rooms which is
operated by Fortune Park Hotels Limited (FPHL) under "Fortune
Landmark" brand. WIL is currently managed by Mr Vikram Khurana who
has over two decades of experience in various businesses. In
January 2016, WIL received demerger order from the Honorable High
Court of Gujarat wherein one of the hotels 'Radisson Blu',
previously owned by WIL, is transferred to Rising Hotels Limited
promoted by Galani Group. The demerger was undertaken for the
purpose of separating the business interests of Khurana and Galani
families wherein, Fortune Landmark shall be now managed and owned
by Khurana family and Radisson Blu by Galani family.
WHITEFIELD SPINTEX: ICRA Keeps B in Not Cooperating Category
------------------------------------------------------------
ICRA Ratings said the ratings of INR29.85 crore bank facilities of
Whitefield Spintex (India) Private Limited (WSIPL) continue to
remain under 'Issuer Not Cooperating' category. The rating is now
denoted as "[ICRA]B (Stable) / A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 3.00 [ICRA]B (Stable); ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Term Loans 25.50 [ICRA]B (Stable); ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Bank Guarantee 1.35 [ICRA]A4; ISSUER NOT
COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
Import LC ( (23.52) [ICRA]A4; ISSUER NOT
COOPERATING; Rating continues
to remain under '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/dated/limited 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.
Whitefield Spintex (India) Private Limited (WSIPL) was
incorporated in September 2013 as a Private Limited Company by Mr.
Minesh Jagani, Mr. Alvish Jagani and their family. The company has
set up its plant at Kherva Village in the Rajkot District of
Gujarat for spinning 30SNE combed single cotton yarn as well as
2/30 twisted spun yarns with an overall production capacity of
3,600 MT (2,593 MT of single yarn and 990 MT of twisted yarn) of
cotton yarn per annum. The manufacturing facilities of the company
are equipped with 14,658 spindles comprising 12,960 spindles of
single cotton yarn and 1,698 spindles of twisted cotton yarn.
=================
I N D O N E S I A
=================
CIMB NIAGA: Fitch Affirms 'bb' Viability Rating
-----------------------------------------------
Fitch Ratings Indonesia has affirmed the National Ratings on four
foreign-owned Indonesian banks and three of their financing
subsidiaries. Fitch Ratings has also upgraded PT Bank OCBC NISP
Tbk's (OCBC NISP) Long-Term Local-Currency Issuer Default Rating
(IDR) to 'A' from 'A-' and its Viability Rating (VR) to 'bb+' from
'bb', and affirmed its other ratings. The Outlooks on the ratings
are Stable.
The other issuers are:
- PT Bank CIMB Niaga Tbk (CIMB Niaga)
- PT Bank Maybank Indonesia Tbk (Maybank Indonesia)
- PT Bank UOB Indonesia (UOBI)
- PT CIMB Niaga Auto Finance (CNAF)
- PT Maybank Indonesia Finance (MIF)
- PT Wahana Ottomitra Multiartha (WOMF)
The upgrade of OCBC NISP's Local-Currency IDR follows Fitch's
upgrade of Indonesia's sovereign rating to 'BBB' from 'BBB-' on
Dec. 20, 2017 (see Fitch Upgrades Indonesia to 'BBB'; Outlook
Stable) and reflects Fitch view that support from its parent,
Oversea-Chinese Corporation Limited (OCBC; AA-/Stable/aa-), is
likely to remain robust, even in case of high sovereign or
macroeconomic stress.
The upgrade of OCBC NISP's VR reflects Fitch's view of the
sustained improvement in its franchise and funding and liquidity
profile, which are now more comparable to its large foreign-owned
bank peers. The improvements are evident in its gradually
increasing market share, stable business model and deposit-
dominated funding model. The upgrade also reflects Fitch belief
that the bank will maintain capitalisation/leverage at a level
that is generally better than many of its domestic peers,
especially taking into account the bank's lower risk appetite and
superior asset quality indicators versus most peers.
'AAA' National Ratings denote the highest rating assigned by Fitch
on its national rating scale for that country. This rating is
assigned to issuers or obligations with the lowest expectation of
default risk relative to all other issuers or obligations in the
same country.
'AA' National Ratings denote expectations of low default risk
relative to other issuers or obligations in the same country.
However, changes in circumstances or economic conditions may
affect the capacity for timely repayment to a greater degree than
is the case for financial commitments denoted by a higher rated
category.
'F1' National Ratings indicate the strongest capacity for timely
payment of financial commitments relative to other issuers or
obligations in the same country. On Fitch's National Rating scale,
this rating is assigned to the lowest default risk relative to
others in the same country. Where the liquidity profile is
particularly strong, a "+" is added to the assigned rating.
KEY RATING DRIVERS
IDRS, SUPPORT RATINGS AND NATIONAL RATINGS
The IDRs, Support Ratings and National Ratings on the four banks
reflect Fitch's view that each bank's higher-rated foreign parent
has the ability and high propensity to provide timely support to
its subsidiary, if needed. The Long-Term Foreign-Currency IDRs (of
those banks where one has been assigned) are constrained by
Indonesia's Country Ceiling at 'BBB'. OCBC NISP's Local-Currency
IDR is capped at three notches above the sovereign rating.
Fitch's view of support is reinforced by the growing strategic
importance of these Indonesian subsidiaries to the parents' Asian
franchises, the parents' majority ownership and control, and a
high level of integration with their parents. Fitch view also
takes into account the large potential for damage to the parents'
reputations if the subsidiaries were to default.
CIMB Niaga is owned by Malaysia-based CIMB Group Holdings Bhd and
Maybank Indonesia is majority owned by Malayan Banking Berhad
(Maybank; A-/Stable/a-). UOBI is majority owned by Singapore-based
United Overseas Bank Limited (UOB; AA-/Stable/aa-).
VIABILITY RATINGS
The VRs of CIMB Niaga, Maybank Indonesia and OCBC NISP reflect
their medium franchises and satisfactory capitalisation profiles.
It also takes into account their moderate funding and liquidity
profiles, with greater dependence on higher-cost time deposits for
funding, and lower profitability (return on average assets)
compared with their larger local peers. OCBC NISP's higher VR at
'bb+' also takes into account its steady performance, and stronger
asset quality due to stricter credit risk management (as reflected
in its below-industry average NPL and SML ratios), compared with
CIMB Niaga and Maybank Indonesia.
SUBSIDIARY RATINGS
The National Ratings of CNAF and MIF reflect Fitch's expectation
of a strong probability of extraordinary support from their
parents in times of need, and take into account their strategic
importance to their parents in supporting the banks' business
expansion in Indonesia's fast-growing consumer financing market.
The parents' support is manifested in their full ownership of the
subsidiaries, name sharing, operational integration and the
provision of funding.
WOMF's rating is support-driven, reflecting Fitch's expectation of
a moderate probability of extraordinary support from Maybank
Indonesia, and ultimate parent Malayan Banking Berhad, for its
subsidiary, if required. The rating also takes into account WOMF's
limited importance to the parent, as reflected in the modest level
of integration between the two, different branding, WOMF's limited
contribution to the group and Fitch view that the company remains
a potential candidate for sale.
DEBT RATINGS
The ratings of the rupiah-denominated senior bonds and bond
programmes issued by the banks, MIF and WOMF are the same as their
National Long-Term and Short-Term Ratings in accordance with
Fitch's criteria.
Fitch rates the legacy subordinated debts of CIMB Niaga and
Maybank Indonesia two notches down from the issuer's anchor rating
(National Long-Term Ratings in the case of the support-driven
Indonesian subsidiaries). This comprises one notch for loss
severity, reflecting their subordinated status, and one notch for
non-performance risk, mainly to account for the bonds' interest
and/or principal deferral features.
The Basel III-compliant subordinated debts of Maybank Indonesia
and UOBI are rated using the same approach as they have similar
deferral features to the legacy subordinated debts. The notching
for non-performance risk is only one, instead of the more common
two, as the risk of non-performance is partly neutralised by
potential parental support.
RATING SENSITIVITIES
IDRS, SUPPORT RATINGS AND NATIONAL RATINGS
Upside potential for the banks' IDRs may result from an upgrade of
Indonesia's Country Ceiling, but only if the parents' ratings
remain above Indonesia's Country Ceiling. OCBC NISP's Long-Term
Local-Currency IDR is sensitive to changes in Indonesia's
sovereign rating and its parent's rating. Support Ratings are
likely to remain unchanged unless there are multiple-notch changes
in their parents' IDRs. There is no rating upside for the banks'
National Ratings as they are already at the highest point on the
scale.
Downward rating pressure may arise from any developments leading
to a weakening of perceived support from their parents, such as
major changes to ownership or a significant weakening in their
parents' financial ability, although Fitch believes this to be a
remote prospect in the near to medium term. The banks' IDRs are
sensitive to changes in the parents' ratings. Deterioration in the
banks' standalone financial profiles is unlikely to impact their
IDRs and National Ratings unless the factors underpinning support
from their parents also weaken.
VIABILITY RATINGS
Rating upside on the banks' VRs may result if their franchises
grow to be more comparable to those of the major Indonesian banks,
while maintaining healthy risk-adjusted profitability, high core
capitalisation, predominantly low-cost deposit-funded balance
sheets and sound asset quality. Further strengthening of the
operating environment could provide scope for upgrades if the
agency also viewed that would significantly reduce the risk of
variability (especially deterioration) in the banks' intrinsic
profiles. Rating downside may result from higher risk appetite,
deterioration in asset quality leading to weaker capitalisation,
or marked weakening in their liquidity profiles, particularly if
the economic environment were to unexpectedly deteriorate.
SUBSIDIARY RATINGS
Any significant decline in ownership by or perceived weakening of
support from the parents would exert downward pressure on the
ratings on CNAF and MIF, including the possibility of multi-notch
downgrades. However, Fitch sees this prospect as remote in the
foreseeable future, given the finance subsidiaries' importance to
the parent banks' consumer businesses. A significant sustained
weakening of CNAF' and MIF's contributions to their parents
leading to a reassessment of the importance of the business would
also exert downward pressure on the ratings.
Rating upside could arise if Fitch were to perceive CNAF and MIF
as core subsidiaries of CIMB Niaga and Maybank Indonesia,
respectively. This would likely result in an equalisation of their
ratings with their respective parents' national ratings, if there
was further evidence of stronger operational integration between
parent and subsidiary.
Any significant dilution in ownership by, or perceived weakening
of support from, the parents would exert downward pressure on the
ratings on WOMF, including the possibility of multi-notch
downgrades. Any changes to the parents' ratings could also impact
on WOMF's ratings.
The rating differential between Maybank Indonesia and WOMF could
narrow if the parent shares its name with WOMF, develops greater
operational integration with the subsidiary, or provides other
forms of tangible support to the company.
DEBT RATINGS
Any changes in the National Long-Term and Short-Term Ratings on
the banks and their finance subsidiaries would affect the ratings
on their bond programmes and debt issues.
The rating actions are:
CIMB Niaga
Long-Term Foreign-Currency IDR affirmed at 'BBB'; Outlook Stable
Short-Term Foreign-Currency IDR affirmed at 'F3'
Viability Rating affirmed at 'bb'
Support Rating affirmed at '2'
National Long-Term Rating affirmed at 'AAA(idn)'; Outlook Stable
National Short-Term rating affirmed at 'F1+(idn)'
Rupiah senior debt programme and tranches under the programme
affirmed at 'AAA(idn)'
Rupiah subordinated debt affirmed at 'AA(idn)'
Maybank Indonesia
Long-Term Foreign-Currency IDR affirmed at 'BBB'; Outlook Stable
Short-Term Foreign-Currency IDR affirmed at 'F3'
Viability Rating affirmed at 'bb'
Support Rating affirmed at '2'
National Long-Term Rating affirmed at 'AAA(idn)'; Outlook Stable
National Short-Term Rating affirmed at 'F1+(idn)'
Rupiah senior debt programme and tranches under programme affirmed
at 'AAA(idn)'
Rupiah sharia senior debt affirmed at 'AAA(idn)'
Rupiah subordinated debt affirmed at 'AA(idn)'
Basel III-compliant rupiah subordinated debt programme and
tranches under the programme affirmed at 'AA(idn)'
OCBC NISP
Long-Term Foreign-Currency IDR affirmed at 'BBB'; Outlook Stable
Long-Term Local-Currency IDR upgraded to 'A' from 'A-'; Outlook
Stable
Short-Term Foreign-Currency IDR affirmed at 'F3'
Viability Rating upgraded to 'bb+', from 'bb'
Support Rating affirmed at '2'
National Long-Term Rating affirmed at 'AAA(idn)'; Outlook Stable
National Short-Term Rating affirmed at 'F1+(idn)'
Rupiah senior debt programme and tranches under the programme
affirmed at 'AAA(idn)'
UOBI
National Long-Term Rating affirmed at 'AAA(idn)'; Outlook Stable
National Short-Term Rating affirmed at 'F1+(idn)'
Rupiah senior debt programme and tranches under the programme
affirmed at 'AAA(idn)' and 'F1+(idn)'
Basel III compliant rupiah subordinated debt programme and
tranches under the programme affirmed at 'AA(idn)'
CNAF
National Long-Term rating affirmed at 'AA+(idn)'; Outlook Stable
National Short-Term rating affirmed at 'F1+(idn)'
MIF
National Long-Term Rating affirmed at 'AA+(idn)'; Outlook Stable
National Short-Term Rating affirmed at 'F1+(idn)'
Rupiah senior debt affirmed at 'AA+(idn)'
Rupiah senior debt programme affirmed at 'AA+(idn)' and 'F1+(idn)'
WOMF
National Long-Term Rating affirmed at 'AA-(idn)'
National Short-Term Rating affirmed at 'F1+(idn)'
Rupiah senior debt programme and tranches under the programme
affirmed at 'AA-(idn)' and 'F1+(idn)'
===============
M O N G O L I A
===============
MONGOLIAN MORTGAGE: Moody's Assigns B3 Long-Term FC Issuer Rating
-----------------------------------------------------------------
Moody's Investors Service has assigned a B3 long-term foreign
currency issuer rating and B3 corporate family rating to Mongolian
Mortgage Corporation HFC LLC.
The ratings outlook is stable.
RATINGS RATIONALE
Mongolian Mortgage Corporation HFC LLC's (MIK) B3 long-term
foreign currency issuer rating reflects its very low credit risk
profile, strong capitalization and stable profitability as the
sole mortgage servicer for the government's affordable housing
finance program.
MIK's B3 ratings are at the same level as the Mongolian sovereign
rating of B3.
MIK's key weaknesses are its elevated counterparty risks due to
its exposure to commercial banks in Mongolia and the Bank of
Mongolia, its credit concentration to the Mongolian residential
property sector and its weak liquidity.
MIK's very strong asset quality is driven by the company's
conservative risk management, and by the low credit and funding
risks in servicing the government's housing program. Under the
program, 90% of MIK's mortgage backed securities (RMBS) are sold
to the Bank of Mongolia and 10% of the lowest tranche are retained
by the originating banks. The tenors of the RMBS are matched with
those of the underlying mortgages.
Moody's considers MIK's capital position as strong relative to the
risks undertaken, because the credit risks of the mortgage loans
are retained by either the commercial banks underwriting the
mortgages or by the Bank of Mongolia as the buyer of RMBS. Moody's
expects MIK's capital position will strengthen in the next 12 to
18 months on continued accumulation of stable mortgage servicing
fees and the absence of credit cost risk at the operating entity.
MIK is highly dependent on the Mongolian government's affordable
housing policy that comprised 98% of its interest income in 2016.
As such, MIK has high concentration risks to the Mongolian
residential property market and the Mongolia's banks. Bank of
Mongolia plays a crucial role as the supplier of seed money to
Mongolia's commercial banks for the origination of conforming
mortgages, and as the purchaser of MIK's RMBS.
MIK's liquidity is weak, but this risk is partially mitigated by
the well-matched maturity of its assets and liabilities. However,
liquidity risk may rise in the future if MIK grows new businesses
that are either wholesale funded or have higher asset-liability
duration mismatches.
Although MIK's B3 rating does not incorporate any uplift from the
government support, Moody's expects a high level of support from
the government of Mongolia in times of stress. Moody's assumption
of support is based on MIK's (1) unique policy role in Mongolia;
(2) close linkages with the central bank and the government; (3)
19.3% direct and indirect government ownership as of the end of
2017; as well as (4) high systemic importance in the Mongolian
financial sector, given its prominent role in the domestic RMBS
market.
Factors that Could Lead to an Upgrade
MIK's B3 ratings could be upgraded if the Mongolian government's
B3 rating is upgraded and MIK's standalone credit metrics remain
robust.
Factors that Could Lead to a Downgrade
MIK's ratings could be lowered if (1) the sovereign rating is
downgraded; or (2) the company expands into new businesses that
will increase liquidity risk or credit risk undertaken.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Finance
Companies published in December 2016.
Mongolian Mortgage Corporation HFC LLC is a wholly owned
subsidiary of Mongolian Mortgage Corporation Holding JSC and is
headquartered in Ulaanbaatar, Mongolia. Its consolidated assets
totaled MNT2.3 trillion ($933 million) as of the end of 2016.
====================
N E W Z E A L A N D
====================
PINNACLE LIFE: A.M. Best Affirms 'B(fair)' Fin. Strength Rating
---------------------------------------------------------------
A.M. Best has affirmed the Financial Strength Rating of B (Fair)
and the Long-Term Issuer Credit Rating of "bb+" of Pinnacle Life
Limited (Pinnacle Life) (New Zealand). The outlook of these Credit
Ratings (ratings) is stable.
The ratings reflect Pinnacle Life's balance sheet strength, which
A.M. Best categorizes as adequate, as well as its adequate
operating performance, limited business profile and appropriate
enterprise risk management.
Pinnacle Life's balance sheet strength assessment mainly reflects
its large intangible assets (predominantly insurance contract
assets), high reinsurance leverage and modest regulatory capital
position. In addition, A.M. Best expects the company's in-force
portfolio to remain consistently profitable, based on a product
portfolio that is expected to deliver high underlying margins. The
claims experience and expense ratio have each improved in recent
years. Although overall earnings have exhibited moderate
volatility, this was driven mainly by discount rate movements.
Pinnacle Life is a small-sized insurer in the New Zealand life
insurance industry, with a market share of less than 1% based on
in-force premiums and new business premiums. The company has a low
product risk profile, with a majority of its in-force premium
related to mortality risk; the remainder is mostly funeral
policies and trauma cover. While the marketing of new business is
done primarily through Pinnacle Life's website and digital
advertising, capital constraints continue to challenge the
company's ability to increase profitable market share.
Pinnacle Life has a developed risk management program based on the
company's current size and complexity. The company has
demonstrated an overall adequate ability to address most of its
risks, primarily through adequate pricing, holding highly liquid
assets in its investment portfolio and partnering with a highly
rated reinsurer to reduce its claims volatility. Therefore, A.M.
Best considers Pinnacle Life's risk management capabilities to be
aligned appropriately with its risk profile.
Positive rating actions may occur if there is substantial
improvement in Pinnacle Life's solvency capital and financial
flexibility. Negative rating actions may occur if there are large
impairments in net insurance contract assets due to higher-than-
expected lapses for its in-force business. Additionally, downward
rating pressure could occur if the company's solvency margin
deteriorates significantly due to higher-than-budgeted operating
expenses or greater-than-assumed claims.
QUEST INSURANCE: A.M. Best Affirms 'B(fair)' Fin. Strength Rating
-----------------------------------------------------------------
A.M. Best has removed from under review with positive implications
and upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to
"bb+" from "bb" and affirmed the Financial Strength Rating of B
(Fair) of Quest Insurance Group Limited (Quest) (New Zealand). The
outlook assigned to these Credit Ratings (ratings) is stable.
The ratings were placed under review with positive implications on
Oct. 13, 2017, following the release of the updated Best's Credit
Rating Methodology (BCRM). These rating actions follow the
completion of A.M. Best's analysis of Quest under the updated
BCRM.
The ratings reflect Quest's balance sheet strength, which A.M.
Best categorizes as adequate, as well as its adequate operating
performance, limited business profile and appropriate enterprise
risk management.
The Long-Term ICR upgrade reflects Quest's very strong risk-
adjusted capitalization, as measured by Best's Capital Adequacy
Ratio (BCAR), supported by positive operating results and growth
in its absolute capital base. A.M. Best expects the company's
prospective BCAR score, despite a decreasing trend, to remain
supportive of its near-term growth targets. Conversely, the
assessment of Quest's balance sheet strength is weighed down by
A.M. Best's view of the overall financial standing of Quest's
parent company, Geneva Finance Limited (GFL), which is expected to
provide limited financial flexibility to Quest.
Other offsetting rating factors include the company's limited
market presence and weak underwriting performance. Historically,
Quest has focused only on providing short-term loan protection and
motor vehicle insurance products to GFL's loan customers. This
quasi-captive model has restricted Quest's premium volume and
growth, and is dependent on GFL's volume of new lending.
Consequently, this has resulted in an extremely limited market
presence and unfavorable underwriting performance, stemming from a
high expense ratio and a lack of economies of scale. While overall
operating results have been consistently positive, these results
have been driven primarily by investment earnings.
Since April 2017, however, Quest has entered into an underwriting
agreement with Janssen's Insurance, which allows Quest to
distribute products beyond GFL's loan customers. The volume of
policies sold is anticipated to triple in the first year of
operation, and A.M. Best expects prospective underwriting
performance to improve.
Quest is well-positioned at its current rating level. Negative
rating actions could occur if there is significant deterioration
in the company's risk-adjusted capitalization or underwriting
performance. In addition, the ratings may experience downward
pressure should there be a material decline in GFNZ's overall
financial strength.
=================
S I N G A P O R E
=================
ANWELL TECHNOLOGIES: To Wind Up Operations and Delist From SGX
--------------------------------------------------------------
Rachel Mui at The Business Times reports that mainboard-listed
Anwell Technologies said that the Singapore High Court had on
March 9 granted an application by the judicial managers (JM) of
the company to discharge its judicial management order (JMO), and
for the company to shut down its operations.
In addition, Chee Yoh Chuang, and Abuthahir Abdul Gafoor of RSM
Corporate Advisory, who were acting as JM of the company, will be
released from their appointment, and be appointed joint
liquidators of the firm instead, The Business Times discloses.
In a filing to the Singapore bourse, the liquidators also said
they will now prepare the necessary applications to the Singapore
Exchange Securities Trading to delist the company's shares, the
report says.
Just last month, the JM of Anwell Technologies announced that
there will not be any further extension of the JMO as they have
"exhausted all means to try to achieve the objectives set out,"
according to the report.
In November last year, Anwell Technologies' China subsidiary
Dongguan Anwell Digital Machinery, and Dongguan Anwell's officers
were found guilty of fraud and sentenced by the Chinese courts,
the Strait Times recalls.
The report relates that the officers include Dongguan Anwell's
executive chairman and CEO Fan Kai Leung, executive director and
chief financial officer Wu Wai Kin and group financial controller
Kwong Chi Kit Victor.
According to the Strait Times, RSM Corporate Advisory said that
Dongguan Anwell was fined CNY200 million (S$41 million), and had
been ordered to repay the Economic & Trade Commission of Guangdong
150 million yuan, the Dongguan Finance Bureau CNY150 million, and
Dongguan Trust Co CNY700 million.
It added that Fan had been sentenced to life imprisonment and a
seizure of his personal assets of up to five million yuan, while
Wu was sentenced to 20 years' imprisonment and a fine of four
million yuan. Kwong was also sentenced to 19 years' imprisonment,
along with a fine of four million yuan. Other officers also
received fines and prison sentences, and the Dongguan Anwell
officers have filed an appeal. These sentences relate to an
investigation by China's public security officials, first
announced by Anwell Technologies in August 2013.
The counter has been suspended and last traded at S$0.09 apiece on
Aug. 13, 2013, the report adds.
*********
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 2018. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
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*** End of Transmission ***