/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/180502.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, May 2, 2018, Vol. 21, No. 086 Headlines A U S T R A L I A ATLAS CONSTRUCTION: Second Creditors' Meeting Set for May 8 AUSTRALIAN HOSPITALITY: Second Creditors' Meeting Set for May 10 CAIJU GROUP: Second Creditors' Meeting Scheduled for May 7 ECLIPSE RESOURCES: Second Creditors' Meeting Set for May 7 ENVIDA PRODUCT: Second Creditors' Meeting Slated for May 8 FLEXI ABS TRUST 2018-1: Fitch Rates Class E Notes 'BB+(EXP)sf' GETSWIFT LIMITED: Founder Joel MacDonald Steps Down as Head HATCH TRANSPORT: Second Creditors' Meeting Set for May 8 LIBERTY TRUST 2018-1: Moody's Gives (P)Ba2 Rating to Cl. E Notes VIRGIN AUSTRALIA: Moody's Affirms B2 CFR, Outlook Now Stable C A M B O D I A NAGACORP LTD: Moody's Assigns First-time B1 CFR, Outlook Stable C H I N A AVIC INTERNAIONAL: Moody's Withdraws Ba1 Rating on 2 Notes CENTRAL CHINA REAL: Fitch Gives BB-(EXP) Rating to New SGD Notes CHINA JINJIANG: Moody's Alters Outlook on Ba2 CFR to Negative CIFI HOLDINGS: Fitch Gives BB(EXP) Rating to USD Senior Notes HYDOO INT'L: Fitch Assigns B-(EXP) Rating to USD Unsec. Notes JIANGYIN CHENGXING: Fitch Withdraws 'B(EXP)' on New USD Notes LANDSEA GREEN: Fitch Gives Final B Rating to USD150MM Sr. Notes PANDA GREEN: Moody's Lowers CFR to B2, Outlook Negative SI CHUAN JUYANG: Fitch Withdraws 'B(EXP)' Rating on New USD Notes I N D I A AGGARWAL AUTOMOTIVE: Ind-Ra Migrates B- Rating to Non-Cooperating AISWARYA SILKS: CRISIL Lowers Rating on INR9MM Cash Loan to D AMIDEEP AUTO: Ind-Ra Maintains BB- LT Rating in Non-Cooperating ANGRIYA SEA: CARE Assigns B+ Rating to INR12cr LT Loan ASSAM COMPANY: Receives at Least 10 Interested Buyers BANGALORE POLYMERS: CARE Assigns B+ Rating to INR21cr LT Loan BHARTIA YARNS: Ind-Ra Hikes Long Term Issuer Rating From 'BB' BUDS TEA: CARE Assigns B Rating to INR24.08cr LT Loan CHANDRAWATI HOSPITALITY: CARE Assigns B Rating to INR14cr Loan CINEVISTA LIMITED: CRISIL Assigns B+ Rating to INR14.5MM Loan DEVI FIRE: CRISIL Reaffirms Then Withdraws B INR2.5M Loan Rating ERA INFRA: NCLT Reserves Order Over UBI's Insolvency Plea EXCEL VEHICLES: CARE Cuts INR57cr Loan Rating to D, Not Coop. FINE YARNS: Ind-Ra Hikes Long-Term Issuer Rating From 'BB-' GATIMAN AUTO: CRISIL Raises Rating on INR4.60MM Cash Loan to B+ INDIA: Lacking Judges for Country's Booming Bankruptcies INDUSTRIAL METALS: CRISIL Assigns B+ Rating to INR4MM Loan KAMAL AGRO: CRISIL Withdraws B Rating on INR2.9MM LT Loan KASHI KANCHAN: Ind-Ra Affirms BB- Issuer Rating, Outlook Stable KRISHNA VALLEY: Ind-Ra Moves 'D' Issuer Rating to Non-Cooperating LAKSHMI VINAAYAKA: CRISIL Reaffirms B Rating on INR9MM Cash Loan MAHESH COTSPIN: CRISIL Reaffirms B+ Rating on INR9.28MM Loan MAHIPAL FOOD: CRISIL Withdraws B+ Rating on INR15MM Cash Loan MAN COTT: Ind-Ra Migrates 'BB' Issuer Rating to Non-Cooperating MANGALORE MINERALS: CRISIL Cuts Rating on INR27.55MM Loan to D NIKHIL PULSES: CARE Assigns B+ Rating to INR7cr LT Loan NILADREE BUILD-TECH: Ind-Ra Assigns BB LT Rating, Outlook Stable NIMISH SYNTEX: Ind-Ra Hikes Long-Term Issuer Rating to 'BB' PARSVNATH LANDMARK: CRISIL Cuts Rating on INR200MM NCD to B+ PRAJWAL PROMOTERS: Ind-Ra Affirms 'B' LT Rating, Outlook Stable PRIDE COKE: Ind-Ra Assigns 'B+' Issuer Rating, Outlook Stable R.R OVERSEAS: CRISIL Moves B Rating to Not Cooperating Category RAJU CHACKO: CARE Assigns B+ Rating to INR22.10cr LT Loan RATHI STYLE: CARE Assigns 'B' Rating to INR5.0cr LT Loan RATNAKAR ISPAT: Ind-Ra Hikes Long Term Issuer Rating to 'BB-' RK NATURAL: Ind-Ra Maintains 'B' Issuer Rating in Non-Cooperating SHREE BASAVESHWAR: Ind-Ra Migrates 'D' Rating to Non-Cooperating SHREE VISHAL: CRISIL Assigns B Rating to INR8MM Cash Loan SHRI VENKATESH: CARE Assigns B+ Rating to INR7cr LT Loan SN BUILDCON: Ind-Ra Maintains B Issuer Rating in Non-Cooperating SOWIL LIMITED: Ind-Ra Migrates 'BB' LT Rating to Non-Cooperating SRI ANNAPOORNA: CARE Assigns B+ Rating to INR8.50cr LT Loan SRI KRISHNA: CARE Assigns B+ Rating to INR1.25cr Loan SRI RAM SPINNING: CRISIL Hikes Rating on INR11.2MM Loan to B SRM POWER: Ind-Ra Migrates 'D' Issuer Rating to Non-Cooperating TRIMURTI FOODTECH: CRISIL Reaffirms D Rating on INR8MM Loan VIJAY JINDAL: Ind-Ra Maintains 'BB+' LT Rating in Non-Cooperating VNC INFRAPROJECTS: CRISIL Moves B+ Rating to Not Cooperating WORLDWIDE TRADELINKS: Ind-Ra Moves BB Rating to Non-Cooperating I N D O N E S I A BUMI SERPONG: Fitch Corrects April 25 Rating Release LIPPO KARAWACI: Moody's Cuts CFR to B2, Outlook Negative J A P A N KINKI OSAKA: Moody's Affirms ba1 Baseline Credit Assessment M A L A Y S I A SUMATEC RESOURCES: Falls Into PN17 Category TH HEAVY: Auditor Issues Disclaimer of Opinion on FY17 Results M O N G O L I A MONGOLYN ALT: Fitch Withdraws 'CCC+(EXP)' Issuer Default Rating N E W Z E A L A N D FIRST CREDIT: Fitch Affirms BB Long-Term IDR, Outlook Stable X X X X X X X X MALDIVES: Fitch Gives B+(EXP) Rating to USD Bonds - - - - - ================= A U S T R A L I A ================= ATLAS CONSTRUCTION: Second Creditors' Meeting Set for May 8 ----------------------------------------------------------- A second meeting of creditors in the proceedings of Atlas Construction Group Pty Ltd has been set for May 8, 2018, at 9:30 a.m. at Level 12, 20 Martin Place, in Sydney, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by May 4, 2018, at 5:00 p.m. Kathy Sozou and Shaun Fraser of McGrathnicol were appointed as administrators of Atlas Construction on April 4, 2018. AUSTRALIAN HOSPITALITY: Second Creditors' Meeting Set for May 10 ---------------------------------------------------------------- A second meeting of creditors in the proceedings of Australian Hospitality Pty Ltd has been set for May 10, 2018, at 10:00 a.m. at the offices of Ferrier Hodgson, Level 25, One International Towers Sydney, 100 Barangaroo Avenue, in Sydney, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by May 9, 2018, at 4:00 p.m. Robyn Louise Duggan and Morgan John Kelly of Ferrier Hodgson were appointed as administrators of Australian Hospitality on April 4, 2018. CAIJU GROUP: Second Creditors' Meeting Scheduled for May 7 ---------------------------------------------------------- A second meeting of creditors in the proceedings of: -- Caiju Group Pty Ltd (Trading name: Ahinah); -- Caiju Holding Pty Ltd; -- Ahinah Chatswood Pty Ltd; -- Ahinah Eastland Pty Ltd; -- Ahinah Macarthur Pty Ltd; -- Ahinah Pacific Fair Pty Ltd; and -- Ahinah Wetherill Park Pty Ltd. has been set for May 7, 2018, at 10:00 a.m. at at the Wesley Conference Centre, 220 Pitt Street, in Sydney, NSW The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by May 4, 2018, at 4:00 p.m. Patrick Loi of Greengate Advisory (NSW) Pty Ltd was appointed as administrator of Caiju Group on April 6, 2018. ECLIPSE RESOURCES: Second Creditors' Meeting Set for May 7 ---------------------------------------------------------- A second meeting of creditors in the proceedings of Eclipse Resources Pty Ltd has been set for May 7, 2018, at 9:30 a.m. at COMO The Treasury Boardroom, Corner of St Georges Terrace and Barrack St, in Perth WA. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by May 4, 2018, at 3:00 p.m. Mervyn Jonathan Kitay of Worrells Solvency was appointed as administrator of Eclipse Resources on Sept 27, 2017. ENVIDA PRODUCT: Second Creditors' Meeting Slated for May 8 ---------------------------------------------------------- A second meeting of creditors in the proceedings of Envida Product Solutions Pty Ltd has been set for May 8, 2018, at 11:00 a.m. at the offices of Macquarie Gordon & Co., OCBC Building, Level 5, 75 Castlereagh Street, in Sydney, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by May 7, 2018, at 4:00 p.m. Angus Carnegie Gordon of Macquarie Gordon & Co was appointed as administrator of Envida Product on April 2, 2018. FLEXI ABS TRUST 2018-1: Fitch Rates Class E Notes 'BB+(EXP)sf' -------------------------------------------------------------- Fitch Ratings has assigned expected ratings to Flexi ABS Trust 2018-1's asset-backed floating-rate notes. The issuance consists of notes backed by small-balance unsecured consumer loans originated by Certegy Ezi-Pay Pty Ltd (Certegy) whose ultimate parent is FlexiGroup Limited (FlexiGroup). The ratings are as follows: AUD100.0 million class A1 notes: 'F1+(EXP)sf'; AUD66.5 million class A2 notes: 'AAA(EXP)sf'; Outlook Stable; AUD66.0 million class A2-G notes: 'AAA(EXP)sf'; Outlook Stable; AUD15.3 million class B-G notes: 'AA(EXP)sf'; Outlook Stable; AUD17.7 million class C notes: 'A(EXP)sf'; Outlook Stable; AUD12.0 million class D notes: BBB(EXP)sf'; Outlook Stable; AUD7.5 million class E notes: BB+(EXP)sf'; Outlook Stable; and AUD15.0 million class F notes: 'NR(EXP)sf' The notes will be issued by Perpetual Corporate Trust Limited in its capacity as trustee of Flexi ABS Trust 2018-1. At the cut-off date at April 23, 2018, the total collateral pool consisted of 141,527 individual consumer loan contracts totalling AUD295.7 million. The receivables are retail point-of-sale, interest-free consumer-finance loans used to finance a wide variety of products. These include solar equipment (40.0%); jewellery (16.8%); roofing, shutters and guttering (7.1%); and other homeowner products. Homeowners make up 55.3% of borrowers, and 49.1% are repeat Certegy customers. KEY RATING DRIVERS Obligor Default Risk: The portfolio consists of receivables originated from a geographically diversified pool of Australian retail customers across solar, jewellery, home items, other items and fitness equipment. Fitch has assigned a weighted-average base-case gross loss rate of 4.6%, based on the portfolio composition. The average contract size is small at AUD2,090, while the weighted average (WA) remaining term is 24.9 months. Cash Flow Dynamics: The ratings on all notes are supported by credit enhancement from the junior notes as well as by soft credit support (excess spread). Structural Risks: A liquidity reserve, funded by proceeds from issuance, will ensure stable cash flows for all rated notes and trust expenses. The transaction includes a fixed-rate swap with notional based on a fixed schedule and a derivative reserve account, which will be established to set aside excess income, to ensure sufficient cash flow is available to cover future swap payments to the extent the deal is overhedged. Counterparty Risks: The transaction includes structural mechanisms that ensure remedial actions take place in the event the swap provider or trust account bank fall below certain ratings. Servicer, Operational Risks: Certegy is a wholly owned subsidiary of FlexiGroup Limited, a provider of retail point-of-sale consumer finance. Certegy provides interest-free consumer loans and cheque guarantee products in Australia. Delinquencies greater than 30 days on Certegy's retail portfolio have historically tracked below 3.0%. The nominated back-up servicer is Dun & Bradstreet, which already has access to Certegy's systems and can step in immediately in the event of servicer termination. Residual Value Risk: All securitised loans are structured so that there is no exposure to residual value risk, with the borrower liable for such risks at all times. EXPECTED RATING SENSITIVITIES Unanticipated increases in the frequency of defaults and loss severity on defaulted receivables could produce loss levels higher than Fitch's base case and are likely to result in a decline in credit enhancement (CE) and remaining loss-coverage levels available to the notes. Decreased CE may make certain note ratings susceptible to negative rating action, depending on the extent of the coverage decline. Hence, Fitch conducts sensitivity analysis by stressing a transaction's initial base-case assumptions. The agency's analysis found that the expected ratings assigned to the class A2 and A2-G (the A2 notes), B-G, C and D notes were sensitive to Fitch's mild default stress in which the base case default rate increased by 10%. The ratings on these notes declined by one notch from the expected ratings assigned to each of these classes. Under Fitch's medium (25% increase) default stress, the ratings on the class A2 notes migrated further to 'AA-sf, while the ratings of the class B-G, C, D and E notes declined to 'Asf', 'BBB+sf', 'BB+sf' and 'BB-sf', respectively. Under Fitch's severe default stress scenario, in which the base case default rate increased by 50%, the ratings on the class A1 and A2 notes deteriorated to 'F1sf' and 'A+sf', respectively, while the ratings of the class B-G, C, D and E notes declined to 'A-sf', 'BBB-sf', 'BBsf' and 'B+sf', respectively. GETSWIFT LIMITED: Founder Joel MacDonald Steps Down as Head ----------------------------------------------------------- Dominic Powell at SmartCompany reports that GetSwift Limited founder and chief executive Joel MacDonald has stepped down from his role at the head of the company, as the saga surrounding the troubled logistics startups continues. Announced as part of a wider board reshuffle, Mr. MacDonald will be replaced by chairman and executive director Bane Hunter, but will continue on as an executive director and serve as president of the company, SmartCompany says. A former AFL football player, Mr. MacDonald founded GetSwift in 2014, spinning it out of a alcohol delivery startup called Liquorun. However, numerous investigations into the business's compliance and disclosure practises in recent months revealed widespread concerns with the startup and has prompted two class action lawsuits, SmartCompany relates. Prior to this, the company had raised over AUD100 million from investors, with its share price hitting an all-time high of AUD4. GetSwift's last trading price was at 41c, SmartCompany notes. According to SmartCompany, the company has also appointed two new directors to the board, Michael Fricklas and David Ryan, who it says are directors with "extensive and distinguished governance". "We feel that not only is the experience right, but the chemistry is right, to assist us with both our growth and our implementation of the more sophisticated governance practices of larger companies. We are all looking forward to working together to make GetSwift the most successful company in its field," Mr. Hunter said in a statement, SmartCompany relays. Getswift Limited (ASX:GSW) -- https://www.getswift.co/-- a technology company, provides secure cloud-based SaaS platform for delivery businesses in Australia and internationally. It offers logistics software. HATCH TRANSPORT: Second Creditors' Meeting Set for May 8 -------------------------------------------------------- A second meeting of creditors in the proceedings of Hatch Transport Pty Ltd has been set for May 8, 2018, at 11:00 a.m. at the offices of Cor Cordis, Mezzanine Level, BGC Centre, 28 The Esplanade, in Perth, WA. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by May 7, 2018, at 4:00 p.m. Clifford Stuart Rocke and Jeremy Joseph Nipps of Cor Cordis were appointed as administrators of Hatch Transport on March 30, 2018. LIBERTY TRUST 2018-1: Moody's Gives (P)Ba2 Rating to Cl. E Notes ---------------------------------------------------------------- Moody's Investors Service has assigned the following provisional ratings to the notes to be issued by Liberty Funding Pty Ltd: Issuer: Liberty Funding Pty Ltd in respect of the Liberty Series 2018-1 Trust AUD70 million Class A1a Notes, Assigned (P)Aaa (sf) AUD[ ] million Class A1b Notes, Assigned (P)Aaa (sf) EUR[ ] million Class A1c Notes, Assigned (P)Aaa (sf) AUD173.6 million Class A2 Notes, Assigned (P)Aaa (sf) AUD25.9 million Class B Notes, Assigned (P)Aa2 (sf) AUD13.3 million Class C Notes, Assigned (P)A2 (sf) AUD7.7 million Class D Notes, Assigned (P)Baa2 (sf) AUD9.1 million Class E Notes, Assigned (P)Ba2 (sf) AUD2.8 million Class F Notes, Assigned (P)B2 (sf) The AUD12.60 million Class G Notes are not rated by Moody's. The AUD equivalent of the Class A1b and Class A1c Notes on the Closing Date will equal AUD385 million. The Class A1b and Class A1c issue size will be determined on or prior to the pricing date. The ratings address the expected loss posed to investors by the legal final maturity. RATINGS RATIONALE The transaction is an Australian prime and non-conforming RMBS secured by a portfolio of residential mortgage loans. A portion of the portfolio consists of loans extended to borrowers with impaired credit histories (4.4%) or made on an alternative documentation basis (3.3%). This is the 25th non-conforming RMBS transaction sponsored by Liberty Financial Pty Limited ("Liberty"). The ratings take account of, among other factors: The fact that Class A1a, Class A1b and Class A1c Notes benefit from 35.0% credit enhancement (CE) and Class A2 Notes benefit from 10.2% CE, while Moody's MILAN CE assumption - representing the loss that Moody's expects the portfolio to suffer in the event of a severe recession scenario - is at 10.2%. Moody's expected loss for this transaction is 1.5%. The subordination to Class A1 Notes strengthens ratings stability, should the pool experience losses above Moody's expectations. A liquidity facility provided by the Commonwealth Bank of Australia (CBA, Aa3/P-1/Aa2(cr)/P-1(cr)), with a required limit equal to 2.0% of the aggregate invested amount of the notes less the redemption fund balance. The facility is subject to a floor of AUD600,000. If the facility provider loses its P-1(cr) counterparty risk assessment, it must within 30 days either: (1) procure a replacement facility provider; or (2) deposit an amount of the undrawn liquidity commitment at the time into an account with a P-1 rated bank. The guarantee fee reserve account, which is unfunded at closing and will build up to a limit of 0.30% of the issued notional from proceeds paid to Liberty Credit Enhancement Company Pty Ltd as Guarantor, from the bottom of the interest waterfall prior to interest paid to the Class G noteholders. The reserve account will firstly be available to meet losses on the loans and charge- offs against the notes. Secondly, it can be used to cover any liquidity shortfalls that remain uncovered after drawing on the liquidity facility and principal. Any reserve account balance used can be reimbursed to its limit from future excess income. The experience of Liberty in servicing residential mortgage portfolios. The interest rate mismatch, which arises when the movements of the 30-day BBSW are not (simultaneously) passed on to the variable rate loans. To mitigate the basis risk, the threshold rate mechanism obligates the Servicer to set interest rates on the mortgage loans at a minimum rate above 1mBBSW, or higher if the trust's income is insufficient to cover the obligations of the Trustee under the transaction documents. A currency swap, which mitigates the cross-currency risk associated with the EUR-denominated Class A1c Notes. According to the current form of the swap documentation, swap linkage has no present rating impact on the Class A1c Notes. This is because the linkage between the notes ratings and the rating of the provider of any of the swaps is mitigated by an obligation to post cash collateral and novate the swap upon downgrade below A3(cr). The key transactional and pool features are as follows: The Class A1a Notes will receive principal prior to any other notes at all times, unless there is an event of default. Once Class A1a Notes are paid off Class A1b and Class A1c Notes will be paid pro-rata until they are repaid in full following which, with the Class B to Class F notes receive sequential principal payments. Upon satisfaction of all stepdown conditions which include - the payment date falling on or after the payment date in April 2020 and absence of charge offs on any notes - Class A1b, Class A1c, Class A2, Class B, Class C, Class D, Class E, and Class F Notes will receive a pro-rata share of principal payments (subject to additional conditions). The Class G Notes do not step down and will only receive principal payments once all other notes have been repaid. The principal pay-down switches back to sequential pay across all notes, once the aggregate loan amount falls below 20.0% of the aggregate loan amount at closing, or on or following the payment date in April 2022. The weighted average scheduled loan to value of the pool is at 69.3%. The portfolio is geographically well diversified due to Liberty's wide distribution network. The portfolio contains 4.4% exposure with respect to borrowers with prior credit impairment (default, judgement or bankruptcy). Moody's assesses these borrowers as having a significantly higher default probability. 3.3% of loans were extended on an alternative documentation basis. For the alternative documentation loans Liberty performs additional verification checks over and above the typical checks for low documentation products. These checks include a declaration of financial position and six months of bank statements, two quarters of Business Accounting Statements or GST returns. Liberty's alternative documentation loans show stronger arrears performance when compared to traditional low documentation loans. Given the additional verification checks and the stronger arrears performance, Moody's says that these alternative documentation loans demonstrate a lower default frequency than standard low documentation loans. Investment and IO loans represent 31.7% and 20.7% of the pool, respectively. Both proportions are lower than the Australian mortgage market averages of 34.3% and 32.7%, respectively, as of the end of December 2017. The IO loans proportion is lower than the 2017 Liberty non-conforming transactions. Moody's assesses that investor buyers have a higher probability of default compared to borrowers who live in the property that serves as security for a particular loan. Similarly, Moody's MILAN analysis has factored in a higher default probability for loans with interest-only periods versus loans amortising from loan origination and without interest-only periods. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Approach to Rating RMBS Using the MILAN Framework" published in September 2017. Factors that would lead to an upgrade or downgrade of the ratings: Levels of credit protection that are greater than necessary to protect investors against current expectations of loss could lead to an upgrade of the ratings. Moody's current expectations of loss could be better than its original expectations because of fewer defaults by underlying obligors or higher recoveries on defaulted loans. The Australian job market and the housing market are primary drivers of performance. A factor that could lead to a downgrade of the notes is worse- than-expected collateral performance. Other reasons for performance worse than Moody's expects include poor servicing, error on the part of transaction parties, a deterioration in credit quality of transaction counterparties, fraud and lack of transactional governance. Moody's Parameter Sensitivities: Parameter Sensitivities are designed to provide a quantitative calculation of how the initial rating might change if key input parameters used in the initial rating process - here the MILAN CE and mean expected loss - differed. The analysis assumes that the deal has not aged. Parameter Sensitivities only reflect the ratings impact of each scenario from a quantitative/model- indicated standpoint. Based on the current structure, assuming an increase in the Portfolio EL and MILAN CE of 50% above the initial assumptions, the Class A2 Notes are sensitive to a one-notch rating migration. Using these same assumptions, the rating on the Class B Notes will drop three notches, and the ratings on Class C and Class D Notes drop four notches. The Class A1 Notes are not sensitive to any rating migration using these same assumptions. Moody's ratings address only the credit risks associated with the transaction. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors. Moody's ratings are subject to revision, suspension or withdrawal at any time at our absolute discretion. The ratings are expressions of opinion and not recommendations to purchase, sell or hold securities. Moody's issues provisional ratings in advance of the final sale of securities and these ratings reflect Moody's preliminary credit opinion regarding the transaction. Upon a conclusive review of the final versions of all the documents and legal opinions, Moody's will endeavour to assign a definitive rating to the transaction. A definitive rating may differ from a provisional rating. VIRGIN AUSTRALIA: Moody's Affirms B2 CFR, Outlook Now Stable ------------------------------------------------------------ Moody's Investors Service has affirmed Virgin Australia Holdings Limited's B2 corporate family rating and B3 senior unsecured ratings and changed the outlook on the ratings to stable from negative. Moody's also affirmed the ratings assigned to the company's Enhanced Equipment Notes (EEN's), Virgin Australia 2013-1A Trust's Baa1 rating, Virgin Australia 2013-1B Trust's Ba2 rating, and Virgin Australia 2013-1C Trust's B1 rating. The affirmation reflects the sizeable equity cushions of about 60%, 55% and 50% on the Class A, Class B and Class C notes, respectively, and projected increases in the equity cushions in upcoming years. These levels are before the priority claims of liquidity facility providers and for costs under an insolvency scenario where the company rejects the financing. The outlook on the EEN ratings is changed to stable from negative. RATINGS RATIONALE The outlook on Virgin's rating had been negative since June 2016. While Virgin's free cash flow has not improved to a level where Moody's believes it can maintain its B2 rating without further improvements in operating cash flow, reductions in capital expenditure, or reliance on shareholder support, Moody's expects debt to EBITDA for fiscal 2018 and 2019 to be between 4.9x and 5.2x, down from 5.8x in fiscal 2017. This is largely due to the equity raising in 2017 which was used to strengthen the balance sheet, as well as an improvement in EBITDA, driven in part by the company's Better Business initiative which is a three year program launched in July 2016 targeting AUD350 million of annualized cash flow savings. This level of leverage provides Virgin with headroom versus the 6.0x downgrade threshold for the rating. While Virgin's EBITDA has been improving and is expected to continue improving, operating cash flow remains insufficient to fund capital expenditure, including for aircraft, and therefore the company remains free cash flow negative. The outlook could return to negative if debt to EBITDA starts to trend upwards, with the catalyst being the trajectory rather than the absolute number approaching the threshold of 6x. The EEN ratings reflect Moody's belief that under an insolvency scenario where Virgin Australia was to reject the transaction, the trustee would timely repossess the aircraft and sell them for more than the remaining debt, given expected ongoing favorable demand for narrow-body aircraft because of strong growth in global passenger demand and limits on Airbus' and Boeing' production capacity in upcoming years. The transaction originally financed 24 of the company's aircraft. The aircraft were delivered new between August 2003 and August 2011. Notes on six of the aircraft have been paid off, notes on seven more aircraft, including the one B777-300ER in the transaction, will mature in 2018, leaving 11 B737-800s in the collateral. The B737-800s are the backbone of the company's shorter haul fleet serving routes within Australia and to and from New Zealand. The 17 current remaining 800s represent 24% of the current total 737-800 fleet of 72 aircraft. Given the cross- default and cross-collateralization of the transaction, Moody's believes the company would eliminate other aircraft of this type should it seek to downsize the network under a formal corporate reorganization. The vintages of the B737-800s in the transaction range from 2003 to 2011, the youngest remaining in the transaction to 2022, the year the transaction matures, while the two 2003 vintages and two of the 2004 vintages will mature in 2019. Moody's assigns ratings to the EENs by adding or subtracting notches to or from an airline's corporate family rating, based on the rating agency's opinions of the importance of the aircraft collateral to the airline's network, whether there is a liquidity facility, its estimates of the size of the equity cushion, and each Class' position in the waterfall. The ratings of the EENs could change if Virgin Australia's corporate family rating is changed, or if the equity cushions erode relative to Moody's projections. WHAT COULD CHANGE THE RATING Moody's would consider upgrading the corporate family rating if Virgin demonstrates that it can maintain its credit metrics at a B1 level on a sustained basis without shareholder support, and has reached a level where it is free cash flow positive. Specifically, Moody's would expect to see debt/EBITDA below 5.0x for at least 12 months. Downward rating pressure could emerge if Virgin's debt to EBITDA starts trending upwards and exceeds 5.5x. Moody's expects the catalyst to be the trajectory rather than the absolute number approaching the threshold of 6x. The principal methodology used in rating Virgin Australia Holdings Limited was Passenger Airline Industry published in April 2018. The principal methodologies used in rating Virgin Australia 2013-1A Trust, Virgin Australia 2013-1B Trust and Virgin Australia 2013-1C Trust were Passenger Airline Industry published in April 2018, and Enhanced Equipment Trust and Equipment Trust Certificates published in December 2015. Virgin Australia Holdings Limited headquartered in Brisbane, is Australia's second largest airline following its launch in 2000 and listing on the Australian Securities Exchange in 2003. As of June 2017 it generated revenues of AUD5 billion. =============== C A M B O D I A =============== NAGACORP LTD: Moody's Assigns First-time B1 CFR, Outlook Stable --------------------------------------------------------------- Moody's Investors Service has assigned a first-time B1 corporate family rating to NagaCorp Ltd. At the same time, Moody's has assigned a B1 backed senior unsecured rating to the company's proposed US dollar bond issuance. The proposed bonds are unconditionally and irrevocably guaranteed by major operating subsidiaries of NagaCorp. The outlook on the ratings is stable. NagaCorp will use the net bond proceeds to grow its VIP gaming segment and refurbish the hotel rooms in Naga 1. RATINGS RATIONALE "NagaCorp's B1 rating reflects its ownership of NagaWorld, which holds the exclusive right to operate casinos in and around Phnom Penh, Cambodia," says Jacintha Poh, a Moody's Vice President and Senior Analyst. NagaCorp's casino license was awarded to its wholly owned subsidiary, Ariston Sdn. Berhad, by the Cambodian government on January 2, 1995 for a duration of 70 years, expiring in 2065. Ariston Sdn. Berhad is the sole casino operator in the area within a 200 kilometer radius of Phnom Penh, except the Cambodia- Vietnam border area, Bokor, Kirirom Mountains and Sihanoukville, up to the end of 2035. The casino license allows NagaCorp to adjust its capacity to suit market demand, as there are no restrictions on operating hours or the number of gaming tables and machines. NagaCorp's B1 rating is also supported by the company's diversified business, which allows it to generate a fairly balanced gross profit distribution across its three major business segments of (1) mass-market table games; (2) mass-market electronic gaming; and (3) VIP gaming. The company also derives earnings from a diversified customer base, with tourists arriving from Greater China, Malaysia and other Southeast Asian countries. "NagaCorp is rated one notch above Cambodia's sovereign rating, based on our assessment of the low likelihood that NagaCorp would be affected in the event of a weakening of Cambodia's economic fundamentals," says Poh, who is also Moody's Lead Analyst for NagaCorp, adding "The company generates nearly all of its revenue from tourists and does not rely on domestic banks or capital markets for funding." Since its listing on the Hong Kong Stock Exchange in 2006, NagaCorp has gradually grown its revenue, despite economic challenges and increasing competition within the gaming industry in Asia. In 2017, the company recorded its strongest growth in revenue owing to a sharp increase in its VIP gaming business. Moody's expects NagaCorp's revenue to grow around 20% each year in 2018 and 2019, supported by improvements across its mass- market gaming and VIP gaming businesses with the ramp up of Naga 2, which opened in November 2017. Moody's expects NagaCorp's mass-market gaming business to be driven by the company's collaboration with China International Travel Services Limited, China Duty Free Group, and Bassaka Air to increase tourist visits to Cambodia and NagaWorld. Over the last five years, Chinese tourist arrivals to Cambodia have grown at a CAGR of 27% to around 1.2 million in 2017 and accounted for 21% of total tourist arrivals to Cambodia, according to Cambodia's Ministry of Tourism. The company also plans to further grow its VIP gaming segment by offering competitive incentives or commissions to gaming promoters. Consequently, Moody's expects NagaCorp's financial metrics to remain solid for its B1 rating, despite an increase in debt. Specifically, Moody's expects NagaCorp to record adjusted debt/EBITDA of around 1.5x, EBIT/interest expense of around 11.2x and RCF/debt of around 30% in 2018. Over the next 12-18 months, Moody's also expects NagaCorp to generate an EBITDA margin of around 30%, which is lower than its last five-year average of around 45%, but is still high among listed gaming companies. The company's high margin is supported by the low labor costs and favorable gaming tax environment in Cambodia. The drop in NagaCorp's EBITDA margin will be due to the growing proportion of revenue from the VIP gaming business, which generates lower margins than the mass-market gaming business. Over the next 12-18 months, Moody's estimates NagaCorp's gross profit margins for its VIP gaming business to be around 20%, and for its mass-market gaming business to be around 95%. NagaCorp's rating is constrained by (1) the company's single-site operation; (2) uncertainty around tax rates and the timing of Cambodia's new gaming law; and (3) its exposure to political instability in Cambodia, changes in economic policies and weaknesses relating to the country's legal system. NagaCorp's proposed US dollar senior unsecured notes are not exposed to either legal or structural subordination risk, and are fully guaranteed by the company's major operating subsidiaries, and are therefore rated at the same level as the company's B1 corporate family rating. According to Cambodia's 1997 Law on Foreign Exchange, there are no restrictions on foreign exchange operations through authorized banks. NagaCorp has established a track record of repatriating funds from its NagaWorld operations to the holding company and has paid dividends to the company's shareholders. The rating outlook is stable, reflecting Moody's expectation that NagaCorp will carry out its expansion plans in a prudent manner while maintaining solid financial metrics and liquidity over the next 12-18 months. NagaCorp's rating is unlikely to be upgraded, because it is constrained to one notch above Cambodia's sovereign rating. To upgrade the rating, Moody's would expect -- in addition to a sovereign upgrade -- the company to maintain its strong operating position within the Cambodian gaming market and solid financial metrics as evidenced by adjusted debt/EBITDA below 2.0x and adjusted retained cash flow/debt above 25%. Downward rating pressure could emerge if (1) Cambodia's rating is downgraded; (2) the operating environment deteriorates, resulting in protracted weakness in operating cash flow generation; (3) the company fails to maintain 100% ownership of Ariston Sdn. Bhd, which holds its Cambodian casino license, and 100% ownership of NagaWorld; (4) the company increases its debt leverage, capital spending or shareholder returns, such that its adjusted debt/EBITDA exceeds 2.5x and adjusted retained cash flow/debt falls below 20% over the next 12-18 months; and (5) the company has insufficient cash to cover its short-term debt obligations. The principal methodology used in these ratings was Gaming Industry published in December 2017. NagaCorp Ltd. was incorporated in the Cayman Islands in 2003 and listed on the Hong Kong Stock Exchange in 2006. The company owns and manages NagaWorld, the largest integrated casino and hotel complex in Phnom Penh, Cambodia. It is developing a second integrated casino and hotel complex in Vladivostok, Russia, which the company expects will commence operation in 2019. NagaCorp was founded by Tan Sri Dr. Chen Lip Keong, the company's chief executive officer and largest shareholder with a 65% stake as of March 31, 2018. ========= C H I N A ========= AVIC INTERNAIONAL: Moody's Withdraws Ba1 Rating on 2 Notes ---------------------------------------------------------- Moody's Investors Service has withdrawn AVIC International Holding Corporation's (AVIC International) Ba1 corporate family rating, and the Ba1 senior unsecured rating assigned to the $300 million 4.75% notes due 2018 and the $200 million 6% notes due 2023 issued by AVIC International Finance & Investment Ltd and guaranteed by AVIC International. Withdrawals: Issuer: AVIC International Holding Corporation Corporate Family Rating, Withdrawn, previously rated Ba1 Issuer: AVIC International Finance & Investment Ltd $300MM 4.75% notes due 2018, Senior Unsecured Rating, Withdrawn, previously rated Ba1. $200MM 6% notes due 2023, Senior Unsecured Rating, Withdrawn, previously rated Ba1. Outlook Actions: Issuer: AVIC International Holding Corporation Outlook, Changed To Rating Withdrawn From Negative Issuer: AVIC International Finance & Investment Ltd Outlook, Changed To Rating Withdrawn From Negative RATINGS RATIONALE Moody's has decided to withdraw the ratings because it believes it has insufficient or otherwise inadequate information to support the maintenance of the ratings. AVIC International is the key platform of Aviation Industry Corporation of China's (AVIC Group) international aviation businesses and most of its non-aviation businesses. AVIC International was 62.52% owned by AVIC Group at the end of March 2017. AVIC International's revenue for the 12 months ended September 2017 totaled RMB150 billion compared with RMB140 billion in 2016. CENTRAL CHINA REAL: Fitch Gives BB-(EXP) Rating to New SGD Notes ---------------------------------------------------------------- Fitch Ratings has assigned Central China Real Estate Limited's (CCRE; BB-/Stable) proposed Singapore dollar senior notes due 2020 an expected rating of 'BB-(EXP)'. The notes are rated at the same level as CCRE's senior unsecured rating because they constitute its direct and senior unsecured obligations. The final rating is subject to the receipt of final documentation conforming to information already received. CCRE intends to use the net proceeds from the note issue for refinancing. CCRE's ratings are supported by the company's competitive position as a real-estate developer in China's Henan province, with broad housing-product diversification and a growing non- property development business from rental properties and project management. Its ratings are also supported by its healthy financial profile with low leverage, as measured by net debt/adjusted inventory that proportionately consolidates its joint ventures, of around 20% at end-2017, slightly lower than our forecast of 23%. CCRE's ratings are constrained by its aggressive strategy of scale expansion over the next two years and we expect CCRE's leverage to increase to above 30% over this period. KEY RATING DRIVERS Solid Position in Henan: Fitch believes CCRE's track record supports its plan to raise its market share in Henan to 10%-15% in the next three to five years. CCRE has been developing residential properties almost entirely in the province over the past 25 years, and it has a presence in 18 prefecture-level cities and an established reputation. CCRE's lower average selling price (ASP) of CNY6,635 per square metre (sq m) compared with peers' ASP of above CNY11,000 per sq m reflects its wide product exposure, which is not driven only by sales in the province's larger cities. The diversification helps it mitigate the risks of policy tightening on housing sales in the provincial capital, Zhengzhou. CCRE's contracted sales reached CNY30.4 billion in 2017, with a market share of 4.3% in Henan, among the top developers in the province. CCRE recorded 51% growth in its 2017 contracted sales, driven by increased penetration and better sell-through rates in lower-tier cities in Henan. This helped expand its market share by 0.7pp. We expect CCRE's annual contracted sales to increase further to CNY35 billion-45 billion in 2018-2019. Growing Non-Development Businesses: Fitch estimates CCRE's non- development business EBITDA/interest coverage rose to 0.3x at end-2017 (end-2016: 0.2x), adding an operating cash flow source other than development property sales to help the company service debt. Growth in hotel and rental income, and its recent expansion into project management of residential property developments in the province's smaller towns, drove the higher contribution from non-development businesses. CCRE is also expanding into the development and operation of cultural tourism projects that will enhance its non-development income in the next three to five years. Local governments are encouraging cultural tourism projects, giving CCRE access to lower-cost funding and alternative land banking channels that improve its financial flexibility. Aggressive Land Acquisition in 2017: In 2017, CCRE replenished 9.8 million sqm in attributable gross floor area of land bank for CNY10.6 billion, or a land-acquisition-to-contracted sales value ratio of 0.5x, exceeding the 0.2x-0.3x in previous years. The more volatile home sales performance in lower-tiered cities may affect the pace at which CCRE sells its newly acquired projects and may limit its scope to deleverage. CCRE's leverage of around 20% at end-2017 was lower than the 27% at end-2016, but still higher than the 17% at end-2015. We expect the company's leverage to stay around 30% for the next three years on accelerated land acquisitions. Fitch believes CCRE's leverage will not rise above 40%, as the company has the flexibility to slow down its land acquisitions due to a sizeable land bank of 24.2 million sq m, sufficient for its development for the next five to six years. Stabilising Margin: Fitch estimates CCRE's EBITDA margin (deducting capitalised interest from cost of sales) to be around 16%-17% in 2018-2019. The EBITDA margin fell to 16% in 2017, from 17% in 2016 and 25% in 2014, affected by CCRE's strategy to clear inventory in 1H15. Higher contracted sales than revenue also squeezed the EBITDA margin as selling, general and administrative expenses, which are more a function of its contracted sales, are apportioned to a much lower level of revenue. The higher contracted sales ASP in 2017 will support its EBITDA margin when these projects are recognised in the next one to two years and CCRE's EBITDA margin should stabilise over time. DERIVATION SUMMARY CCRE has increased its sales to a level comparable with those of 'BB-' rated peers, while maintaining a healthier financial profile. CCRE's contracted sales of CNY30 billion are comparable with 'BB-' rated peers, such as Yuzhou Properties Company Limited's (BB-/Stable) CNY40 billion, China Aoyuan Property Group Limited's (BB-/Stable) CNY46 billion, and KWG Property Holding Limited's (BB-/Stable) CNY29 billion. Its Fitch-rated 'BB' peers have higher contracted sales of CNY50 billion-70 billion. CCRE's leverage of 20% on average in the past four years compares favourably with that of 'BB-' rated peers' 30%-45%. CCRE's recent land acquisitions may increase its leverage to above 30% in the next two years, although most of the newly acquired sites are in Henan province, where the company has a well-established reputation. CCRE's EBITDA margin of 17% is near the bottom of the 18%-25% range of 'BB-' rated peers, as it has been affected by the company's destocking strategy since 1H15. Fitch expects the recognition of projects with rising contracted sales ASP since 2017 to stabilise its EBITDA margin over time. Fitch forecasts EBITDA margins of 16%-17% in 2018-2019. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Total contracted sales to increase by 26% in 2018 and 25% in 2019 -- Average selling price of CNY6,600-6,700 per sqm in 2018-2019 (2017: CNY6,635 per sqm) -- EBITDA margin (excluding capitalised interest) at 16%-17% for 2018-2019 -- Land acquisition budget as a percentage of total contracted sales of 27%-33% for 2018-2019, allowing the company to maintain a land bank reserve of five years of contracted sales RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action - Contracted sales sustained above CNY50 billion - Leverage persistently at 30% or below - Contracted sales to total debt sustained at above 1.5x (2017: 1.4x) Developments that May, Individually or Collectively, Lead to Negative Rating Action - Decline in contracted sales for a sustained period - Leverage at 40% or above for a sustained period - EBITDA margin below 18% for a sustained period LIQUIDITY Sufficient Liquidity: As of end-2017, the company had total cash of CNY13.4 billion (including restricted cash of CNY2.1 billion), sufficient to cover short-term debt of CNY4.4 billion maturing in one year (consisting of bank loans of CNY0.4 billion, other loans of CNY0.1 billion and senior notes of CNY3.9 billion). Diversified Funding, Lower Costs: CCRE had total debt of CNY15.6 billion as of end-2017, consisting of bank loans, other loans, senior notes and corporate bonds. There were unutilised banking facilities amounting to CNY64.3 billion as at 2017. The average cost of borrowing dropped to 6.8% in 2017, from 8.9% in 2013, 7.9% in 2015 and 6.9% in 2016. CHINA JINJIANG: Moody's Alters Outlook on Ba2 CFR to Negative ------------------------------------------------------------- Moody's Investors Service has revised to negative from stable the outlook on the Ba2 corporate family rating (CFR) of China Jinjiang Environment Holding Co. Ltd. (CJE) and the Ba3 senior unsecured rating on its USD bond. At the same time, Moody's has affirmed all the ratings. RATINGS RATIONALE "The negative outlook on CJE's ratings reflects the consideration that the company's credit metrics have weakened beyond our original expectations, mainly due to the planned outage of some of the existing operating capacity of its waste-to-energy (WTE) projects," says Ralph Ng, a Moody's Assistant Vice President and Analyst. "In addition, the company's accelerated pace of overseas expansion reflects the consideration that its aggressive appetite will increase regulatory and execution risks, which are incorporated in the negative outlook," adds Ng. CJE's weakened credit metrics are primarily a result of the reduction of cash flows from its existing eight operating projects, due to the planned outage -- implemented as part of its ongoing expansion and upgrade program -- together with increased interest costs. The program involves about 50% of its total operating capacity and Moody's expects the fleets of each project will be upgraded by phase. The program was in turn prompted by CJE's strategic reasons to expand its capacity for organic growth. Moody's expects the environmental requirements and emission standards will continue to rise across the industry in China. Moody's expects each project will take 12 months on average to complete by phase and on a rolling basis, starting originally in late 2017, and during that period, CJE's recurring cash flows will be moderately reduced in 2018. While the planned outage will also constrain CJE's liquidity, Moody's expects it is manageable within the Ba2 rating and negative outlook. As a result, Moody's estimates that CJE's adjusted retained cash flows (RCF)/debt will register about 8% in the next 12 months, compared to the downgrade trigger of 10% for its current Ba2 CFR. The negative outlook also reflects Moody's concerns -- as indicated -- in regard to its accelerated pace of overseas expansion. On April 22, CJE announced a SGD15 million investment in a WTE greenfield project company in Brazil for 51% ownership. While the size of the current investment is relatively small (less than 1% of CJE's total assets at the end of March 2018) and in a preliminary stage, the accelerated pace of expansion in other emerging markets will bring further regulatory and execution risks to CJE's overall credit profile. Moreover, Moody's expects the project will consolidate into CJE, and any further borrowings by the project company, together with CJE's other overseas projects, will increase CJE's leverage at its consolidated level. During the outlook period, Moody's will monitor the plant expansion progress and CJE's pace of additional overseas investments. The rating could be downgraded if CJE's credit quality deteriorate, for example, (1) there are further planned outages for existing capacity which will materially jeopardize CJE's ability to generate recurring cash flow and thus adversely impact its credit metrics; (2) CJE continues with its more aggressive overseas strategies; and (3) CJE maintains its aggressive dividend policies. Financial metrics that Moody's would consider for a downgrade include RCF/debt remaining below 10% and FFO/interest cover below 3.0x. A rating upgrade is unlikely, given the negative outlook. The outlook on CJE's rating could change to stable if CJE strengthens its financial profile, such that RCF/debt improves to above 10% on a consistent basis over the next 12-18 months. At the same time, CJE would maintain a stable business profile without aggressive overseas expansions and would recoup cash flows from existing capacity after completion of the expansion and upgrade program on a timely basis. The methodology used in these ratings was Unregulated Utilities and Unregulated Power Companies, published in May 2017. China Jinjiang Environment Holding Co. Ltd. (CJE) is a Singapore- listed waste-to-energy (WTE) operator in China. CJE operates along the whole value chain for WTE, from planning and construction to the operation and management of the facilities. At the end of March 2018, CJE had 20 operating WTE facilities with a total waste treatment capacity of 28,280 tons/day and electricity generating capacity of 521MW in 12 provinces in China. CIFI HOLDINGS: Fitch Gives BB(EXP) Rating to USD Senior Notes ------------------------------------------------------------- Fitch Ratings has assigned China-based property developer CIFI Holdings (Group) Co. Ltd.'s (BB/Stable) proposed US dollar senior notes an expected rating of 'BB(EXP)'. The final rating is contingent on the receipt of final documents conforming to information already received. The notes are rated at the same level as CIFI's senior unsecured debt as they represent the direct, unconditional, unsecured and unsubordinated obligations of the company. The proceeds of the notes will be used to refinance debt and for general corporate purposes. KEY RATING DRIVERS Strong Performance in 2017: CIFI's attributable contracted sales in 2017 increased by 88% to CNY55 billion, while land acquisitions picked up to 82% of contracted sales on an attributable basis. Leverage, as measured by net debt/adjusted inventory with proportionate consolidation of joint ventures (JVs) and associates, was stable at 36% at end-2017. The healthy leverage was due to CIFI's share placement, more flexible land premium payment and adoption of the JV model, which improves operational efficiency and lowers land acquisition and funding costs. Fitch expects CIFI's leverage to rise slightly but stay well below 45% for the next 12-18 months as CIFI plans to acquire more land in 2018 to further strengthen its land bank. CIFI had a total land bank of 31 million sq m with an average cost of CNY6,750/sq m at end-2017, which is sufficient for more than four years of development. Healthy Margin: CIFI's EBITDA margin, excluding the effect of acquisition revaluation, has been consistently above 25%, and it was at 26.2% in 2017. Fitch expects the margin to continue widening to close to 30% by 2018 due to its resilient average selling price (ASP) and low land cost, which Fitch estimates at 30% of the contracted ASP. CIFI's large portfolio of projects in Tier 1 and 2 cities and its shift to offer products that appeal to upgraders rather than the mass market have enhanced its profit structure. Focus on Top-Tier Cities: CIFI has a diversified presence in the Yangtze River Delta, Pan Bohai Rim, Central Western Region and Guangdong/Fujian provinces, reducing its exposure to uncertainty in local policies and economies while providing room to expand. More than 90% of the company's attributable land bank at end-2017 was in Tier 1 and 2 cities, which means CIFI is less exposed to the oversupply plaguing lower-tier cities. In addition, CIFI entered 18 new cities in 2017 with its projects spreading over 40 cities now, helping mitigate risks arising from policy intervention in individual cities. Nevertheless, strong and widespread implementation of home-purchase restrictions by the authorities may slow growth. Lower Funding Costs: CIFI has developed diversified funding channels, including onshore bonds and offshore bank loans. The company sold USD300 million in five-year 5.5% bonds in January 2018 and issued USD600 million of senior perpetual debt at 5.375% in 2017. It also successfully issued HKD2,790 million of zero- coupon convertible bonds in February 2018. The proceeds will be used to refinance its existing borrowings. The company reduced its average funding cost to 5.2% in 2017, from 5.5% in 2016. Fitch expects CIFI's active management of its capital structure to maintain its funding cost at a low level, despite the tighter liquidity and unfavourable funding environment in 2018. DERIVATION SUMMARY CIFI's closest peer is Sino-Ocean Group Holding Limited (BBB- /Stable: standalone credit profile: BB) in terms of contracted sales, land bank size and geographic focus on Tier 1 and affluent Tier 2 cities. CIFI's leverage of around 35% is lower than the 40% leverage Fitch expects for Sino-Ocean in 2018 and significantly lower than the above 60% leverage of 'BB' peers, such as Guangzhou R&F Properties Co. Ltd. (BB-/Negative) and Beijing Capital Development Holding (Group) Co., Ltd. (BBB- /Negative, standalone credit profile: BB). CIFI's EBITDA margin that is consistently above 25% is also slightly higher than Sino- Ocean's 23%-25%, but in line with that of Guangzhou R&F and Beijing Capital Development. However, its nil recurring EBITDA interest coverage is inferior to Sino-Ocean's 0.4x and Guangzhou R&F's 0.2x. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer - Attributable contracted sales of CNY75 billion in 2018 - Attributable land acquisition at 75% of contracted sales in 2018 then slowing to 55% in 2019 (2017: 82%) - Adjusted EBITDA margin improving to around 30% by 2018 - Flattish average land cost in 2018 compared with 2017 acquisition costs - 30% dividend payout RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action -- leverage, measured by net debt/adjusted inventory, sustained below 30% (2017: 35.9%) -- EBITDA margin, excluding the effect of acquisition revaluations, of over 30% for a sustained period (2017: 26.2%) -- maintaining high cash flow turnover despite the JV business model and consolidated contracted sales/debt at over 1.2x (2017: 1.4x) Developments that May, Individually or Collectively, Lead to Negative Rating Action -- substantial decrease in contracted sales -- EBITDA margin, excluding the effect of acquisition revaluation, below 25% for a sustained period -- net debt/adjusted inventory above 45% for a sustained period LIQUIDITY Ample Liquidity: CIFI had unrestricted cash of CNY29.8 billion at end-2017, enough to cover short-term debt of CNY11.8 billion. The company issued several tranches of senior perpetual, senior and convertible bonds in the past several months and had approved but unutilised facilities of CNY4.5 billion at end-2017. This will be sufficient to fund development costs, land premium payments and debt obligations for the next 18 months. HYDOO INT'L: Fitch Assigns B-(EXP) Rating to USD Unsec. Notes ------------------------------------------------------------- Fitch Ratings has assigned Hydoo International Holding Limited's (B-/Stable) proposed US dollar-denominated senior unsecured notes an expected 'B-(EXP)' rating and a Recovery Rating of 'RR4'. Hydoo's proposed notes are rated at the same level as its senior unsecured rating because they constitute its direct, unsubordinated and senior unsecured obligations under the guarantee. The notes are being offered in exchange for its USD160 million notes due December 2018 (2018 notes) and as new issuance. Hydoo intends to use net proceeds from any new note issuance primarily for refinancing existing debt. The final rating on the proposed notes is contingent on the receipt of final documents conforming to information already received. The ratings are supported by Hydoo's low leverage of approximately 8% as of end-2017, which further declined from 24% in 2016 on asset disposals during 2017 and its controlled construction and land acquisition pace. Hydoo's ratings are constrained by its small business scale, low non-development income and sluggish trade-centre demand. Hydoo's liquidity position will be sufficient if it successfully refinances the 2018 notes through the current exchange offer and proposed new issue. Failure to do so will weaken its liquidity significantly and may result in a negative rating action. Hydoo had an unrestricted cash balance of CNY1 billion and restricted cash balance of CNY858 million (CNY325 million was pledged for bank loans) as of end-2017, against short-term debt of CNY2.25 billion (including the 2018 notes). KEY RATING DRIVERS Trade Centre Performance Stabilising: Hydoo is focused on trade- centre development, where demand has been weak due to SMEs scaling down new investments, falling relocation demand, local government delays in completing transport networks and lower investor appetite for commercial properties. However, there are signs that demand is picking up, with local governments relocating distributors located in city centres to rural areas to free up land for higher economic value-added purposes, such as residential and commercial uses, following the run-up in property prices in the previous few years. Hydoo's average selling price (ASP) rebounded by 16% yoy in 2017 to CNY5,833 per square meter (sqm) and contracted sales improved by 8% yoy to CNY2,719 million, mainly due to the higher ASP, after being on a decline from 2014-2016. We expect 2018 contracted sales to rise to over CNY3,000 million and gross floor area sold to increase by over 20% yoy. EBITDA Margin Weaker than Expected: Fitch's expects Hydoo's 2018 EBITDA margin to normalise back to the low-to mid-20 percentage level, after dropping to 8% in 2017 (2016: 27%). Hydoo's management says the margin drop was due to a delay in recognising revenue from its Liuzhou Trade Center project, which commenced sales in 2H17 and contributed over CNY1 billion in contracted sales, while recognising associated selling, general and administrative expenses. Improving Leverage: Fitch's expects Hydoo's leverage to remain below 10%, assuming disciplined capex plans for 2018-2019. Leverage, as measured by net debt/adjusted inventory, improved substantially to 8% at end-2017, from 24% in the previous year, as the company disposed of CNY890 million of assets and cut its construction and land acquisition pace. Hydoo's large post- disposal land bank of 9.5 million (sqm) as at end-2017 is still sufficient for over 15 years of development, providing flexibility to cut further land purchases, if necessary, to lower leverage. Low Non-Development Income: Hydoo's rating is constrained by its trade-centre development focus and lack of significant non- development income. Income from property management services and rentals contributed only around 4% of total revenue in 2017. The lack of diversification weakens cash flow quality and raises operational risk during industry downturns. Continued trade- centre demand weakness may lead Hydoo to cut ASPs and narrow its margin to speed up sales, which may substantially lower operational cash flow generation. Recurring EBITDA/gross interest paid is likely to remain at the 0.1x level. Higher Risk Lower-Tier Cities: Hydoo's trade centres are mainly located across 10-12 tier three- and four-cities to tap relocation and urbanisation demand. Fitch believes sales are more volatile in these cities than in more developed ones and demand may reach saturation faster due to the economies' smaller populations and GDP. Sales for the subsequent phases of Hydoo's large-scale integrated trade-centre projects (400,000sqm or larger) hinge on continued urbanisation, but lower-tier cities will face intense competition for financial and human resources from other developing cities. DERIVATION SUMMARY Fitch has compared Hydoo with other trade-centre developers, such as China South City Holdings Limited (CSC, B/Stable) and Wuzhou International Holdings Limited (CCC), and believe it is appropriately placed in between, as Hydoo is worse than CSC in terms of scale, margin and non-development income, but better than Wuzhou in terms of leverage, margin and asset churn. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: - Contracted sales of over CNY3 billion per annum in 2018-2019 - EBITDA margin of around 20%-25% over 2018-2019 Recovery rating assumptions: - Hydoo would be liquidated in a bankruptcy because it is an asset-trading company - 10% administrative claim - Value of inventory and other assets realised in a reorganisation and distributed to creditors - A haircut of 50% on adjusted inventory and property, plant and equipment, as it has a lower margin than its peers and its rental yield is below 3% - A 25% haircut to accounts receivables Based on its calculation of the adjusted liquidation value after administrative claims, Fitch's recovery analysis suggests a Recovery Rating of 'RR1', which reflects our expectation of average recovery prospects in the 90%-100% range in a distressed scenario. However, Hydoo's Recovery Rating is capped at 'RR4', reflecting the average recoverability for offshore creditors in China. RATING SENSITIVITIES Developments that may, individually or collectively, lead to positive rating action include: Positive rating action will not be considered unless Hydoo can boost its scale substantially by expanding its geographical coverage beyond lower-tier cities and sustains sales in subsequent phases of its existing projects, while at the same time not compromising financial metrics. Developments that may, individually or collectively, lead to negative rating action include: - Deterioration in refinancing prospects that has a significant adverse effect on the liquidity profile - Sustained decline in trade-centre contracted sales - Net debt/adjusted inventory sustained above 40% LIQUIDITY Notes Refinancing in Progress: Management plans to refinance the USD160 million bonds due 2018 with an exchange offer and new issuance. Hydoo had an unrestricted cash balance of CNY1 billion and a restricted cash balance of CNY858 million (CNY325 million was pledged for bank loans) as of end-2017, against short-term debt of CNY2.25 billion, of which 53% was in bank loans. Fitch will monitor progress and believes the company will be able to execute its refinancing plan, given its sufficient liquidity position and available bank credit facilities of over CNY2 billion. JIANGYIN CHENGXING: Fitch Withdraws 'B(EXP)' on New USD Notes ------------------------------------------------------------- Fitch Ratings has withdrawn the 'B(EXP)' expected rating with a Recovery Rating of 'RR4' on Jiangyin Chengxing Industrial Group Co., Ltd.'s (B/Stable) proposed US dollar senior notes. The notes were to have been issued by Red Cloud Capital Limited, a wholly owned subsidiary of Jiangyin Chengxing. The expected rating was assigned on February 4, 2018. KEY RATING DRIVERS Fitch has withdrawn the expected rating as Jiangyin Chengxing's proposed debt issuance is no longer expected to convert to final ratings. LANDSEA GREEN: Fitch Gives Final B Rating to USD150MM Sr. Notes --------------------------------------------------------------- Fitch Ratings has assigned China-based residential property developer Landsea Green Group Co., Ltd.'s (Landsea; B/Positive) USD150 million 9.625% senior notes due 2020 a final rating of 'B' and a Recovery Rating of 'RR4'. The notes are rated at the same level as Landsea's senior unsecured rating as they represent the company's unconditional and irrevocable obligations. The assignment of the final rating follows the receipt of documents conforming to information already received. The final rating is in line with the expected rating assigned on April 11, 2018. KEY RATING DRIVERS Deleveraging in 2018: Fitch expects the company's leverage, measured by net debt to adjusted inventory, to fall below 50% in 2018 when the majority of its US projects acquired in 2013-2016 are due to be delivered. This is underpinned by the company's sold but yet-to-be delivered projects of about CNY1.3 billion and CNY8.3 billion in attributable saleable resources as of end-2017. In addition, operating cash flows from the growing project- management business should rise and contribute to deleveraging. Landsea's leverage improved slightly to 67.2% in 2017, compared with around 70% during 2014-2016, due to disciplined land acquisition during the year. Meanwhile, the company's asset-light strategy of holding minority equity interests for the majority of its projects allows it to increase its total contracted sales without carrying higher leverage. Landsea recorded attributable sales of CNY9.1 billion in 2017, which represented 47% of its total sales of CNY19.5 billion. Fitch expects the percentage of attributable sales to total sales value to drop further to 25%-30% in the next two to three years under the strategy. Small, Diversified Operation: Fitch believes the company's quality land bank and diversified operations will support its expansion to more than CNY10 billion in attributable contracted sales from 2018. Landsea's attributable land bank was 2.3 million sq m at end-2017, smaller than that of peers in the 'B' rating category, but it can still support the company's development for around three years. The company targets core Tier 2 cities in China like Hangzhou, Nanjing and Suzhou, and around 64% of its land bank is in the Yangtze River Delta. Landsea's 10 US projects are in coastal areas and together represent 11% of its land bank. Growing Project-Management Business: Landsea's project-management business posted a high EBITDA margin of 55% in 2017, although it was lower than the 60%-70% reported in 2015-2016, as the company was providing services mainly to third parties instead of related ones. Fitch expects EBITDA from this segment to cover gross interest expense by more than 1x from 2018 and rise towards 2x, underpinned by solid new orders in the past three years, and Landsea's ability to obtain new orders following better brand recognition. EBITDA coverage already reached 1x in 2017, meeting our estimate (2016: 0.8x). Landsea's property project-management business has expanded rapidly and the company was adding CNY1 billion-2 billion in new orders each year during 2015-2017. It had an order book of CNY3.9 billion at end-2017, which will support its business in the next two-three years. We expect revenue from this segment to increase by 50% in 2018. Improved Margin: Landsea's EBITDA margin before capitalised interest rose to 23.1% in 2017 from 10.4% in 2016, mainly because more products with higher profitability were delivered in China during the year. Fitch also expects the overall margin to improve towards 25%, driven by the delivery of profitable projects sold in past two to three years in China, sustained improvement in the US business, and contribution from the higher-margin project- service business. DERIVATION SUMMARY Landsea's leverage is higher than that of most of its 'B' rated peers, such as Hong Yang Group Company Limited (B/Stable) and Xinyuan Real Estate Co., Ltd. (B/Stable), which generally have leverage of below 60%. Its scale is also smaller than its peers, averaging at CNY10 billion in attributable contracted sales a year. The adoption of an asset-light strategy and the monetising of its experience in green-technology homes differentiate Landsea from traditional homebuilders, and support its deleveraging. Its quality land bank in China and diversification into the US will help the company expand its contracted sales to above CNY10 billion in the next year. Non-development EBITDAR from the project-management service and apartment subleasing businesses, and investment properties is about 1x its cash interest and rental expenses, exceeding that of all its 'B' rated peers. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for Landsea include: - Attributable contracted sales value at CNY10 billion- CNY13 billion a year during 2018-2019; - US business matures and starts to book annual revenue of above CNY2 billion from 2018; - Land replenishing at 1.8x of gross floor area sold of the same year during 2018-2019; - Construction expenses accounting for 30%-40% of attributable sales value during 2018-2019; - New orders for the project-management business sustained above CNY2 billion per year from 2018, with EBITDA margin of the business staying at 55%. Recovery analysis assumptions: - Landsea will be liquidated in a bankruptcy because it is an asset-trading company - 10% administrative claims - Onshore and offshore inventories are separated to better match assets and debts The liquidation estimate reflects Fitch's view of the value of inventory and other assets, and estimated value of the project-management service business that can be realised and distributed to creditors - Fitch applied a haircut of 30% on its receivables, 30% on onshore adjusted inventory, and 40% on offshore inventory, which is lower than in our previous assumption given its improved profitability - Fitch applied a multiple of 4x on the forecast EBITDA of the project-management business, and then a haircut of 40% of the estimated value of the project-management service - Repayment waterfall: onshore assets to repay tax claims and onshore borrowing; offshore assets to repay the rest of uncovered onshore borrowing (assuming these rank pari passu with offshore borrowing), and offshore borrowing Based on its calculation of the adjusted liquidation value, after administrative claims of 10%, and based on the order of the repayment waterfall, Fitch estimawe estimate the recovery rate of the offshore senior unsecured debt at 51%, which corresponds to a Recovery Rating of 'RR4'. RATING SENSITIVITIES Developments that may, individually or collectively, lead to positive rating action include: - Net debt/adjusted inventory sustained below 50% - EBITDA margin sustained above 15% - Non-development EBITDAR / (cash interest + rental expenses) sustained above 1.5x. Non-development segment includes project-management services, subleasing and investment property businesses (2017: 0.91x) Developments that may, individually or collectively, lead to the Outlook reverting to Stable: - Failure to maintain the above positive rating sensitivities, and a shift away from the company's current asset-light strategy LIQUIDITY Adequate Liquidity: Landsea had CNY3.3 billion in available cash on hand at end-2017, which exceeded its short-term debt of CNY2.2 billion. Landsea has generated positive free cash flow in the past two years, and we expect the trend to continue in the next two years, supported by the company's healthy sales and highly profitable project-management business. PANDA GREEN: Moody's Lowers CFR to B2, Outlook Negative ------------------------------------------------------- Moody's Investors Service has downgraded Panda Green Energy Group Limited's corporate family rating (CFR) to B2 from B1 and senior unsecured debt rating to B3 from B2. At the same time, Moody's has revised the outlook of the ratings to negative from stable. RATINGS RATIONALE "The downgrade reflects Panda Green's weakened financial profile, following its aggressive expansion in 2017, which has resulted in elevated business risks and weak debt coverage metrics that are no longer consistent with the prior ratings," says Ada Li, a Moody's Vice President and Senior Analyst. Panda Green has made significant investments in solar projects as part of its plan to scale up its capacity. Moody's expects the company's annual investment in solar projects and capex to be around RMB2.5 billion over the next two years. As of the end of 2017, the company had outstanding solar concession acquisition rights and hydropower development rights amounting to RMB824 million and RMB1.7 billion, respectively. Consequently, Moody's expects that the company's financial leverage at end 2018 -- in terms of funds from operations (FFO) to debt -- will be less than 2%, and debt/capitalization will be around 75-78%, after considering the annualized cash flow contributions of newly acquired projects in 2017 and the absence of further equity placement. Such metrics leave limited headroom within the ratings, especially when considered in the context of execution challenges and delays in approval of government subsidies. Moody's understands from Panda Green that its solar capex plan is discretionary, and underpinned by the company's ability to raise new equity. During 2017, the company raised HKD2.15 billion in equity from its largest shareholder, China Merchants Group (CMG), as well as from other strategic investors. Recurrence of such equity placements will improve the headroom within the rating. "The negative outlook considers the company's heightened liquidity risk and uncertainties over the timing of collecting the government renewable energy subsidies," adds Li. Panda Green has weak liquidity, reflected in its limited ability to generate positive operating cash flows, rising borrowing costs, and a degree of uncertainty over the timing of collecting the government renewable energy subsidies. During 2017, Panda Green's total installed capacity (including associates and JVs) increased by 61.6%, or 796MW, to 2.087GW. The company has not announced any new acquisitions or expansions so far in 2018. Moody's acknowledges that Panda Green's entry into the hydropower business will be on a staggered basis, subject to government approvals, and therefore limiting the need for large incremental debt. Panda Green's B2 CFR incorporates: (1) its standalone credit strength; and (2) a one-notch uplift based on Moody's assessment of likely support from CMG when needed. Such uplift also considers Panda Green's role as CMG's renewable energy investment platform and manageable scale relative to the size of CMG's national business. The senior unsecured debt rating is one notch lower than the CFR, reflecting subordination risk. The outlook on Panda Green's ratings could change to stable, if Panda Green pursues a less aggressive expansion strategy which, at the same time, strengthens its liquidity profile, reduces financial leverage on a sustained basis. Indications of stabilizing financial metrics include, funds from operations (FFO)/debt over 2.0% and FFO/interest coverage above 1.2x on a sustained basis. The ratings will be downgraded if Panda Green's credit metrics deteriorate relative to Moody's expectation, which could be due to high refinancing pressure, an accelerated debt-funded expansion, the underperformance of its power generation businesses or prolonged delays in receiving solar power generation subsidies. Unfavorable regulatory changes that materially impact the company's earnings and cash flows could also pressure the ratings. Metrics indicative of downward ratings pressure include FFO/interest coverage below 1.1x and adjusted debt/capitalization above 80% over a prolonged period. A material change in ownership or control of CMG and/or China Merchant New Energy's credit profiles could also lead to downward ratings pressure. Upward ratings trend is unlikely in the near term, given the negative outlook. The principal methodology used in these ratings was Unregulated Utilities and Unregulated Power Companies published in May 2017. Panda Green Energy Group Limited, formerly known as United Photovoltaics Group Limited, principally engages in solar power generation in China. At the end of 2017, Panda Green reported 2.09GW of gross installed capacity based on 65 projects operated through its subsidiaries, associates and joint ventures. Listed on the Hong Kong Stock Exchange, the company was 22.24% by owned by China Merchants New Energy Group (CMNE) and parties acting in concert with CMNE; and 22.14% owned by China Huarong Asset Management Co., Limited (Huarong, A3 stable). CMNE is 79.36% owned by China Merchants Group, a conglomerate which is wholly owned by the State-owned Assets Supervision and Administration Commission of China's State Council, and Hurong is 63.4% owned by China's Ministry of Finance. SI CHUAN JUYANG: Fitch Withdraws 'B(EXP)' Rating on New USD Notes ----------------------------------------------------------------- Fitch Ratings has withdrawn the expected ratings assigned to Si Chuan Province JuYang Group Limited's (JuYang, B/Stable) proposed US dollar-denominated senior unsecured notes. The proposed notes were to have been issued by JuYang's wholly owned subsidiary Zhong Yi Holdings Limited and were assigned a 'B(EXP)' expected rating with Recovery Rating of 'RR4' on January 16, 2018. KEY RATING DRIVERS Fitch has chosen to withdraw the ratings on the proposed notes for commercial reasons. ========= I N D I A ========= AGGARWAL AUTOMOTIVE: Ind-Ra Migrates B- Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Aggarwal Automotive Private Limited's (AAPL) 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 the rating. The rating will now appear as 'IND B-(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR300 mil. Fund-based limit migrated to Non-Cooperating Category with IND B-(ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 6, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE AAPL was incorporated by Mr. Harshvardhan Bansal and family, and started its operations in February 2015. AAPL is a distributor of Hyundai cars in Delhi and has three showrooms. AISWARYA SILKS: CRISIL Lowers Rating on INR9MM Cash Loan to D ------------------------------------------------------------- CRISIL has downgraded its rating on the bank facilities of Aiswarya Silks (AS) to 'CRISIL D' from 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 9 CRISIL D (Downgraded from 'CRISIL B+/Stable') Long Term Loan 1 CRISIL D (Downgraded from 'CRISIL B+/Stable') Standby Line of Credit 0.5 CRISIL D (Downgraded from 'CRISIL B+/Stable') The rating downgrade reflects delays in repayment of bank debt by AS. These delays have been due to working capital intensive nature of operations and resultant stretch in liquidity. The rating reflects AS's modest scale and working capital intensive nature of operations in the apparels retail business. The firm's financial risk profile also continues to remain below- average. These rating weaknesses are partially offset by its partners' extensive experience in the apparels retailing business. Key Rating Drivers & Detailed Description Weaknesses * Modest scale and working capital intensive nature of operations: The firm's scale of operations is modest, reflected in its revenue of around INR34 crore in fiscal 2017. The industry is marked by high fragmentation with many small to large size players and small players like AS have limited bargaining power. The firm's large working capital requirements are driven by its high inventory levels. This is reflected in its high gross current assets (GCAs) of 210 days as on March 31, 2017. * Below-average financial risk profile: Financial risk profile continues to remain below-average with moderate TOL/TNW of 2.5 times and weak interest coverage of 1.3 times for fiscal 2017. Strength * Partner's extensive experience in the apparels retailing industry: The firm's partners have a long standing industry experience of around three decades in the retail apparel/readymade garments industry. On account of the long standing experience, the partners have established strong relations with suppliers and customers. Established as a partnership firm in 1986, AS is engaged in the retailing of apparel/readymade garments with 2 retail outlets. Based in Kottayam (Kerala), the firm is promoted and managed by Mr. A Venugopalan. AMIDEEP AUTO: Ind-Ra Maintains BB- LT Rating in Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Amideep Automobiles' Long-Term Issuer Rating in 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 the rating. The rating will continue to appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR95 mil. Fund-based working capital facilities maintained in Non-Cooperating Category with IND BB- (ISSUER NOT COOPERATING) /IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on January 8, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Amideep Automobiles commenced operations as a family-owned partnership firm in 2012 and is an authorized dealer of Honda Motorcycle and Scooter India Pvt. Ltd.'s motorcycles and scooters in India. ANGRIYA SEA: CARE Assigns B+ Rating to INR12cr LT Loan ------------------------------------------------------ CARE Ratings has assigned rating to the bank facilities of Angriya Sea Eagles Private Limited (AES), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 12 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The ratings assigned to the bank facilities of AES are tempered by fragmented and seasonal nature of business and business stabilization risk. However, the ratings derive comfort from experienced and resourceful promoters and well established associate companies, location advantage, only player currently in the cruise liner business in India and financial closure achieved. Going forward the ability of the company to stabilize operations and achieve envisaged income from operations and profitability along with enhancing its geographical influence will be key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Fragmented and seasonal nature of business: Tourism industry is one of the biggest and fastest growing industries in the world, but it is characterized by seasonality. It is an integral part of global business and is highly dependent on seasonal changes in climatic conditions and economic activities. AES will not be operating the cruise liner during the monsoon season, between June-September. However, the cruise liner would be used as a flotel that would be anchored at the dock and would be providing facilities available on the cruise liner for the tourists like restaurant, banquet hall for corporate meetings, marriage events, accommodation, etc that would result in reduced operational expenses. Business stabilization risk: Acquisition of an existing business involves thorough research and due diligence in order to avoid upheavals in future. The risk on acquisition of an existing business does not end with ascertaining the owner's discretionary income, plant and machinery, clientele, track record, location, goodwill etc., it also requires the entity to project the future on grounds of various assumptions in order to secure its position in the market. Key Rating Strengths Experienced and resourceful promoters and well established associate companies: The promoters of the company are Capt. Nitin Dhond and Mr. Kiran Thakur. Mr. Kiran Thakur has a strong presence in the field of education with memberships to many governing bodies. He is the Vice-President of Belgaum Jilha Prathamik Shikshan Samitee which runs schools and colleges. He is a member of Governing Council of South Konkan Education Society, Vice Chairman - RPD College of Arts and Science and GSS College, Chariman - Agricultural Research Centre, Member - Indira Gandhi Open University Centre, Belgaum, President - Dnyan Prabhodhan Mandir School. He has been recognized for his work and given awards and prizes for his humble work like Dr. N. B. Parulekar Award and Acharya Atre Award for journalism; S. V. Kirloskar Trust Award; Raosaheb Gogte Award for Entrepreneurship, Vocational Award from Rotary Club for Outstanding performance in educational field, Shahu Award (Ichalkaranji), A. A. Desai Award for excellence in social education. Capt. Nitin Dhond is a Merchant Navy Captain and has passed out from the prestigious Naval academy, T. S. Rajendra in 1977-78. He has to his credit the distinction of working with international companies like Mobil Oil, Reliance, etc. and has undertaken special assignments like Ship to ship transfers operation of LPG tankers, dry docking LPG tankers for Varun Shipping Ltd. As part of a group, which established the Mhadei Research Center, one of the first field research stations in the region, his work has been recognized by state as national agencies. In 2010 he was awarded the Konkan Ratna award. AES is supported by its group entities like Swapnagandha Resorts Private Limited which operate under the brand name 'Swapnagandha' and 'Wildernest' and have been in the hospitality business for over a decade and a half and thus enjoy a huge client base and wide network. Further, Rachana Infotech Private Limited that focuses on IT as well as Industrial automation and Robotics and have been in the IT field for the last 15 years with clients across India. Location advantage: ASE has their primary business operations in Goa which is renowned as a tourist destination for sun, good beaches and cheap living. Tourism in Goa has increased substantially over the last decade, with increase in number of both domestic and international visitors. The foreign visitors are mostly from the UK, Scandinavia, Germany, Switzerland and Russia among other countries. Thirty per cent of the foreign tourists who come to Goa are the kind that return every year. Only player currently in the cruise liner business in India and government backing: AES was established for running a cruise liner ship, by the name 'Angriya', in the Indian territorial waters between Mumbai and Goa and back by taking over the running business of erstwhile partnership firm M/s Sea Eagles Navigation in line with the rules and policies of the Indian Register of Shipping. Presently, the cruise liners in India operate between ports in India to International destinations. The Government of India has mooted the ambitious 'SagarMala' project that aims to modernize the existing ports infrastructure, enhance capacity and to develop 6+ top notch ports and to improve port connectivity through rail corridors, freight friendly expressways and inland waterways. AES has leased terminals at Mumbai port Trust in Mumbai and Mormugao Port Trust in Goa for parking of the ship at the respective locations. Financial closure achieved: The firm has achieved the financial closure for purchase and renovation of their cruise liner at Panaji, Goa. The business operations of ASE shall begin from April 2018. The business operations were funded by term loan of INR15 crore and promoter's own contribution of INR60 crore. Panaji, Goa based Angriya Sea Eagles Private Limited (ASE) was incorporated in the December 2017 by taking over the running business of the partnership firm M/s Sea Eagles Navigations, which is also owned by the Mr. Kiran Thakur and Mr. Nitin Dhond, together with all the assets, properties, both movable and immovable and the liabilities to commence the business to run a cruise liner, by the name 'Angriya', between Mumbai and Goa. The company was established to carry on the business of leisure activities like sailing in yatches and ships. They would also be involved in conducting training programmes for imparting skills in sea navigation, sailing either on navigation basis or as part of imparting expeditions and with that aim to hold expeditions in inland water or on high seas. ASE is currently in project phase and expected to start commercial operations of the cruise liner by April 2018. The total proposed cost of the project for renovation, refurbishment and other additions to the cruise liner is INR75 crores which is being funded by a term loan of INR15 crores and promoter's own contribution of INR60 crores. ASSAM COMPANY: Receives at Least 10 Interested Buyers ----------------------------------------------------- Business Standard reports that exceeding expectations of the lenders of Assam Company India Ltd, undergoing bankruptcy proceedings at the Guwahati bench of the National Company Law Tribunal (NCLT), the world's first tea company has found at least 10 suitors. Among those which have given an Expression of Interest (EOI), at least five are tea producers, while two are asset reconstruction companies (ARCs), Business Standard discloses. The former comprise the diversified Apeejay Group, Warren Tea, Luxmi Tea Company that owns the Makaibari tea estate, MK Shah Exports and Dhunseri Petrochem. The last one is present in both tea and oil, a portfolio perfectly matching the potentially insolvent firm. According to Business Standard, the ARCs are Arcil Asset Reconstruction Company and Suraksha Asset Reconstruction. Purnendu Chatterjee, the non-resident who owns The Chatterjee Group (TCG), which is into petrochemicals and oils, has also placed an EOI. So, too, to the surprise of the lenders, has Global Coal Mining, a mining and coal washery firm. Hyderabad-based Megha Engineering & Infrastructures has also done so, with the necessary documents; however, it hasn't paid the process participation fees or the earnest money deposit, the report says. Business Standard relates that sources said although TCG's immediate interest is on the Amguri oilfield in Assam, up for sale, it wants to foray into tea at a time when the sector is showing signs of improvement, with prices on the rise. For Dhunseri Petrochem and other tea producers, acquisition of Assam Company's 14 prized estates will add to their production capacity and might help them manufacture boutique tea, Business Standard notes. For TCG and Global Coal Mining, it will be a new foray. It has been suggested the ARCs might be aiming to resell the assets of Assam Company after making a turnaround. Previously, sources had suggested the sale of Assam Company could be difficult, owing to its nearly INR14 billion in dues, nature of business and lack of assets in the oil vertical. However, based on a challenge on the eligibility criteria by MK Shah Exports, the NCLT bench has ordered a revision of the eligibility criteria and directed the Resolution Professional (RP) to go for a modified EOI, according to Business Standard. T Kannan, the RP, had said any company wishing to bid must have a net worth of at least INR4 billion and a surplus fund of INR500 million. For the ARCs and other financial entities, the assets under management should be at least INR40 billion for the preceding three financial years or the commutted fund available for investment should be INR20 billion, Business Standard notes. However, the NCLT order doesn't affect the companies which have already given an EOI. Sources said the RP, in consultation with the Committee of Creditors, is considering whether to contest NCLT's order at the appellate tribunal. Kannan declined to comment. The last day for submission of a resolution plan is May 21, Business Standard notes. A forensic audit of Assam Company's account is also on, to detect any irregularities in the finances, adds Business Standard. As reported in the Troubled Company Reporter-Asia Pacific on Nov. 6, 2017, the Economic Times said the National Company Law Tribunal has ordered corporate insolvency resolution process against Assam Company India for defaulting INR596 crore in payments to Srei Infrastructure. Assam Company India Limited is an India-based company engaged in tea cultivation and manufacturing. The Company's segments include Plantations, Oil and Gas, Special Economic Zone (SEZ) and Others. The Company's geographical segments include within India and outside India. The Company has approximately 14 tea estates and over three oil blocks, in the State of Assam. The Company's tea estates are located in Doom Dooma, Tinsukia, Dibrugarh, Moran, Jorhat and Nagaon. The Company's oil and gas blocks are Amguri and AAONN-2005/1 in Assam and AA-ON/7 in Assam and Nagaland. BANGALORE POLYMERS: CARE Assigns B+ Rating to INR21cr LT Loan ------------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Bangalore Polymers Private Limited (BPPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 21.00 CARE B+; Stable Assigned Long-term/Short- 9.00 CARE B+; Stable/CARE A4 Term Bank Assigned Facilities Detailed Rationale and key rating drivers The ratings assigned to the bank facilities of BPPL are constrained by its small and fluctuating scale of operations, leveraged capital structure and weak coverage indicators. The ratings are further constrained on account of BPPL's presence in a competitive industry and high working capital requirements. The ratings, however, draw comfort from experienced management with long track of operations, long-standing relationship with principal supplier and moderate profitability margins. Going forward, the ability of the company to increase scale of operations while improving its capital structure alongside its working capital requirements shall be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weakness Small and fluctuating scale of operations: The scale of operations remained small marked by total operating income and gross cash accruals of INR1.76 crores and INR0.16 crores respectively in FY17 (refers to the period April 1 to March 31). The scale stood small primarily because the company is working as a del-credere agent whereby the company is generating revenue in the form of commission income. Additionally, the company's net worth base stood small at INR2.72 crores as on March 31, 2017. The small scale limits the company's financial flexibility in times of stress and deprives it from scale benefits. Furthermore the total operating income of the company has been fluctuating for the last three financial years (FY15-FY17). The total operating income of the company declined by 12.75% in FY16 over previous year and reported growth of 15.34% in FY17. Leveraged capital structure and weak coverage indicators: The capital structure of the company stood leveraged owing to high dependence on external borrowings to fund its customers for procurement coupled with a low net-worth base. The overall gearing stood around 4x as on the last balance sheet dates (FY16 and FY17). The debt-service coverage indicators of the company stood weak owing to high total debt resulting in high interest cost. Interest coverage ratio and total debt to gross cash accruals stood weak at below 1.5x and above 60x respectively for FY16-FY17. High working capital requirements: The company being a del- credere agent for GAIL; the realization risk from customers is transferred from GAIL to BPPL. Any delays from the side of customers would adversely impact the liquidity profile of the company. Competitive nature of business: BBPL is operating in a competitive industry with low-entry barriers which limits the bargaining power of the company and has exerts pressure on its profitability margins. Further, BPPL's revenues are linked to the demand of plastic granules. Key Rating Strengths Experienced management coupled with long-standing relationship with principal supplier: The operations of the company are currently being managed by Mr. Subhash Bharita and Ms. Sumitra Bharita. They have an experience of almost one and a half decades through their association with BPPL. They are further supported by a second tier management team which comprises of members with requisite experience in their respective fields. BPPL has been associated with Gas Authority of India Limited for almost one and a half decades. The long-standing relationship with its principal supplier enhances the company's image and thus assures healthy growth prospects. Comfortable profitability margins: BPPL, being a del-credre agent earns its revenue as commission income against which the company incurs operational cost in form of employee expenses. Owing to low operational cost, PBILDT margin of the company stood comfortable at Bangalore based Bangalore Polymers Private Limited (BPPL) was incorporated in 1993 and is currently being managed by Mr. Subhash Bharita and Ms. Sumitra Bharita. BPPL is a del- credere agent of Gail Authority India Limited (GAIL) for plastic granules. BHARTIA YARNS: Ind-Ra Hikes Long Term Issuer Rating From 'BB' ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Bhartia Yarns Private Limited's (BYPL) Long-Term Issuer Rating to 'IND BB+' from 'IND BB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR10 mil. Fund-based facilities Long-term rating upgraded; short-term rating affirmed with IND BB+/Stable/IND A4+ rating; and -- INR90 mil. Non-fund-based facilities affirmed with IND A4+ rating. KEY RATING DRIVERS The upgrade reflects a substantial improvement in BYPL's EBITDA margin and credit metrics. According to 9MFY18 interim numbers, the company's EBITDA margin improved to 5.7% (FY17: 2.3%; FY16: 1.3%) as it focused on high-margin customers. BYPL's credit metrics was comfortable owing to its lower dependency on debt and diversified customer base. EBITDA interest coverage (operating EBITDA/gross interest expense) increased to 5.3x in 9MFY18 (FY17: 1.2x; FY16: 3.5x) and net financial leverage (adjusted net debt/operating EBITDA) improved to 0.8x (2.9x; 6.5x) on account of an improvement in absolute EBITDA. Ind-Ra expects the credit metrics to remain comfortable in the near term in view of the absence of any debt-led capex plans and a likely improvement in EBITDA margin further. BYPL's scale of operations, however, continued to be small despite an improvement in revenue to INR554 million at FYE18 (provisional) (FY17: INR361 million; FY16: INR356 million) on account of an increase in orders from the organized players, driven by the successful roll-out of the Goods and Services Tax. BYPL's ratings are constrained by the commodity-trading nature of the business and its exposure to foreign exchange fluctuations. The ratings, however, are supported by BYPL's comfortable liquidity position as indicated by around 11.4% utilization of its non-fund-based working capital limits during the 12 months ended March 2018; fund-based working capital limits were unutilized. The ratings are further supported by four decades of experience of the promoters in the textile business. RATING SENSITIVITIES Positive: A sustained increase in the scale of operations and operating profitability margins, leading to a sustained improvement in the credit metrics would be positive for the ratings. Negative: Any deterioration in revenue and operating profitability margins leading to deterioration in credit metrics would be negative for the ratings. COMPANY PROFILE BYPL was started by Mr. Arun Bhartia on April 23, 1999 as a private limited company. BYPL is engaged in importing and trading of textiles and other related products including polyester yarns, polyester staple fibers, viscose spun yarns, embroidery threads and related products. BYPL is a part of Bhartia Yarns Group which also includes Fine Yarns (IND BB/Stable) and Nimish Syntex (IND BB/Stable). All the entities trade yarn. BUDS TEA: CARE Assigns B Rating to INR24.08cr LT Loan ----------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Buds Tea Industries Limited (BTIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 24.08 CARE B/Stable Assigned Long-term/short- 2.00 CARE B/Stable/CARE A4 term Bank Assigned Facilities Detailed Rationale & Key Rating Drivers The ratings assigned to the bank facilities of BTIL takes into account the weak financial risk profile of the company marked with leveraged capital structure and agro climatic risk and resultant price risk. The ratings however derive strength from the experience of the promoters in the tea industry. Improvement in capital structure and profitability are the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Weak financial risk profile marked with leveraged capital structure: The capital structure of the company was marked with high overall gearing. Although a significant portion of the total debt comprised unsecured and interest-free loans from associates, high utilisation of its working capital limits, outstanding term loans coupled with low net worth resulted in a leveraged capital structure. Accordingly the total debt/Gross Cash Accruals also remained high. Agro climatic risk and resultant price risk: The company has a bought leaf factory and procures tea leaves from local sources. The production of tea leaves in turn is susceptible to the vagaries of nature and the resultant demand supply gap also leads to variation in prices. This also exposes the company's profits to fluctuation due to price risk. Key Rating Strength Experience of the promoters in the tea industry: BTIL is a part of the Limtex Group and its operations are managed by promoters- directors Mr Gopal Poddar, Mr Shankar Poddar and Mr Subhash Poddar. The directors have experience of more than three decades in the tea business through various companies in the group. The Limtex group has a strong presence in the tea industry through its eight tea factories and three tea gardens. Buds Tea Industries Limited (BTIL), incorporated in 2013, is engaged in the manufacture and sale of tea. For this it has a bought leaf factory in Jalpaiguri, West Bengal. The operations of BTIL are managed by directors and brothers Mr. Gopal Poddar, Mr. Shankar Poddar and Mr Subhash Poddar. BTIL is a part of the Limtex Group of Industries which is promoted by Kolkata based Poddar family which is mainly into tea. CHANDRAWATI HOSPITALITY: CARE Assigns B Rating to INR14cr Loan -------------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Chandrawati Hospitality and Tourism (CHT), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 14.00 CARE B; Stable Assigned Detailed Rationale& Key Rating Drivers The rating assigned to the bank facilities of CHT are constrained on account of project implementation and stabilization risk pertaining to its on-going capex. The ratings are further constrained on account of its partnership nature of its constitution and inherent cyclical nature of hotel industry and intense competition. The rating also factor in the time and cost overrun due to delay in implementation of the project. The ratings, however, derive strength from strategic location of hotel along with collaboration with an established hotel brand. The ability of CHT to complete the project on time without any cost overrun, achieve envisaged sales realization along with high occupancy ratio by attracting higher number of visitors would be the key rating sensitivity. Detailed description of key rating drivers Key Rating Weaknesses Project implementation and stabilsation risk associated with ongoing debt funded capex: CHT is currently implementing a greenfield project to construct a 4-star hotel at Bharatpur, Rajasthan with a capacity of 124 beds. The total project cost is INR32.46 crore with debt to equity ratio of 2.11 times. With high project gearing and the project yet to be completed, post project implementation and stabilization risk towards achieving the envisaged capacity utilization and sales realization remains crucial for the firm. The project has been delayed by fifteen months and commencement of operations is expected to start from October, 2018. Constitution as a partnership firm: There is inherent risk of possibility of withdrawal of capital and dissolution of the firm in case of death/retirement/insolvency/personal contingency of any of the partners. Inherent cyclical nature of hotel industry and intense competition: Hotel industry is inherently cyclical in nature with demand linked to economic scenario and performance of the economy. The performance of hotel also depends upon the parameters like location of property, demand supply scenario; target customers etc. Also, Indian hotel industry is highly fragmented in nature with presence of large number of organized and unorganized players spread across all regions, which intensifies competition. Key Rating Strengths Strategic location of hotel: The site for the project (Bharatpur, Rajasthan) is a strategic one as there is a famous bird sanctuary named Keoladeo National Park or Ghana Pakshi Vihar in its vicinity and Lohagarh Fort (Bharatpur) which attract many tourists mainly foreigners. Also nearby cities like Agra is 50 kms away from the site along with Fatehpur Sikri which is 23 kms and Mathura-Vrindavan which is at a distance of about 30-35 kms. The site is also a part of NCR (National Capital Region) of India. Bharatpur is also well connected by road and rail with Jaipur, New Delhi, Uttar Pradesh and other cities of Rajasthan. Bharatpur based (Rajasthan) Chandrawati Hospitality and Tourism (CHT) is a partnership firm established on December 25, 2010. The firm is promoted by Mr. Jitendra Singh, Mrs Beena Singh, Mr. Bijil Singh. They are into the education sector and run Engineering and ITI colleges namely Rajasthan College of Engineering for Women and Rajasthan Institute of Engineering and Technology. CHT is constructing a hotel at a location situated at Bharatpur and is expected to start operations in October, 2018. The firm has done tie up with Mariott Hotels India Private Limited for running the operations and would also use the brand name of J W Mariott for the same. It will be a 4-star hotel consisting of total 124 Spacious rooms, delightful range of in- house dining venues, Swimming Pool, Coffee shop, Banquet halls etc. with modern conveniences offered for travellers. The total project cost is estimated at INR32.46 crore which is to be funded with a proposed debt-equity mix of 2.11 times. CINEVISTA LIMITED: CRISIL Assigns B+ Rating to INR14.5MM Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' ratings to the long term bank facilities of Cinevista Limited (Cinevista). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 6 CRISIL B+/Stable Cash Credit 14.5 CRISIL B+/Stable Proposed Cash Credit Limit 1.5 CRISIL B+/Stable The rating reflects weak debt protection metrics, large working capital requirements and susceptibility of its revenue profile to the risks inherent in production. These weaknesses are partially offset by promoter's extensive experience in the media and entertainment industry. Key Rating Drivers & Detailed Description Weakness * Weak debt protection metrics: Debt protection metrics is weak with net cash accrual to total debt (NCATD) and interest coverage ratios of 0.04 and 0.8 times, respectively, for fiscal 2017, estimated to be at similar levels for fiscal 2018. The debt protection measures to remain are expected to improve over the medium term with increase in revenues. * Large working capital requirements: Cinevista has large working capital requirements, with gross current assets at more than a year as on March 31, 2017. This is mainly because of large debtors of 210 days and inventory of 622 days. CRISIL believes that Cinevista will continue to have large working capital requirements with increase in its scale of operations over the medium term. * Exposure to risks inherent in TV content production: Cinevista is exposed to the risk of changing viewership preferences and time or cost overruns in production, availability. Moreover, attraction, and retention of creative talent and artistes are challenging tasks in the TV content production business. Strengths * Extensive experience of promoters: Promoters have experience of more than 30 years in the media and entertainment business. Cinevista has produced more than 65 TV serials till date. Over the past few years, Cinevista has established healthy relationships with channel broadcasters and artists. Fund support from promoters also support the company's liquidity. Outlook: Stable CRISIL believes that Cinevista will maintain its business risk profile on the back of the industry experience of its promoters. The outlook may be revised to 'Positive' if significant increase in revenues or profitability, while improving working capital cycle, leads to better financial risk profile. Conversely, the outlook may be revised to 'Negative' if decline in revenues or margins, or delays in debtor realisations leads to stretch in working capital cycle, impacting its financial risk profile. Cinevista, incorporated in 1993 by Mr. Prem Kishan Malhotra and Mr. Sunil Mehta, is engaged in production of television serials and commercial advertisements. The company currently has one serial on air and is planning to launch 3 new serials in fiscal 2019. It also owns a studio in Kanjurmarg, Mumbai. The company is listed on the Bombay and National Stock Exchanges. DEVI FIRE: CRISIL Reaffirms Then Withdraws B INR2.5M Loan Rating ---------------------------------------------------------------- CRISIL has reaffirmed its ratings on the bank facilities of Devi Fire Services (DFS) and subsequently withdrawn the ratings at the company's request and on receipt of a no-objection certificate from the bankers. The withdrawal is in line with CRISIL's policy on withdrawal of bank loan ratings. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1 CRISIL A4 (Rating reaffirmed and Withdrawn) Cash Credit 2.5 CRISIL B/Stable (Rating reaffirmed and Withdrawn) Proposed Cash Credit Limit 2.5 CRISIL B/Stable (Rating reaffirmed and Withdrawn) Proposed Working Capital Facility 1. CRISIL B/Stable (Rating reaffirmed and Withdrawn) DFS is a partnership firm set up by Mr Devidas Raut and Mr. Dilip Raut in 1985. The firm manufactures special vehicles such as fire-fighting vehicles, diesel tankers and truck mounted cranes. The manufacturing facilities is located in MIDC in Solapur. ERA INFRA: NCLT Reserves Order Over UBI's Insolvency Plea --------------------------------------------------------- Livemint.com reports that the National Company Law Tribunal on April 25 reserved its order over the insolvency plea filed by Union Bank of India against debt-ridden Era Infra Engineering Ltd. Livemint.com says the principal bench of NCLT headed by President Justice M.M. Kumar reserved order after concluding the arguments from both the sides. The tribunal has allowed the parties to file their written submission before it, if they want to, within next two days. NCLT was hearing the plea of UBI, which had moved to recover INR681.04 crore, along with an overdue external commercial borrowing of $11.97 million, as on May 31, 2017, Livemint.com discloses. According to Livemint.com, Era Infra was in the first list of 12 defaulting companies which was issued by Reserve Bank of India, directing banks to recover debts through the Insolvency and Bankruptcy Code (IBC). Livemint.com notes that the matter was stuck at NCLT after Era Infra contended before the tribunal that several company petitions had been filed before the Delhi high court with a prayer for winding up the company and during its pendency tribunal could not proceed. However, in February NCLT decided to move ahead with insolvency proceedings against Era Infra Engineering. About Era Infra Era Infra Engineering Limited engages in the execution of construction contracts involving engineering, procurement and construction projects across a range of sectors, such as roads and highways, power, railways, metro, aviation, industrial, institutional and related segments. Its principal business activities are to carry on the business of builders, civil contractors, and sanitary engineers, architects, town planners and to submit tenders for the aforesaid business; to layout, develop, construct, build, erect, demolish, re-erect, repair, remodel, execute or do any other work in connection with any industrial complex/parks, flyovers, ports, airports, highways, roads, railways, irrigation, dam and canals, among others, and to act as manufacturer, trader, dealer, importer, exporter, buyer, seller of all any type/kind of material used in the construction/ infrastructure industry, including setting up of ready mix plant in India or abroad. Eighteen winding-up petitions filed by various operational and financial creditors against Era Infra Engineering are pending before the Delhi High Court, Livemint.com reported. Union Bank of India is not among them. Era Infra Engineering owes more than INR10,000 crore to its creditors. Era is one of the 12 bad loan accounts that have been directed by the central bank to be referred under IBC, Livemint.com said. EXCEL VEHICLES: CARE Cuts INR57cr Loan Rating to D, Not Coop. ------------------------------------------------------------- CARE Ratings has been seeking monthly No Default Statements (NDS) from Excel Vehicles Private Limited (EVPL) for more than six months to monitor the outstanding rating vide e-mail communications dated April 16, 2018, April 3, 2018, March 31, 2018, March 2, 2018, February 28, 2018, February 2, 2018, January 31, 2018, January 3, 2018, December 31, 2017, December 5, 2017, November 30, 2017, November 2, 2017, October 30, 2017, October 4, 2017, September 29, 2017, September 2, 2017, August 31, 2017, August 4, 2017, July 28, 2017 and numerous phone calls. However, despite our repeated requests, the company has not provided NDSs. 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 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 EVPL's rating on bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 57.00 CARE D; Issuer not cooperating; Facilities Revised from CARE BB-; Stable Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The revision in the rating for the bank facilities of EVPL takes into account delays in its debt servicing obligations due to weak liquidity caused by cash losses and elongated working capital cycle. Detailed description of the key rating drivers Key Rating Weakness Delays in debt servicing: There are delays in debt servicing and over-drawings in fund based working capital limits owing to weak liquidity caused by cash losses and elongated working capital cycle. Incorporated in the year 2012, EVPL belongs to Bhopal-based "My Car" Group. EVPL operates in Bhopal and nearby region as an authorized dealer of Tata Motors Limited (TML) for its commercial vehicle segment in Madhya Pradesh. The company deals in all models of TML in commercial vehicle segment. FINE YARNS: Ind-Ra Hikes Long-Term Issuer Rating From 'BB-' ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Fine Yarns' Long-Term Issuer Rating to 'IND BB' from 'IND BB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR10 mil. Fund-based facilities Long-term rating upgraded; short-term rating affirmed with IND BB/Stable/IND A4+ rating; and -- INR130 mil. Non-fund-based facilities affirmed with IND A4+ rating. KEY RATING DRIVERS The upgrade reflects a substantial improvement in Fine Yarns' EBITDA margin and credit metrics. According to 9MFY18 interim numbers, the company's EBITDA margin improved to 5.1% (FY17: 2.1%; FY16: negative 0.2%) as it focused on high-margin customers. Fine Yarns' credit metrics was comfortable owing to its lower dependency on debt and diversified customer base. EBITDA interest coverage (operating EBITDA/gross interest expense) increased to 10.0x in 9MFY18 (FY17: 1.7x; F6: negative 0.2x) and net financial leverage (adjusted net debt/operating EBITDA) improved to 0.3x (2.5x; negative 8.4x) on account of an improvement in absolute EBITDA. Ind-Ra expects the credit metrics to remain comfortable in the near term in view of the absence of any debt-led capex plans and a likely improvement in EBITDA margin further. Fine Yarns' scale of operations, however, remained small despite an improvement in its revenue to INR898 million at FYE18 (provisional) (FY17: INR315 million; FY16: INR390 million) on account of an increase in orders from the organized players, driven by the successful roll-out of the Goods and Services Tax. Fine Yarns' ratings are constrained by the commodity-based nature of the business and its exposure to foreign exchange fluctuations. The ratings, however, are supported by Fine Yarns' comfortable liquidity position as indicated by its around 6.5% utilization of the non-fund-based working capital limits during the 12 months ended March 2018; fund-based working capital limit were unutilized. The ratings are further supported by four decades of experience of the promoters in the textile business. RATING SENSITIVITIES Positive: A sustained increase in the scale of operations and operating profitability margins, leading to a sustained improvement in the credit metrics would be positive for the ratings. Negative: Any deterioration in revenue and operating profitability margins leading to deterioration in the credit metrics would be negative for the ratings. COMPANY PROFILE Mr. Arun Bhartia started Fine Yarns in 1999 as a proprietorship firm. Fine Yarns is engaged in importing and trading of textiles and other related products including polyester yarns, polyester staple fibers, viscose spun yarns, embroidery threads and related products. Fine Yarns is a part of Bhartia Yarns Group, which also includes Bhartia Yarns (IND BB+/Stable) and Nimish Syntex (IND BB/Stable). All the entities trade yarn. GATIMAN AUTO: CRISIL Raises Rating on INR4.60MM Cash Loan to B+ --------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facility of Gatiman Auto Private Limited (GAPL) to 'CRISIL B+/Stable' from 'CRISIL B/Stable', while reaffirming its rating on the short-term bank facilities at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee .2 CRISIL A4 (Reaffirmed) Cash Credit 4.6 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable') Letter of Credit 1.45 CRISIL A4 (Reaffirmed) The upgrade reflects improvement in GAPL's business risk profile, as healthy demand increased revenue to INR93.4 crore in fiscal 2017 from INR81.2 crore in fiscal 2016, while profitability remained at 8.7%. Financial risk profile also improved, with networth and gearing of INR12.6 crore and 1.06 times, respectively, as on March 31, 2017, against INR10.96 crore and 1.55 times a year ago. The ratings continue to reflect small scale of operations in the highly fragmented auto ancillary industry, and exposure to risks relating to volatility in raw material prices. These weakness are partially offset by the experience of the promoters and their funding support along with moderate financial risk profile. Analytical Approach Unsecured loans (outstanding at INR1.90 crore as on March 31, 2017) extended to GAPL by the promoters have been treated as neither debt nor equity. That's because these loans carry lower- than-market interest rates and are expected to remain in the business over the medium term. Key Rating Drivers & Detailed Description Weaknesses * Small scale of operations and intense competition: Despite increasing to INR75.9 crore in fiscal 2017 from INR41.9 crore in fiscal 2016, revenue remains modest due to competition. Intense competition may continue to restrict the scalability of operations and limit the pricing power with suppliers and customers, thereby constraining profitability. * Exposure to fluctuations in raw material prices: Volatility in the price of raw material should continue to impact profitability. Strengths * Experience of promoters and their funding support: Benefits from the promoters' experience of over two decades, their strong understanding of the local market dynamics, and healthy relations with customers and suppliers should continue to support the business. The promoters are also expected to continue extending timely, need-based funds to aid financial flexibility. * Moderate financial risk profile: Networth has been adequate at INR12.6 crore as on March 31, 2017, with moderate gearing of 1.06 times. Also, the debt protection metric remained moderate marked by interest coverage of 2.83 times and NCATD of 0.24 times as on March 31, 2017. Outlook: Stable CRISIL believes GAPL will continue to benefit over the medium term from the experience of the promoters. The outlook may be revised to 'Positive' if there is significant improvement in revenue, profitability and cash accrual along with prudent working capital management. Conversely, the outlook may be revised to 'Negative' if low cash accrual, stretch in working capital cycle, or large, debt-funded capital expenditure weakens financial risk profile and liquidity. GAPL, incorporated in 1988 at Pithampur (Madhya Pradesh), manufactures sheet metal components (press parts), mainly fuel tanks, silencer assemblies, and tippers for automobile and industrial original equipment manufacturers. Mr Ashvin Shah, Mr Subhash Chuttar, Mr Shyam Jain, and Mr Prafull Kothadiya are the promoters. INDIA: Lacking Judges for Country's Booming Bankruptcies -------------------------------------------------------- Bloomberg News reports that India's revamped bankruptcy process is in full swing and investors from Blackstone Group LP to Oaktree Capital Group LLC are salivating over an estimated $210 billion of stressed assets that are up for grabs. But the courtrooms handling the thousands of bankruptcies are lacking a key component: Judges. Ten benches with a combined 26 judges and technical staff are hearing more than 2,500 insolvency cases, Bloomberg relates citing latest official data. Bloomberg notes that based on the workload a year ago, researchers estimated India needs about 80 benches over five years. That estimate is starting to look conservative, as tighter rules introduced by the banking regulator in February are poised to tip hordes of additional deadbeat borrowers into bankruptcy. According to Bloomberg, a streamlined bankruptcy process is crucial for Prime Minister Narendra Modi's attempts to come to grips with a simmering banking crisis that's sucking energy out of India's economy. Any failure to resolve the shortage of judges also has implications for large global investors who are lining up to chase bargains across industries ranging from steel to cement, the report says. "The National Company Law Tribunal appears to be understaffed and ill-equipped to deal with the increasing volume," Bloomberg quotes Punit Dutt Tyagi, Delhi-based executive partner at Lakshmikumaran & Sridharan Attorneys, as saying referring to the court system set up to handle bankruptcies. "This situation is unlikely to get better with time." Bloomberg notes that the NCLT was set up in June 2016 and gained full powers in January 2017, when India's new bankruptcy laws took effect. Electrosteel Steels Ltd. last week became the first large defaulter to complete the revamped bankruptcy process, missing the initial 180-day deadline for resolution but just about meeting the 270-day outer limit. On Feb. 12, the banking regulator ordered banks to take defaulters straight to the NCLT if they can't come up with a repayment plan within six months, according to Bloomberg. That will likely accelerate the buildup of cases in court, which stood at 9,073 on Jan. 31, including 2,511 instances of insolvency, 1,630 cases of merger and amalgamation, and 4,932 cases under other sections of the Companies Act, lawmakers were told last month. Moreover, the bankruptcy process risks getting complicated by challenges to the court's orders. Renaissance Steel, one of the companies that bid to buy Electrosteel under the bankruptcy process, plans to appeal the decision to award Electrosteel to Vedanta Ltd., the Economic Times reported this week, citing an official it didn't identify. The government is aware of the shortage of judges and is in the process of appointing more though numbers can't be confirmed immediately, said a person with knowledge of the matter, asking not to be identified as the information isn't public, Bloomberg relays. Three new benches of the NCLT will also be set up, the person said. According to Bloomberg, the accumulation of bankruptcy cases means that it sometimes takes about six months just to get a new insolvency case admitted to court, said Shardul S. Shroff, executive chairman of Delhi-based law firm Shardul Amarchand Mangaldas & Co. "These courts don't have time to hear company law related matters as they say the insolvency cases are taking up all their time," Shroff, as cited by Bloomberg, added. "In the absence of more judges it will be difficult for them to deal with the workload." INDUSTRIAL METALS: CRISIL Assigns B+ Rating to INR4MM Loan ---------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to bank facilities of Industrial Metals (IM). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 4 CRISIL B+/Stable Letter of Credit 21 CRISIL A4 The ratings reflect the modest scale of operations amidst intense competition in the steel trading business, average financial risk profile and susceptibility to volatility in prices of steel products. These weaknesses are partially offset by the extensive experience of IM's promoters. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations: Intense competition in the steel trading business has kept the scale of operations modest, as reflected in estimated revenue of INR45 crore in fiscal 2018, and limits the pricing power with customers and principals, thereby constraining profitability. * Susceptibility to price fluctuations: Prices of steel products are driven by demand from key end-user industries, which is further linked to economic cycles. Slowdown in economic activity may weaken revenue growth. Profitability also remains susceptible to sharp volatility in steel prices, which was evident in fiscal 2016. * Average financial risk profile: Financial risk profile is marked by low estimated networth of INR5.05 crore as on March 31, 2017. Networth was eroded due to capital withdrawals in the past. Total outside liabilities to adjusted networth ratio stood at over 3 times as on same date. Strength * Extensive experience of promoters in steel trading business: The three decade-long experience of IM's promoters has aided sustained growth in revenue to an estimated INR44.6 crore, from INR27.8 crore, over the four fiscals through March 2018, despite a slowdown in end-user industries. Outlook: Stable CRISIL believes IM will benefit from the extensive experience of its promoters. The outlook may be revised to 'Positive' if the firm reports significant and sustained growth in operating income and cash accrual, and better working capital management. The outlook maybe revised to 'Negative' in case of lower-than- expected sales and profitability, any substantial working capital requirement, or large withdrawal weakening the financial risk profile and liquidity. IM, a partnership firm formed in 1979, trades in steel products such as mild steel, high tensile steel and boiler plates. Operations of the Mumbai-based firm are managed by partners, Mr Fenil Timbadia and Mr Kautilya Cyclewala. KAMAL AGRO: CRISIL Withdraws B Rating on INR2.9MM LT Loan --------------------------------------------------------- CRISIL has been consistently following up with Kamal Agro Industries (KAI) for obtaining information through letters and emails dated December 14, 2017, January 17, 2018, April 11, 2018 and April 16, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 9 CRISIL B/Stable (Issuer Not Cooperating; Migrated from 'CRISIL B/Stable'; Rating Withdrawn) Proposed Long Term 2.9 CRISIL B/Stable (Issuer Not Bank Loan Facility Cooperating; Migrated from 'CRISIL B/Stable'; Rating Withdrawn) Term Loan 2.1 Cooperating; Migrated from 'CRISIL B/Stable'; Rating Withdrawn) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of KAI. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for KAI is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Information Adequacy Risk with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the rating on the bank facilities of KAI to 'CRISIL B/Stable Issuer Not Cooperating' from 'CRISIL B/Stable'. CRISIL has withdrawn its rating on the bank facilities of KAI at the company's request and after receiving a no-objection certificate from Bank. The rating action is in line with CRISIL's policy on withdrawal of its ratings on bank facilities. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. KAI was established by Mr Ram Bilas, Mr Binod Kumar, and Mr Rajesh Kumar in 2011. The firm's cotton ginning and pressing unit and cotton oil extraction unit in Hisar (Haryana), commenced commercial operations in October 2011. The guar processing unit in Hisar began operations in November 2012. KASHI KANCHAN: Ind-Ra Affirms BB- Issuer Rating, Outlook Stable --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Kashi Kanchan Private Limited's (KKPL) Long-Term Issuer Rating at 'IND BB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR150 mil. Fund-based limits affirmed with IND BB-/Stable rating; and -- INR40 mil. Non-fund-based limits affirmed with IND A4+ rating. KEY RATING DRIVERS The affirmation reflects KKPL's continued small scale of operations and modest credit metrics, owing to its presence in the highly competitive construction industry. Revenue improved to INR314.3 million in FY17 (FY16: INR241.3 million) because of the execution of a larger number of work orders. KKPL booked INR343.8 million in revenue for FY18 and on April 1, 2018, it had an order book position of INR809.4 million, which is likely to be completed in the next three financial years. In FY17, gross interest coverage (operating EBITDA/net interest expenses) was stable at 1.7x (FY16: 1.7x) because of a proportionate increase in EBITDA to INR44.4 million (INR34.0 million) and interest expense, while net financial leverage (total adjusted net debt/EBITDA) reduced to 3.8x (4.2x) due to the rise in the absolute operating profit. The ratings also reflect KKPL's modest liquidity, indicated by an average utilization of the fund-based limits of about 94.5% for the 12 months ended March 2018. The ratings are, however, supported by KKPL's promoters' experience of over four decades in civil construction and a comfortable operating margin of 14.1% in FY17 (FY16: 14.1%) because it majorly executes labor-intensive projects. RATING SENSITIVITIES Positive: A sustained improvement in the scale of operations and credit metrics will be positive for ratings. Negative: Sustained deterioration in the credit metrics on sustained basis could be negative for ratings. COMPANY PROFILE KKPL was incorporated as a partnership concern in 1974 by Mr. Surendra Kumar Padhi and Mr. Abhimanyu Padhi. The firm was reconstituted as a private limited company in 2005. KKPL undertakes civil construction activities in road, drainage, and building construction, primarily in Odisha. KRISHNA VALLEY: Ind-Ra Moves 'D' Issuer Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Krishna Valley Power Private Limited's (KVPPL) Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND D(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR146.85 mil. Term loans (Long-term) due on March 2027 migrated to Non-Cooperating Category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 13, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE KVPPL was primarily founded to develop hydro power projects. The site for the proposed project has been identified approximately 15km downstream of the Bhatsa dam and approximately 9km downstream of existing capacity and is located near village Khutghar, Maharashtra with an installed capacity 1,500KW. LAKSHMI VINAAYAKA: CRISIL Reaffirms B Rating on INR9MM Cash Loan ---------------------------------------------------------------- CRISIL has reaffirmed its ratings on bank facilities of Sri Lakshmi Vinaayaka Rice Industries (SLVRI) to 'CRISIL B/Stable' Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 9 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 1 CRISIL B/Stable (Reaffirmed) The rating reflects SLVRI's below-average financial risk profile, marked by an aggressive capital structure and inadequate debt protection metrics. The rating also factors in the firm's large working capital requirements and the susceptibility of its operating margin to volatility in raw material prices. These rating weaknesses are partially offset by the extensive experience of SLVRI's promoters in the rice milling industry and the firm's established relationships with suppliers and customers. Key Rating Drivers & Detailed Description Strengths * Extensive experience of partners in bulk drug trading business: SLVRI's partners have been operating in the rice milling business for 16 years. Over the years, the partners have established strong relationships with suppliers and customers. SLVRI has been able to achieve revenue to INR47.4 cr for FY 2016-17 (refers to financial year, April 1 to March 31). CRISIL believes that SLVRI will continue to benefit over the medium term from its promoters' experience in the business. Weaknesses * Large working capital requirements: SLVRI's operations are working capital intensive, with gross current assets of 134 days as on March 31, 2016. The firm procures paddy from farmers and brokers in Karnataka and generally gets credit of 10 to 15 days from its suppliers. It has a policy of storing paddy for two to three months; however, the inventory increases during peak season. Payments from customers who are majorly brokers are realised within 60 to 90 days. SLVRI has been financing its working capital requirements through cash credit facility of INR9 cr , which remained fully utilised, CRISIL believes that SLVRI's operations will remain working capital intensive over the medium term largely because of its large inventory requirements. * Susceptibility of operating margin to volatility in raw material prices: SLVRI's operating margin was low at 2.7 per cent for FY 2016-17. Additionally, the firm's operating margin will remain susceptible to fluctuations in raw material prices. CRISIL believes that SLVRI's operating margin is expected to moderate at 2-2.8 per cent over the medium term. Outlook: Stable CRISIL believes that SLVRI will continue to benefit over the medium term from its promoter's extensive industry experience and its established relationships with suppliers and customers. The outlook may be revised to 'Positive' if the firm's financial risk profile, particularly its liquidity, improves through sustained increase in cash accruals or through infusion of substantial long-term funds by its promoters. Conversely, the outlook may be revised to 'Negative' if a pile-up in inventory leads to lengthening of the firm's working capital cycle, adversely affecting its liquidity, or if debt-funded capital expenditure leads to deterioration in its gearing. Set up in 2007 as a partnership firm, SLVRI processes rice or paddy into rice. The firm's day-to-day operations are managed by Mr. Satyanarayana. Profit after tax (PAT) and net sales were estimated at INR0.20 crore and INR47.4 crore, respectively, for fiscal 2017, as against INR0.2 crore and INR9.9 crore, respectively, in the previous fiscal. MAHESH COTSPIN: CRISIL Reaffirms B+ Rating on INR9.28MM Loan ------------------------------------------------------------ CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long- term bank facilities of Mahesh Cotspin Private Limited (MCPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 9.28 CRISIL B+/Stable (Reaffirmed) Long Term Loan 1.72 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect MCPL's small scale of operations in the highly fragmented cotton ginning industry, below-average financial risk profile, and exposure to risks relating to volatility in cotton prices and changes in government regulations. These strengths are partially offset by the experience of the promoters and their funding support. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations and intense competition: Despite increasing to INR75.9 crore in fiscal 2017 from INR41.9 crore in fiscal 2016, revenue remains modest due to competition from the several spinning units with large capacities. Intense competition may continue to restrict the scalability of operations and limit the pricing power with suppliers and customers, thereby constraining profitability. * Below-average financial risk profile: Networth has been modest at INR2.7 crore as on March 31, 2017, with high gearing of 4.13 times. Also, the debt protection metric remained moderate marked by interest coverage of 1.9 times and NCATD of 0.06 times as on March 31, 2017 * Exposure to fluctuation in cotton prices and change in government regulations: Availability of cotton depends on the monsoon and hence cotton prices keep fluctuating. Government interventions also impact the pricing of cotton. Strength * Experience of promoters and their funding support: Benefits from the promoters' experience of around a decade, their strong understanding of the local market dynamics, and healthy relations with customers and suppliers should continue to support the business. The promoters are also expected to continue extending timely, need-based funds to aid financial flexibility Outlook: Stable CRISIL believes MCPL will continue to benefit from the experience of the promoters. The outlook may be revised to 'Positive' if higher-than-expected cash accrual strengthens financial risk profile. Conversely, the outlook may be revised to 'Negative' if lower-than-expected cash accrual, stretch in working capital cycle, or large, debt-funded capital expenditure weakens financial risk profile and liquidity. MCPL was incorporated in May 2012 to take over the operations of a proprietorship firm, Mahesh Industries, which was set up by Mr Radheshyam Bhandari in 2005. The company processes raw cotton (kapas) into cotton bales; it also crushes cotton seed to manufacture cotton seed cake and oil. The products are sold across Maharashtra. MAHIPAL FOOD: CRISIL Withdraws B+ Rating on INR15MM Cash Loan ------------------------------------------------------------- CRISIL has reaffirmed its ratings on the bank facilities of Mahipal Food and Gum Industries (MFGI) and subsequently withdrawn the ratings at the company's request and on receipt of a no- objection certificate from the bankers. The withdrawal is in line with CRISIL's policy on withdrawal of bank loan ratings. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 15 CRISIL B+/Stable (Rating reaffirmed and Withdrawn) MFGI, a partnership firm of Mr Sanjay Mahipal, Ms Munni Devi, and Ms Nisha Mahipal, processes and manufactures guar split and trades in mustard oil. Its processing unit is at Sriganganagar, Rajasthan, and has installed capacity of 120 tonne per day (tpd) for guar gum. MAN COTT: Ind-Ra Migrates 'BB' Issuer Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Man Cott Private Limited's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise, despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using the rating. The rating will now appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR250 mil. Fund-based Working Capital Limits migrated to Non-Cooperating Category with IND BB (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 21, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 2003, Man Cott is promoted by Shri Bhupendra Singh Rajpal and Shri Rajendra Singh Rajpal of Manjeet Group of Sendhwa, Madhya Pradesh. The company is primarily engaged in ginning and pressing of cotton. It has a 290bales/day manufacturing unit in Pimpalgaon (Maharashtra) and an 180bales/day manufacturing unit in Kuppa (Maharashtra). MANGALORE MINERALS: CRISIL Cuts Rating on INR27.55MM Loan to D -------------------------------------------------------------- CRISIL has downgraded its rating on the bank facilities of Mangalore Minerals Private Limited (MMPL) to 'CRISIL D' from 'CRISIL BB+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Discounting .15 CRISIL D (Downgraded from 'CRISIL BB+/Stable') Cash Credit 11.00 CRISIL D (Downgraded from 'CRISIL BB+/Stable') Term Loan 27.55 CRISIL D (Downgraded from 'CRISIL BB+/Stable') The downgrade reflects weak liquidity risk profile marked by high utilization of the cash credit facility for the past 12 months ending March 2018 and delay in repayment of term loan. The group's scale of operation was lower than expectation due to prevailing ban on sand mining in the state of Karnataka, Gujarat & Andhra Pradesh. Further gradual weakening in working capital cycle marked by stretched receivable cycle lead to weak business performance in the year ending March 31, 2018. Analytical Approach For arriving at its ratings, CRISIL has combined the business and financial risk profiles of Mangalore Minerals Pvt Ltd (MMPL) and Mandovi Minerals Pvt Ltd (Mandovi Minerals), together referred to as the MMPL group. This is because both these entities are in similar line of business, have a common management, and fungible cash flows. Key Rating Drivers & Detailed Description Weakness * Weak Liquidity: Due to weak liquidity and increase in working capital requirement there was insufficient funds for the term loan repayment obligation. * Exposure to risks related to intense competition in the highly regulated and fragmented industrial sands market: There have been a number of restrictions on sand mining, especially in Karnataka, Gujarat & Andhra Pradesh, in the recent past because of environmental issues resulting in an increase in unwashed silica prices. Sand miners in Mangalore have been severely affected after the Government of Karnataka passed the Uniform Sand Mining Policy in April 2011, which does not allow sand mining in Coastal Regulation Zones and prohibits the use of machinery to mine sand from rivers. Consequently, the price of sand in Mangalore has increased by over four times. However, this risk is mitigated by the group's presence in different geographies. Furthermore, the group has passed on increases in raw material costs to customers, as reflected in healthy operating margin of around 30% over the past three years. Though operating margin has not been affected by intensifying competition, the working capital cycle remains stretched. Intensifying competition and the economic slowdown have led to delays in realization of payments from customers recently. Thus business risk profile should remain exposed to political and regulatory risks. Strengths * Extensive experience of promoters: The group is managed by Mr Shivaji Mendon, who has over five decades of experience in the silica industry. This has helped the group to establish relationship with key customers mostly original equipment manufacturers (OEMs) and set up facilities in strategic locations with proximity to silica supply'unwashed silica sand available at low prices. The MMPL group, promoted by Mr Shivaji Mendon and Mrs Rama Mendon, is headquartered in Mangalore. Incorporated in 1987, MMPL, the flagship entity of the group, produces industrial sands. Mandovi Minerals is also promoted by the Mendons. Incorporated in 2004, it manufactures washed and dry silica sand. NIKHIL PULSES: CARE Assigns B+ Rating to INR7cr LT Loan ------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Nikhil Pulses Private Limited (NPPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank Facilities 7.00 CARE B+; Stable Assigned Detailed Rationale The rating assigned to the bank facilities of NPPL is constrained by modest albeit fluctuating scale of operations, low profit margins coupled with susceptibility to volatility in agro- commodities prices, leveraged capital structure and weak debt coverage indicators, working capital intensive nature of operations and presence in the highly competitive & fragmented agro-processing industry. The aforesaid constraints, however, partially offset by moderate track record of operations and experienced promoters. NPPL's ability to continuously increase the scale of operations and improve profit margins by improving capacity utilization amidst competitive scenario along with improving capital structure and liquidity position by efficient management of working capital requirement are the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Modest scale of operations: Total operating income (TOI) declined from INR58.85 crore in FY17 (vis-a-vis INR66.42 crore in FY16) on account of reduced realization coupled with lower demand due to demonetization. Nevertheless, the scale of operations continues to remain modest with low net-worth base of INR1.22 crore as on March 31, 2017 (vis-a-vis INR1.20 crore as on March 31, 2016) thus limiting its financial flexibility to an extent. However for 11MFY18 it has posted income of INR56.60 crore which is 80% of projected sales of FY18. Low profit margins coupled with susceptibility to volatile agro- commodities prices: The PBILDT margin in FY17 have been improved to 1.42% from 0.92% in FY16 on account of reduction in material cost and power fuel cost. Given the low PBILDT margin coupled with high interest and depreciation expenses, the PAT margin also stood low at 0.03% in FY17 (vis-a-vis 0.08% in FY16). Leveraged capital structure and moderate debt coverage indicators: The capital structure of NPPL stood leveraged with an overall gearing of 3.53 times as on March 31, 2017 (vis-Ö-vis 3.96 times as on March 31, 2016), given the high reliance on external debt viz. working capital bank borrowings, term loans and unsecured loans against which tangible net-worth stood low at INR1.22 crore in FY17 on account of low profitability. Further the debt coverage indicators stood weak with total debt/GCA and interest coverage at 23.66 times and 1.42 times respectively in FY17 (vis-a-vis 26.940 times and 1.55 times respectively in FY16). Working capital intensive nature of operations: The operations of the firm are working capital intensive in nature with daily working capital requirements related to purchase of raw materials and payment to suppliers. However, the operating cycle is moderate with moderate inventory holding and collection period. Nevertheless the working capital utilization remained high due to timing differences arises on account of mismatch of cash flows. Highly competitive nature of operations: NPPL operates in a highly competitive market environment wherein a large no. of organized & unorganized players is engaged in the grains processing activities. This is evidently reflected in the low profit margins garnered by the company, in addition to the trading & processing nature of operations fetching lower margins. Key Rating Strengths Moderate track record of operations with group synergies: NPPL possesses a moderate track record of over a decade of operations in processing of pulses like Urad and Moong dal. Over the years company has successfully established its brand under name of "Nikhil Pulses" in market. NPPL sells its products to wholesalers and retailers across Maharashtra, Gujarat, Punjab, Bihar, Guwahati etc. Experienced promoters with over three decades of experience in food processing activities: Mr. Mahendra Kumar Agarwal is a managing director of company having more than a decade experience in food processing industries. Mr. Babul Lal Agarwal, father of Mr. Mahendra Kumar Agarwal is into existence in similar industries for more than three decades have helped company to achieve consistent growth in sales for past four years. Hence, the extensive experienced of the directors enable them to establish strong marketing connects and production process excellence for the company. Incorporated in 2001, Nikhil Pulses Private Limited (NPPL) is engaged in processing & trading of all types of dal mainly mong dal and urad dal, possessing installed capacities of 15000 quintals and utilized at 75% in FY17 at its processing facilities located at Jaipur in Rajasthan. The resultant products, viz. processed urad and moong dal, are in-turn sold to the wholesalers and retailers of food items from Maharashtra, Gujarat, Punjab, Bangalore, Bihar etc. through brokers. The firm sells dal under the brand names of "Nikhil Pulses". On the other hand, the raw pulses are procured from the traders of various agro-commodities located in Maharashtra, Gujarat, Andhra Pradesh and Tamil Nadu. NILADREE BUILD-TECH: Ind-Ra Assigns BB LT Rating, Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Niladree Build- Tech Private Limited (NILADREE) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR107.6 mil. Term loan due on March 2024 assigned with IND BB/Stable rating; and -- INR6 mil. Fund-based working capital limits assigned with IND BB/Stable rating. KEY RATING DRIVERS The ratings reflect NILADREE's modest scale of operation and credit metrics as it operates in a highly competitive and price sensitive hospitality industry. According to FY18 provisional financials, NILADREE's revenue was INR153 million (FY17: INR126 million, FY16: INR131 million). During FY17, revenue had declined due to demonetization and cyclone in October 2016, which caused low occupancy of hotels. NILADREE's net interest coverage (operating EBITDA/net interest expense) improved to 2.2x in FY18 (FY17: 2.1x) primarily due to an increase in absolute EBITDA (FY18: INR51 million; FY17: INR46 million) and net financial leverage (total adjusted net debt/operating EBITDAR) deteriorated to 4.1x (3.55x) due to an increase in the total debt. The operating EBIDTA margins declined to 33.0% in FY18 (FY17: 36.4%) due to an increase in personnel and other expenses. The liquidity position of the company is tight, as reflected in its around 97.8% average utilization of the working capital limits during the 12 months ended March 2018. The ratings, however, are supported by around two decades of experience of the directors in the hospitality industry. RATING SENSITIVITIES Negative: A sustained deterioration in the interest coverage could lead to a negative rating action. Positive: A substantial improvement in the scale of operations along with a sustained improvement in the interest coverage could lead to a positive rating action. COMPANY PROFILE Incorporated on August 25, 1999, NIADREE operates three-star hotels namely Hotel East West and Blue Lily Beach Resort in Baliapanda, Puri. Blue lily Beach Resort started its operations in 2011 and Hotel East West started its operations in 2014. The hotels are managed by Mr. Dilip Rout. NIMISH SYNTEX: Ind-Ra Hikes Long-Term Issuer Rating to 'BB' ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Nimish Syntex's (NS) Long-Term Issuer Rating to 'IND BB' from 'IND BB-' The Outlook is Stable. The instrument-wise rating actions are: -- INR10 mil. Fund-based facilities Long-term rating upgraded; short-term rating affirmed with IND BB/Stable/IND A4+ rating; and -- INR140 mil. Non-fund-based facilities affirmed with IND A4+ rating. KEY RATING DRIVERS The upgrade reflects a substantial improvement in NS' EBITDA margin and credit metrics. According to 9MFY18 interim numbers, the company's EBITDA margin improved to 3.4% (FY17: 1.5%; FY16: negative 2.3%) as it focused on high-margin customers. NS' credit metrics was comfortable owing to its lower dependency on debt and diversified customer base. EBITDA interest coverage (operating EBITDA/gross interest expense) increased to 5.1x in 9MFY18 (FY17: 0.8x; FY16: negative 1.6x) and net financial leverage (adjusted net debt/operating EBITDA) improved to 0.2x (1.3x; negative 3.6x) on account of an improvement in absolute EBITDA. Ind-Ra expects the credit metrics to remain comfortable in the near term in view of the absence of any debt-led capex plans and a likely improvement in EBITDA margin further. NS' scale of operations, however, remained modest despite an improvement in its revenue to INR2,113 million at FYE18 (provisional) (FY17: INR749 million; FY16: INR425 million) due to an increase in orders from the organized player, owing to the successful roll-out of the Goods and Services Tax. The steep rise in revenue in FY18 was on account of a favorable market opportunity which helped the company receive orders worth INR1,000 million. This was, however, a one-time phenomenon. From FY19, the growth would be as per the historical trend and revenue is likely to be in the range of INR1,000 million to INR1,500 million. NS' ratings are constrained by the commodity-trading nature of the business and its exposure to foreign exchange fluctuations. The ratings, however, are supported by NS' comfortable liquidity profile as indicated by its around 27.8% utilization of the non- fund-based working capital limit during the 12 months ended March 2018; fund-based working capital limit were unutilized. The ratings are further supported by four decades of experience of the promoters in the textile business. RATING SENSITIVITIES Positive: A sustained increase in the scale of operations and operating profitability margins, leading to a sustained improvement in the credit metrics would be positive for the ratings. Negative: Any deterioration in revenue and operating profitability margins leading to deterioration in credit metrics would be negative for the ratings. COMPANY PROFILE Mr. Arun Bhartia started NS in 1999 as a partnership firm. NS is engaged in importing and trading of textiles and other related products including polyester yarns, polyester staple fibers, viscose spun yarns, embroidery threads and related products. NS is a part of Bhartia Yarns Group, which also includes Bhartia Yarns (IND BB+/Stable) and Fine yarns (IND BB/Stable). All the entities trade yarn. PARSVNATH LANDMARK: CRISIL Cuts Rating on INR200MM NCD to B+ ------------------------------------------------------------ CRISIL has downgraded its rating on non-convertible debentures (NCDs) of Parsvnath Landmark Developers Pvt Ltd (PLDPL) to 'CRISIL B+/Stable' from 'CRISIL BB-/Negative'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Non Convertible 200 CRISIL B+/Stable (Downgraded Debentures from 'CRISIL BB-/Negative') The downgrade reflects lower-than-expected collections resulting from slower construction progress. Despite achieving 96% saleability in a group housing project till date, the delay in handover of Phase I and slowdown in construction progress of Phase II has adversely impacted customer advances. The rating reflects exposure to project implementation risk and modest debt protection metrics. These weaknesses are partially offset by the favourable location of the company's La Tropicana project with healthy saleability. Analytical Approach For arriving at its rating, CRISIL has considered the financials of PLDPL on a standalone basis. Key Rating Drivers & Detailed Description Weakness * Exposure to project implementation risk: Construction progress of Phase II has been delayed due to funding constraints, resulting in lower-than-expected customer advances. Furthermore, approval for the building plan of the economically weaker section (EWS) project (Phase 3) has been pending with New Delhi Municipal Council for over a year, thus exposing PLDPL to project implementation risk. The company is at an advance stage of tying up an additional construction finance loan to meet the pending project cost. * Modest debt protection metrics: The company had issued INR200 crore of NCDs in October 2016, with a one-year interest moratorium and scheduled repayments over 36 months through October 2019. As per the initial agreement, the moratorium ended on October 12, 2017, and the first coupon of INR10 crore was payable. However, the stretched liquidity led to the company restructuring the first NCD coupon payment. Further, the company has restructured its coupon payment of INR38 crore, which was due on April 12, 2018. Strength * Favourable location of project with healthy saleability: The La Tropicana project is at the prime location of Civil lines, New Delhi. The project is being developed in a phased manner with Phases 1 and 2 comprising luxury apartments spread over 0.2 crore square foot (sq ft) of saleable area. These phases were launched in 2009 and have witnessed healthy saleability of about 96% as on date. Furthermore, the construction of Phase I has been completed in December 2016 with possession of flats in progress. Advances of around 90% pertaining to Phase I have been received and the balance would be received on completion of pending minor construction and possession of these flats. Outlook: Stable CRISIL believes liquidity will remain restricted in the near term, due to lower-than-expected cash inflow, impacted by slowdown in project progress. The outlook may be revised to 'Positive' if there is pick-up in construction progress, leading to steady cash inflow and improved debt protection metrics. Conversely, the outlook may be revised to 'Negative' if there is a further stretch in cash flow or delays in meeting the construction-linked milestones, as per NCD terms. PLDPL is a special-purpose vehicle, promoted by Parsvnath Developers Ltd (PDL; rated 'CRISIL D') to develop La Tropicana, a 0.23-crore sq ft residential project located at Civil Lines, New Delhi. The project, which is being executed in phases, comprises 505 luxury apartments, houses for the EWS, and commercial units, spread over a saleable area of 0.2 crore sq ft. The company is yet to launch its 40-storied building for EWS. Prior to September 2016, PDL held 78.0% equity stake in PLDPL, with Sankaty Advisors through Sterling Pathway holding 22.0%. After the NCD issuance in October 2016, PDL has bought out Sterling Pathway's stake in the company, thereby making PLDPL its wholly-owned subsidiary. Incorporated in 1990, PDL develops real estate projects, and has a well-diversified portfolio of residential apartments, integrated townships, commercial and retail projects, special economic zones, information technology parks, and hotels. PRAJWAL PROMOTERS: Ind-Ra Affirms 'B' LT Rating, Outlook Stable --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Prajwal Promoters Private Limited's (Prajwal) Long-Term Issuer Rating at 'IND B'. The Outlook is Stable. The instrument-wise rating action is: -- INR195 mil. Term loan due on January 2020 affirmed with IND B/Stable rating. KEY RATING DRIVERS The affirmation continues to reflect the execution and off take risks associated with Prajwal's under-construction Adithya Project. The project comprises 217 units, as per Real Estate Regulatory Authority Karnataka. Until March 2018, Prajwal had completed the construction of four villas. The firm is currently constructing 10 villas, which are likely to be completed by end- December 2018. Prajwal projected the sale of 38 units for FY18; however, it sold 19 units worth INR120 million, collecting INR21.9 million of the amount. Prajwal sold lower-than-projected number of units owing to a slowdown due to demonetization and the Real Estate (Regulation and Development) Act, 2016, implementation. The ratings also reflect a modest funding risk, as Prajwal commences construction once a customer books and makes payment for a unit. The project cost is INR706.38 million, which is being funded by a debt of INR195 million, a promotor contribution of INR150 million and a customer advance of INR361.4 million. As of March 2018, Prajwal had incurred a construction cost of INR120 million, INR80 million of which was debt-funded, followed by advance payments (INR20 million) and promoter equity (INR20 million). The loan repayment will start from June 2019. The ratings factor in upcoming development near the project, which is located near the Jigani-Anekal single lane road that has been approved for double-lane expansion. Moreover, the Karnataka government's cabinet has approved the supply of the Cauveri river water to the residents of Anekal and Suryanagari. In view of these developments, the management expects a substantial improvement in the sale of units. The ratings, however, continue to be supported by the promoters' experience of over four decades of experience in real estate. RATING SENSITIVITIES Negative: Project delays or weak sales affecting the debt service ability could lead to a negative rating action. Positive: The completion and the sale of the villas and row houses, as planned, leading to strong cash flow visibility could lead to a positive rating action. COMPANY PROFILE Incorporated in 2008, Bengaluru-based Prajwal is undertaking the construction of Adithya, which has a plot area of 491,139 square feet and a saleable area 270,000 square feet. PRIDE COKE: Ind-Ra Assigns 'B+' Issuer Rating, Outlook Stable ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Pride Coke Private Limited (Pride) a Long-Term Issuer Rating at 'IND B+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR94.5 mil. Long-term loan due on February 2025 assigned with IND B+/Stable rating; -- INR160 mil. Fund-based limits assigned with IND B+/Stable rating; -- INR15 mil. Non-Fund-based limits (FLC) assigned with IND B+/Stable/IND A4 rating; and -- INR25 mil. Non-fund-based limits (BG) assigned with IND A4 rating. KEY RATING DRIVERS The ratings are constrained by Pride's small scale of operations and modest credit metrics due to low capacity utilization and a muted demand. Revenue was INR116 million in FY17 (FY16: INR114 million) with interest coverage (operating EBITDA margin/gross interest expense) of 1.5x (0.4x) and net financial leverage (net adjusted debt/ operating EBITDA margins) of 8.3x (17.3x). During the last two financial years, the company had witnessed low sale volume of coal due to a muted demand. The company achieved revenue of INR488 million in 10MFY18, as per interim financials. Moreover, the liquidity profile is tight as reflect from 95% utilization of the fund-based limits during the 12 months ended February 2018. The ratings factor in the company's debt-led diversification plan of installing a rice mill unit during FY17. Despite of a rise in debt level due to the capex, the debt equity ratio remained at a comfortable level during FY17. The ratings are supported by the company's healthy EBITDA margin of 23.6% in FY17 (FY16: 8.1%) on account of a rise in average realization of coal. Also, its promoter has a decade-long experience in running a coal business. RATING SENSITIVITIES Positive: A sustained improvement in the scale of operations and credit metrics will positive for the ratings. Negative: Substantial deterioration in the liquidity profile on a sustained basis will be negative for ratings. COMPANY PROFILE Pride was incorporated in 2004 and manufactures low-ash metallurgical coke and coke breeze. It also has a 32,400 metric tons per annum rice processing unit. R.R OVERSEAS: CRISIL Moves B Rating to Not Cooperating Category --------------------------------------------------------------- CRISIL has been consistently following up with R.R Overseas (RR) for obtaining information through letters and emails dated December 20, 2017, March 9, 2018 and March 13, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 4.5 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) Long Term Loan 1.3 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) Proposed Working 6.2 CRISIL B/Stable (Issuer Not Capital Facility Cooperating; Rating Migrated) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of R.R Overseas, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on R.R Overseas is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of R.R Overseas to CRISIL B/Stable Issuer not cooperating'. Set up as a partnership firm in 2013 by members of Ohri and Davesar families, RR mills and processes basmati rice at its unit in Tarn Taran Sahib, Punjab, which began operating from November 2015. RAJU CHACKO: CARE Assigns B+ Rating to INR22.10cr LT Loan --------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Raju Chacko (RC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 22.10 CARE B+; Stable Assigned Short-term Bank Facilities 2.90 CARE A4 Assigned Detailed Rationale & Key Rating Drivers The ratings assigned to the bank facilities of Raju Chacko (RC) are tempered by small scale of operations along with fluctuating total operating income, working capital intensive on account of elongated average inventory holding days, weak debt coverage indicators, tender based nature of operations, profitability margins being susceptible to fluctuation in raw material prices, constitution of the entity as proprietorship firm with inherent risk of withdrawal of capital, customer and geographic concentration risk and highly fragmented and competitive civil construction industry. The ratings, however, derives its strengths from reasonable track record with experienced promoter for more than a decade in construction industry, satisfactory profitability margins albeit declining PAT margin during the review period, comfortable capital structure, medium to long-term revenue visibility from order book position and stable outlook of construction industry. Going forward, the ability of the firm to increase its scale of operations, execute the projects in timely manner and timely receipt of contract proceeds are the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Small scale of operations along with fluctuating total operating income: Despite having a long track record, the scale of operations of the firm is small marked by total operating income (TOI) of INR13.62 crore in FY17. Furthermore, the total operating income of the firm is seen fluctuating during the review period. The revenue decreased from INR11.03 crore in FY15 to INR8.00 crore in FY16 due to lesser projects executed by the firm. However, in FY17, the total operating income increased to INR13.62 crore owing to more number of projects procured by the firm. Furthermore, in 11MFY18, the firm has achieved total operating income of INR30.92 crore. Apart, the networth of the company is small at INR7.80 crore as on March 31, 2017 as compared to other peers in the industry. Working capital intensive on account of elongated average inventory holding days: The firm is operating in a working capital intensive industry on account of stretched inventory holding days. The firm receives the payment from its customers within 15-30 days from the date of bill raised. Furthermore, the average creditor's period stood at 1 day in FY17, as the firm makes payment to its creditors within a week. The firm maintains average inventory of around three months to execute the current projects in timely manner. However, due to certain delays in executing the project, the outstanding balance of work in progress remained high as on account closing date resulting in high inventory days which stood at 473 days in FY17 when compared to 856 days in FY16. Owing to the aforementioned reasons, the operating cycle of the firm elongated to 484 days in FY17 compared to 872 days in FY16. To meet the above working capital gap, the company has to depend on working capital facility. The average utilization of the cash credit facility was 80% for the last 12 month ended February 28, 2018. Weak debt coverage indicators: The debt coverage indicators of the firm remained weak during review period. Total debt/GCA deteriorated from 5.94x in FY15 to 12.34x in FY16 due to increase in total debt levels and decrease in gross cash accruals. However, TD/GCA improved to 8.70x in FY17 on account of decrease in total debt levels as a result of repayment of term loan obligations coupled with marginal increase in gross cash accruals. Furthermore, the PBILDT interest coverage ratio decreased from 2.20x in FY15 to 1.92x in FY16 due to increase in interest cost. However, in FY17, ICR improved to 2.05x in FY17 due to increase in PBILDT levels in absolute terms and stood satisfactory. Profitability margins are susceptible to fluctuation in raw material prices: The basic input materials for execution of contracts are steel, bitumen and cement, the prices of which are highly volatile. Moreover, the firm does not have any long term contracts with its suppliers for purchase of aforesaid raw materials. Hence, the operating margin of the firm is exposed to any sudden spurt in the input material prices along with increase in labour prices being in labour intensive industry. Furthermore, the firm does not have price variation clause in work agreements which would impact the profitability of the firm. Constitution of the entity as proprietorship firm with inherent risk of withdrawal of capital: Constitution as a proprietorship has the inherent risk of possibility of withdrawal of the capital at the time of personal contingency which can adversely affect its capital structure. Furthermore, proprietorships have restricted access to external borrowings as credit worthiness of the proprietor would be key factor affecting credit decision for the lenders. Customer and geographic concentration risk: The firm is a contractor for various departments of state government of Kerala. RC participates in tenders for receiving work orders from departments of government of Kerala such as Kerala Public Works Department (PWD), Kerala State Transport Project Department, Road Fund Board, Kerala State Construction Corporation etc.The geographic presence of these customers are restricted to various districts of Kerala which reflect high geographical concentration risk along with customer concentration risk. Highly fragmented and competitive civil construction industry: Raju Chacko is operating in highly competitive and fragmented industry. The firm witnesses intense competition from both the organized and largely unorganized players as the projects are tender-based and the revenues are dependent on the firm's ability to bid successfully for these tenders. This fragmented and highly competitive industry results into price competition thereby affecting the profitability margins of the companies operating in the industry. Key Rating Strengths Long track record with experienced promoter for three decades in construction industry: Raju Chacko is a proprietorship firm started by Mr. Raju Chacko in the year 1988. Mr. Raju Chacko is a civil engineer with rich experience in this field whereas the proprietor looks after day to day activities of the firm. Due to long track record in the construction industry, the promoter has established relations with its customers which has benefitted in terms of bagging new orders in competitive environment. Satisfactory profitability margins albeit declining PAT margin during the review period: The firm has satisfactory profitability margins due to better margin associated with projects under execution. However, the PBILDT margin of the firm has been fluctuating in the range 21%-32% during the review period FY15-17 due to the fluctuation in raw material prices. resulted in fluctuations in PBILDT margins. Furthermore, PAT margin is also seen declining from 6.27% in FY15 to 5.07% in FY17 due to increasing finance expenses on account of moderate utilization of working capital utilization and availment of fresh term loan in FY15-16. Comfortable capital structure: The capital structure of the firm remained comfortable during the review period. Debt equity ratio of the firm remained below unity for the last three balance sheet date ended March 31, 2017 on account of increase in tangible net worth due to year-on-year accretion of profits to net worth along with moderate term loans (mainly pertaining to machinery loan) in the books of firm. However, overall gearing ratio of the firm deteriorated from 1.05x as on March 31, 2015 to 1.73x as on March 31, 2016 due to increase in debt levels on account of availment of fresh term loan in FY15-16. Further, overall gearing ratio improved to 1.52x as on March 31, 2017 as a result of structured repayment of term loan obligations. Medium to long-term revenue visibility from order book position: The firm has a healthy order book of INR65.10 crore as on February 28, 2018 which translates to 4.78x of total operating income of FY17. The said order book provides revenue visibility for medium to long- term period. Stable outlook of construction industry: The construction industry contributes around 8% to India's Gross domestic product (GDP). Growth in infrastructure is critical for the development of the economy and hence, the construction sector assumes an important role. The Government of India has undertaken several steps for boosting the infrastructure development and revives the investment cycle. The same has gradually resulted in increased order inflow and movement of passive orders in existing order book. The focus of the government on infrastructure development is expected to translate into huge business potential for the construction industry in the long-run. In the short to medium term (1-3 years), projects from transportation and urban development sector are expected to dominate the overall business for construction companies. Raju Chacko (RC) was established in the year 1988 as a proprietorship firm. The firm is a civil contractor and has its registered office located at Muvattupuzha, Kerala. RC is engaged in civil construction of road works, buildings and railway works in the state of Kerala. The clientele of the firm include Kerala Public Works Department (PWD), Kerala State Transport Project Department, Road Fund Board, Kerala State Construction Corporation etc. The firm purchases inputs required for civil construction (like cement, steel, etc.) from local suppliers in and around Kerala. RATHI STYLE: CARE Assigns 'B' Rating to INR5.0cr LT Loan -------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Rathi Style And Textile Private Limited (RSTPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 5.00 CARE B; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of RSTPL is constrained by fluctuating albeit moderate scale of operations coupled with low capitalization, thin operating margin and profit margin, comfortable capital structure and weak debt coverage indicators, stretched liquidity position and presence in highly fragmented and competitive textile industry. The above constraints are partially offset by experienced and resourceful promoter in the apparel trading industry. Going forward, the ability of the company to increase its scale of operations along with improvement in profitability margins & capital structure and efficient management of the working capital requirements would be the key rating sensitivities. Detailed description of Key rating drivers Key rating Weakness Fluctuating albeit moderate scale of operations coupled with low capitalization: The total operating income has reflected a fluctuating trend in past (FY15-17) on account of fluctuation in the prices of traded goods. The total operating income grew on y- o-y basis by 17.49% from INR73.81 crore in FY16 to INR86.72 crore in FY17 on account of increase in the number of orders received from existing customers coupled with addition of new customers. Nevertheless, the scale of operations continues to remain moderate with relatively low tangible net-worth base of INR1.19 crore as on March 31, 2017. The moderate scale coupled with low networth base limits the entity's financial flexibility in times of stress and deprives it from scale benefits. Thin operating margin and profit margin: The operating margins of the company remained low in the range of 0.03-0.07% during last three years ended as on March 31, 2017 owing to trading nature of business, wherein the margins are inherently low due to low value addition. Further PBILDT margin has improved by 4bps from 0.03% in FY16 to 0.07% in FY17 due to better sales realization, however it continues to remain low. Further due to no external debt and trading nature of operation it has no interest and depreciation expenses. Comfortable capital structure and weak debt coverage indicators: The capital structure of the company stood comfortable marked by overall gearing of 0.91x as on March 31, 2017 (vis-Ö-vis 7.14x as on March 31, 2016) on account of improvement profitability coupled with infusion of equity share capital at premium amounting to INR1.13 crore during FY17. The debt service coverage indicators remained leveraged marked by weak total debt to GCA at 26.22 times as on March 31, 2017 (vis-Ö-vis 12.358 times as on March 31, 2016) on account of infusion of unsecured loan amounting to INR0.92 crores during FY17 to fund the business operations. Stretched liquidity position: The liquidity position of the company is remained moderately weak marked by stretched current ratio of 1.05x times and quick ratio of 1.03x times as on March 31, 2017, owing to trading nature of business where most of the funds are blocked in debtors. Investment in NWC as % TCE remained at 99.78% as on March 31, 2017. Further cash flow from operations remained negative during FY17. Presence in highly fragmented and competitive textile industry: RSTPL operates in highly fragmented, organized and unorganized market of textile industry marked by large number of small sized players. The industry is characterized by low entry barrier due to minimal capital requirement and easy access to customers and supplier. Also, the presence of big sized players with established marketing & distribution network results into intense competition in the industry. Key rating Strengths Experienced and resourceful promoter in the apparel trading industry: Mr. Chaina Ram Saini and Ms. Monika Bhatter have good experience in this domain and looks after the overall management of the firm. Further, the directors are supported by a team of qualified managerial personnel having long standing experience in the industry. Further the promoters are resourceful and supporting the business through infusion of equity capital on year on year basis. Rathi Style And Textile Private Limited (RSTPL) was incorporated in the year 2012 as a private limited company and currently the entire operations are handled by Mr. Chaina Ram Saini & Ms. Monika Bhatter. The actual operations of the company have started since FY15. RSTPL is engaged in trading of readymade garments for women namely kurtis, leggings, and western top and others. The company procures traded goods from the local market based in Maharashtra & Gujarat. RSTPL sells its products in Maharashtra & Gujarat and generates ~100% of its revenue from domestic market. RATNAKAR ISPAT: Ind-Ra Hikes Long Term Issuer Rating to 'BB-' ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Ratnakar Ispat India Private Limited's (RIIPL) Long-Term Issuer Rating to 'IND BB-' from 'IND B+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR73.8 mil. (reduced from INR97 mil.) Term loan due on October 2022 upgraded with IND BB-/Stable rating; -- INR100.0 mil. Fund-based working capital limits upgraded with IND BB-/Stable rating. KEY RATING DRIVERS The upgrade reflects an improvement in RIIPL's revenue, profitability and thus credit metrics in FY17, owing to an improvement in capacity utilization. In FY17, revenue grew to INR578.9 million (FY16: INR525.5 million) on account of an increase in the number of order executed. RIIPL achieved revenue of INR789.5 million as of February 2018 attributed to an improvement in the price of its end-products. EBITDA margins rose to 4.8% in FY17 (FY16: net loss of 6.4%). with the stabilization of operations. Thus, EBITDA interest coverage (operating EBITDA/gross interest expense) improved to 1.4x in FY17 (FY16: negative 1.5x) and net leverage (Ind-Ra adjusted net debt/operating EBITDAR) to 10.1x (negative 7.1x). However, the company's operational and financial profiles remain weak, due to its short operational track record and presence in the highly competitive steel industry which is vulnerable to price fluctuations in raw materials. Also, the company has a long net working capital cycle (FY17: 61 days; FY16: 32 days), owing to increase in inventory days. The ratings are supported by the company's comfortable liquidity position as indicated by its around 74.4% average use of the working capital limits during the 12 months ended March 2018. Also, RIIPL's promoters have close to three decades of experience in the iron and steel industry. RATING SENSITIVITIES Positive: An improvement in the scale of operations and operating profitability leading to an improvement in the credit metrics, and an improvement in the net working capital days, on a sustained basis, will be positive for the ratings. Negative: Deterioration in the operating profitability leading to deterioration in the credit metrics, on a sustained basis, will be negative for the ratings. COMPANY PROFILE Established in July 2012, RIIPL is promoted by Mr. Shankar Lal Jat, Mrs. Prem Devi Jat and Mrs. Geeta Devi The company has a 80,000 metric tons per annum TMT bar and MS Billets manufacturing facility in Khasra (Rajasthan). The company has started its commercial production from April 2015. RK NATURAL: Ind-Ra Maintains 'B' Issuer Rating in Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained R.K. Natural Fibre Private Limited's (RKN) Long-Term Issuer Rating in 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 the ratings. The rating will continue to appear as 'IND B (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR68 mil. Fund-based facilities maintained in Non- Cooperating Category with IND B (ISSUER NOT COOPERATING)/ IND A4 (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on February 27, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE RKN was incorporated in 2010 and is engaged in the business of ginning and pressing of raw cotton. The company's plant is located near Vadodara with production capacity of 16,000MT per annum. SHREE BASAVESHWAR: Ind-Ra Migrates 'D' Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Shree Basaveshwar Sugars Ltd.'s (SBSL) 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 the rating. The rating will now appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR3,240.6 bil. Term loan (Long-term) due on December 2020- August 2023 migrated to Non-Cooperating Category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on February 27, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE SBSL operates an integrated sugar manufacturing unit with a capacity of 3,500TCD of sugar, 60,000 LPD of molasses/ spirit, and a 26MW captive power plant. The plant started operations in March 2015. In FY15, the company reported revenue of INR40.3 million, operating EBITDA of INR26.4 million and net profit of INR2.4 million. Provisional results for 1HFY16 indicate revenue of INR294.3 million, EBITDA of INR103.4 million, interest expense of INR167.4 million and net loss of INR63.9 million. As of September 2015, the company had debt of INR3.97 billion. SHREE VISHAL: CRISIL Assigns B Rating to INR8MM Cash Loan --------------------------------------------------------- CRISIL has revoked the suspension of its ratings on the bank facilities of Shree Vishal Jewellers (SVJ), and has assigned 'CRISIL B/Stable' rating. CRISIL had suspended the ratings on December 10, 2014, as the firm had not provided information required for a rating review. However, requisite information has now been shared, enabling CRISIL to assign the ratings. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 8 CRISIL B/Stable (Assigned; Suspension Revoked) Proposed Working 7.5 CRISIL B/Stable (Assigned; Capital Facility Suspension Revoked) The rating reflects SVJ's modest scale of operations amid intense competition, susceptibility to fluctuations in gold prices and to government regulations, and average financial risk profile, these weakness are partially offset by established market position and experience of partners in the jewellery retail business Analytical Approach Unsecured loans (outstanding at INR0.65 crore as on March 31, 2017) extended to SVJ by the partners have been treated as neither debt nor equity. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations amid intense competition: Competition continues to intensify in the jewellery manufacturing industry, especially with the entry of branded pan-India players. Intense competition may continue to restrict the scalability of operations and limit the pricing power with suppliers and customers, thereby constraining profitability. Consequently, revenue and operating margin are estimated to be modest at INR32 crore and 7%, respectively, in fiscal 2018. * Susceptibility to fluctuations in gold prices and to government regulations: Volatility in gold prices, along with government regulations, constrains the business as the firm maintains sizeable inventory averaging 160 days. * Average financial risk profile: Gearing is estimated to be moderate at 1.05 times as on March 31, 2018, with modest networth of INR6.8 crore. Further, interest coverage ratio is also estimated to be weak at 1.4 times in fiscal 2018. Also debt protection matrix is average as reflected in interest cover and NCATD ratio of 1.3 times and 0.05 times respectively. Strength * Established market position and experience of partners: Benefits from the partners' experience of over six decades, their strong understanding of the local market dynamics, and healthy relations with customers and suppliers should continue to support the business. Over the years, they built a strong brand presence in Pimpri Chinchwad Municipal Corporation Outlook: Stable CRISIL believes SVJ will continue to benefit over the medium term from the experience of the partners. The outlook may be revised to 'Positive' if larger-than-expected cash accrual resulting from significant increase in scale of operations strengthens financial risk profile. Conversely, the outlook may be revised to 'Negative' if lower-than expected growth in revenue and profitability, stretched working capital cycle, or any large, debt-funded capital expenditure weakens financial risk profile. SVJ was set up in 1983 at Pune as a partnership between Mr Kantilal Sonigara and family. The firm retails in gold, silver and diamond jewellery at its showroom in Nigadi, Pune; the size of this showroom is about 3,000 square feet. SHRI VENKATESH: CARE Assigns B+ Rating to INR7cr LT Loan -------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Shri Venkatesh Trading Company (SVTC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 7.00 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of SVTC is primarily constrained on account of its financial risk profile marked by continuous decline in scale of operations, moderate profitability, weak solvency position and stressed liquidity position. The rating is, further, constrained on account of its presence in the highly fragmented and competitive industry and constitution as a proprietorship concern. The rating, however, favourably takes into account vide experience of the management in the industry. The ability of the firm to increase its scale of operations while maintaining profitability margin and improvement in solvency position with better management of working capital would be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Continuous decline in scale of operation with moderate profitability margins: The scale of operations of the firm has witnessed continuous decline during past three financial years ended FY17 (refers to 01 April to 31 March) owing to decline in hiring running income. PBILDT margin of the firm has witnessed continuously growth in last three financial years ended FY17 owing to higher proportionately decline in hire running expenses. Despite improvement in PBILDT margin, PAT margin has declined by 154 bps in FY17 over FY16 due to higher interest expenses in FY17. Weak solvency position and stressed liquidity position: The capital structure of SVTC stood highly leveraged with an overall gearing of 6.18 times as on March 31, 2017. Further, the debt service coverage indicators of the firm stood weak with total debt to GCA of 12.59 times as on March 31, 2017. Further, the liquidity position of the firm stood stressed with full utilization of its working capital bank borrowings in last twelve month ended January 2018. Due to high collection period, operating cycles of the firm stood elongated in FY17. Presence in highly fragmented and competitive industry: Transportation and logistics business is a highly competitive business on account of high degree of fragmentation in the industry with presence of a large number of small players having limited fleet size, both in organized and unorganized sectors. The players with superior quality of service and presence in different locations across country and clientele across various industries would enjoy competitive edge and would be able to garner more business and long term contracts. Key Rating Strengths Experienced management: The overall affairs of SVTC are managed by Mr. Bhagwan Das Maheshwari, Partner, who has more than four decades of experience in the transportation and logistics services. Mrs. JyotiMaheshwari, Partner, has around 5 years of experience in the industry and looks after finance and accounts function of the firm. The partners are assisted by a qualified and experienced management team. Katni (Madhya Pradesh) based SVTC was formed in 1991 as a proprietorship concern by Mr. Bhagwan Das Maheswari to carry out business of logistics services. Subsequently in 2010, it was converted into partnership firm with Jyoti Maheshwari and currently they are sharing profit and loss in the ratio of 60%:40%. The firm has fleet of 160 owned trucks along with the firm also hires trucks from other dealers also. Apart from logistics servies, the firm also engaged in the trading of fire clay, iron ore and fly ash. SN BUILDCON: Ind-Ra Maintains B Issuer Rating in Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained SN Buildcon's Long-Term Issuer Rating in the non-cooperating category. The issuer did not participate in the surveillance exercise, despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will continue to appear as 'IND B (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR60 mil. Proposed long term loans maintained in Non- Cooperating Category with Provisional IND B (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on February 5, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE SN Buildcon is a partnership firm set up in July 2014. It is an SPV formed specifically for the execution of a proposed residential project, Green Fields in Wadki. SOWIL LIMITED: Ind-Ra Migrates 'BB' LT Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Sowil Limited's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise, despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using the rating. The rating will now appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR20 mil. Fund-based limits migrated to Non-Cooperating Category with IND BB (ISSUER NOT COOPERATING) rating; -- INR10.47 mil. Term loan due on April 2018 migrated to Non- Cooperating Category with IND BB (ISSUER NOT COOPERATING) rating; and -- INR50 mil. Non-fund-based limits migrated to Non-Cooperating Category with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on March 9, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 1996, Sowil was formerly known as Sir Owen Williams Investment Ltd. It has a corporate office in Mumbai. The company provides consultancy services for all types of highway development works, railway works, bridges, structures, and tunneling. SRI ANNAPOORNA: CARE Assigns B+ Rating to INR8.50cr LT Loan ----------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Sri Annapoorna Enterprises (SAE), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 8.50 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of SAE are tempered by short track record with small scale of operations, weak debt coverage indicators, working capital intensive nature of operations due to high inventory holding period, vulnerability to government regulations and partnership nature of constitution with inherent risk of withdrawal of capital. The rating, however, derives strength by experience of the partners for more than a decade in tobacco business, growth in total operating income during the review period, satisfactory profitability margins, comfortable capital structure and stable outlook of tobacco industry. Going forward, ability of the firm to increase its scale of operations and improve profitability margins and to manage working capital requirements efficiently would be the key rating sensitivities. Detailed Description of the key rating drivers Key Rating Weaknesses Short track record with small scale of operations: The firm has a track record of around four years; however, the total operating income (TOI) of the firm remained low at INR26.10 crore in FY17 with a low net worth base of INR5.72 crore as on March 31, 2017 as compared to other peers in the industry. Weak debt coverage indicators during review period: The debt coverage indicators marked by interest coverage and TD/GCA remained weak during the review period. The interest coverage ratio and TD/GCA has deteriorated from 1.55x and 19.88x respectively in FY15 to 1.31x and 26.45x in FY17 due to increase in interest cost at back of high utilization of working capital limits. Vulnerability of the tobacco business to government regulations and to climatic risks affecting tobacco availability: Tobacco products form a major source of revenue in the form of taxes to both central as well as state government and hence there are regular modifications in taxation laws/tax rates with respect to the same. Due to the harmful nature of the product, the various state governments have banned. Manufacture and sale of various tobacco products under the Food Safety and Standards (Prohibition and Restrictions on Sales) Regulations, 2011 and availability of tobacco is highly susceptible to the factors like area under cultivation, Climatic risk, crop yield. Hence, the profitability margins of the firm are vulnerable to government regulations on tobacco products and availability of tobacco. Working capital intensive nature of operations due to high inventory holding period: The firm has working capital intensive nature of operations due to high inventory holding period. Owing to trading nature of business and availability of tobacco is seasonal in nature (susceptible to climatic risks), the firm has to buy the tobacco depending on availability. Due to market demand fluctuations, the firm holds the inventory till it gets better pricing. Hence the firm has elongated inventory holding period of 142 days in FY17.The firm receives the payment from its customers within 30-40 days from the date of invoice. The operating cycle of the firm is stood at 182 days in FY17. Average working capital utilization of the firm during the last 12 months period ended 28 February 2018 is 80%. Partnership nature of constitution with inherent risk of withdrawal of capital: Constitution as a partnership has the inherent risk and possibility of withdrawal of capital at a time of personal contingency which can adversely affect the capital structure of the firm. Key Rating Strengths Experience of the Partners for more than a decade in tobacco business: Mr. Hari Babu, managing partner is a graduate and having 10 years of experience in same line of business. The above factors helped the firm in approaching tobacco boards for purchasing tobacco in auction platforms and to establish relationship with customers. Growth in total operating income during the review period: The total operating income of the firm increased steadily y-o-y at a CAGR of 13.23% i.e., from INR17.98 crore in FY15 to INR26.10 crore in FY17, at back of increase in sales volume with repetitive orders from existing customers. Satisfactory profitability margins and comfortable capital structure during review period: Profitability margins of the firm are seen satisfactory during the review period. The PBILDT margin of the firm has increased from 3.49% in FY15 to 5.04% in FY17 due to increase in selling price of tobacco and increase in sales volume. The PAT margin of the firm remained fluctuating during review period. PAT margin of the firm stood in the range of 1.07%-1.24% due to increase in interest and depreciation costs. The capital structure of the firm remained comfortable during review period. Debt equity ratio of the firm stood below zero from the past three financial years dated 31 March, 2018. Overall gearing ratio of the firm stood at 1.46x in FY17 due to high utilization of working capital bank borrowings by the firm to manage its day to day operations. Stable outlook of tobacco industry Cigarettes currently represent one of the most popular forms of tobacco, accounting for nearly 90% of the global tobacco sales value. The global cigarette market today represents a multi-billion dollar market and according to IMARC group, its total revenues reached values worth US$ 816 Billion in 2017, representing a CAGR of around 7% during 2009-2017. Despite falling volumes in developed markets as a result of an increasing awareness on the harmful effects of cigarette smoking, manufacturers have been able to increase value growth. Factors driving the cigarette market include a continuous increase in the prices of cigarettes and an increasing popularity of premium products. Another major factor driving the growth is the rising consumption of cigarettes in developing countries. Owing to the aforementioned reasons, the outlook for tobacco industry looks stable for the medium term. Andhra Pradesh based, Sri Annaporna Enterprises (SAE) was established in the year 2014 as a partnership firm by Mr.Hari Babu & Mrs. Jayasree. The company is engaged in the trading of tobacco. The company purchases tobacco from local farmers and traders, and sells the same to its clients located across Andhra Pradesh. SRI KRISHNA: CARE Assigns B+ Rating to INR1.25cr Loan ----------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Sri Krishna Timber Mart & Saw Mill (SKTM), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 1.25 CARE B+; Stable Assigned Short-term Bank Facilities 10.75 CARE A4 Assigned Detailed Rationale & Key Rating Drivers The ratings assigned to the bank facilities of SKTM are tempered by its small scale of operations with declining operating income, foreign exchange fluctuation risk, inherent cyclicality risks associated with real estate sector and timber price, proprietor nature of its business, leveraged capital structure with weak debt coverage indicators and working capital intensive nature of operations. The ratings are further tempered on account of highly competitive and fragmented nature of its business and foreign exchange fluctuation risk. The ratings, however, derive strength from its experienced promoter with long track record of operations and increasing profit margins. Going forward, the ability of the firm to efficiently manage its working capital requirements along with its ability to improve its scale of operations, profitability margins and debt coverage indicators will be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Small scale of operations with declining total operating income: SKTM achieved a total operating income of INR11.28 crore in FY17 and has a networth of INR1.65 crore as on March 31, 2017 indicating its small scale of operations. Further, small scale of operations of SKTM affects its negotiation capabilities with stakeholders and thereby impacts its profitability margins. The total operating income of the firm has been declining Y-O-Y owing to seasonal nature of business along with slow-down in real estate and construction sector leading to limited demand for timber. Total operating income stood at INR11.28 crore in FY17 as against INR11.87 crore and INR17.46 crore in FY16 and FY15 respectively. Inherent cyclicality risks associated with real estate sector and timber prices: The firm is exposed to a persistent sectorial concentration as majority of the firm's revenue are driven by the real estate sector. Further, any slowdown in the construction activity could impact the revenue growth. Furthermore, the firm's procurement is not against firm orders and its margins remain vulnerable to volatility in the prices of timber. Leveraged capital structure and weak debt coverage indicators with working capital intensive nature of operations: On account of higher debt profile of the company for FY17 amounting to INR6.07 crore as against thin net worth of INR1.65 crore and cash profits of INR0.14 crore in FY17, the capital structure of the firm stood leveraged with overall gearing ratio standing at 3.68x as on March 31, 2017. The debt coverage indicators of SKTM remained weak indicated by its total debt to gross cash accrual of 42.71xx in FY17 as against 44.08x in FY16. Furthermore, the interest coverage ratio as indicated by PBILDT/interest improved marginally and stood at 1.31x in FY17 as against 1.28x in FY16 on account of lower interest costs in FY17. SKTM's working capital intensive nature of business operations is indicated by its higher operating cycle days of 175 days for FY17 as against 151 days for FY16. Although the purchases are backed by a letter of credit (LC) with a usance period of 180 days, the net working capital intensity of the firm remained high on account of high debtors following high sales made in the last quarter and thereby the average collection period increased to 60 days for FY17 as against 56 days for FY16. Furthermore, high amounts of inventory holding also led to higher operating cycle days for FY17 .Furthermore, the firm has utilized its OD limits to the maximum extent for the past 12 months ended March 2018. Proprietorship nature of business along with highly competitive and fragmented nature of timber industry: Proprietorship nature of its business limits the funding capability of SKTM to avail loans at cheaper rates from various sources of finance along with giving it the risk of capital withdrawal by proprietor on personal exigencies. Further, SKTM faces stiff competition from a large number of unorganized players in the timber industry, given the low entry barriers and low value addition, which exerts pressure on the profitability of the firm. Foreign exchange fluctuation risk: Import of timber by SKTM from various countries makes its profitability margins susceptible to foreign exchange rate fluctuations. However the firm has not made any major losses arising out of these foreign currency fluctuations in the past owing to forward sales contract facility with the bank. Key Rating Strengths Experienced Proprietor with established track record of the entity: The proprietor of SKTM, Mr. Balan, has an experience of nearly 30 years in Timber trading business. Prior to the start of SKTM in 1996, Mr. Balan had assisted in the timber business of his uncle nearly for 10 years. He has been running this business in the name of SKTM nearly from 21 years till date. Increasing Profit margins: The PBILDT margin of the firm has been increasing y-o-y during the review period mainly due to reduction in cost of raw material consumed. It has remained modest at 5.79% in FY17 as compared to 5.62% in FY16, given the low value additive nature of business. The PAT margin of the firm remained thin during review period due to moderate PBILDT levels along with high financial expenses. However, the PAT margin improved to 1.26% in FY17 as against 1.12% in FY16 due to increase in operating profit resulting in absorption of interest and finance charges. Salem (Tamilnadu) based, Sri Krishna Timber Mart & Saw Mill (SKTM) is a proprietorship firm established in 1998 by Mr. S Balan. SKTM is the retail and wholesale dealers of wood and wood products and is involved in sawing of timber logs into different sizes as per specifications of the customer. SKTM has a saw mill in salem, spread over an area of 1.5 acres with a capacity to saw upto 36,000 cubic feet of wooden logs. SKTM procures the various types of wood like hardwood, kabukalli and green heart etc from Singapore, South America and South Africa etc. The firm imported around 50% of total wood purchases and balance requirement of wood was sourced locally. SRI RAM SPINNING: CRISIL Hikes Rating on INR11.2MM Loan to B ------------------------------------------------------------ CRISIL has upgraded its rating on the long term bank facilities of Sri Ram Spinning Mills limited (SRML) to 'CRISIL B/Stable' from 'CRISIL B-/Stable' while assigning 'CRISIL A4' to its short term bank facilities. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 11.2 CRISIL B/Stable (Upgraded from 'CRISIL B-/Stable') Corporate Loan 2.0 CRISIL B/Stable (Upgraded from 'CRISIL B-/Stable') Letter of Credit 0.5 CRISIL A4 (Assigned) Proposed Long Term 2.25 CRISIL B/Stable (Upgraded Bank Loan Facility from CRISIL B-/Stable') Standby Line of 1.75 CRISIL B/Stable (Upgraded Credit from 'CRISIL B-/Stable') Working Capital 0.30 CRISIL B/Stable (Upgraded Demand Loan from 'CRISIL B-/Stable') Long Term Loan 2.00 CRISIL B/Stable (Upgraded from 'CRISIL B-/Stable') Upgrade reflects improvement in business profile with increase in revenue and margins. Revenue and margins is estimated to have increased to INR52 crore and 8.5% in Fiscal 2018 against INR40 crore and 8.3% in Fiscal 2017. Improved business profile resulted in improving in financial risk profile particularly liquidity. Liquidty is further supported by need based fund infusion from promoters. Interest coverage ratio is estimated to have increased to around 1.9 times form 1.7 times in Fiscal 2017. The rating reflects modest scale and working capital-intensive operations in a fragmented textile industry, and a below-average financial risk profile because of moderate gearing and weak debt protection metrics. The rating also factors in susceptibility to cotton availability its prices and government policy regarding the cotton industry. These weaknesses are partially offset by the extensive experience of the promoters in the textile industry, and their need based funding support. Key Rating Drivers & Detailed Description Weakness: * Modest scale of operations in a highly fragmented industry: Revenue is estimated to be around INR 52 crore in fiscal 2018 and expected to grow marginally current fiscal. The operations will remain exposed to intense competition in a fragmented industry. * Susceptibility to availability and prices of cotton and to government regulations: Operations will remain susceptible to any high volatility in cotton prices, its availability or any adverse impact of government regulations pertaining to the industry. * Below-average financial risk profile: The financial risk profile is below-average, marked by modest networth of INR10.3 crore, moderate gearing ratio of 1.7 times, and average debt protection metrics marked by interest coverage ratio of 1.9 times, estimated for the Fiscal 2018. * Moderate working capital requirement: The company's operations are working capital intensive as reflected in gross current assets of above 105 days as on March 31, 2018. The working capital will continue to remain high over the medium term due to high inventory requirement of the company. Strengths: * Promoters' extensive experience and need based fund support: Benefits from the promoters' extensive experience of over a decade. Over the years the promoters have developed established relationship with the customers and suppliers resulting in uninterrupted supply of raw material and repeated order, supporting the business risk profile of the company. Furthermore need-based fund infusions should continue to support operations of the company. Outlook: Stable CRISIL believes SRML will continue to benefit from its promoters' industry experience and established relationships with customers and suppliers. The outlook may be revised to 'Positive' if steady sales growth and better profitability lead to higher cash accrual. The outlook may be revised to 'Negative' if decline in accrual; large, debt-funded capital expenditure; or increase in working capital requirement weakens the financial risk profile, especially liquidity. Established in 1995, SRML manufactures cotton yarn of counts ranging from 30's to 40's and has a capacity of 23184 spindles in Hyderabad, Telangana. SRM POWER: Ind-Ra Migrates 'D' Issuer Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated SRM Power Private Limited's (SRMPPL) 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 the rating. The rating will now appear as 'IND D(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR204.17 mil. Term loans I (long-term) due on October 2026 migrated to Non-Cooperating Category with IND D (ISSUER NOT COOPERATING) rating; and -- INR23.12 mil. Term loans II (long-term) due on October 2021 migrated to Non-Cooperating Category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 12, 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 2004, SRMPPL is developing a mini hydroelectric power project (Somavathy) with an installed capacity of 23,000KW near Kalasa in Mudigere, Karnataka. The project was commissioned on Oct. 24, 2011. TRIMURTI FOODTECH: CRISIL Reaffirms D Rating on INR8MM Loan ----------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL D' rating on the long-term bank facilities of Trimurti Foodtech Private Limited (TFPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 8 CRISIL D (Reaffirmed) Funded Interest Term Loan 0.86 CRISIL D (Reaffirmed) Proposed Long Term Bank Loan Facility 2.54 CRISIL D (Reaffirmed) Term Loan 2.33 CRISIL D (Reaffirmed) Working Capital Term Loan 6.11 CRISIL D (Reaffirmed) The rating continues to reflect delays by TFPL in servicing instalments on term loan due to delays in receivables realisations, leading to stretched liquidity. Furthermore, cash credit limit was overdrawn for above 30 days. Key Rating Drivers & Detailed Description Weaknesses * Weak financial risk profile: On account of the loss incured by the company in fiscal 2017, the net worth was been eroded. * Large working capital requirement: Gross current assets were 311 days as on March 31, 2017, driven by stretched receivables and moderate inventory of 158 days and 50 days, respectively. Strength * Experience of promoter: Though TFPL was incorporated in 2007, its promoter has been in the food processing industry since 1991 through a group entity, Trimurti Food, and has successfully managed retail outlets and jelly and vegetable products. Management is decentralised, with each division overlooked by different people. The company also exports jelly to the Middle East and Japan. TFPL, incorporated in 2007 at Aurangabad, manufactures frozen food, including jellies, fruit pulp, and snacks. Mr Atul Banginwar, the promoter, also owns the Pet Pooja chain of restaurants, which it lets out on franchise basis for selling snacks. The products are sold both in the domestic and global markets. VIJAY JINDAL: Ind-Ra Maintains 'BB+' LT Rating in Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Vijay Jindal Builders Private Limited's Long-Term Issuer Rating in 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 continue to appear as 'IND BB+(ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR60 mil. Fund-based limits maintained in non-cooperating category with IND BB+ (ISSUER NOT COOPERATING)/IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on Feb. 16, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 2009, Vijay Jindal Builders is engaged in the business of civil construction works. VNC INFRAPROJECTS: CRISIL Moves B+ Rating to Not Cooperating ------------------------------------------------------------ CRISIL has been consistently following up with VNC Infraprojects (VNC; a part of the Mahavir VNC group) for obtaining information through letters and emails dated March 15, 2018 and March 20, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 3 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Cash Credit 1.5 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Proposed Long Term 18.0 CRISIL B+/Stable (Issuer Not Bank Loan Facility Cooperating; Rating Migrated) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of VNC Infraprojects, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on VNC Infraprojects is consistent with 'Scenario 2' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BBB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the ratings on bank facilities of Emerald Industries to CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. For arriving at the ratings, CRISIL has consolidated the business and financial risk profiles of VNC with its group entity - Mahavir Construction Company - Mumbai (MCC). This is because both these entities - together referred to as the Mahavir VNC group - execute the same line of business and have significant financial interlinkages. MCC is a Mumbai-based proprietorship firm formed by Mr Kishore Shah in 1983. It undertakes civil construction activities on contract or sub contract basis for Municipal Corporation of Greater Mumbai (MCGM), Mumbai Metropolitan Region Development Authority (MMRDA) and Maharashtra Housing and Area Development Authority (MHADA). VNC is a Mumbai-based proprietorship firm formed by Mr Chirag Jain in 2008. VNC undertakes civil construction activities on contract or sub contract basis for MCGM, MMRDA, and MHADA. WORLDWIDE TRADELINKS: Ind-Ra Moves BB Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Worldwide Tradelinks' 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: -- INR300 mil. Fund-based limit migrated to Non-Cooperating Category with IND BB (ISSUER NOT COOPERATING)/IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 4, 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 November 2010, Worldwide Tradelinks manufactures knitted readymade garments. ================= I N D O N E S I A ================= BUMI SERPONG: Fitch Corrects April 25 Rating Release ---------------------------------------------------- Fitch Ratings has issued a correction to the ratings release on PT Bumi Serpong Damai Tbk published on April 25, 2018. It includes the criteria reports that were omitted. The revised release is as follows: Fitch Ratings has assigned Indonesia-based homebuilder PT Bumi Serpong Damai Tbk's (BSD, BB-/Stable) USD250 million 7.25% senior unsecured notes due 2021 a final rating of 'BB-'. The notes are issued by BSD's wholly owned subsidiary, Global Prime Capital Pte. Ltd, and guaranteed by BSD and certain subsidiaries. The final rating follows the receipt of documents conforming to the information already received and is in line with the expected rating assigned on 14 March 2018. The notes are rated in line with BSD's senior unsecured rating as they represent the unconditional, unsecured and unsubordinated obligations of the company. BSD will use approximately 52% of the net proceeds from the new notes to refinance rupiah bonds that will mature in June 2018. The rest of the proceeds from the new issue will be used for business expansion and working capital. Fitch has factored in the refinancing plan and additional borrowing and believes BSD's profile remains consistent with the assigned 'BB-' rating. KEY RATING DRIVERS Large, Low-cost Land Bank: BSD's rating is supported by its strong brand, project execution track record and large, low-cost land bank. This provides BSD with the flexibility to adjust product mix and maintain relatively high presales, in contrast with its lower-rated peers' volatility. Fitch believes BSD's large low-cost land bank leads to stronger profit margins, which support future cash flows. BSD's reported ready-for-sale land bank inventory had a historical cost of around IDR1.5 million/sq m versus the average selling price (ASP) of around IDR16 million/sq m at BSD City, the company's key development project located 25 km from Jakarta's central business district. BSD reported total land bank booked as inventory and land for future development of over 4,000 hectares as of December 2017, which is sufficient for at least another 20 years of development. Land Sales Drive Presales: Land plot sales contributed 55% to BSD's total presales in 2017, compensating for a shortfall in residential sales. BSD's total presales rose 16% yoy to IDR7.2 trillion in 2017, 20% higher than Fitch's expectation. BSD expects land plot sales to continue as a significant contributor to its 2018 presales target at around 26%. Fitch sees demand for commercial products, such as land plots and shop houses, as more cyclical and volatile than residential; therefore, Fitch expects more variation in BSD's presales and cash flows. Nevertheless, Fitch views land plot sales as an integral part of BSD's business model, especially considering BSD City's scale and matured development. Lower Development Concentration: BSD City historically contributed more than 70% of total presales. Fitch expects development concentration to drop in the next two-three years, in line with growing contribution from projects other than BSD City. BSD recently launched its first high-rise project in Surabaya, with a decent take-up rate of around 60%. Over the medium term, the company plans to launch another high-rise project in Surabaya and new townships in other major cities such as Samarinda and Manado. The company also expects to book more presales in existing high- rise developments in Jakarta - Southgate in south Jakarta and Element Rasuna in Jakarta's central business district (CBD). Management believes Element's prime location within the CBD and Southgate's strategic location with key amenities such as a commuter line and an Aeon mall are the properties' key selling points. High Capex, Conservative Balance Sheet: BSD plans to incur total capex of IDR5.5 trillion until 2020 to expand its investment property portfolio through construction or acquisition. The company completed the acquisition of Sinarmas MSIG tower in September 2017 from Golden Agri Resources, a related party, for IDR2.4 trillion (USD178 million), with the final IDR1 trillion payment to be made in 1H18 using part of the proceeds from the bonds. The company increased its stake in PT Plaza Indonesia Realty Tbk to 44.72% (2016: 37.99%) with a reported investment value of IDR5 trillion as of end-September 2017, and will buy more shares when the opportunity arises. Comfortable Leverage: Fitch expects BSD's leverage to remain comfortably low in the next 12-18 months even with the adjustment and incremental debt from the bonds. Fitch expects BSD to return to a net cash position by 2020 and achieve IDR10 trillion in presales if the company continues its strong presales momentum and successfully executes its future projects outside BSD City. Relationship with Major Shareholder: The recent related-party transaction ratifies Fitch's view of the weak linkage with BSD's major shareholder, Sinarmas Land, and therefore Fitch rates BSD on a standalone basis. Fitch also notes that company founders hold the land titles to 1,439.5 hectares out of 4,740.6 hectares in total land bank inventory as of 31 December 2017. Fitch excluded this part of the inventory when computing BSD's leverage using net debt to net inventory. Fitch believes the bond documentation, together with local regulations, where minority shareholder approval is required for "conflict of interest" transactions in conjunction with the record of transactions between BSD and Sinarmas Land, point towards an independent relationship and therefore, Fitch has assessed the linkage as weak. High Supply, Muted Property Market: Fitch believes the overall property market will remain muted due to the abundant supply of residential properties marketed at the upper middle class, which has been the focus of major Indonesian developers. Demand in the segment, which Fitch has classified as apartments or housing units priced between IDR500 million and IDR2 billion, was primarily driven by speculative investment, which caused a surge in ASPs. Fitch believes demand for speculative investments has since moderated, with investors trying to realise profits, constraining ASP growth. Fitch thinks it will take some time for end-users to digest the supply. Fitch, however, notes that there are projects that continue to sell well despite the slowdown, benefiting from strategic locations and niche buyers. DERIVATION SUMMARY BSD's rating is comparable with PT Ciputra Development Tbk (CTRA, BB-/Stable) and PT Pakuwon Jati Tbk (PWON, BB-/Positive). BSD has a larger development scale than CTRA, which is offset by its more concentrated development in BSD City, relative to CTRA's better geographic diversification. Both BSD and CTRA also generate sufficient recurring revenue, with recurring revenue to gross interest at more than 2x. They are therefore rated at the same level. PWON is rated at the same level as BSD despite its smaller development profile because Moody's believes PWON has a stronger recurring profile than BSD, stemming from its higher quality investment property assets. Fitch expects PWON's recurring cover to be far superior to its 'BB-' peers, which underpins the Positive Outlook. KEY ASSUMPTIONS Fitch's key assumptions within our rating case for the issuer include: - Lower presales in 2018-2019 of around IDR5 trillion, driven by our expectation of lower land bank sales and flat residential demand towards Indonesian elections in 2019 - US dollar bond proceeds for refinancing and capex - IDR2 trillion in annual capex in 2018-2019 RATING SENSITIVITIES Developments that may, individually or collectively, lead to positive rating action: - Recurring EBITDA/net interest expense at more than 2.5x (2018F: 2.5x) - Recurring EBITDA of more than USD120 million with top five assets contributing less than 50% to recurring revenue (2018F: USD76 million; 54% contribution) - Annual attributable presales of more than IDR10 trillion with BSD City contributing less than 50% (2018F: IDR5.1 trillion) - Leverage, measured as net debt/net inventory, at less than 30% (2018F: 26%) Developments that may, individually or collectively, lead to negative rating action: - Recurring EBITDA/net interest expense at less than 1.75x - Leverage, measured as net debt/net inventory, at more than 40% LIQUIDITY High Liquidity Buffer: As of December 2017, BSD had total unrestricted cash of over IDR5 trillion against debt maturing in 12 months of IDR1.8 trillion. Fitch expects BSD will continue generating positive free cash flow from operations, driven by strong cash flows from high-margin township presales and a growing recurring portfolio. BSD has historically maintained a high cash balance to fund opportunistic land acquisitions or investment properties. LIPPO KARAWACI: Moody's Cuts CFR to B2, Outlook Negative -------------------------------------------------------- Moody's Investors Service has downgraded the corporate family rating of Lippo Karawaci Tbk (P.T.) to B2 from B1. At the same time, Moody's has downgraded the backed senior unsecured rating of the bonds issued by Theta Capital Pte. Ltd., a wholly-owned subsidiary of Lippo Karawaci, to B2 from B1. The bonds are guaranteed by Lippo Karawaci and some of its subsidiaries. The rating outlook is negative. The rating action concludes Moody's review of the company's rating for downgrade, which was initiated on April 11, 2018, after Lippo Karawaci's delay in reporting its financial reporting and its failure to fulfill certain reporting obligations under the indentures of its US dollar notes. RATINGS RATIONALE On April 17, 2018, Lippo Karawaci filed its 2017 audited consolidated financial results with the Indonesian stock exchange. It then subsequently submitted the certificate -- as required under the indenture of its US dollar bonds -- stating details on and the computation of its fixed charge coverage ratio with respect to the four most recent quarters to the bond trustee. "The downgrade reflects weaker-than-expected operating cash flow coverage for interest payments at the holding company level and a shift in Lippo Karawaci's business mix over the next 12-18 months, such that its operating cash flows will be reliant on asset sales that are subject to delays and market conditions," says Jacintha Poh, a Moody's Vice President and Senior Analyst. In 2017, operating cash flow at the holding company level -- that is, total consolidated cash flows excluding the cash flows of Siloam International Hospitals Tbk (P.T.) and Lippo Cikarang Tbk (P.T.), but including any intercompany cash flows (dividends and proceeds from asset sales) -- was weak. The company had a net cash outflow from operations of IDR1.3 trillion, which included interest payments of IDR1.1 trillion. The shortfall was met by (1) cash at the holding company level, which had fallen to around IDR1 trillion as of Dec. 31, 2017, from IDR1.8 trillion as of Dec. 31, 2016; and (2) cash flows from investing activities which included the disposal of property, equipment and software as well as the sale of short-term investments. "Over the next 12-18 months, without the successful execution of assets sales, Moody's expects net operating cash outflow at the holding company level to be around IDR800 billion, which has to be met by cash or further sales of short-term investments" adds Poh. While Lippo Karawaci had short-term investments of around IDR7 trillion as of Dec. 31, 2017, which included stakes in Lippo Malls Indonesia Retail Trust, First REIT and PT Kawasan Industri Jababeka Tbk, any major divestments of stakes in its listed real estate investment trusts will hamper execution of the company's asset-light strategy. Furthermore, Lippo Karawaci's fixed charge coverage ratio is below 2.0x hence the company is unable to incur further indebtedness, under the indenture of its US dollar bonds, to cover the net operating cash outflow, including interest payments of around IDR1 trillion. As of Dec. 31, 2017, Lippo Karawaci had short-term debt of IDR1.9 trillion, of which (1) IDR555 billion are amortizing payments relating to its USD65 million syndicated loan that has a final maturity in September 2019; and (2) IDR677 billion is a USD50 million syndicated loan that has an extendable maturity, at the option of Lippo Karawaci, up to September 2019. Assuming an extension of its USD50 million syndicated loan, Moody's expects Lippo Karawaci to have a sufficient undrawn committed facility to cover the company's remaining debt maturities in 2018. However, it remains exposed to refinancing risk in 2019. The negative outlook reflects uncertainty around the execution of Lippo Karawaci's asset sales which could result in a further deterioration of the holding company's liquidity over the next 12-18 months. Given the negative outlook, Lippo Karawaci's ratings are unlikely to be upgraded over the next 12-18 months. The outlook could return to stable if the company executes its asset sales such that (1) operating cash flows at the holding company level are sufficient to cover interest payments; and (2) there is sufficient cash at the holding company level to meet debt repayments over the next 12 months. On the other hand, the ratings could be downgraded if (1) Lippo Karawaci is unable to address its refinancing risk in a timely manner; and (2) there is a delay or inability to execute asset sales such that cash flow at the holding company level are insufficient to cover interest payments. Lippo Karawaci's senior unsecured bond rating could also be lowered if debt is incurred at its subsidiaries. The principal methodology used in these ratings was Homebuilding And Property Development Industry published in January 2018. Lippo Karawaci Tbk (P.T.) is one of the largest property developers in Indonesia, with a sizable land bank of around 1,364 hectares as of 31 December 2017. It owns and/or manages -- either directly or via its real estate investment trusts -- 47 malls, 31 hospitals and nine hotels. Lippo Karawaci owns a 31% stake in First REIT and a 30% stake in Lippo Malls Indonesia Retail Trust. ========= J A P A N ========= KINKI OSAKA: Moody's Affirms ba1 Baseline Credit Assessment ----------------------------------------------------------- Moody's Japan K.K. has affirmed the A2/P-1 long-term/short-term bank deposit ratings of Resona Holdings, Inc.'s subsidiary banks, Resona Bank, Limited and Saitama Resona Bank, Limited. At the same time, Moody's has affirmed the A2/P-1 long- term/short-term bank deposit ratings of Resona Holdings' indirect subsidiary, The Kinki Osaka Bank, Ltd. All the outlooks for the ratings above are stable. Moody's has taken the following rating actions: Resona Bank, Limited: - Baseline credit assessment (BCA): Upgraded to baa1 from baa2 - Adjusted BCA: Upgraded to baa1 from baa2 - Long-term bank deposit rating (domestic and foreign currency): Affirmed at A2 - Short-term bank deposit rating (domestic and foreign currency): Affirmed at P-1 - Counterparty Risk (CR) assessment: Affirmed at A1(cr)/P-1(cr) - Outlook: Stable Saitama Resona Bank, Limited: - BCA: Upgraded to baa1 from baa2 - Adjusted BCA: Upgraded to baa1 from baa2 - Long-term bank deposit rating (domestic and foreign currency): Affirmed at A2 - Short-term bank deposit rating (domestic and foreign currency): Affirmed at P-1 - Counterparty Risk (CR) assessment: Affirmed at A1(cr)/P-1(cr) - Outlook: Stable The Kinki Osaka Bank, Ltd.: - BCA: Affirmed at ba1 - Adjusted BCA: Upgraded to baa1 from baa2 - Long-term bank deposit rating (domestic and foreign currency): Affirmed at A2 - Short-term bank deposit rating (domestic and foreign currency): Affirmed at P-1 - Counterparty Risk (CR) assessment: Affirmed at A1(cr)/P-1(cr) - Outlook: Stable RATINGS RATIONALE The ratings affirmation follows the ownership transfer of Kinki Osaka Bank, Kansai Urban Banking Corporation (KUBC), and The Minato Bank, Ltd. as wholly-owned subsidiaries of Kansai Mirai Financial Group, Inc. (KMFG) on April 1, 2018. KMFG is a newly formed intermediate holding company which is 51% owned by Resona Holdings. Sumitomo Mitsui Banking Corporation (SMBC, A1 stable, BCA a3) owns 21% of KMFG and the remaining shares are publically listed. The A2 ratings of Resona Bank and Saitama Resona Bank are two notches higher than their baa1 BCAs because of Moody's assumption of a "very high" probability of government support, in times of need, given their importance as the banking subsidiaries of Resona Holdings, a systemically important financial group that operates across Japan. The BCAs and long-term ratings of Resona Bank and Saitama Resona Bank are at the same level, based on Moody's assessment that: (1) the two banks are closely interconnected and are both under the management of Resona Holdings; (2) their capital management is centralized at the holding company; and (3) they have close inter-bank support relationships. The upgrade of the BCAs and Adjusted BCAs of Resona Bank and Saitama Resona Bank to baa1 from baa2 reflects Resona Holdings': (1) steadily improving group-consolidated capital ratios; (2) strong asset-risk profile, supported by a well-diversified loan portfolio, which comprises residential mortgage loans and loans to small- and medium-sized enterprises; (3) stable earnings profile; and (4) very high liquidity levels, backed by strong deposits and ample liquid assets. Kinki Osaka Bank's A2 rating is two notches higher than the bank's baa1 Adjusted BCA, because of Moody's assessment of a very high probability of government support for the bank. Moody's assessment is based on the bank's importance as a wholly owned subsidiary of KMFG, which is in turn a consolidated subsidiary of Resona Holdings. Kinki Osaka Bank's baa1 Adjusted BCA benefits from three notches of uplift because of affiliate support from Resona Bank, the largest banking subsidiary of Resona Holdings. The uplift reflects Moody's assumption of a "very high" probability of support from Resona Holdings in times of need, given the importance of the bank under the KMFG umbrella. The affirmation of Kinki Osaka Bank's BCA at ba1 reflects: (1) Moody's view that while the bank's capital ratio on a standalone basis has improved, an assessment of capital solely at the bank level would overestimate its capital strength, because of the ease of moving capital between KMFG and its subsidiary banks; and (2) the likely positive synergy created by Kinki Osaka Bank's integration with Minato Bank and KUBC under KMFG. The ratings outlook for Resona Holdings' subsidiary banks is stable, reflecting Moody's expectation that the financial metrics of the banks will remain broadly unchanged, given the group's stable earnings and strong asset-risk profile. What Could Change the Ratings -- Up Moody's will likely upgrade the BCAs of Resona Bank and Saitama Resona Bank - which would lead in turn to an upgrade of their long-term ratings - if Resona Holdings improves its group- consolidated TCE ratio to at least 10% on a sustained basis, by accumulating retained earnings or by raising additional capital, without significantly increasing its asset risk. And, Moody's will upgrade Kinki Osaka Bank's ratings, if Moody's believes affiliate support has strengthened or Moody's upgrades Kinki Osaka Bank's BCA. What Could Change the Ratings -- Down Factors that could result in a downgrade of the ratings for Resona Bank and Saitama Resona Bank include, but are not limited to: (1) a failure to maintain a TCE ratio of at least 8% on a group-consolidated basis; (2) a bottom-line annual loss for the banks or the group, or both, on a consolidated basis; or (3) a downgrade of Japan's sovereign rating. Moody's would downgrade Kinki Osaka Bank's ratings if Moody's believes the bank is less strategically important to the group. A downgrade of the ratings for Resona Bank and Saitama Resona Bank would also lead to a downgrade of the ratings for Kinki Osaka Bank. The principal methodology used in these ratings was Banks (Japanese) published in September 2017. Resona Bank, Limited (headquartered in Osaka City) and Saitama Resona Bank, Limited (headquartered in Saitama City) are the major operating bank subsidiaries of Resona Holdings, Inc. (headquartered in Tokyo). The Kinki Osaka Bank, Ltd. (headquartered in Osaka City) is the major operating bank subsidiary of Kansai Mirai Financial Group, Inc. (headquartered in Osaka City), which is in turn an intermediate bank holding company and a subsidiary of Resona Holdings, Inc. Resona Holdings, Inc. is a major banking group in Japan, with total consolidated assets of JPY49.0 trillion at the end of 2017. =============== M A L A Y S I A =============== SUMATEC RESOURCES: Falls Into PN17 Category ------------------------------------------- The Sun Daily reports that Sumatec Resources Bhd has been admitted into the Practice Note 17 (PN17) category after its external auditors Grant Thornton Malaysia's disclaimer opinion on its financial statements ended December 31, 2017. According to the report, the auditors said Sumatec's ability to continue as going concern is dependent on a series of corporate exercises including a proposed acquisition of Markmore Energy (Labuan) Ltd (MELL) from its controlling stakeholder Tan Sri Halim Saad. The Sun Daily relates that the proposed acquisition's objective is to obtain new source of funds to generate adequate cash flow for the development and production of the Kazakhstan-based Rakushechnoye oil and gas field owned by MELL's unit CaspiOilGas LLP, in order to achieve positive cash flow from its operating activities and also to settle its major debts and obligations. However, the auditors said it was unable to find audit evidence in relation to the feasibility and sustainability of the plans. Sumatec recorded a net loss of RM113.95 million and RM171.06 million at the group and company levels, respectively, as well as a negative cash flow of RM15.33 million and RM9.86 million for the financial year ended December 31, 2017, the Sun Daily discloses. The Sun Daily adds that the group said in a bourse filing that it is looking into formulating a regularisation plan to address its PN17 status, which is required to be submitted to the regulator within 12 months, failing which will face suspension and delisting. Sumatec Resources Berhad offers services to the oil and natural gas industry. The Company offers engineering and construction services, offers marine transport services of oil, provides onshore drilling rigs and related equipment, stores oil, and explores and develops marginal oil fields. Sumatec also builds biomass fueled power plants, and explores and mines for metals. TH HEAVY: Auditor Issues Disclaimer of Opinion on FY17 Results -------------------------------------------------------------- The Sun Daily reports that TH Heavy Engineering Bhd's (THHE) independent auditor Messrs Deloitte PLT has expressed a disclaimer of opinion on its audited financial statements ended Dec. 31, 2017. As part of its regularisation plan, THHE proposed to novate the contract for the provision of engineering, procurement, construction, installation and commissioning and leasing for Layang floating, production, storage and offloading (FPSO) facilities awarded to it by JX Nippon Oil & Gas Exploration (Malaysia) Ltd to Yinson Energy Sdn Bhd, the Sun Daily says. The Sun Daily relates that upon the proposed novation, the FPSO Layang vessel is subject to impairment review. The valuer's report states an indicative range of fair market value less cost of disposal between US$18.0 million and US$23.0 million (RM73.1 million and RM93.4 million); and estimated scrap value between US$10.0 million and US$15.0 million (RM40.6 million and RM60.9 million). However, the shortfall between the carrying value and the recoverable amount on the basis of fair value or scrap value was not recognised as impairment loss by THHE in view that the proposed novation has yet to be completed as at year-end. "As such, we are unable to ascertain whether the carrying value of the FPSO Layang vessel included in the capital work-in- progress as at Dec 31, 2017 at RM745.65 million is fairly stated," the auditor, as cited by the Sun Daily, said. It also highlighted that the ability of THHE to carry on as a going concern, among others, is dependent on the implementation of the key components of the proposed regularisation plan as well as the ability to achieve sustainable and viable operations with adequate cash flows generate from operating activities, the report relays. "In the event that these are not forthcoming, the group may be unable to realise the assets and discharge liabilities in the normal course of business." Therefore, the auditor said, THHE's financial statements may require adjustment to restate the carrying amounts of the assets to their recoverable amounts and to provide further liabilities that may arise, The Sun Daily adds. About TH Heavy TH Heavy Engineering Berhad is an investment holding company. The Company is engaged in the provision of management services. The Company is engaged in the fabrication of offshore steel structures and the provision of other related offshore oil and gas engineering services in Malaysia. The Company operates through three segments: Construction services, Offshore crane works and Others. The Construction services segment includes engineering, procurement, construction, installation and commissioning (EPCIC) capabilities. Its EPCIC activities include fabrication, construction and maintenance of offshore structures; construction and maintenance of onshore plants; offshore and onshore crane manufacturing and servicing; marine operations and support services; hook-up and commissioning (HUC), and engineered packages. The Others segment includes management services and transportation services. Its subsidiary, O&G Works Sdn. Bhd., produces a range of marine and offshore pedestal cranes. TH Heavy slipped into Practice Note 17 (PN17) status in April 2017 after the company's independent auditors expressed a disclaimer opinion on its accounts for the financial year ended Dec. 31, 2016. =============== M O N G O L I A =============== MONGOLYN ALT: Fitch Withdraws 'CCC+(EXP)' Issuer Default Rating --------------------------------------------------------------- Fitch Ratings has withdrawn the 'CCC+(EXP)' expected Long-Term Issuer Default Rating for Mongolyn Alt (MAK) LLC as well as the 'CCC+(EXP)' expected rating on its proposed senior US dollar notes with a Recovery Rating of 'RR4'. Fitch is withdrawing MAK's expected ratings as its proposed debt issuance, which is critical to the company's liquidity, is no longer expected to convert to final ratings. RATING SENSITIVITIES No longer relevant as the ratings have been withdrawn. ==================== N E W Z E A L A N D ==================== FIRST CREDIT: Fitch Affirms BB Long-Term IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has affirmed New Zealand-based First Credit Union's Long-Term Issuer Default Rating (IDR) of 'BB' with a Stable Outlook and Viability Rating of 'bb'. At the same time, Fitch has assigned First Credit Union a Long-Term Local-Currency IDR of 'BB' with a Stable Outlook. KEY RATING DRIVERS IDRS AND VIABILITY RATING First Credit Union's ratings reflect its higher risk appetite relative to most other deposit-taking institutions in New Zealand. As a result, Fitch believes asset quality is likely to be more volatile through the cycle. The credit union's risk appetite is partly driven by its customer base, which is typically in areas less serviced by New Zealand's larger banks. The ratings also take into account the credit union's modest profitability for its risk profile and its strong capital ratios and liquid-asset holdings relative to peers. The credit union's higher risk appetite is evident through its geographic concentration and its loan portfolio composition. At end-June 2017 (FYE17), about half of the portfolio was made up of consumer loans with the remainder being residential mortgages, which contributed to First Credit Union's weaker asset quality compared with many of its peers. Fitch believes this is unlikely to change in the foreseeable future. About a third of First Credit Union's residential mortgages had a loan/value ratio greater than 80%, higher than most of New Zealand's banks and building societies. Fitch views the earnings and profitability of First Credit Union as low relative to the nature of its business and the risks undertaken, limiting its ability to absorb higher loan losses and generate capital. The earnings outlook for the short term is weaker as a result of high operating costs associated with the recent migration to a new core banking system and the establishment of a wholly owned insurance subsidiary although these investments could improve profitability in the medium term. Fitch believes First Credit Union's operational risk will remain elevated in the short term as the change to the new core banking system requires some adjustment and it is also in the process of switching some product providers. Poor implementation has the potential to negatively impact its franchise but could provide profitability upside if successfully implemented. Fitch expects First Credit Union to maintain capital and liquidity positions above its peers over the medium term, which can offset some of its risks although the gap may narrow modestly if targeted loan growth is achieved. The credit union's capital ratios, both risk- and un-risk-weighted, have been toward the top end of domestic peers, although the absolute capital base is small. Cash and deposits made up 38% of total assets at FYE17, with the majority being at call or maturing within three months. RATING SENSITIVITIES IDRS AND VIABILITY RATING First Credit Union's IDRs and Viability Rating are sensitive to a change in the credit union's risk appetite and earnings. Ratings may be upgraded if there is a sustained improvement in risk appetite, possibly through lower-risk underwriting or a stronger risk-control framework, while maintaining strong capital ratios and high liquidity. Positive rating action may also occur if earnings become more commensurate with the level of risk assumed by First Credit Union. Alternatively, ratings are likely to face downward pressure if there is a weakening in First Credit Union's risk appetite, possibly due to a deterioration in underwriting standards that increases the risk of significant deterioration or greater volatility in key financial metrics. SUPPORT RATING AND SUPPORT RATING FLOOR The Support Rating and Support Rating Floor are sensitive to changes in assumptions around the propensity or ability of the New Zealand authorities to provide timely support to First Credit Union. The existence of a bank resolution framework means Fitch is unlikely to upgrade these ratings. The rating actions are as follows: First Credit Union: Long-Term IDR affirmed at 'BB'; Outlook Stable Short-Term IDR affirmed at 'B' Long-Term Local-Currency IDR assigned at 'BB'; Outlook Stable Short-Term Local Currency IDR assigned at 'B' Viability Rating affirmed at 'bb' Support Rating affirmed at '5' Support Rating Floor affirmed at 'No Floor' =============== X X X X X X X X =============== MALDIVES: Fitch Gives B+(EXP) Rating to USD Bonds ------------------------------------------------- Fitch Ratings has assigned the Maldives' forthcoming US dollar- denominated bonds an expected rating of 'B+(EXP)'. KEY RATING DRIVERS The expected rating is in line with the Maldives' Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'B+' with a Stable Outlook. RATING SENSITIVITIES The rating would be sensitive to any changes in the Maldives' Long-Term Foreign-Currency IDR. Fitch assigned the Maldives a Long-Term Foreign-Currency IDR of 'B+' with a Stable Outlook in May 2017. The Long-Term Local- Currency IDR is also 'B+'/Stable. ********* 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. *** End of Transmission ***