/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/180504.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 Friday, May 4, 2018, Vol. 21, No. 088 Headlines A U S T R A L I A ESPRIT: To Close All Stores in Australia and New Zealand FASHIONOID PTY: First Creditors' Meeting Set for May 14 JUMPCLIMB: Fringe World Sue to Claw Back Money Owed to Artists LOCAL BLUE: First Creditors' Meeting Set for May 11 M K DESIGN: First Creditors' Meeting Set for May 14 MOULE ENTERPRISES: Second Creditors' Meeting Set for May 11 NRA DEVELOPMENTS: Second Creditors' Meeting Set for May 14 PARMAC AIRCONDITIONING: Second Creditors' Meeting Set for May 14 C H I N A BLUEFOCUS COMM: Moody's Alters Outlook to Neg. & Affirms B1 CFR CHINA AOYUAN: Fitch Rates Proposed USD Notes 'BB-(EXP)' CHINA AOYUAN: Moody's Assigns B2 Rating to Proposed USD Notes CHINA EVERGRANDE: Fitch Alters Outlook to Pos. & Affirms B+ IDR CONCORD NEW: Fitch Revises Outlook to Neg. & Affirms IDR at BB- SINGAPORE TECHNOLOGIES: Chinese Unit Files for Bankruptcy YINGLI GREEN: Supplier Files $897.5M Arbitration Request YINGLI GREEN: Files Form 20-F Reporting RMB3.3-Bil. 2017 Loss YUZHOU PROPERTIES: Fitch Rates Proposed USD Notes 'BB-(EXP)' I N D I A AGASTHYACODE RUBBER: CRISIL Hikes Rating on INR13MM Loan to B- AIRCEL LTD: CEO Steps Down; To Assist IRP on Bankruptcy AUM SHRI HOTELS: CRISIL Moves B+ Rating to Not Cooperating Cat. B.V.L. EXPORTS: ICRA Keeps B Rating in Not Cooperating Category BINANI CEMENT: Court Told Lenders to Consider UltraTech Bid CALIFORNIA AGRI: CRISIL Moves B+ Rating to Not Cooperating CHINAR SYNTEX: CRISIL Moves B+ Rating to Not Cooperating DLA INDUSTRIES: CRISIL Migrates B- Rating to Not Cooperating EPC CONSTRUCTIONS: NCLT Approves IDBI Bank's Insolvency Bid ESSAR STEEL: Numetal, ArcelorMittal Prove Eligibility to Bid GOOD LUCK: CRISIL Migrates B- Rating to Not Cooperating Category INDUS MEGA: ICRA Keeps D Rating in Not Cooperating Category JAGATJIT INDUSTRIES: ICRA Withdraws B- Rating on INR95.16cr Loan JAYPEE INFRATECH: Valia Wants JAL to Pay Fine for Delivery Delay K G N MOTORS: CRISIL Assigns B Rating to INR10MM Cash Loan K.K. BUILDERS: ICRA Keeps B+ Rating in Not Cooperating Category K.K. LEISURES: ICRA Maintains B- Rating in Not Cooperating Cat. KARTHIKAI TEXTILE: CRISIL Cuts Rating on INR13.5MM Loan to D KAVERI COTEX: ICRA Maintains B Rating in Not Cooperating Category KBN GOLD: CRISIL Migrates B Rating to Not Cooperating KISSAN AGRO: CRISIL Withdraws B Rating on INR6MM Cash Loan KRISHNA COTTON: CRISIL Reaffirms B+ Rating on INR7MM Cash Loan LANDSCAPE REALITY: CRISIL Moves B+ Rating From Not Cooperating LASCO LIFESTYLE: ICRA Migrates D Rating to Not Cooperating Cat. MAGPPIE EXPORTS: ICRA Moves B Rating to Not Cooperating Category MALWA AUTOMOBILES: CRISIL Reaffirms B+ Rating on INR13.07MM Loan MANAV AGRI: CRISIL Withdraws B+ Rating on INR17.5MM Cash Loan MANDOVI MINERALS: CRISIL Reaffirms B Rating on INR12.31MM Loan P.S. INDUSTRIES: CRISIL Withdraws B- Rating on INR7MM Cash Loan PAREKH AGENCIES: CRISIL Migrates B+ Rating to Not Cooperating POWER CABLE: ICRA Withdraws B Rating on INR7.50cr LT Loan PRAKASAM ENTERPRISES: CRISIL Reaffirms B+ Rating on INR10MM Loan R.A. KNITWEAR: CRISIL Migrates B+ Rating to Not Cooperating RAGHURAM INDUSTRIES: CRISIL Moves B+ Rating to Not Cooperating RAJHANS IMPEX: CRISIL Lowers Rating on INR17MM Loan to B RAMCO EXTRUSION: ICRA Keeps B+ Rating in Not Cooperating Category RATTAN RICE: CRISIL Withdraws B+ Rating on INR5.5MM Loan RISE ON: ICRA Maintain C Rating in Not Cooperating Category SAGAR ENTERPRISES: CRISIL Reaffirms B+ Rating on INR9MM Loan SAIWIN CERAMIC: ICRA Keeps B Rating in Not Cooperating Category SANTOSH ENTERPRISES: ICRA Keeps B Rating in Not Cooperating SARATHY MOTORS: CRISIL Withdraws B+ Rating on INR9MM Cash Loan SHALAK EATABLE: CRISIL Moves B- Rating to Not Cooperating Cat. SHARANAMMA DIGGAVI: ICRA Maintains D Rating in Not Cooperating SHIVA STRUCTURES: ICRA Keeps B- Rating in Not Cooperating SHIVHARE ROAD: CRISIL Migrates B+ Rating to Not Cooperating SHUKLA AGRITECH: CRISIL Cuts Rating on INR5.5MM Term Loan to D TATA MOTORS: Fitch Affirms BB+ Long-Term IDR, Outlook Stable TECHNICO STRIPS: CRISIL Withdraws B+ Rating on INR17.75MM Loan VARDHMAN POLYTEX: ICRA Migrates D Rating to Not Cooperating WINNING EDGE: ICRA Keeps B+ Rating in Not Cooperating Category N E W Z E A L A N D CBL INSURANCE: Liquidation Hearing Set for June S I N G A P O R E AVATION GROUP: Fitch Puts B+ IDR on Rating Watch Positive X X X X X X X X MALDIVES: Fitch Assigns Final 'B+' Rating to USD100 Million Bonds - - - - - ================= A U S T R A L I A ================= ESPRIT: To Close All Stores in Australia and New Zealand -------------------------------------------------------- Patrick Hatch at The Sydney Morning Herald reports that global fashion retailer Esprit is pulling out of Australia and New Zealand and will close more than 60 outlets in the region, leaving 350 employees without jobs. SMH relates that the company, which was founded in California in 1968 and has been operating in Australia since the 1980s, said on May 3 it had been unprofitable in the local market for some time and had now made the "unfortunate but unavoidable" decision to leave. According to SMH, Esprit's operations in the region consist of 16 retail stores, 13 factory outlets and 38 concession stores inside Myer stores, which will all close by the end of the 2018 calendar year. The 67 outlets are split between NSW (25), Victoria (17), Queensland (12), Western Australia and New Zealand (6), and South Australia (1). There will be about 100 jobs lost in NSW, 90 in Victoria, and 30 in New Zealand, SMH discloses. Thomas Tang, executive director of the Hong Kong Stock Exchange-listed Esprit group said its Australian operations had been running at a loss "despite intensive efforts made by the teams in the past years to turn around the business," the report relays. "In order to strengthen our foundation, the group intends to withdraw from these markets and this will allow us to concentrate efforts and resources to develop other markets in Asia," SMH quotes Mr. Tang as saying. SMH adds that the company said it would continue to honor Esprit gift cards and fulfil all obligations to employees. Esprit operates in more than 40 countries, and its sales of AUD50 million in Australia and New Zealand last year made up about 2 per cent of its global revenue, SMH notes. FASHIONOID PTY: First Creditors' Meeting Set for May 14 ------------------------------------------------------- A first meeting of the creditors in the proceedings of Fashionoid Pty. Ltd., trading as Metalicus, will be held at the offices of PKF Melbourne, Level 13, 440 Collins Street, in Melbourne, on May 14, 2018, at 2:00 p.m. Petr Vrsecky, Stirling L. Horne and Jason G. Stone of PKF Melbourne were appointed as administrators of Fashionoid Pty on May 2, 2018. JUMPCLIMB: Fringe World Sue to Claw Back Money Owed to Artists -------------------------------------------------------------- Brisbane Times reports that Fringe World organisers have launched proceedings to place JumpClimb into administration, and vowed to return booking fees to artists affected by the events company's collapse. The move to engage lawyers K&L Gates and repay artists was announced in a statement released May 3, which said the Fringe board met on May 2 and agreed to place Noodle Palace and JumpClimb into administration. "The directors of JumpClimb aren't moving on this under their own volition and it's leaving artists and production companies affected in a state of limbo," the statement, as cited by Brisbane Times, read. "It is Fringe World's position that it is in the absolute interests of all affected that an external controller be appointed over JumpClimb and Noodle Palace as soon as possible." According to the report, booking fees gathered through the Fringe ticketing system will be returned to artists, a move the statement said would "put up to AUD85,000 to the problem if the liquidators aren't able to claw back the debts owed by JumpClimb artists". JumpClimb announced on April 27 it would cease operations, citing a "downturn in ticket sales on recent projects, debtors going into receivership and the general economic slow-down" as reasons for going under, Brisbane Times relays. The report says the company had overseen the management, marketing and public relations of a suite of popular Perth events, including the Aviary Rooftop Sessions, Perth Comedy Festival and the Noodle Palace Fringe attraction. "We are currently in conversations with other organisations to purchase and continue to operate our other flagship events to ensure the people of Perth can still enjoy these experiences," the company said this week, the report relays. Brisbane Times notes that the move left artists out of pocket, with some claiming they were still owed thousands of dollars for their performances at this year's festival. According to Brisbane Times, Fringe World chief executive Marcus Canning said the "million-dollar question" was still being asked: "what did JumpClimb do with all the money?" "Our goal is for a suitably experienced, qualified and independent person to investigate what has happened and try and claw back funds for the benefit of affected artists and production companies," the report quotes Mr. Canning as saying. Brisbane Times relates that Mr. Canning said organisers felt the return of booking fees to artists was "our duty" and Fringe World would do "everything in our power to support (the affected artists) in whatever ways possible". "It's the ethical thing to do and it's an expression of our values," he said. "At the heart of all we do are the artists." It is understood artists who took part in events organised by JumpClimb had contracts with the company and not with Fringe World. The arrangement meant box office revenue from the Fringe World ticketing system went to JumpClimb, and then on to the artists- a system Fringe organisers used with several other presenters without issue, the report states. Brisbane Times adds that Fringe World organisers said they had upheld their end of the contract and paid JumpClimb everything owed for the 2018 festival in March, however the money did not then go on to the artists involved. Artists affected by JumpClimb's financial woes have been urged to email artists@fringeworld.com.au. LOCAL BLUE: First Creditors' Meeting Set for May 11 --------------------------------------------------- A first meeting of the creditors in the proceedings of Local Blue Pages Pty Ltd, trading as Bluey's Pages, will be held at Australian Institute of Company Directors, Level 26, 367 Collins Street, in Melbourne, Victoria, on May 11, 2018, at 11:00 a.m. Domenico Alessandro Calabretta and Grahame Ward of Mackay Goodwin were appointed as administrators of Local Blue on May 1, 2018. M K DESIGN: First Creditors' Meeting Set for May 14 --------------------------------------------------- A first meeting of the creditors in the proceedings of M K Design and Construction Pty Ltd will be held at the offices of G S Andrews Advisory, 22 Drummond Street, in Carlton, Victoria, on May 14, 2018, at 3:00 p.m. Gregory Stuart Andrews and Andrew Juzva of G S Andrews Advisory were appointed as administrators of M K Design on May 2, 2018. MOULE ENTERPRISES: Second Creditors' Meeting Set for May 11 ----------------------------------------------------------- A second meeting of creditors in the proceedings of Moule Enterprises Pty Ltd, Carr Seabreeze Pty Ltd, and Diary Investments Pty Ltd has been set for May 11, 2018 at 10:00 a.m. at Collins Square, Business Centre, Level 6, 727 Collins St, in Docklands, VIC. 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 10, 2018, at 4:00 p.m. Matthew James Byrnes and Andrew Hewitt of Grant Thornton were appointed as administrators of Moule Enterprises on March 27, 2018. NRA DEVELOPMENTS: Second Creditors' Meeting Set for May 14 ---------------------------------------------------------- A second meeting of creditors in the proceedings of NRA Developments Pty. Ltd. has been set for May 14, 2018, at 10:30 a.m. at the offices of PKF Melbourne, Level 13, 440 Collins Street, Melbourne. 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 11, 2018, at 4:00 p.m. Glenn Jeffrey Franklin and Jason Glenn Stone of PKF Melbourne were appointed as administrators of NRA Developments on April 6, 2018. PARMAC AIRCONDITIONING: Second Creditors' Meeting Set for May 14 --------------------------------------------------------------- A second meeting of creditors in the proceedings of Parmac Airconditioning & Mechanical Services Pty Ltd has been set for May 14, 2018, at 2:00 p.m. at Business Centre, Collins Square, Tower 2, Level 6, 727 Collins Street, in Docklands, Victoria. 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 11, 2018, at 4:00 p.m. Matthew James Byrnes and Said Jahani of Grant Thornton were appointed as administrators of Parmac Airconditioning on April 6, 2018. ========= C H I N A ========= BLUEFOCUS COMM: Moody's Alters Outlook to Neg. & Affirms B1 CFR --------------------------------------------------------------- Moody's Investors Service has changed BlueFocus Communication Group Co., Ltd's rating outlook to negative from stable, and has affirmed the company's B1 corporate family rating. Moody's has also changed Blue Skyline Communication Limited's rating outlook to negative from stable, and has affirmed the company's B1 senior unsecured rating. RATINGS RATIONALE "The change in rating outlook to negative reflects BlueFocus' weakened operating cash flow due to higher working capital needs, coupled with increased refinancing risks, amid tighter funding conditions," says Gloria Tsuen, a Moody's Vice President and Senior Analyst. BlueFocus reported net cash outflow from operations of RMB124 million in 2017, widening from the RMB90 million outflow in 2016, as a result of strong growth in its digital advertising business. As is typical for its digital advertising business, the company has longer receivables than payable days, because its large China-based corporate customers have credit periods of around 120 days, but its own credit periods with media and digital platform partners are around 90 days. As a result, continuing growth in its digital advertising business would require investment in working capital. At the same time, the company's liquidity continues to be modest with a high reliance on short-term financing. It held RMB1.1 billion in cash against RMB2.3 billion in short-term debt as of the end of March 2018. Historically BlueFocus had solid access to the domestic bond and loan markets, but funding conditions have become more challenging over the past six months, thus posing higher refinancing risk. As such, the company is also seeking new funding channels such as receivable-backed securities. "At the same time, we are affirming BlueFocus' B1 rating," adds Tsuen. BlueFocus's debt leverage has improved. The company reduced its reported debt by RMB1.4 billion in 2017 by selling some of its wealth management products and available-for-sale securities, and its adjusted debt/EBITDA improved year-on-year to 5.1x from 6.9x. Such a leverage level is consistent with the B1 rating level. BlueFocus' rating is also supported by the company's long track record and leadership in China's public relations/advertising industry, capabilities especially in the mobile and digital sectors with high growth opportunities, growing global footprint, as well as its diversified blue chip customer base. The company's revenue grew 24% year-on-year in 2017, but since growth was driven by the low-margin digital advertising business, its adjusted EBITDA margin declined 1.1 percentage points to 6.4%. Moody's expects BlueFocus' margins to stabilize in the 6%-7% range over the next 12-18 months, as it benefits from its increasing scale, the integration of previous acquisitions, and expense controls. The rating continues to reflect the company's acquisitive strategy and high investment needs in a rapidly changing industry. There is no upward rating pressure, given the negative outlook. However, the outlook could return to stable if BlueFocus: (1) improves its liquidity position and maintains solid access to the funding markets, and (2) stabilizes its margins and resumes steady operating cash flow generation. Downward rating pressure could arise if BlueFocus': (1) liquidity deteriorates, (2) adjusted EBITDA margins continue to decline, or (3) adjusted debt/EBITDA is above 6x. Significant debt-funded acquisitions, investments or dividends could also result in negative rating actions. The principal methodology used these ratings was Business and Consumer Service Industry published in October 2016. Established in 1996 and headquartered in Beijing, BlueFocus Communication Group Co., Ltd provides one-stop end-to-end brand management and marketing services, mainly to large corporations. It listed on the Shenzhen Stock Exchange in 2010. BlueFocus has operations in more than 10 countries, with 5,000 employees and 100 offices across China, Hong Kong, Singapore, North America and Europe. CHINA AOYUAN: Fitch Rates Proposed USD Notes 'BB-(EXP)' ------------------------------------------------------- Fitch Ratings has assigned China Aoyuan Property Group Limited's (BB-/Stable) proposed US dollar senior notes an expected 'BB-(EXP)' rating. The notes are rated at the same level as Aoyuan's senior unsecured rating because they constitute its direct and senior unsecured obligations. Aoyuan intends to use the net proceeds from the proposed notes to refinance its existing offshore indebtedness. The final rating is subject to the receipt of final documentation conforming to information already received. KEY RATING DRIVERS Strong Sales Performance: Aoyuan's sales growth remained strong at 78% in 2017 after an increase of 69% in 2016, as the company stuck to its fast-churn strategy and demand was strong in its home markets in the Guangdong-Hong Kong-Macau Greater Bay Area in southern China. Sales amounted to CNY45.6 billion in 2017, with the home markets accounting for 53% of total contracted sales value. Fitch expects contracted sales to continue to rise in 2018, backed by Aoyuan's adequate sellable resources of above CNY120 billion at end-2017. The company targets sales to reach CNY73 billion in 2018. Total contracted sales in January-April 2018 were on track to meet the target, rising 143% yoy to CNY20.8 billion. Stable Financial Profile: Aoyuan has been able to keep its leverage healthy despite rapid expansion. Leverage, measured by net debt/adjusted inventory, was 30% at end-2017, up from 28.7% at end-2016. This gives the company headroom below the 40% level where Fitch would consider negative rating action in the short term. Sales efficiency, measured by contracted sales/gross debt, was stable at 1.1x at end- 2017. Fitch expects Aoyuan to maintain its fast-churn model and prudent land acquisition strategy, with annual land premium budgeted at 40%-50% of contracted sales on cash flow basis. This should keep its financial profile healthy for the next 12-18 months, supporting its credit profile. Quality Land Bank: Aoyuan had 135 projects with 23.9 million square metres (sq m) of gross floor area at end-2017, sufficient for three to four years of development; 56% of the land by gross floor area is located in the Pearl River Delta, of which more than 50% is in the Greater Bay Area, a cluster of cities including Guangzhou, Shenzhen, Hong Kong and Macau where urbanisation is likely to pick up due to geographic integration. Aoyuan's land bank also enjoys a low average cost of CNY2,131 per sq m, or around 20% of Fitch's estimated average selling price for 2018, supporting its future profitability. Healthy Liquidity; Cheaper Funding: Aoyuan has a strong liquidity position, which supports its planned expansion. It had total cash of CNY26.5 billion at end-2017 against short-term debt of CNY21.1 billion, and CNY16.9 billion in unutilised committed credit facilities. Meanwhile, funding initiatives in the last few years, including issuance of onshore bonds and offshore bank loans, and its diversified funding channels reduced its weighted-average funding cost to 7.2% at end-2017 from 8.1% in 2016 and 9.5% in 2015. DERIVATION SUMMARY Aoyuan's scale is comparable to those of other 'BB-' rated Chinese developers that have contracted sales of CNY40 billion-50 billion. These include Times China Holdings Limited (BB-/Stable), Logan Property Holdings Company Limited (BB-/Stable) and Yuzhou Properties Company Limited (BB-/Stable). Its sales efficiency ratio is also similar to those of fast-churn homebuilders, such as Yuzhou and Times. Aoyuan's healthy leverage of below 35% in the past several years is in line with those of Logan and Central China Real Estate Limited (BB-/Stable), which are in the 30%-40% range. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: - A stable land acquisition pace in 2018 at 40%-50% of contracted sales - Increase in contracted sales to CNY65 billio-70 billion in 2018, which are estimated based on sellable resources - Company to maintain its fast-churn and high cash-flow turnover business model RATING SENSITIVITIES Negative: Developments that may, individually or collectively, lead to negative rating action include: - EBITDA margin sustained below 20% (2017: 24.8%) - Net debt/adjusted inventory sustained above 40% (end- 2017: 30%) - Contracted sales/gross debt sustained below 1.2x (end- 2017: 1.1x) - Decrease of total land bank sellable gross floor area to below 3.5x of annual contracted sales gross floor area for a sustained period Positive: Positive rating action is not expected unless Aoyuan substantially increases its scale and establishes core markets in multi-regions without compromising its financial metrics. This is not expected over the next 12-18 months. LIQUIDITY Healthy Liquidity: Aoyuan has a strong liquidity position, which supports its planned expansion. It has total cash of CNY26.5 billion at end-2017 against short-term debt of CNY21.1billion, and CNY16.9 billion in unutilised committed credit facilities. CHINA AOYUAN: Moody's Assigns B2 Rating to Proposed USD Notes ------------------------------------------------------------- Moody's Investors Service has assigned a B2 senior unsecured rating to the USD notes to be issued by China Aoyuan Property Group Limited (B1 stable). The ratings outlook is stable. China Aoyuan plans to use the proceeds from the proposed notes mainly to refinance existing offshore indebtedness. RATINGS RATIONALE "The proposed note issuance will not have a material impact on China Aoyuan's credit metrics, because the proceeds will be mainly used for debt repayment," says Kaven Tsang, a Moody's Vice President and Senior Credit Officer. In addition, the proposed issuance will lengthen the company's debt maturity profile. China Aoyuan's B1 corporate family rating (CFR) reflects its track record of property development in economically strong Guangdong Province. It also considers the strength of its management through previous down cycles, its adequate liquidity and access to offshore bank funding. On the other hand, the B1 CFR is constrained by the execution risks associated with the company's planned expansion. The B1 CFR also reflects Moody's expectation that the company's revenue/adjusted debt ratio, which is currently weak for its B1 rating, to gradually improve to around 55% in the next 12-18 months and to about 65% by the end of 2019, and that its EBIT/interest coverage will improve to 2.8x-3.0x in the next 12-18 months from 2.5x in 2017. These improvements are based on Moody's expectation that China Aoyuan's revenues will improve to RMB17-23 billion in the next 12-18 months, supported by strong contracted sales growth. The company's contracted sales grew by 78% for 2017 to RMB45.6 billion, of which around 85% were attributable to the company. The B2 senior unsecured debt rating is one notch lower than the corporate family rating due to structural subordination risk. This risk reflects the fact that the majority of claims are at the operating subsidiaries. These claims have priority over China Aoyuan's senior unsecured claims in a bankruptcy scenario. In addition, the holding company lacks significant mitigating factors for structural subordination. As a result, the likely recovery rate for claims at the holding company will be lower. The stable outlook reflects Moody's expectation that over the next 12 months China Aoyuan will continue to achieve positive growth in contracted sales, remain prudent in its land acquisitions and maintain an adequate liquidity position, while posting improved credit metrics. Upward ratings pressure could emerge if it 1) demonstrates sustained growth in contracted sales and revenue recognition through cycles without sacrificing profitability; (2) maintains prudent practices in its land acquisitions and financial management; (3) further improves its credit metrics, such that EBIT/interest registers 3.0x or above and revenue/adjusted debt is 80% or above on a sustained basis; and (4) maintains good liquidity, such that cash consistently covers short-term debt and there is sufficient room in its maintenance covenants for bank loans. However, the ratings could be downgraded if (1) the company shows more volatility or slower growth in contracted sales, or (2) the company's credit metrics weaken, or both. In particular, Moody's would consider downgrading the rating if China Aoyuan's EBIT/interest falls below 2.0x or revenue/adjusted debt registers less than 65%. A weakening in the company's liquidity, as reflected by cash/short-term debt below 1.0x, could also lead to a downgrade. The principal methodology used in these ratings was Homebuilding And Property Development Industry published in January 2018. Listed on the Hong Kong Stock Exchange in October 2007, China Aoyuan Property Group Limited was founded in 1996 by Mr. Guo Zi Wen, the chairman of the company. As of 31 December 2017, the company had 135 projects with a total gross floor area of 24.87 million square meters in its land bank, which can support its development needs for the next 3 years. CHINA EVERGRANDE: Fitch Alters Outlook to Pos. & Affirms B+ IDR ---------------------------------------------------------------- Fitch Ratings has revised the Outlook on China Evergrande Group to Positive from Stable, and affirmed the Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B+'. Evergrande's senior unsecured rating and the rating on all its outstanding senior notes are affirmed at 'B-', with a Recovery Rating of 'RR6'. The Outlook revision reflects Fitch's expectation that Evergrande's leverage, measured by net debt/adjusted inventory, can be sustained below 50%, after falling to 49.6% at end-2017 from 63.3% in 2016, if management follows through with its commitment to lower the company's gearing. Its leverage headroom is very small and Fitch thinks it is premature to upgrade Evergrande's ratings until more sustained deleveraging is seen. The sharp decline in Evergrande's leverage was mainly due to the one-off CNY130 billion in new equity raised by its homebuilding subsidiary, Hengda Real Estate Group Co., Ltd. (Hengda), in 2017, of which CNY117 billion was received in 2017. Fitch believes Evergrande's improving credit profile is also reflected in the continued reduction of the payable-to-gross inventory ratio to 0.38x in 2017 from 0.46x in 2016. Evergrande's ratings had been constrained to the 'B' rating category by its aggressive financial policy as its business profile is more commensurate with that of 'BB' rating category peers. KEY RATING DRIVERS Financial Profile Improvement: Fitch estimates that Evergrande's 2017 leverage would have been closer to 62% without the CNY130 billion raised by Hengda. Of more significance is Hengda's sharp increase in EBITDA margin to 30.4%, helped by higher selling prices from 2016. Evergrande's improved profitability can be supported until 2020 just based on its large land bank of almost 156 million sq m at end-2015, which would fully enjoy the higher selling prices. The company's sustained significant reduction of its payable ratio since it plateaued at 0.5x and above between 2012 and 2015 is another credit improvement. Fitch thinks the payable-to-inventory ratio can be sustained at 2017's level of 0.38x while the company is still deleveraging, assuming Evergrande only replenishes land it sold. Deleveraging Objective: Evergrande had in its 2017 results announcement said it will "further reduce its net gearing ratio in 2018" and "will systematically plan its business development for the year through prudent land acquisitions, emphasis on promoting sales and controlling costs and expenses". Its stated 2018 contracted sales target of CNY550 billion can potentially allow it to cut this year's land acquisition by more than half of the 126 million sq m in gross floor area (GFA) of new land reserves it acquired in 2017. Fitch will assess Evergrande's deleveraging plan in conjunction with its trade payable changes to ensure that the company is not placing more reliance on its contractors and suppliers to extend more credit to help it deleverage. Sizeable Low-Cost Land Bank: Evergrande's land bank is well diversified and distributed in accordance with economic development potential. Fitch estimates that its 312 million sq m land bank can generate a conservative CNY2,925 billion in contracted sales. Its widespread diversification is shown by 15 of China's faster developing provinces plus Chongqing municipality (out of 31) accounting for 80% of its total contracted sales, which we expect to continue. Evergrande's large proportion of active projects also demonstrates its land bank robustness. Evergrande had 656 projects for sale, 628 under construction and 498 projects going through delivery in 2017, out of its 766 projects at end-2017. Evergrande's average land cost of CNY1,711 per sq m is low compared with the average selling price (ASP) of CNY9,960 per sq m it achieved in 2017 and CNY10,233 in 1Q18. Minorities Leakage Impact Contained: The dilution of Evergrande's stake in Hengda to 63.5% in 2017 from 100% has resulted in increased subordination of the parent's creditors. Fitch believes this impact is not yet significant as Evergrande's leverage, based on proportionately consolidating Hengda, is only 3% higher than that of the consolidated leverage. The presence of minorities also means that Evergrande's attributable scale is reduced. The risk of material subordination at Evergrande may surface when Hengda has a significantly lower leverage than that of the consolidated profile. The high level of debt concentrated at Evergrande ex-Hengda may reflect Evergrande's inability to strengthen its financial profile through improved performance at Hengda and this will indicate weak control over Hengda and therefore show weak parent-subsidiary linkage between the two. Shareholder Friendly Measures: Evergrande bought back its shares totalling HKD6.3 billion (CNY5.6 billion) in 2017. It also plans to declare a high dividend of 50% of distributable profit since 2016 following the completion of the restructuring of Hengda. These measures will exhaust liquidity at the holding company level and weaken its debt-servicing capacity. DERIVATION SUMMARY Evergrande's business profile is more comparable with 'BB' category peers as Evergrande has a diversified footprint across the country and products. This offsets its very aggressive financial profile, which is in the weak 'B' category. Its peers like Country Garden Holdings Co. Ltd. (BBB-/Stable), Greenland Holding Group Company Limited (BB-/Negative) and Sunac China Holdings Limited (BB-/Negative) are operating with similar aggressiveness in their scale expansion and are of similar size except for Sunac, which is growing very rapidly to match these peers. Country Garden's leverage of around 30% and churn rate of over 1.5x are commensurate with an investment-grade profile and explains the multiple-notch rating difference with Evergrande. Greenland's leverage is higher than Evergrande's but Greenland has a large level of uncollected sales and a lower payable to offset its high leverage. Greenland as a state-owned enterprise has a strong position in acquiring land at low costs especially for new city districts that local governments are keen to develop. Fitch expects Sunac's leverage to fall below 50% in 2018 and it does not have high payables risks, unlike Evergrande. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer - low single-digit total growth in land bank over the next three years - ASP to increase in 2018 but moderate to 2017 level by 2020; GFA growth to range between 5% and 10% to get single-digit contracted sales growth from 2019. - land cost to increase by 5% per annum resulting in falling EBITDA margin towards 25% - dividend payout ratio of 30% following the 50% special dividend to be declared after completion of Hengda restructuring Recovery Rating Assumptions: - Evergrande will be liquidated in a bankruptcy because it is an asset-trading company - 10% administrative claims - The liquidation estimate reflects Fitch's view of the value of inventory and other assets that can be realised and distributed to creditors - Evergrande's current tax payables net of tax assets will be the most senior claim over its lenders - Fitch applied a haircut of 30% on its receivables, and 50% on its investment properties - Fitch applied a higher haircut of 40% on adjusted inventory despite Evergrande's high margin, which would otherwise support a lower 25% to 30% discount rate, because Fitch believes there will be a leakage of its recoverable value to its very high level of trade creditors Fitch estimates the recovery rate of the offshore senior unsecured debt at 0%, which corresponds to a Recovery Rating of 'RR6'. This is based on our calculation of the adjusted liquidation value (after administrative claims) of 10%, and based on the order of repayment waterfall. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Net debt/adjusted inventory sustained below 50% (49.6% in 2017) - Contracted sales/gross debt sustained above 0.8x (0.7x in 2017) Developments That May, Individually or Collectively, Lead to the Outlook Reverting to Stable - Failure to achieve the above over the next 12 months - Change in management strategy to refocus on aggressive expansion from stated objective to reduce gearing ratio - Failure to reduce short-term debt to below 35% of total debt (48% at end-2017) LIQUIDITY Liquidity Remains Adequate: Evergrande has maintained a large cash balance totalling CNY288 billion, including CNY136 billion of restricted cash. It has CNY356 billion of debt maturing in 2018 that can be funded by ongoing contracted sales and its existing cash. Fitch expects Evergrande's working capital investment to fall sufficiently to generate positive cash flow from operations (CFO) in 2018 to support debt repayment. The company also issued HKD18 billion in convertible bonds in 1Q18 to improve its liquidity. FULL LIST OF RATING ACTIONS China Evergrande Group - Long-Term IDR affirmed at 'B+', Outlook revised to Positive from Stable - Senior unsecured debt rating affirmed at 'B-', with Recovery Rating of 'RR6' - USD598.18 million 6.25% senior notes due 2021 affirmed at 'B-', with Recovery Rating of 'RR6' - USD1 billion 8.25% senior notes due 2022 affirmed at 'B-', with Recovery Rating of 'RR6' - USD4.68 billion 8.75% senior notes due 2025 affirmed at 'B-', with Recovery Rating of 'RR6' - USD1 billion 9.5% senior notes due 2024 affirmed at 'B-', with Recovery Rating of 'RR6' - USD500 million 7% senior notes due 2020 affirmed at 'B-', with Recovery Rating of 'RR6' - USD1.34 billion 7.5% senior notes due 2023 affirmed at 'B-', with Recovery Rating of 'RR6' CONCORD NEW: Fitch Revises Outlook to Neg. & Affirms IDR at BB- --------------------------------------------------------------- Fitch Ratings has revised the Outlook on China-based Concord New Energy Group Limited's (CNE) Long-Term Foreign-Currency Issuer Default Rating (IDR) to Negative from Stable and affirmed the rating at 'BB-'. Fitch has also affirmed CNE's senior unsecured rating and the rating on its USD200 million 7.9% bonds due 2021 at 'BB-'. The Negative Outlook reflects CNE's sharp rise in leverage in 2017, which exceeded Fitch's expectation primarily due to the time lag between capacity installation and grid connection and lower-than-estimated realised average tariffs, resulting in lower power generation revenue. In addition, profitability of the engineering, procurement and construction (EPC) segment that was weaker than Fitch's expectation, coupled with higher-than-expected selling, general, and administrative (SG&A) expenses, dampened CNE's EBITDA generation. Fitch expects CNE to deleverage in 2018, primarily driven by new capacities installed in 2017. Fitch will re-assess CNE's ratings based on the company's utilisation hours and realised tariff in 1H18, which will provide greater visibility on its pace of deleveraging. The agency expects CNE's utilisation hours to remain stable in 2018 compared with 2017 while the average realised tariff for its wind farms will decline in the low single digits from the 2017 level. CNE also has some flexibility in deferring its cash payments for capex. CNE's liquidity remains comfortable with sufficient end-2017 unrestricted cash balance and unutilised credit facilities to fully cover short-term debt. The company's liquidity position has been strengthened by its issuance of the USD200 million bonds and HKD233 million in convertible loans earlier this year. KEY RATING DRIVERS Rise in 2017 Leverage: CNE's FFO adjusted net leverage surged to 9.1x in 2017 from 2.9x a year ago, higher than Fitch's expectation. The commissioning of new capacity was later than we had expected, its realised average tariff was dragged down by two wind farms in Yunnan where tariffs fell under pressure from market-power trading, its EPC segment profits and SG&A expenses were weaker than Fitch's estimates, leading to the company's higher leverage. CNE's attributable power generation rose 17.8% yoy in 2017 to 2,447GWh, of which its consolidated capacity contributed 1,215GWh, up 32.7% yoy. Newly installed capacity in 2017 of up to 384MW did not contribute much revenue in the year due to the time lag between installation and grid connection. The utilisation of CNE's consolidated wind farms improved to 2,072 hours in 2017 from 1,785 hours a year ago, consistent with the industry trend of curtailment alleviation. In 2017, 41,900GWh of wind power was wasted in China, a 16% improvement from the previous year. Deleveraging from 2018: Fitch expects CNE's new capacity installed in 2017 to contribute full-year revenue in 2018, allowing the company to deleverage. The agency expects CNE's 2018 consolidated power generation volume to nearly double in 2018 and to grow by another 40% in 2019, assuming stable utilisation hours compared with 2017. CNE's attributable power generation grew 82% yoy in 1Q18. Upside potential to Fitch's forecast remains if grid availability of wind power continues to improve and China's power demand remains reasonably strong. Market Trading Reduces ASP: The average realised tariff of CNE's consolidated wind farms dipped 4.0% in 2017 to CNY0.583/kWh from CNY0.6074/kWh a year ago. The average selling price (ASP) was mainly dragged down by two wind farms in Yunnan province that were built in 2016 and contributed meaningful volume in 2017. Yunnan province is a pioneer in regulating a high proportion of market-traded electricity, which is usually settled at lower prices than benchmark tariffs. Fitch thinks the trend of more wind farms participating in power-market trading is taking off in China, which could put the tariffs of CNE's wind and solar farms under pressure if more projects are obliged to accept market prices. Delay in Renewable Subsidies: CNE's renewable subsidy amounted to CNY370 million, or 52% of its power revenue of CNY718 million in 2017. The proportion was lower than 2016's 61% as CNE disposed of some solar projects, which required a higher subsidy. CNE's renewable subsidy receivables, from a time lag in payment, increased 156% yoy to CNY448 million at end-2017. Fitch doesn't expect CNE to receive a much higher subsidy in 2018 as the government has yet to announce the catalogue for the seventh batch of renewable energy projects that are entitled to receive subsidies. The delay in subsidy payments, which occurs because solar and wind power generators have to wait for projects that start operating to be included in the next batch of catalogues before the government pays the subsidies, will keep weighing on renewable operators' cash flow in the coming years amid the shortage in China's renewable surcharge fund and the government's reluctance to raise retail power tariffs. Higher Capex; Longer Terms: CNE's capex nearly doubled yoy to CNY3.5 billion in 2017 including CNY835 million paid with bills instead of cash. Fitch estimates a large part of 2017 capex was to settle payables to equipment suppliers from 2016. Payables for construction-in-progress rose to CNY2.1 billion at end-2017. Fitch expects cash capex of CNY3.0 billion in 2018, based on the assumption of 500MW in capacity addition and more preferential credit terms from equipment suppliers. VAT Deduction: Wind and solar farms enjoy a 50% VAT rebate as an incentive for supplying renewable energy. In addition, in the first five operational years, wind farms usually do not need to pay VAT, which is deducted from investment in equipment. Their revenue is net of VAT and therefore deducted VAT is not included in reported EBITDA. Fitch has adjusted CNE's EBITDA and funds from operations by a 50% VAT deduction because wind farms receive 100% of the VAT deduction only in the first five operational years and after that only a 50% rebate is applicable. DERIVATION SUMMARY CNE's credit profile is similar to that of Greenko Dutch B.V (a special restricted group that issued bonds with a rating of BB-). CNE has lower counterparty risk as its revenue stream relies mostly on State Grid Corporation of China (A+/Stable) and China's Renewable Energy Subsidy Fund, while Greenko Dutch's key customers - non-federal Indian government-owned utilities - have weaker credit profiles. Both companies enjoy preferential dispatch priority despite different regulatory frameworks but face volume volatility risk due to the nature of renewable energy. Greenko Dutch had lower FFO adjusted net leverage of 5.4x at end-March 2017 compared with 6.0x-6.5x for CNE during its investment cycle. However, Greenko Dutch's FFO fixed-charge coverage ratio was weaker at 1.3x compared with 2.6x-2.7x for CNE. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer - 500MW of wind power capacity installed in 2018, followed by 300MW per year in the next few years - Utilisation of existing capacity remains stable at 2017 levels; new capacity contributes 3.6 months in the year of installation - Average tariff of existing wind farms to decline 3% yoy in 2018 and 2019 to account for potentially higher market-traded volume. Wind power's on-grid tariff to decline for new projects in 2018, 2019 and 2021, but remain largely stable thereafter. - Capex reaches CNY3.0 billion in 2018 considering preferential credit terms provided by wind-power equipment providers; capex gradually drops to CNY2.2 billion in 2021 due to lower new installations - EPC segment breaks even on gross profit level in 2018-21 - Fitch adjusts EBITDA and FFO by adding back 50% of CNE's VAT deductions from equipment RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action For Fitch to revise Outlook from Negative to Stable: - Evidence of FFO adjusted net leverage falling below 6.0x in 2018 and further deleveraging towards 5.0x in 2019 and 2020 - FFO fixed-charge coverage higher than 3.0x on a sustained basis Developments that May, Individually or Collectively, Lead to Negative Rating Action - Evidence of failure to reduce FFO adjusted net leverage towards 6.0x in 2018 - Average realised tariff declines more than 3% from 2017 average in the first half of 2018 - Average utilisation of CNE's wind and solar farms deteriorate from 2017 level in the first half of 2018 LIQUIDITY Sufficient Liquidity: CNE had CNY1.0 billion in unrestricted cash at end-2017, sufficient to cover CNY558 million in current debt due 2018. Fitch estimates a negative CNY2.7 billion in free cash flow and CNY3.0 billion in capex in 2018, which should be well-financed by the newly issued USD200 million bonds and HKD233 million convertible loans as well as easy access to project loans. CNE has solid banking relationships, with CNY2.7 billion in undrawn credit facilities from major Chinese banks as of end-2017. Fitch expects FFO fixed charge coverage to recover to 3.1x at end-2018 from 2.2x at end-2017. SINGAPORE TECHNOLOGIES: Chinese Unit Files for Bankruptcy -------------------------------------------------------- Annabeth Leow at The Business Times reports that a Singapore Technologies Engineering (ST Engineering) subsidiary has filed a bankruptcy petition in China, the Temasek-controlled technology, defence and engineering group said on April 23. The Business Times relates that JHK - a road construction equipment joint venture between ST Engineering's land systems unit, ST Kinetics, and China's state-owned Jiangsu Huatong Machinery - was placed under members' voluntary liquidation in late 2016. The bankruptcy petition - filed in Zhenjiang city, in the province of Jiangsu - was to avoid further cash outlay, the report discloses citing ST Engineering's announcement on the Singapore Exchange website. According to the report, the company, which ended production in 2016 amid operating losses, was unable to dispose of its land and building assets "despite its best efforts for more than a year to secure buyers". The report relates that ST Engineering said that the failure was due to weak demand for industrial properties in the Zhenjiang area. ST Kinetics owns 75.3 per cent of JHK, with its Chinese partner holding the remainder, the report notes. The Business Times adds that ST Engineering said that it has fully written down its investments in the joint venture, with a one-off charge in the three months to Sept. 30, 2016. That charge - to the tune of SGD61 million - comprised an impairment of ST Kinetics' net carrying value in JHK, as well as closure costs such as staff compensation. ST Engineering added that the bankruptcy petition is not expected to have any material impact on its consolidated net tangible assets per share and earnings per share for the current financial year, The Business Times relays. YINGLI GREEN: Supplier Files $897.5M Arbitration Request -------------------------------------------------------- Yingli Green Energy Holding Company Limited said in a press release that one of its long-term polysilicon suppliers filed a request for arbitration of its claim against the Company with the London Court of International Arbitration (LCIA) on April 26, 2018. The Company has not fully performed some of its long-term polysilicon supply contracts on their original terms, and suppliers have sent the Company invoices or demand letters for failing to perform certain obligations under these contracts. On Dec. 15, 2017, one of the Company's subsidiaries received a notice of termination from the unnamed Supplier notifying the Company of its decision to terminate its long-term polysilicon supply contract with the Company with immediate effect and claiming no less than US$897.5 million of payments due and payable by the Company under the contract. After receiving the notice of termination, the Company has been actively communicating with the Supplier to find an amicable solution but no mutual agreement has been reached yet. The Company plans to vigorously defend its rights in the arbitration proceeding while continuing to seek a mutually beneficial solution with the Supplier. About Yingli Green Energy Yingli Green Energy Holding Company Limited (NYSE: YGE), known as "Yingli Solar" -- http://www.yinglisolar.com/-- is a photovoltaic (PV) module manufacturer. Yingli Green Energy's manufacturing covers the photovoltaic value chain from ingot casting and wafering through solar cell production and PV module assembly. Headquartered in Baoding, China, Yingli Green Energy has more than 20 regional subsidiaries and branch offices and has distributed more than 20 GW solar panels to customers worldwide. Yingli Green reported a net loss attributable to the Company of RMB3.31 billion on RMB8.36 billion of total net revenues for the year ended Dec. 31, 2017, compared to a net loss attributable to the Company of RMB2.09 billion on RMB8.37 billion of total net revenues for the year ended Dec. 31, 2016. As of Dec. 31, 2017, Yingli Green had RMB10.34 billion in total assets, RMB20.83 billion in total liabilities and a total shareholders' deficit of RMB10.49 billion. The report from the Company's independent accounting firm PricewaterhouseCoopers Zhong Tian LLP on the consolidated financial statements for the year ended Dec. 31, 2017, includes an explanatory paragraph stating that facts and circumstances including accumulated and recurring losses from operations, negative working capital, cash outflows from operating activities, and uncertainties regarding the repayment of financing obligations raise substantial doubt about the Company's ability to continue as a going concern. YINGLI GREEN: Files Form 20-F Reporting RMB3.3-Bil. 2017 Loss ------------------------------------------------------------- Yingli Green Energy Holding Company Limited filed with the Securities and Exchange Commission its Annual Report on Form 20-F reporting a net loss attributable to the Company of RMB3.31 billion on RMB8.36 billion of total net revenues for the year ended Dec. 31, 2017, compared to a net loss attributable to the Company of RMB2.09 billion on RMB8.37 billion of total net revenues for the year ended Dec. 31, 2016. As of Dec. 31, 2017, Yingli Green had RMB10.34 billion in total assets, RMB20.83 billion in total liabilities and a total shareholders' deficit of RMB10.49 billion. The report from the Company's independent accounting firm PricewaterhouseCoopers Zhong Tian LLP on the consolidated financial statements for the year ended Dec. 31, 2017, includes an explanatory paragraph stating that facts and circumstances including accumulated and recurring losses from operations, negative working capital, cash outflows from operating activities, and uncertainties regarding the repayment of financing obligations raise substantial doubt about the Company's ability to continue as a going concern. Debt Restructuring In order to properly consider the Company's options with respect to and ultimately resolve the debt repayment issues, and to improve the Company's liquidity and debt structure, the board of directors of the Company formed a special committee comprised solely of independent directors in March 2017 to assess its operating and financial situation and evaluate, develop and recommend one or more strategic alternatives and financing plans potentially workable to the Company and its creditors. The Special Committee subsequently engaged an outside financial advisor and legal advisors to assist it in carrying out its work. The Company has been in active discussion with its creditors about potential debt restructuring plans. As part of the debt restructuring, the Company is also in active discussion with a potential investor who may provide fresh funds in the form of equity investments in the Company's principal operating subsidiaries in China. The Company endeavors to work out a debt restructuring plan that will significantly reduce the amount of outstanding debts of its principal subsidiaries and provide it with funding necessary to maintain and improve its normal operations. As of April 30, 2018, while alternative debt restructuring plans have been prepared and discussed among the Company, its major creditors and the potential new investor, the Company has not received any binding proposal from any party with respect to the debt restructuring and neither the Company nor the Special Committee have made any decision to engage in any particular transaction with respect to the debt restructuring. While the Company was aware that its major creditors are working on a formal proposal to the Company, the Company can give no assurance as to the timing or content of such proposal. The Company can give no assurance that any proposed debt restructuring plan, if received, will be agreed to by all of its creditors or be acceptable to the Company as determined by its board of directors and the Special Committee. In addition, the Company's board of directors and the Special Committee may conclude that it will no longer be possible to work out a debt restructuring plan that preserves some value for their shareholders without compromising the interests of our creditors, in which case it may approve a debt restructuring plan that disposes all of the Company's business and assets to its creditors without leaving any value for its shareholders. Voluntary Forbearance by Creditors The Company has successfully persuaded many of its creditors to refrain from enforcing the Company's debt payment obligations or initiate any bankruptcy, liquidation or similar proceeding against the Company (including any of its major subsidiaries) in any jurisdiction before a viable debt restructuring plan is adopted and approved by all relevant parties. As a debt restructuring plan may maximize value for all creditors, the Company will endeavor to persuade its creditors to continue such voluntary forbearance. The Company cannot assure, however, that it will always be successful in persuading all of its creditors to observe such voluntary forbearance. One of the holders of the MTNs filed a lawsuit against Tianwei Yingli in a PRC court to recover the amount due under such MTNs. The claimed principal amount of the MTNs held by the Note Holder is RMB65.7 million, representing approximately 3.7% of the total amount of the MTNs that are still outstanding. The Note Holder claimed that Tianwei Yingli should repay principal, interest and overdue penalty on the MTNs for an aggregate amount of RMB74.4 million and bear costs relating to the lawsuit. In addition, in March 2018, one of financial creditors of Yingli China, filed a lawsuit against Yingli China, demanding immediate repayment of outstanding loans from this creditor with a total amount of RMB106.4 million (including RMB98 million of principal and RMB8.4 million of unpaid interests). Tianwei Yingli and Yingli China have been vigorously defending its rights in court while continuing to seek a mutually beneficial solution out of court. Considering the amount claimed by the Note Holder, the Company does not expect this lawsuit to have any direct material impact on the Companys overall operation or liquidity position. The Company notified all holders of the MTNs of the lawsuit filed by the Note Holder and the Company is not aware of any other legal proceedings initiated by holders of the MTNs against the Company or any of its subsidiaries. The Company is also still in discussion with all of its other financial creditors and is not aware of any other legal proceedings initiated by any of its other financial creditors. However, the Company's negotiation efforts may not be successful and the Company cannot assure that its creditors will continue to observe any voluntary forbearance in the future. Based on the management's assessment, there can be no assurance, however, that above measures will be successfully completed on terms acceptable to the Company, or effectively implemented within one year after the date that the consolidated financial statements are issued, or when implemented, it will mitigate the relevant conditions or events that raise substantial doubt about the Company's ability to continue as a going concern. The Company's plans for maintaining its continuing operations, even if successful, may not result in sufficient cash flow to finance and maintain its business. A full-text copy of the Form 20-F is available for free at: https://is.gd/Pq8soE About Yingli Green Energy Yingli Green Energy Holding Company Limited (NYSE: YGE), known as "Yingli Solar", -- http://www.yinglisolar.com/-- is a photovoltaic (PV) module manufacturer. Yingli Green Energy's manufacturing covers the photovoltaic value chain from ingot casting and wafering through solar cell production and PV module assembly. Headquartered in Baoding, China, Yingli Green Energy has more than 20 regional subsidiaries and branch offices and has distributed more than 20 GW solar panels to customers worldwide. YUZHOU PROPERTIES: Fitch Rates Proposed USD Notes 'BB-(EXP)' ------------------------------------------------------------ Fitch Ratings has assigned Yuzhou Properties Company Limited's (Yuzhou; BB-/Stable) proposed US dollar senior unsecured notes an expected 'BB-(EXP)' rating. The notes are rated at the same level as Yuzhou's senior unsecured rating because they constitute direct and senior unsecured obligations of the company. The final rating is subject to the receipt of final documentation conforming to information already received. The company's management says it plans to use most of the net proceeds from the issue to refinance existing indebtedness. The Chinese homebuilder's ratings are supported by its strong contracted sales growth, regional diversification and favourable margin compared with its peers. Yuzhou's active land acquisition approach will support higher contracted sales in the medium term, though it drove leverage, defined by net debt to adjusted inventory, up to 42% by end-2017. Fitch believes leverage of 40%-45% will be reasonable as the company's operating scale will be larger. Fitch's assessment of Yuzhou's ratings will depend on whether it can manage its contracted sales growth without significantly impairing its leverage and margins. KEY RATING DRIVERS Land Purchases Underpin Expansion: Fitch believes Yuzhou's recent land acquisitions will enhance its geographical diversification as they include properties in three cities where it does not yet operate, Beijing, Foshan and Shenyang. The company, which is strongly positioned in the West Strait Economic Zone and the Yangtze River Delta, will be able to gradually expand into northern China as some properties acquired are in Tianjin and Shenyang. Contracted sales in the West Strait Economic Zone and the Yangtze River Delta accounted for 35% and 60% of total contracted sales in 2017, respectively. Fitch expects the company's operating scale to continue increasing in these two regions. Yuzhou's total contracted sales increased 73.7% to CNY40.3 billion in 2017. Higher Leverage: Yuzhou's leverage have increased to 42% by the end of 2017 (end-2016: 37.5%), as Yuzhou used 50%-60% of its annual presales proceeds to acquire land to maintain growth in contracted sales beyond 2017. Fitch believes a rise in leverage to 42% at end-2017 is still reasonable because of the good quality of its recent land purchases and the increase in contracted sales. Yuzhou's attributable land acquisition cost of CNY15 billion was 37.2% of its total contracted sales in 2017 and more than 70% of it was paid in 2017. Margin Remains Robust: Yuzhou's land acquisition prices will be lowered by the very low average land cost for the recent acquisition of seven projects in China from Coastal Greenland Limited. Fitch expects Yuzhou's gross profit margin to remain at 30%-35% and EBITDA margin at 25%-30% (before capitalised interest), which is high relative to peers rated in the 'BB' category. Most of the sites purchased in 2016 and 2017 are in good locations in major cities in the Yangtze River Delta and the West Strait Economic Zone, where the company has a record of achieving increases in selling prices. DERIVATION SUMMARY Yuzhou's business profile and scale are trending towards those of 'BB' rated peers. A faster churn rate may be achieved with a slightly lower margin. Yuzhou's recent expansion into the Yangtze River Delta will increase its leverage, but Fitch believes higher leverage that remains below 45% in the next 12 months will be reasonable as it has acquired good quality sites and achieved a much larger operating scale. CIFI Holdings (Group) Co. Ltd. (BB/Stable) is the closest peer to Yuzhou as both of them are focussed on the Yangtze River Delta, while Yuzhou is also strongly positioned in the West Strait Economic Zone, and less exposed in the Bohai Rim. CIFI has lower leverage and higher sales efficiency than Yuzhou, while its EBITDA margin is lower than Yuzhou. As Yuzhou is striving to balance its margin and sales efficiency, Fitch expects its margin to trend down but sales efficiency to improve. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: - Attributable contracted sales of CNY30 billion-CNY50 billion a year in 2018-2020 (CNY30 billion in 2017) - Contracted average selling price to rise 10% a year in 2018- 2020 (33% in 2017) - Gross profit margin (before capitalised interest) of 30%-35% in 2018-2020 (35% in 2017) - Land acquisition costs to account for 50%-60% of total contract sales each year in 2018-2020 (37% in 2017) RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Attributable contracted sales sustained above CNY30 billion (2017: CNY30 billion) - Net debt/adjusted inventory sustained below 40% (2017: 42%) - Attributable contracted sales / gross debt sustained above 1.2x (2017: 1.1x) - EBITDA margin (before capitalised interest) sustained above 25% (2017: 34%) Developments That May, Individually or Collectively, Lead to Negative Rating Action - Net debt/adjusted inventory sustained above 45% - Attributable contracted sales/gross debt sustained below 1.0x - EBITDA margin (before capitalised interest) sustained below 20% LIQUIDITY Liquidity: The company had unrestricted cash of CNY15.6 billion at end-2017. The company has diversified funding channels to ensure the sustainability of its liquidity to meet its short-term debt of CNY16.7 billion and support its planned expansion. Besides bank loans, it has established channels for both onshore and offshore bond issuance, as well as equity placement. ========= I N D I A ========= AGASTHYACODE RUBBER: CRISIL Hikes Rating on INR13MM Loan to B- -------------------------------------------------------------- CRISIL has revised its rating on the long-term bank facility of Agasthyacode Rubber Traders (ART) from 'CRISIL B/Stable' to 'CRISIL D' and simultaneously upgraded to 'CRISIL B-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 13 CRISIL B-/Stable (Revised from 'CRISIL B/Stable' to 'CRISIL D' and Simultaneously Upgraded to 'CRISIL B-/Stable') The rating downgrade takes into account the instance of overdrawals of more than 30 days in the months of September and December 2017. The simultaneous rating upgrade reflects sufficient track record of timely debt servicing maintained by ART since then. The rating also reflects weak risk management policies and financial risk profile. These weaknesses are partially offset by the promoter's extensive experience. Key Rating Drivers & Detailed Description Weaknesses * Weak risk management policies: The firm has suffered inventory losses owing to weak risk management policies. * Weak financial risk profile: Financial risk profile is marked by weak capital structure and subdued debt protection metrics. Liquidity is under pressure, with fully utilised bank limit and withdrawal of capital in fiscal 2017, despite the absence of term loans. With infusion of capital in fiscal 2018 and marginal improvement in business risk profile, financial metrics are expected to improve, albeit will remain weak. Strength * Extensive experience of the partners: Promoters are in the business of trading in rubber sheets and scrap for around 2 decades. Outlook: Stable CRISIL believes that ART will continue to benefit over the medium term from the industry experience of its promoter. The outlook may be revised to 'Positive' if substantial cash accrual leads to a stronger financial risk profile. Conversely, the outlook may be revised to 'Negative' if low revenue or profitability, or stretch in working capital cycle results in weakening in liquidity. Set up in 2000 as a partnership between Mr Biju Lal and Mr Baiju Lal, Kollam-based ART trades in rubber sheets and scrap rubber. AIRCEL LTD: CEO Steps Down; To Assist IRP on Bankruptcy ------------------------------------------------------- The Economics Times reports that Aircel Ltd. chief executive officer Kaizad Heerjee has resigned from his position, marking the exit of a man widely credited with turning around the mobile phone operator before it ran into financial stress as competition intensified with the entry of Reliance Jio. Heerjee will, however, continue to work with the insolvency resolution professional (IRP) to help the telco, which has filed for bankruptcy protection, sort out its interim funding, ET relates citing people familiar with the developments. May 1 was his last working day in Aircel, the report says. ET notes that Heerjee was nominated as the CEO of Aircel towards the end of 2013 after that post lay vacant for almost eight months. He was chief operating officer (COO) under Sandip Das, who left his position as Aircel CEO to join Mukesh Ambani's Jio. Heerjee had joined Aircel from Malaysian operator U Mobile a year before he became CEO, adds ET. As reported in the Troubled Company Reporter-Asia Pacific on March 2, 2018, Reuters said Aircel Ltd filed for bankruptcy on Feb. 28, 2018, pressured by a high debt pile and mounting losses following a price war triggered by a telecom upstart. Talks between Aircel, 74% owned by Malaysia's Maxis Communications Bhd, and Reliance Communications Ltd (RCom) to combine their wireless business was called off in late 2017 due to regulatory and legal uncertainties and interventions by various parties, Reuters said. Aircel, whose debt amounts to INR155 billion ($2.38 billion), then tried unsuccessfully to restructure its debt, Reuters related. Aircel Limited, along with its subsidiaries Aircel Cellular Limited and Dishnet Wireless Limited, is a telecom service provider with a pan India presence. Aircel offers GSM-based 2G services in all the 22 telecom circles and has also introduced 3G services in select geographies. AUM SHRI HOTELS: CRISIL Moves B+ Rating to Not Cooperating Cat. --------------------------------------------------------------- CRISIL has been consistently following up with Aum Shri Hotels and Resorts Private Limited (Aum) for obtaining information through letters and emails dated February 20, 2018, March 31, 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 ---------- --------- ------- Bank Guarantee 17.31 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Proposed Long Term .69 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 Aum Shri Hotels and Resorts Private Limited, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Aum Shri Hotels and Resorts Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the ratings on bank facilities of Aum Shri Hotels and Resorts Private Limited to CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Aum is a closely held private limited company, promoted by Mr. Arvind Preet Singh and Mr. Anil Thakran. The company was incorporated in July 2012 and has entered into a joint development agreement with Three C Properties Pvt. Ltd. (TCPL) for development of residential township in Gurgaon. Aum owns the land and is entitled to 44 per cent of the saleable proceeds from the project, while the joint development partner - TCPL, who undertake development of the project, is entitled to remainder of the sale proceeds. B.V.L. EXPORTS: ICRA Keeps B Rating in Not Cooperating Category --------------------------------------------------------------- ICRA Ratings said the rating for the INR125.00 crore bank facilities of B.V.L. Exports Private Limited continues to remain in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA] B (Negative) ISSUER NOT COOPERATING." Amount Facilities (INR crore) Ratings ---------- ----------- ------- Packing Credit 75.00 [ICRA]B (Negative) ISSUER NOT COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category Cash Credit 50.00 [ICRA]B (Negative) ISSUER NOT COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category The rating is based on no updated information on the entity's performance since the time it was last rated in January 2017. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating does not adequately reflect the credit risk profile of the entity. The entity's credit profile may have changed since the time it was last reviewed by ICRA; however, in the absence of requisite information, ICRA is unable to take a definitive rating action. As part of its process and in accordance with its rating agreement with B.V.L. Exports Private Limited, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information, and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. B.V.L. Exports Private Limited was incorporated in 2000 and is engaged in the trading of tobacco. The company continued to operate as a tobacco exporter till 2004 when it transferred its entire tobacco export business to Indian Tobacco Traders. The company then ventured into granite mining by buying granite quarry in Ongole District of Andhra Pradesh. The company mines black galaxy variety of granite. From December 2014, the company has restarted trading of tobacco. Mr. Bellam Jayanth Babu is the Managing Director of BVL and has more than 20 years of experience in tobacco industry. BINANI CEMENT: Court Told Lenders to Consider UltraTech Bid ----------------------------------------------------------- LiveMint.com reports that the Kolkata bench of the bankruptcy court on May 2 ruled that the lenders of debt-ridden Binani Cement Ltd. should consider the revised offer of UltraTech Cement Ltd. even as it allowed Dalmia Bharat Ltd., chosen by lenders to take over the indebted cement-maker, to submit new bids, effectively restarting a contest between the two suitors. After being outbid by Dalmia Bharat, UltraTech made a binding offer to pay INR7,960 crore for the assets of Binani Cement, compared with Dalmia Bharat's offer of INR6,932.46 crore. However, Binani Cement's lenders declined to consider UltraTech's higher offer because it came after Dalmia Bharat was declared the highest bidder, LiveMint.com says. According to LiveMint.com, the lenders had decided before bids were received that they would negotiate only with the highest bidder, their legal counsel told the tribunal. Though UltraTech offered to pay over INR1,000 crore more, they were constrained from considering it by rules they had themselves set. Appearing for UltraTech, lawyer Mukul Rohatgi told the National Company Law Tribunal (NCLT) that UltraTech was ready to raise its bid by INR500 crore more if Dalmia Bharat matched the current offer, the report relays. "It is made clear that if both (companies) are willing to participate in the bidding process, the committee of creditors is expected to allow both in the bidding process," the tribunal, as cited by LiveMint.com, said in its order. With this verdict, the committee of creditors now has the legal sanction to consider UltraTech's bid, said Ratnanko Banerji, senior counsel who represented Binani Industries Ltd, the parent of the beleaguered cement-maker, according to LiveMint.com. In the same order, the bench has extended the time for finalizing a resolution plan for Binani Cement till June 24. It will review progress on June 4, LiveMint.com reports. "We are surprised by the order passed by the NCLT today," Dalmia Bharat said in a statement, LiveMint.com relays. The insolvency resolution professional, or the administrator, and the committee of creditors had followed "the due process of law" in selecting the Dalmia Bharat-led consortium as the highest bidder, it said. "In our view, any revised offer from an unsuccessful resolution applicant outside the resolution process cannot become a basis for setting aside the decision of the committee of creditors. We have strong conviction that we have followed the law as per due process and believe that we will eventually succeed. We will take all the appropriate steps required," Dalmia Bharat said. About Binani Cement Binani Cement is a subsidiary of Binani Industries, a conglomerate with manufacturing and R&D operations. It has a manufacturing capacity of 11.25 million tonnes (mt) per annum with integrated plants in India and China, and grinding units in Dubai. On July 25, 207, the Kolkota bench of the National Company Law Tribunal (NCLT) admitted an insolvency petition against Binani Cement. Bank of Baroda (BoB) had referred Binani to the bankruptcy court after it failed to repay a sum of INR97 crore. BoB has appointed Vijaykumar V Iyer of Deloitte India as the interim resolution professional (IRP) to oversee the insolvency process. The company owes a consortium of lenders close to INR3,042.93 crore. Edelweiss ARC, which has bought over a chunk of the debt from bankers, is now the leader of the consortium. CALIFORNIA AGRI: CRISIL Moves B+ Rating to Not Cooperating ---------------------------------------------------------- CRISIL has been consistently following up with California Agri Nuts Corp. (CANC) for obtaining information through letters and emails dated March 28, 2018, April 10, 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/ 10 CRISIL B+/Stable (Issuer Not Overdraft Cooperating; Rating Migrated) facility 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 California Agri Nuts Corp., which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on California Agri Nuts Corp. 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 facility of California Agri Nuts Corp. to CRISIL B+/Stable Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. CANC is a partnership firm established in 2008 by Mr Raju Bhatia and family. Based in Delhi, the firm trades in dry fruits and spices. CHINAR SYNTEX: CRISIL Moves B+ Rating to Not Cooperating -------------------------------------------------------- CRISIL has been consistently following up with Chinar Syntex Limited (CSL) for obtaining information through letters and emails dated March 28, 2018, April 10, 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 21 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Proposed Long Term 2 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 Chinar Syntex Limited, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Chinar Syntex Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Chinar Syntex Limited to CRISIL B+/Stable Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. CSL, incorporated in 1992, is promoted by Mr Purushottam Aggarwal, Mr Naresh Aggarwal, and Mr Nand Kishore Aggarwal. It manufactures suiting and shirting fabric under the Chinar brand. Its weaving unit is in Bhiwani, Haryana. DLA INDUSTRIES: CRISIL Migrates B- Rating to Not Cooperating ------------------------------------------------------------ CRISIL has been consistently following up with DLA Industries Private Limited (DLA) for obtaining information through letters and emails dated January 29, 2018, March 5, 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 ---------- --------- ------- Bank Guarantee 0.15 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Cash Credit 4.75 CRISIL B-/Stable (Issuer Not Cooperating; Rating Migrated) Proposed Long Term 5.10 CRISIL B-/Stable (Issuer Not Bank Loan Facility Cooperating; Rating Migrated) Term Loan 10.00 CRISIL B-/Stable (Issuer Not Cooperating; Rating Migrated) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of DLA Industries Private Limited, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on DLA Industries Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the ratings on bank facilities of DLA Industries Private Limited to CRISIL B-/Stable/CRISIL A4 Issuer not cooperating'. Incorporated in 2014 in Karnal, DLA Industries Pvt Ltd is engaged in manufacture of wooden laminates, pre lamp boards, acrylic hi-glass and modular kitchen The Company is promoted by Mr.Darshan Lal Arora, Smt.Promila Arora and Mr. Pankaj Arora. EPC CONSTRUCTIONS: NCLT Approves IDBI Bank's Insolvency Bid ----------------------------------------------------------- The Hindu BusinessLine reports that the Mumbai Bench of the NCLT has directed commencement of corporate insolvency resolution process for EPC Constructions India Pvt Ltd, formerly known as Essar Projects (India) Ltd, on a petition filed by IDBI Bank to recover outstanding loans of INR969 crore. The report relates that as per the submissions made by IDBI Bank before the Tribunal, the account of EPC Constructions, which executes engineering, procurement and construction projects, was declared a non-performing asset on December 31, 2014 under RBI guidelines. This is the second Essar Group firm to face insolvency proceedings after Essar Steel, the report notes. Essar Group was earlier under a debt pile of nearly INR1.4 lakh crore, of which it has paid INR80,000 crore with the sale of Essar Oil and other assets, including real estate. After going through the pleadings on record and submissions made by the lenders, NCLT Member MK Shrawat noted that the financial creditor has duly sanctioned and disbursed the various loan facilities. According to BusinessLine, IDBI Bank said it had issued a demand letter to the debtor on Nov. 8, 2017 demanding the outstanding amount, but the debtor still failed to repay it. Further, IDBI Bank had issued a letter in December 2017 calling upon the corporate guarantor of the rupee term loan to pay the same, the report says. Further, another letter was issued by the financial creditor, calling upon the corporate guarantor of the working capital loan to pay the amount. But both the guarantors also failed to make payment to the financial creditor, said the bank, the report relays. ESSAR STEEL: Numetal, ArcelorMittal Prove Eligibility to Bid ------------------------------------------------------------ The Press Trust of India reports that the committee of creditors of Essar Steel Ltd. on May 2 discussed eligibility issues with Numetal and ArcelorMittal for bidding for the 10-million steel mill at Hazira, people familiar with the development said. These companies were given time till May 1 by the lenders to give then in writing that they were fit to bid, the report says. "The CoC had given them time till Tuesday evening [May 1] to submit in writing why they are eligible to bid. Today, both the companies gave presentation to the CoC on their eligibility," the report quotes a banker as saying. PTI relates that a Numetal official confirmed that the company was given the opportunity to discuss its eligibility with the CoC, while an ArcelorMittal spokesman confirmed being called for the meeting with the lenders. "We are working with the CoC to address their concerns, if any," Numetal spokesman told PTI. Russia's VTB Capital-backed Numetal and ArcelorMittal are the only two bidders for Essar Steel in the first round of bids as NCLT has stayed the second round of bids, according to the report. PTI relates that the first round of bids were rejected by the resolution professional and the lenders, citing technical reasons or ownership issues (promoters of these bidders being related to the original defaulting promoters) leading to the re-bids, which had three bidders -- Numetal-JSW, ArcelorMittal- Nippon Steel, and Vedanta. In the April 24 meeting, the CoC had raised certain compliance issues under Section 29A-c of the IBC, the report notes. On April 26, Numetal had moved the National Company Law Appellate Tribunal in new Delhi against an order allowing rival ArcelorMittal to clear bank dues of associate companies so that it can become eligible for acquisition of Essar Steel, PTI relays. ArcelorMittal has challenged its disqualification from bidding. PTI says the NCLAT will hear the petitions again on May 17 filed by Numetal and ArcelorMittal India challenging eligibility criteria. About Essar Steel Incorporated in 1976, Essar Steel India Ltd. is a part of the Essar Group and is having 10 MTPA integrated steel manufacturing facilities at Hazira, Gujarat and iron ore beneficiation and pelletisation facilities in Paradeep, Odisha (12 mtpa) and Vizag, Andhra Pradesh (8 mtpa). The company also owns and operates two iron ore slurry pipelines -- one each in Odisha (Dabuna to Paradip) and Andhra Pradesh (Kirandul-Vizag), which transport the iron ore slurry from the beneficiation plant (located near the iron ore mines in Dabuna and Kirandul) to the pellet plant (located near the Paradip and Vizag ports). A large portion of the iron ore pellets produced are intended for captive consumption by ESIL's steel plant at Hazira for cost optimization. The National Company Law Tribunal (NCLT) - Ahmedabad Bench admitted Essar Steel's insolvency case on Aug. 2, 2017. Satish Kumar Gupta of Alvarez and Marsal India has been appointed as interim resolution professional upon the suggestion of State Bank of India (SBI). Essar Steel owes more than INR45,000 crore to lenders, of which INR31,671 crore had already been declared as non-performing as of March 31, 2016, The Economic Times disclosed. The SBI-led consortium of 22 creditors accounts for 93% of this amount. Essar Steel owes $450.67 million to Standard Chartered Bank (SCB) in debt. GOOD LUCK: CRISIL Migrates B- Rating to Not Cooperating Category ---------------------------------------------------------------- CRISIL has been consistently following up with Good Luck Capital Private Limited (GLC) for obtaining information through letters and emails dated January 29, 2018, March 5, 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 18 CRISIL B-/Stable (Issuer Not Cooperating; Rating Migrated) Overdraft 10 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Proposed Non 2 CRISIL A4 (Issuer Not Fund based limits 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 Good Luck Capital Private Limited, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Good Luck Capital Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the ratings on bank facilities of Good Luck Capital Private Limited to CRISIL B-/Stable/CRISIL A4 Issuer not cooperating'. Established in 2004 by the Garg family, GLC, based in Ghaziabad (Uttar Pradesh) trades in steel products such as ingots, billets, and scrap. It also trades in coal. The promoters have been in the business since 1972 through Good Luck Traders which was merged with GLC in 2004. INDUS MEGA: ICRA Keeps D Rating in Not Cooperating Category ----------------------------------------------------------- ICRA Ratings said the rating for the INR15.00 crore bank facilities of Indus Mega Food Park Pvt. Ltd. (IMFPPL) continues to remain in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D; ISSUER NOT COOPERATING". ICRA had earlier moved the rating of IMFPPL to the 'ISSUER NOT COOPERATING' category as the entity was non-cooperative. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Unallocated 15.00 [ICRA]D ISSUER NOT COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Indus Mega Food Park Pvt. Ltd. is a special purpose vehicle, incorporated in 2011, for setting up a mega food park in Panwa village of Madhya Pradesh under the mega food park scheme of MoFPI. IMFPl is being promoted by Ananda Enterprises India Private Limited, Ananda Aqua Exports Private Limited, Ananda Bhagavathi Foods Pvt. Ltd., ARGM Agro Foods Pvt. Ltd., Devi Sea Foods Limited, Him Kailash Hydro Power Private Limited, Vasistha Holdings Limited, and HES Infra Pvt. Limited. JAGATJIT INDUSTRIES: ICRA Withdraws B- Rating on INR95.16cr Loan ---------------------------------------------------------------- ICRA Ratings has withdrawn the long-term ratings of [ICRA]B- with a negative outlook and the short-term rating of [ICRA]A4 outstanding for the INR226.56 crore bank facilities of Jagatjit Industries Limited. ICRA continues to have MB- rating outstanding with a negative outlook for the fixed deposit programme of the company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term fund 79.28 [ICRA]B-(Negative) Rating based bank Withdrawn facilities- Cash Credit Long-term fund 95.16 [ICRA]B-(Negative) Rating based bank Withdrawn facilities- Term Loan Short-term fund 0.72 [ICRA]A4 Rating Withdrawn based bank facilities Short-term non- 25.00 [ICRA]A4 Rating Withdrawn fund based bank facilities Unallocated 26.40 [ICRA]B-(Negative) Rating Withdrawn Rationale The ratings assigned for bank facilities of the company have been withdrawn at the request of the company and on the basis of no objection certificate provided by its bankers. Incorporated in August 1944 by Late Mr. L P Jaiswal, JIL is primarily involved in manufacturing and distribution of IMFL under its flagship brand, Aristocrat, in the domestic market. JIL also manufactures country liquor in Punjab. Liquor sales account for ~90% of the company's revenues. In addition to liquor, JIL also manufactures malt extract and malt milkfood, mainly for GSK Consumer Healthcare, which accounts for ~9% of JIL's revenues. Moreover, JIL has leased commercial properties in Gurgaon (Haryana) and New Delhi which provide rental income of ~Rs. 18 crore annually. JIL's manufacturing unit for IMFL, country liquor as well as malt extract and malt milk-food, is located in Kapurthala (Punjab). The unit also has an in-house distillery. Besides this, JIL also has two bottling units in Alwar (Rajasthan) and Hyderabad (Telangana). JAYPEE INFRATECH: Valia Wants JAL to Pay Fine for Delivery Delay ---------------------------------------------------------------- The Economic Times reports that Jaypee Infratech, which is facing insolvency proceedings, has inched closer towards a resolution with the Sudhir Valia group signing the outline of the resolution plan with the company's lenders, where it has suggested that the liability for delayed delivery of apartments and villas in the mega real estate project, which starts in Noida and goes up to Agra, should be borne by Jaiprakash Associates Ltd. (JAL), the original promoters of the company. ET relates that while completing the project will cost around INR6,000 crore, Valia group will pump in INR3,510 crore for which it has already tied up a INR4,000-crore facility from Yes Bank. The remaining amount is to come through payments from homebuyers, which is linked to construction, the report says. The new owners have proposed to maintain an escrow account for each project where money coming from homebuyers will be deposited. According to the report, the agreement, which has classified homebuyers as "operational creditors", a notch below banks, has raised concerns but sources said that the treatment is in line with the current provisions of the Insolvency and Bankruptcy Code. While recognising that homebuyers enjoyed protection under RERA, Valia group is of the view that the apartments in Jaypee Infratech were booked before the law kicked in and the money paid by the buyers was used for building an expressway, paying interest to banks and other purposes, resulting in a shortfall of funds to complete the project. In addition, it has argued that once the project is completed, there will be "good appreciation" in value, making homebuyers "better off", although they have the option to claim a refund now, the report states. Since Jaypee is already short of funds, for the new owner, deploying funds for completion is seen to be critical instead of paying penalty to some buyers, sources said, ET relays. As a result, Valia group has argued that Jaiprakash Associates Ltd (JAL) should bear the penalty for delayed payment. Based on the current analysis, the entire project will take 3-5 years to be completed, says ET. According to the latest plan for the much-delayed project, construction was to be completed by March 2021 and the new ownership may result in construction work stretching into 2023, the report adds. About Jaypee Infratech Jaypee Infratech Limited (JIL) is engaged in the real estate development. The Company's business segments include Yamuna Expressway Project and Healthcare. The Company's Yamuna Expressway Project is an integrated project, which inter alia includes construction of 165 kilometers long six lane access controlled expressway from Noida to Agra with provision for expansion to eight lane with service roads and associated structures on build, own, operate and transfer basis. The Company provides operation and maintenance of Yamuna Expressway for over 36 years, collection of toll and the rights for development of approximately 25 million square meters of land for residential, commercial, institutional, amusement and industrial purposes at over five land parcels along the expressway. The Healthcare business segment includes hospitals. The Company has commenced development of its Land Parcel-1 at Noida, Land Parcel-3 at Mirzapur and Land Parcel-5 at Agra. As reported in the Troubled Company Reporter-Asia Pacific on Aug. 15, 2017, Moneycontrol said the Allahabad bench of the National Company Law Tribunal on Aug. 9 accepted lender IDBI Bank's plea and classified Jaypee Infratech as an insolvent company. With this, the board of directors of the company remains suspended. According to the report, the Tribunal will now appoint an insolvency resolution professional -- an official from one of the seven accounting firms selected for this purpose. The professional will sit with Jaypee's creditors to see if a resolution of the company's debt is possible. The appointed official will get 270 days to turn around the company's finances. In case the turnaround doesn't happen, the company's assets will be liquidated. The TCR-AP reported on April 23, 2018, that CARE Ratings reaffirmed ratings on certain bank facilities of Jaypee Infratech Limited (JIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 6,550.00 CARE D Reaffirmed Non-Convertible Debentures 211.95 CARE D Reaffirmed Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities and instruments of JIL continue to factor in delays in debt servicing by the company due to its weak financial performance and stretched liquidity position. K G N MOTORS: CRISIL Assigns B Rating to INR10MM Cash Loan ---------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of K G N Motors Private Limited (KMPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 10 CRISIL B/Stable Rupee Term Loan 5 CRISIL B/Stable The rating reflects a weak financial risk profile and exposure to competitive pressures. These rating weaknesses are partially offset by an established market position and comfortable risk management policies with respect to inventory and debtors. Key Rating Drivers & Detailed Description Weaknesses * Weak financial risk profile: The total outside liabilities to tangible networth ratio was high at over 11 times as on March 31, 2017, while the interest coverage ratio was modest at 1.5 times for fiscal 2017. * Exposure to competitive pressures: The company is a dealer for commercial vehicles of Ashok Leyland Ltd (ALL) and operations are entirely dependent on the principal. In the automobile industry, principals themselves face competitive pressures in their respective segments. Hence there is a tendency to squeeze margins of dealers. Strengths: * Established market position: The company has been in the automobile dealership business since 2007. It has thus been able to develop a healthy relationship with the main principal, ALL, and establish a strong market position in Pune, Maharashtra. It has also set up good infrastructure in its area of operations with three showrooms. * Comfortable risk management policies: The company maintains low inventory and debtors of 10-15 days and 15-30 days, respectively. Outlook: Stable CRISIL believes KMPL will maintain a stable business risk profile over the medium term backed by its established market position in the automobile dealership business and longstanding relationship with ALL. The outlook may be revised to 'Positive' if the financial risk profile improves on account of better-than-expected cash accrual or infusion of capital. The outlook may be revised to 'Negative' in case of a stretch in the working capital cycle or any debt funded capital expenditure, leading to further deterioration in the financial risk profile, specially liquidity. KMPL was incorporated in 2007, promoted by Mr Mubin Riaz Inamdar. The company is an authorised dealer of ALL for sales and service of its entire range of commercial vehicles. The company currently has three 3S (sales, service, and spares) showrooms in Pune. K.K. BUILDERS: ICRA Keeps B+ Rating in Not Cooperating Category --------------------------------------------------------------- ICRA Ratings said the ratings for the INR66.00 crore bank facilities of K.K. Builders (KKB) continues to remain in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable)/[ICRA]A4; ISSUER NOT COOPERATING". ICRA had earlier moved the ratings of KKB to the 'ISSUER NOT COOPERATING' category due to non-submission of monthly 'No Default Statement' ("NDS") by the entity. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-Term- 7.35 [ICRA]B+ (Stable); ISSUER NOT Term Loans COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category Long Term- 23.00 [ICRA]B+ (Stable); ISSUER NOT Fund Based COOPERATING; Rating continues Facility to remain in the 'Issuer Not Cooperating' category Short Term- 35.00 [ICRA]A4; ISSUER NOT Non-Fund Based COOPERATING; Rating continues Facility to remain in the 'Issuer Not Cooperating' category Long Term/ 0.65 [ICRA]B+(Stable)/[ICRA]A4; Short Term- ISSUER NOT COOPERATING; Unallocated Rating continues to remain In the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. K.K. Builders, a partnership firm formed in 1994, is a Kerala based civil construction contractor. The firm is involved in the execution of road, bridge and building construction projects for Government agencies. The firm is a contractor registered with the Kerala Public Works Department (PWD). The firm has obtained ISO 9001:2008 and ISO 14001:2004 certifications and has the requisite management, manpower and equipment resources to execute road and bridge projects. K.K. LEISURES: ICRA Maintains B- Rating in Not Cooperating Cat. --------------------------------------------------------------- ICRA Ratings said the rating for the INR15.00 crore bank facilities of K.K. Leisures & Tourism International Private Limited (KKLTIPL) continues to remain in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B-; ISSUER NOT COOPERATING". ICRA had earlier moved the rating of KKLTIPL to the 'ISSUER NOT COOPERATING' category due to non-submission of monthly 'No Default Statement' ("NDS") by the entity. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-Term- 14.27 [ICRA]B- (Stable); ISSUER NOT Term Loans COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category Long-Term- 0.73 [ICRA]B- (Stable); ISSUER NOT Unallocated COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. K.K. Leisures & Tourism International Private Limited, incorporated in 2007, owns and operates hotels across Kerala. The Company has three hotels under the name - Broad Bean; of which two hotels are located in Kannur district and a resort in Munnar district. During September 2013, the promoters of the company acquired a 3-star property in Kochi - Broad Bean, Vytilla (erstwhile Nyle Plaza), which was later upgraded to a 4-star hotel and operates as a subsidiary of KKLT. The group enjoys moderate brand equity due to its operational history of over a decade of the 'Broad Bean' chain. KARTHIKAI TEXTILE: CRISIL Cuts Rating on INR13.5MM Loan to D ------------------------------------------------------------ CRISIL has downgraded its rating on the long term bank facilities of Karthikai Textile Mills (KTM) to 'CRISIL D' from 'CRISIL BB+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 3 CRISIL D (Downgraded from 'CRISIL BB+/Stable') Foreign Bill Discounting 4.5 CRISIL D (Downgraded from 'CRISIL BB+/Stable') Term Loan 13.5 CRISIL D (Downgraded from 'CRISIL BB+/Stable') The downgrade reflects delays in servicing term debt because of weak liquidity following stretch in receivables. Ratings also reflect stretch in liquidity and modest scale of operations in the intensely competitive RMG industry. However, KTM benefits from its extensive experience of the proprietor. Key Rating Drivers & Detailed Description Weaknesses * Stretch in liquidity: KTM's operations is working capital intensive owing to delay in export receivables resulting in stretched liquidity * Modest scale of operations in the intensely competitive RMG industry: With INR45 crore of revenue during fiscal 2017, scale has remained small and the company remains exposed to intense competition in the RMG industry. Further, the export revenue has been declined which constituted a significant portion of the revenues. Strength * Extensive experience of the proprietor: Presence of over three decades in the RMG segment has enabled the proprietor to establish strong relationships with customers and suppliers. Established in 1979 as a proprietorship concern of Mr P Eswara Moorthy in Tirupur, Tamil Nadu, KTM manufactures and exports hosiery garments for men, women, and children. It exports to Dubai and Poland. The production capacity at its unit is 150,000 pieces per month and processing capacity is 8000 kilograms of fabric per day. The firm also owns a windmill with 600 kilovolt ampere capacity in Udamalpet, Tamil Nadu, which meets around 70% of its power requirements. KAVERI COTEX: ICRA Maintains B Rating in Not Cooperating Category ----------------------------------------------------------------- ICRA Ratings said the rating for INR14.75-crore bank facilities of Kaveri Cotex Private Limited continues to remain under 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]B(Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based- 14.00 [ICRA]B(Stable) ISSUER NOT Cash Credit COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Fund based- 0.28 [ICRA]B(Stable) ISSUER NOT Term Loan COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Unallocated 0.47 [ICRA]B(Stable) ISSUER NOT Limits COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category ICRA had earlier moved the rating of KCPL to the 'ISSUER NOT COOPERATING' category due to non-submission of monthly 'No Default Statement' ("NDS") by the entity. The rating is based on limited information on the entity's performance since the time it was last rated in October 2016. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating does not adequately reflect the credit risk profile of the entity. The entity's credit profile may have changed since the time it was last reviewed by ICRA; however, in the absence of requisite information, ICRA is unable to take a definitive rating action. As part of its process and in accordance with its rating agreement with KCPL, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information, and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. Incorporated in 2006, Kaveri Cotex Private Limited (KCPL) is engaged in the cotton ginning and pressing business. The company is currently managed by the two directors, Mr. Hasmukhbhai Patel and Mr. Vinodbhai Ranipa. The company's manufacturing facility is located at Moti Banugar in Jamnagar, Gujarat. It currently has 38 ginning machines and one pressing machine (automatic) with an installed production capacity of 400 cotton bales per day (24-hour operations). KBN GOLD: CRISIL Migrates B Rating to Not Cooperating ----------------------------------------------------- CRISIL has been consistently following up with KBN Gold and Diamond Jewellery (KBN) for obtaining information through letters and emails dated March 28, 2018, April 10, 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 9.8 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) Proposed Long Term .2 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 KBN Gold and Diamond Jewellery, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on KBN Gold and Diamond Jewellery 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 KBN Gold and Diamond Jewellery to CRISIL B/Stable Issuer not cooperating'. Established in 2013 as a partnership between Mr Deepak Kamboj, his wife, Ms Pinki Kamboj and his daughter, Ms Malika Kamboj, KBN is engaged in retail and wholesale of gold and diamond jewellery. It operates a jewellery showroom in Varanasi, Uttar Pradesh. KISSAN AGRO: CRISIL Withdraws B Rating on INR6MM Cash Loan ---------------------------------------------------------- CRISIL has been consistently following up with Kissan Agro Industries (KAI) for obtaining information through letters and emails dated March 28, 2018, April 5, 2018 and April 12, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 6 CRISIL B/Stable (Issuer Not Cooperating; Migrated from 'CRISIL B/Stable'; Rating Withdrawn) Proposed Long Term 2.75 CRISIL B/Stable (Issuer Not Bank Loan Facility Cooperating; Migrated from 'CRISIL B/Stable'; Rating Withdrawn) Term Loan 1.00 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. KAI was set up as a partnership firm in 2012 by Mr Tarsem Chand, his son Mr Pawan Kumar, and their relative, Ms Promila. The firm is based in Mandi Adampur, Haryana. It gins cotton, extracts cotton oil, and manufactures guar gum splits. It commenced commercial operations in November 2012. KRISHNA COTTON: CRISIL Reaffirms B+ Rating on INR7MM Cash Loan -------------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long-term bank facilities of Krishna Cotton - Jamnagar (KC). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 7 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 1.64 CRISIL B+/Stable (Reaffirmed) Term Loan 1.36 CRISIL B+/Stable (Reaffirmed) The ratings continue to reflect reflect the firm's modest scale of operations in a highly-fragmented cotton ginning and pressing industry, and expected below-average financial risk profile because of high gearing and weak debt protection metrics. These rating weaknesses are mitigated by the promoters' extensive industry experience and the benefits from the proximity of the ginning unit to the cotton-growing belt in Gujarat. Key Rating Drivers & Detailed Description Weakness * Intense competition in the fragmented industry: The entry barriers in cotton ginning and pressing industry are low on account of low capital, technology intensity, and low differentiation in end product. CRISIL believes that KC will face direct competition from many unorganised players and thus it will have limited pricing power and limited scale of operations, over the medium term. * Below-average financial risk profile: Financial risk profile remains constrained by modest networth and high gearing (INR2.9 Cr. and 2.3 times, respectively, as on March 31, 2017). Debt protection metrics are average, with interest coverage of 2 times and net cash accrual to total debt of 0.05 time in fiscal 2017. The financial risk profile may continue to be below average over the medium term. Strengths * Extensive industry experience of promoters: The promoters of KC have past experience in the cotton industry. The firm benefits from the extensive experience of its promoters, their understanding of the dynamics of the local market, and established relationships with customers and suppliers. CRISIL believes that KC will continue to benefit from the strong industry experience of its partners and achieve sustained revenue growth, over the medium term. * Proximity to cotton-growing belts: KC's production facility is based in the cotton-growing belt in Gujarat. This will enable KC to procure raw cotton directly from local farmers, thus making its operations more cost-effective. Outlook: Stable CRISIL believes KC will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if higher-than-expected revenue or profitability leads to improvement in debt protection metrics. Conversely, the outlook may be revised to 'Negative' if the financial risk profile weakens due to large, debt-funded capital expenditure or stretched working capital requirement. Set up in 2011, KC is a partnership firm in Jamnagar (Gujarat) that gins and presses cotton. The firm is owned and managed by the Kasundra family. LANDSCAPE REALITY: CRISIL Moves B+ Rating From Not Cooperating -------------------------------------------------------------- Due to inadequate information, CRISIL, in line with Securities and Exchange Board of India guidelines, had migrated the rating on the long-term bank facility of Landscape Reality (LR) to 'CRISIL B+/Stable Issuer Not Cooperating'. However, management has started sharing information necessary for carrying a comprehensive rating review. Consequently, CRISIL is now migrating the rating from 'CRISIL B+/Stable Issuer Not Cooperating' to 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 67 CRISIL B+/Stable (Migrated from 'CRISIL B+/Stable' Issuer Not Cooperating) The rating continues to reflect LR's exposure to risks related to timely inflow of customer advances, saleability and completion of project, and cyclicality inherent in the real estate industry. These weaknesses are partially offset by promoters' experience, locational advantage of ongoing project, and strong financial flexibility of promoters. Key Rating Drivers & Detailed Description Weaknesses: * Susceptibility to risks related to completion and saleability of ongoing project: The company is currently executing phases II and III of its residential project, Anant Shrishti, in Kanhe near Pune. Though phase 1 is about 90% complete, construction of phases II and III is yet to start. Project progress and sales velocity will remain key rating sensitivity factors over the medium term. * Exposure to inherent cyclicality: The real estate sector is affected by volatile prices, opaque transactions, and a highly fragmented market. This is compounded by aggressive timelines for completion and shortage of manpower (project engineers and skilled labour). Strengths: * Extensive experience and funding support of promoters: The firm's promoters have longstanding presence in the gold jewellery and real estate segments and have extended financial support in the past. Promoters are likely to continue to extend need-based funding aid over the medium term. * Advantageous location: The project is well-connected with various areas of Pune through national highway and is about 20-25 kilometres from central areas like Pune City Railway station, Airport etc. Outlook: Stable CRISIL believes LR will continue to benefit over the medium term from the extensive experience of its promoters. The outlook may be revised to 'Positive' if sizeable customer advances and timely implementation of ongoing project lead to healthy cash inflow. The outlook may be revised to 'Negative' if time and cost overruns in ongoing project or delays in receipt of customer advances lead to low cash inflow and pressure on liquidity. Set up in 2010 in Pune as a limited liability partnership firm, LR is currently executing a residential project in Pune. The firm is promoted by Dajikaka Gadgil Developers Pvt Ltd, which in turn belongs to Gadgil family of Pune (promoters of PN Gadgil Jewellers Pvt Ltd). LASCO LIFESTYLE: ICRA Migrates D Rating to Not Cooperating Cat. --------------------------------------------------------------- ICRA Ratings has moved the long-term rating for the bank facilities of Lasco Lifestyle Limited to the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]D ISSUER NOT COOPERATING." Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based-Cash 30.00 [ICRA]D; Rating moved to Credit the 'Issuer Not Cooperating' category The rating takes into account continued delays in debt servicing by the entity. As part of its process and in accordance with its rating agreement with LLL, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information, and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. The rating is based on limited information on the entity's performance since the time it was last rated in October 2016. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating does not adequately reflect the credit risk profile of the entity. The entity's credit profile may have changed since the time it was last reviewed by ICRA; however, in the absence of requisite information, ICRA is unable to take a definitive rating action. Incorporated in 2004, Lasco Lifestyle Ltd. is engaged in the business of trading silk and art silk fabric, and processed greige fabric. In the case of the latter, the company procures the greige fabric, and since it does not have any in-house processing capacity, it outsources the processing activities such as dyeing, embroidery, etc. to other job-work units in Surat, and then markets the processed fabric. The direct trading of silk and art silk fabric (or ready-made fabric) accounts for ~75% of the total sales and the remaining from processed greige fabrics. The fabrics traded by the company find application in the manufacture of sarees, dress materials and shirting. LLL has a registered office and warehouse located at Surat, Gujarat. MAGPPIE EXPORTS: ICRA Moves B Rating to Not Cooperating Category ---------------------------------------------------------------- ICRA Ratings has reassigned its long-term rating to [ICRA]B from [ICRA]BB(SO) on the INR19.50-crore bank facilities of Magppie Exports Private Limited. The outlook on the long-term rating is 'Stable'. ICRA has also moved the rating to the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]B(Stable) ISSUER NOT COOPERATING." Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 19.50 [ICRA]B (Stable) ISSUER NOT COOPERATING; Reassigned from [ICRA]BB(SO) (Stable) and moved to 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Rationale The rating reassignment follows the delays in debt servicing by Dwarkadhis projects Private Limited (DPPL) to the lender(s). The rating, now, no longer draw comfort from the corporate guarantee extended by DPPL for the rated bank facilities of MEPL. Further, the ratings are constrained due to the opportunity driven operations of MEPL in steel trading business resulting in the inherently low and volatile margins in the trading business. The profitability of the company will remain exposed to fluctuations in market prices of commodities traded, given that most trading transactions are not on a back to back basis. The rating continues to draw comfort from established track record of the promoters in the stainless-steel industry with established relationship with suppliers. Outlook: Stable ICRA believes MEPL will continue to benefit from the extensive experience of its promoters and the established presence of the company in trading business of stainless-steel coils/sheets. Key rating drivers Credit strengths Long track record in stainless-steel business: Established track record of the company and management in its core trading business of stainless-steel coils/sheets. Credit challenges Opportunity driven business led to volatile margins: The ratings are constrained due to the opportunity driven operations of MEPL in steel trading business resulting in the inherently low and volatile margins in the trading business. Exposure of profitability to fluctuations in market prices of raw material: The profitability of the company will remain exposed to fluctuations in market prices of commodities traded, given that most trading transactions are not on a back to back basis. MEPL, incorporated in 1994, is engaged in the business of trading of stainless steel coils/sheets. MEPL purchases stainless steel coils / sheets and sells the same in the domestic market. The company was initially catering to the requirement of stainless steel coils for the promoter group company Magppie International Limited (MIL), however over the years the company has developed a diversified client base. MALWA AUTOMOBILES: CRISIL Reaffirms B+ Rating on INR13.07MM Loan ---------------------------------------------------------------- CRISIL has reaffirmed its rating on the long term bank facilities of Malwa Automobiles Private Limited (MAPL) at 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 13.07 CRISIL B+/Stable (Reaffirmed) CRISIL rating continues to reflect the company's weak financial risk profile and constrained liquidity. These weaknesses are partially offset by the promoters' extensive experience and diversified revenue base. Key Rating Drivers & Detailed Description Weaknesses * Weak financial risk profile: Total outside liabilities to adjusted networth ratio (TOLANW) is estimated to be at 5.1 times as on March 31, 2018, and should improve in the absence of any debt-funded capital expenditure. Networth is estimated to be at INR5.75 crore as on March 31, 2018. * High bank limit utilisation: Utilisation of bank lines remains high at 95-98% due to working capital intensive operations. However, in the absence of any major debt obligation, cash accrual and rental income should provide cushion to liquidity over the medium term. Strengths: * Promoters' extensive experience: Promoters' experience of around two decades has helped build strong relations with suppliers and customers, and should continue to support business risk profile. * Diversified revenue base: Over half the revenue is derived from the petrol pump business. The workshop contributes 3-5% of total revenue, and the showroom business accounts for the rest. Presence of a diversified revenue base reduces dependence on one business line. Outlook: Stable CRISIL believes MAPL will continue to benefit over the medium term from its promoters' extensive experience. The outlook may be revised to 'Positive' if higher-than-expected growth in revenue, and efficient working capital management strengthen financial risk profile. The outlook may be revised to 'Negative' if lower-than-expected cash accrual, stretch in working capital cycle, or a large debt-funded capital expenditure pressurises liquidity. Established in 1997, Delhi-based MAPL has a dealership for TATA's passenger vehicles and workshop, and has a petrol pump business. Operations are carried out under own name for the vehicle and workshop businesses. The petrol pump business, however, is operated under the Hindustan Petroleum Corporation Ltd (HPCL) brand. Day-to-day operations are managed by Mr Chander Mohan Sharma, Mr Bal Krishan Sharma, and Ms Kamlesh Sharma. MANAV AGRI: CRISIL Withdraws B+ Rating on INR17.5MM Cash Loan ------------------------------------------------------------- CRISIL has been consistently following up with Manav Agri Foods Private Limited (MAFPL) for obtaining information through letters and emails dated February 20, 2018, and March 7, 2018, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 17.5 CRISIL B+/Stable (Issuer Not Cooperating; Rating Withdrawn) Term Loan 5.5 CRISIL B+/Stable (Issuer Not Cooperating; 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 they are arrived at without any management interaction and are 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 MAFPL. This restricts CRISIL's ability to take a forward MAFPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB rating category or lower. Based on the last available information, the rating on bank facilities of MAFPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'. CRISIL has withdrawn its ratings on the bank facilities of MAFPL on the request of the company and receipt of a no objection / due certificate from its bank. The rating action is in line with CRISIL's policy on withdrawal of its ratings on bank loans. MAFPL was established in 2007, promoted by Mr Ashok Gheek to process rice. The company started commercial production in April 2012. It has a paddy processing plant at Holambi, Delhi. MANDOVI MINERALS: CRISIL Reaffirms B Rating on INR12.31MM Loan -------------------------------------------------------------- CRISIL has reaffirmed its rating on the long-term bank facilities of Mandovi Minerals Private Limited at 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 2 CRISIL B/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 2.69 CRISIL B/Stable (Reaffirmed) Term Loan 12.31 CRISIL B/Stable (Reaffirmed) The ratings continue to reflect the extensive experience of promoters. These strengths are partially offset by exposure to risks related to intense competition in the highly regulated and fragmented industrial sands market. 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 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 * 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 and Maharashtra, 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 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 realisation 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. Outlook: Stable CRISIL believes MMPL group's business risk profile will continue to be supported by the extensive experience of its promoters. The outlook may be revised to 'Positive' if working capital management is efficient or if increase in scale of operations improves business risk profile. The outlook may be revised to 'Negative' if stretch in working capital cycle or large, debt-funded capital expenditure weakens financial risk profile or if adverse regulatory changes affect business volumes. 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. P.S. INDUSTRIES: CRISIL Withdraws B- Rating on INR7MM Cash Loan --------------------------------------------------------------- CRISIL has been consistently following up with P.S. Industries - Baddi (PSI) for obtaining information through letters and emails dated March 28, 2018, April 5, 2018 and April 12, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 4 CRISIL B-/Stable (Issuer Not Cooperating; Migrated from 'CRISIL B-/Stable'; Rating Withdrawn) Long Term Loan 1.3 CRISIL B-/Stable (Issuer Not Cooperating; Migrated from 'CRISIL B-/Stable'; Rating Withdrawn) Proposed Long Term .2 CRISIL B-/Stable (Issuer Not Bank Loan Facility 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 PSI. 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 PSI 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 PSI to 'CRISIL B-/Stable Issuer Not Cooperating' from 'CRISIL B-/Stable'. CRISIL has withdrawn its rating on the bank facilities of PSI 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. PSI based in Baddi, Himachal Pradesh, was established as a partnership firm between Ms. Prem Trehan and Mr. Sushil Trehan in 2014. The firm manufactures polypropylene and high-density polyethylene woven bags and fabrics. PAREKH AGENCIES: CRISIL Migrates B+ Rating to Not Cooperating ------------------------------------------------------------- CRISIL has been consistently following up with Parekh Agencies (PA) for obtaining information through letters and emails dated February 27, 2018, April 10, 2018 and April 16, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Discounting 2.7 CRISIL A4 (Issuer Not under Letter of Cooperating; Rating Migrated) Credit Cash Credit 2.0 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Letter of Credit 4.0 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Term Loan 1.8 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Parekh Agencies, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Parekh Agencies 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 ratings on bank facilities of Parekh Agencies to CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Established in 1990 and based in Indore, Madhya Pradesh, PA is a family-managed partnership firm of Mr Vijay Parekh, Mr Aditya Parekh, and Mrs Rooplata Parekh. The firm trades in starch, pharmaceutical bulk drugs, and imported plastic granules used for manufacturing bottles for intravenous glucose. The partners also own Dhanlaxmi Starch Products, which manufactures modified starch used as an adhesive in various industries. Its manufacturing facility is near Indore. POWER CABLE: ICRA Withdraws B Rating on INR7.50cr LT Loan --------------------------------------------------------- ICRA Ratings has withdrawn the long-term rating of [ICRA]B (Stable) for the INR7.50-crore long-term fund-based bank facilities of Power Cable Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Fund- based/CC 7.50 [ICRA]B (Stable); withdrawn Rationale The ratings assigned to PCI have been withdrawn at the request of the company, based on the no-objection certificate provided by its banker. Power Cable Industries (PCI), established in 2005 by Mr. Amit Agarwal and Mr. Ajay Agarwal as a trader for aluminium products, mainly deals in aluminium wire, rods and ingots. The trading unit is in the industrial belt of Bawana, Delhi. PRAKASAM ENTERPRISES: CRISIL Reaffirms B+ Rating on INR10MM Loan ---------------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long-term bank loan facility of Prakasam Enterprises (PE). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 10 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect the firm's working capital-intensive operations, and exposure to intense competition in the tobacco business. The rating also factors in below-average financial risk profile because of high gearing and modest interest coverage ratio and net worth. These weaknesses are partially offset by the partners' extensive experience in the tobacco processing business and established relationships with key customers and suppliers. Analytical Approach Unsecured loans of INR2.37 crore have been treated as debt (treated as neither debt nor equity earlier) considering regular withdrawals, and as they are not subordinated to bank and have higher interest than the market rate. Key Rating Drivers & Detailed Description Weaknesses * Working capital-intensive operations: The firm's large working capital requirement is indicated by gross current assets of 191 days as on March 31, 2017, on account of sizeable inventory. * Below-average financial risk profile: Modest networth of INR3.71 crore and debt of INR14.05 crore resulted in high gearing of 3.78 times as on March 31, 2017. Total outside liabilities to tangible networth ratio was over 4.4 times as on March 31, 2017, due to large working capital debt. Interest coverage ratio was 1.21 times and net cash accrual to adjusted debt ratio was 0.02 time for fiscal 2017. Strengths * Partners' extensive experience in the tobacco processing business and established relationships with key customers and suppliers: The firm is promoted by Ms Ravuri Suseela and Mr Ravuri Ayyavaraiah, who have experience of 30 years in various agriculture-based industries such as cotton, rice, and tobacco. Over the years they have developed strong relationships with major suppliers and customers. Outlook: Stable CRISIL believes PE will continue to benefit from its partners' extensive industry experience. The outlook may be revised to 'Positive' if a sustainable increase in revenue and profitability results in a better financial risk profile. The outlook may be revised to 'Negative' if revenue and profitability decline, or if the firm undertakes large, debt-funded capital expenditure, leading to deterioration in the financial risk profile. Set up as a partnership concern by Ms Ravuri Suseela and his family members in 2005, PE processes and sells flue-cured Virginia tobacco, which is used mainly in manufacturing cigarettes, and pipe and chewing tobacco. The firm is based at Tanguturu in Prakasam (Andhra Pradesh). R.A. KNITWEAR: CRISIL Migrates B+ Rating to Not Cooperating ----------------------------------------------------------- CRISIL has been consistently following up with R.A. Knitwear Private Limited (RAW) for obtaining information through letters and emails dated March 26, 2018, April 12, 2018 and April 18, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 7.5 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Letter of Credit .4 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of R.A. Knitwear Private Limited, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on R.A. Knitwear Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the ratings on bank facilities of R.A. Knitwear Private Limited to CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Set up in November 2011 by Mr A Selvaraj, RAW is engaged in the manufacture of readymade garments at its manufacturing facility at Tirupur (Tamil Nadu). RAGHURAM INDUSTRIES: CRISIL Moves B+ Rating to Not Cooperating -------------------------------------------------------------- Due to inadequate information and in line with Securities and Exchange Board of India guidelines, CRISIL had migrated its rating on the long-term bank facilities of Raghuram Industries to 'CRISIL B+/Stable (Issuer not cooperating)'. However, the firm's management has started sharing the information necessary for a comprehensive review of the rating. Consequently, CRISIL is migrating the rating from 'CRISIL B+/Stable (issuer not cooperating)' to 'CRISIL B+/Stable. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5 CRISIL B+/Stable (Migrated from 'CRISIL B+/Stable Issuer Not Cooperating') Proposed Long Term 0.6 CRISIL B+/Stable (Migrated from Bank Loan Facility 'CRISIL B+/Stable Issuer Not Cooperating') The rating continues to reflect the firm's exposure to intense competition in the rice milling industry resulting in low profitability, susceptibility of profitability to volatility in paddy prices, vulnerability of operations to regulatory changes, and below-average financial risk profile. These weaknesses are partially offset by the extensive industry experience of the firm's promoters in the rice milling industry. Key Rating Drivers & Detailed Description Weaknesses: * Exposure to intense competition in the rice milling industry resulting in low profitability: Raghuram's business risk profile is constrained by modest scale of operations in the fragmented rice milling industry, indicated by the firm's milling capacity of 8 tonne per hour (tph). * Susceptibility of operating profitability to volatility in raw material prices and to changes in government regulations: Cost of paddy accounts for 85-90% of the cost of producing rice. Hence, operating profitability is highly susceptible to volatility in paddy prices. Moreover, change in policy pertaining to rice procurement and in other regulations may affect profitability. * Below-average financial risk profile: Networth was modest at INR3.16 crore, leading to gearing of 1.01 times, as on March 31, 2017. Debt protection metrics were average, indicated by net cash accrual to total debt ratio of 0.13 time and interest coverage of 2.33 times for fiscal 2017. Strength: * Extensive industry experience of the promoters: The promoters' experience of over 20 years in the rice industry has enabled the firm to establish healthy linkages with farmers in the region, aiding raw material (paddy) procurement. Furthermore, established healthy relationships with Food Corporation of India, traders, and wholesalers, ensure steady sales. Outlook: Stable CRISIL believes Raghuram will continue to benefit from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if there is a substantial and sustained increase in profitability, or in networth because of sizeable equity infusion. The outlook may be revised to 'Negative' if profitability declines steeply, or if capital structure weakens significantly because of large, debt-funded capital expenditure or a stretch in working capital cycle. Set up in 2009, Raghuram mills and processes paddy into rice, rice bran, broken rice, and husk, at its mill in Nalgonda (Telangana). The firm is managed by Mr Sri Emmadi Anjaiah, Mr Sri Emmadi Somanarsaih, and Mr Sri Emmadi Somaiah. RAJHANS IMPEX: CRISIL Lowers Rating on INR17MM Loan to B -------------------------------------------------------- CRISIL has downgraded its ratings on bank loan facilities of Rajhans Impex Private Limited (RIPL) to 'CRISIL B/Stable/CRISIL A4' from 'CRISIL BB-/Stable/CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1 CRISIL A4 (Downgraded from 'CRISIL A4+) Foreign Exchange Forward 1.5 CRISIL A4 (Downgraded from 'CRISIL A4+) Line of Credit 17.0 CRISIL B/Stable (Downgraded from 'CRISIL BB-/Stable') Proposed Long Term 2.5 CRISIL B/Stable (Downgraded Bank Loan Facility from CRISIL BB-/Stable') The downgrade reflects weakening of the business and financial risk profiles. Profitability is expected to remain under pressure, due to volatile raw material prices and increasing competition. The company reported losses during fiscal 2017, and is estimated to book net margin of less than 1.0% in fiscal 2018. Gearing rose to 3.65 times as on March 31, 2017, from 2.69 times time a year before, and may continue to be high in the medium term due to modest profitability. Cash accrual is likely to be in the range of INR0.5-0.75 crore in the medium term, much lower than what is anticipated and reported in the past. The rating continues to reflect the modest scale of operations, large working capital requirement, and susceptibility to volatile raw material prices and foreign exchange (forex) rates. These rating weaknesses are offset by extensive experience of the promoter in the brass rods and billets industry. Analytical Approach Unsecured loans extended by RIPL's promoters, and preference shares as neither debt nor equity as they are interest-free, and will remain in the business. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations, and susceptibility to fluctuations in raw material prices and forex rates: RIPL operates on a modest scale amidst intense competition, as reflected in estimated sales of INR70 crore in fiscal 2018. Imports of copper zinc and brass scrap, the primary raw materials, expose the company to volatility in raw material prices and forex rates. This led to losses during fiscal 2017, and kept profitability modest in fiscal 2018. Though the company hedges its forex exposure, operating margin will remain vulnerable to volatility in raw material prices and forex rates. * Moderate working capital requirement: Operations are working capital intensive, as reflected in estimated gross current assets of 125 days as on March 31, 2018. The company has significant receivables and inventory of 60 days each, and does not get credit from suppliers. * Modest financial risk profile: Gearing rose to 3.65 times as on March 31, 2017, from 2.69 times a year before, due to net losses, and is likely to remain weak at over 2.5 times in the medium term. Debt protection metrics may also remain subdued, due to low profitability. Strength * Extensive experience of the promoter in the brass rods and billets industry: The two decade-long experience of the key promoter, Mr Jinesh Shah, in the extrusion brass rods industry, and his healthy relationships with customers and suppliers, will continue to support the business risk profile. Outlook: Stable CRISIL believes RIPL will continue to benefit from the extensive experience of its promoter. The outlook may be revised to 'Positive' if larger-than-expected accrual and stable working capital cycle lead to an improvement in the financial risk profile, particularly liquidity. The outlook may be revised to 'Negative' if financial risk profile, particularly liquidity, weakens because of lower-than-expected accrual, stretch in working capital cycle, or large debt-funded capital expenditure. RIPL was established by Mr Jinesh Shah in 2004. The Jamnagar (Gujarat)-based company manufactures brass solid rods, hollow rods, wires and coils, customised profiles, flats and centrifugal castings. These products are used in industries such as defence, automotive, ship building, transformers and switchgear, sanitary fittings, and building hardware. RAMCO EXTRUSION: ICRA Keeps B+ Rating in Not Cooperating Category ----------------------------------------------------------------- ICRA Ratings said the rating for INR13.00 crore bank facilities of Ramco Extrusion Private Limited (REPL) continues to remain under 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]B+(Stable) ISSUER NOT COOPERATING". ICRA had earlier moved the rating of REPL to the 'ISSUER NOT COOPERATING' category due to non-submission of monthly 'No Default Statement' ("NDS") by the entity. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based- 11.00 [ICRA]B+ (Stable) ISSUER NOT Overdraft COOPERATING; Rating continues Facility to remain in 'Issuer Not Cooperating' category Term Loan 2.00 [ICRA]B+ (Stable) ISSUER NOT COOPERATING; Rating continues to remain in 'Issuer Not Cooperating' category The rating is based on limited information on the entity's performance since the time it was last rated in October 2016. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating does not adequately reflect the credit risk profile of the entity. The entity's credit profile may have changed since the time it was last reviewed by ICRA; however, in the absence of requisite information, ICRA is unable to take a definitive rating action. As part of its process and in accordance with its rating agreement with REPL, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information, and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. REPL was established as a limited company in 2004 by Mr. Vinod M. Jain and Mr. Suresh M. Jain and is engaged in the manufacture of aluminium extrusion products like slidings, ladder sections, heat sinks, round/square/rectangle tubes, miscellaneous sections which find use in construction, automotive, medical and transportation. The company has its registered office at Mumbra, Panvel and manufacturing facility at Murbad, Kalyan. RATTAN RICE: CRISIL Withdraws B+ Rating on INR5.5MM Loan -------------------------------------------------------- CRISIL has been consistently following up with Rattan Rice Mills (RRM) for obtaining information through letters and emails dated December 6, 2017, and March 8, 2018, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5.5 CRISIL B+/Stable (Issuer Not Cooperating; Rating Withdrawn) Proposed Long Term Bank Loan Facility 1.45 CRISIL B+/Stable (Issuer Not Cooperating; Rating Withdrawn) Term Loan 2.05 CRISIL B+/Stable (Issuer Not Cooperating; 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 they are arrived at without any management interaction and are 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 RRM. This restricts CRISIL's ability to take a forward RRM is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB rating category or lower. Based on the last available information, the rating on bank facilities of RRM continues to be 'CRISIL B+/Stable Issuer Not Cooperating'. CRISIL has withdrawn its ratings on the bank facilities of RRM on the request of the company and receipt of a no objection / due certificate from its bank. The rating action is in line with CRISIL's policy on withdrawal of its ratings on bank loans. Incorporated in 1988 as a partnership firm, RRM is engaged in milling, sorting, grading and selling of basmati and nonbasmati rice in domestic and international market. The firm has its rice processing unit at Sirsa (Haryana). The operations are managed by Mr. Rattan Pal and family. RISE ON: ICRA Maintain C Rating in Not Cooperating Category ----------------------------------------------------------- ICRA Ratings said the rating for INR27.60-crore bank facilities of Rise On Group (RG) continues to remain under 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]C ISSUER NOT COOPERATING". ICRA had earlier moved the rating of RG to the 'ISSUER NOT COOPERATING' category due to non-submission of monthly 'No Default Statement' ("NDS") by the entity. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based- 27.60 [ICRA]C ISSUER NOT COOPERATING; Term Loan Rating continues to remain under 'Issuer Not Cooperating' category The rating is based on limited information on the entity's performance since the time it was last rated in October 2016. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating does not adequately reflect the credit risk profile of the entity. The entity's credit profile may have changed since the time it was last reviewed by ICRA; however, in the absence of requisite information, ICRA is unable to take a definitive rating action. As part of its process and in accordance with its rating agreement with RG, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information, and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. Established in February 2013, Rise on Group is a Surat-based real estate firm. The firm has been established for the construction of a residential project, 'Melaanio Residency', and a commercial complex, 'Leonard Square'. RG is promoted by the Maniya and Kheni families, who have been engaged in real estate development for more than three decades through the Rise On Group and M. K. Group, respectively. The construction work of both the projects commenced from April 2014. Project completion was scheduled for December 2015 for Leonard Square, and August 2016 for Melaanio Residency. The firm is a part of the Rise On Group, which has been engaged in the real estate business for over three decades in Surat and Ahmadabad. The firm also has two group concerns, Vama Infra {rated [ICRA]BB(Stable) 'Issuer Not Cooperating' in November 2017} and Hindva Builders {rated [ICRA]BB-(Stable) in December 2016}. SAGAR ENTERPRISES: CRISIL Reaffirms B+ Rating on INR9MM Loan ------------------------------------------------------------ CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long-term bank facility of Sagar Enterprises (SE). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 9 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect the below-average financial risk profile, modest scale of operations and large working capital requirement. These weaknesses are partially offset by extensive experience of the proprietor in the readymade garments (RMG) business and his established relationships with key customers. Key Rating Drivers & Detailed Description Weaknesses * Below-average financial risk profile: Networth is estimated to improve marginally to INR13.7 crore as on March 31, 2018, from INR13.4 crore a year before. Consistent capital withdrawals, for the past four fiscals, have kept networth low at INR13-14 crore. The total outside liabilities to tangible networth ratio (TOL/ANW) was moderate at 1.71 times as on March 31, 2017, and may improve to 1.4-1.6 times over the medium term. Debt protection metrics will remain average, as reflected in interest coverage ratio of 1.6 times for fiscal 2017, and may be in the range of 1.5-1.8 times in the medium term. * Modest scale of operations: Intense competition in the readymade garments industry has kept the scale of operations modest, with revenue of around INR33 crore estimated for fiscal 2018, and constrains the bargaining power with customers and suppliers. * Large working capital requirement: Operations are working capital-intensive in nature, as reflected in estimated gross current assets of 215 days as on March 31, 2018, mainly led by sizeable inventory of 140 days, projected to remain in the range of 130-135 days over the medium term. Strength * Extensive experience of promoters and established relationships with principal customer: SE, set up in 1995, is owned and managed by Mr Sunil Khanna, who has nearly 15 years of experience in the RMG business. The firm also has a diverse portfolio of over 90 products, including linen, hosiery, menswear and women's wear. Sales are entirely towards the canteen store department (CSD; a solely-owned Government of India Enterprise under the Ministry of Defence) and the central police canteen stores, backed by a longstanding association of over two decades. The firm has also started selling through online channels under the Sagar Brand; however, revenue contribution remains negligible in fiscal 2018. Outlook: Stable CRISIL believes SE will continue to benefit from its established relationship with CSD. The outlook may be revised to 'Positive' if sustained growth in revenue and profitability, backed by diversification in clientele, leads to higher cash accrual and stronger debt protection metrics. The outlook may be revised to 'Negative' if a stretch in working capital cycle, lower profitability, or any further cash withdrawals, weaken the capital structure and debt protection metrics. SE was setup as a proprietorship concern of Mr Sunil Khanna. The firm sells RMG and home furnishings, and has a diversified range of products, including shirts, T-shirts, hosiery, track suits, blankets, bedsheets, and towels). Manufacturing is entirely outsourced to local players. SAIWIN CERAMIC: ICRA Keeps B Rating in Not Cooperating Category --------------------------------------------------------------- ICRA Ratings said the ratings of INR12.27 crore bank facilities of Saiwin Ceramic Private Limited (SCPL) continue to remain under 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]B(Stable)/A4; ISSUER NOT COOPERATING." Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term-Loan 7.27 [ICRA]B(Stable); ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' Category Cash Credit 4.00 [ICRA]B(Stable); ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' Category Bank Guarantee 1.00 [ICRA]A4; ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis limited information on the issuers' performance. Accordingly the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Incorporated in February 2016, SCPL is engaged in manufacturing of digital ceramic wall tiles in sizes 300x600mm and 300x900mm. The manufacturing facility is located at Morbi with an installed capacity to manufacture 30,000 Metric Tonnes (10,000 boxes per day) of wall tiles per annum. The commercial operations have been commenced from September 21, 2016. SANTOSH ENTERPRISES: ICRA Keeps B Rating in Not Cooperating ----------------------------------------------------------- ICRA Ratings said the rating for the INR6.95-crore bank facilities of Santosh Enterprises continues to remain in the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]B(Stable)/[ICRA]A4 ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based 2.75 [ICRA]B (Stable) ISSUER NOT Cash credit COOPERATING; Rating continues Limits to remain in the 'Issuer Not Cooperating' category Fund based 4.00 [ICRA]A4 ISSUER NOT COOPERATING; Bills Rating continues to remain in Discounting the 'Issuer Not Cooperating' Limits category Unallocated 0.20 [ICRA]B (Stable) ISSUER NOT limits COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests from ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuer's performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Established in 1990, Santosh Enterprises (SE) is a proprietorship concern and is engaged in fabrication of steel structural installation components like angle, channel, plates, railings and gallery mainly used in wind mills supplied by Wind World India Limited (WWIL) erstwhile Enercon India Limited. The firm operates through its fabrication and galvanization units at Ambad and Gonde, Nashik. SARATHY MOTORS: CRISIL Withdraws B+ Rating on INR9MM Cash Loan -------------------------------------------------------------- CRISIL has been consistently following up with Sarathy Motors (Kollam) (SMK) for obtaining information through letters and emails dated April 5, 2018 and April 12, 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) 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 SMK. 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 SMK 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 SMK to 'CRISIL B+/Stable Issuer Not Cooperating' from 'CRISIL B+/Stable'. CRISIL has withdrawn its rating on the bank facility of SMK 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. Established in 1987, SMK is a partnership firm and is the only authorised dealer of BAL's two-wheelers in Kollam, Kerala. About 60% of its revenue comes from two-wheeler sales, and the rest from sale of spare parts and vehicle servicing. Its daily operations are managed by Mr Rajesh Somanathan. SHALAK EATABLE: CRISIL Moves B- Rating to Not Cooperating Cat. -------------------------------------------------------------- CRISIL has been consistently following up with Shalak Eatable Products Pvt. Ltd. (SEPL) for obtaining information through letters and emails dated January 29, 2018, March 5, 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 ---------- --------- ------- Standby Overdraft 1.50 CRISIL A4 (Issuer Not Facility Cooperating; Rating Migrated) Term Loan 14.66 CRISIL B-/Stable (Issuer Not Cooperating; Rating Migrated) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Shalak Eatable Products Pvt. Ltd., which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Shalak Eatable Products Pvt. Ltd. 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 ratings on bank facilities of Shalak Eatable Products Pvt. Ltd. to CRISIL B-/Stable/CRISIL A4 Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. SEPL, incorporated in 2008, is setting up a manufacturing unit for production of 2D and 3D pellet snacks in Mohammadpur, Lucknow. The company is being managed by Mr Rajesh Bansal and Mr Yogesh Bansal, and is expected to start commercial operations from June 2017. SHARANAMMA DIGGAVI: ICRA Maintains D Rating in Not Cooperating -------------------------------------------------------------- ICRA Ratings said the rating for the INR8.00 crore bank facilities of Sharanamma Diggavi Memorial Educational Trust (SDMET) continues to remain in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D; ISSUER NOT COOPERATING". ICRA had earlier moved the rating of SDMET to the 'ISSUER NOT COOPERATING' category due to non cooperation by the entity in providing required information for carrying out the surveillance of the rating. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 6.29 [ICRA]D; ISSUER NOT COOPERATING; Based Term Loan Rating continues to remain in the 'Issuer Not Cooperating' category Long Term- 1.71 [ICRA]D; ISSUER NOT COOPERATING; Unallocated Rating continues to remain in the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Sharanamma Diggavi Memorial Education Trust (SDME) was formed and registered as a Trust in the year October, 2006. SDME was established by the educationist Mr. Basawaraj Diggavi, the Chairman of SDME. SDME operates three educational institutions comprising of one primary school, one high school and one pre-university college. SHIVA STRUCTURES: ICRA Keeps B- Rating in Not Cooperating --------------------------------------------------------- ICRA Ratings said the rating for the INR22.50-crore bank facilities of Shiva Structures Pvt Ltd continues to remain in the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]B-(Stable)/[ICRA]A4 ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based- 6.00 [ICRA]B- (Stable) ISSUER NOT Term Loan COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category Fund Based- 7.50 [ICRA]B- (Stable) ISSUER NOT Cash Credit COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category Non Fund Based- 9.00 [ICRA]A4 ISSUER NOT Bank Guarantee COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests from ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuer's performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Shiva Structures Pvt Ltd (SSPL) was initially set up as a proprietorship firm under the name Shiva Construction by Mr. Madhukar Deshmukh in the year 1996 and was later converted into a private limited company in October 2008. The company is involved in executing contracts of irrigation work and road construction for state government and civil bodies. The company is registered as a Class 1A contractor with the state's Public Work Department (PWD) and an approved contractor for various government and civil bodies. SHIVHARE ROAD: CRISIL Migrates B+ Rating to Not Cooperating ----------------------------------------------------------- CRISIL has been consistently following up with Shivhare Road lines (SRL) for obtaining information through letters and emails dated March 22, 2018, April 12, 2018 and April 18, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 3.5 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Cash Credit 1.0 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Letter of Credit 1.5 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Term Loan 8.8 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Shivhare Road lines, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Shivhare Road lines 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 ratings on bank facilities of Shivhare Road lines to CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. SRL was incorporated in 1983 by Mr Suresh Chand Shivhare and is engaged in material handling and transportation. Based in Gwalior (Madhya Pradesh), the firm primarily works for oil refineries in government and private sector. SHUKLA AGRITECH: CRISIL Cuts Rating on INR5.5MM Term Loan to D -------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank loan facilities of Shukla Agritech Flour Industries Private Limited (SAFIPL) to 'CRISIL D' from 'CRISIL B/Stable'. The downgrade reflects continuous delay in interest payment on the term loan. This was due to weakening of liquidity, driven by delay in starting of operations by 8- 9 months. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5.25 CRISIL D (Downgraded from 'CRISIL B/Stable') Term Loan 5.55 CRISIL D (Downgraded from 'CRISIL B/Stable') The rating also reflects exposure to high offtake risk and to intense competition in the flour industry. These rating weaknesses are partially offset by the extensive entrepreneurial experience of the promoters. Key Rating Drivers & Detailed Description Weaknesses: * Exposure to high offtake risk and to intense industry competition: The flour business is highly fragmented, with numerous small, unorganized players catering to local demands. This has led to a modest scale of operations and has limited the ability to bargain with suppliers and customers. * Vulnerability to fluctuations in raw material prices and to vagaries of the monsoon: Vulnerability of the wheat crop to the vagaries of the monsoon can lead to fluctuations in the availability and prices of wheat, thus impacting the business risk profile. Strength: * Extensive entrepreneurial experience of the promoters: The promoters have an experience of more than 25 years in construction and in rice milling. This has helped them in understanding the dynamics of the local market, anticipating price trends, and calibrating purchasing and stocking decisions. SAFIPL, incorporated in 2016, has set up a unit for manufacturing atta and maida in Rewa, Madhya Pradesh. The company is promoted by Mr Mahendra Prasad Shukla, Mrs Shushila Shukla, and Mr Shivam Shukla. Operations commenced in December 2017. TATA MOTORS: Fitch Affirms BB+ Long-Term IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has affirmed India-based Tata Motors Limited's (TML) Long-Term Issuer Default Rating at 'BB+'. The Outlook is Stable. TML's rating, which includes a one-notch uplift from its standalone rating of 'BB' on its linkage with Tata Sons Limited (TSOL), reflects its leading position in India's commercial-vehicle market and the passenger-vehicle business, which is recovering after the success of new product launches in recent years. TML's rating also reflects its 100%-owned subsidiary Jaguar Land Rover Automotive plc's (JLR, BB+/Stable) strong positioning in the premium segment and a financial profile that will remain solid even after considering substantial investments for capacity expansion and new technologies over the next few years. JLR's EBITDA accounted for more than 85% of TML's consolidated EBITDA in the fiscal year ended 31 March 2017 (FY17). The Stable Outlook reflects Fitch's expectations of gradually improving profitability and strong financial flexibility, which will help to meet significant investment requirements, especially in the JLR business, without any liquidity concerns and support TML's leverage at a level commensurate with the current rating. KEY RATING DRIVERS Improving Indian Business: TML has strengthened its leading position in the Indian commercial-vehicle segment after product launches that addressed portfolio gaps and helped improve customer engagement. TML's sales volume grew by 9% yoy in medium and heavy commercial vehicles and 23% in light commercial vehicles in FY18. Its overall market share rose to 47.5% as of December 2017 from 44.4% as of March 2017, according to Society of Indian Automobile Manufacturers data. We expect demand for commercial vehicles to remain healthy in the next 12-18 months, supported by India's improving economy and the government's plans to ramp up infrastructure outlays. TML's strategy to increase its presence in different sub-segments has helped it regain some of its lost market share in India's passenger-vehicle market despite intense competition. TML's passenger-vehicle market share rose to 6.2% as of December 2017 from 5.2% as of March 2017 as the company's volume gained 21% yoy in FY18. TML's sales volume in the growing SUV market surged more than 150% in FY18 on good market reception of its new models, such as Nexon and Hexa. Fitch expects continued growth in TML's passenger-vehicle business as the company is aiming to increase its product range to cover nearly 95% of the market by 2020 from about two-thirds currently. Gradually Improving Profitability: Fitch expects TML's margins to improve gradually over the medium term as the company benefits from increasing scale as well as steps to achieve cost savings. TML's India business will benefit from healthy volume growth and its strategy to reduce the number of passenger-vehicle platforms, which will help to streamline costs and maintain profitability despite intense competition. JLR's profitability will be supported by model updates and new launches that will enable greater coverage across various market segments. JLR will also benefit from an increase in lower-cost production locations as its Slovakian plant ramps up after it is commissioned in 2018. In Fitch's view, these factors will help to counter the impact of higher costs arising from rising metal prices and tightening emission requirements globally. Robust JLR Business: JLR continues to benefit from its strong brand positioning in the premium segment and solid financial metrics. JLR is relatively small compared with other premium carmakers but its growth strategy has focused on improving portfolio breadth, especially in the high-growth SUV segment, and improving geographic diversification outside of the UK. JLR is also investing significantly to expand its offerings in non-conventional drivetrains. This will help mitigate risks associated with more challenging emission regulations. Robust growth in China and the new facility in Slovakia will help to counterbalance risks from Brexit. High Capex; Stable Leverage: Fitch expects TML's sizeable investments in capacity expansion, vehicle architecture and new technologies to lead to negative free cash flow (FCF) over FY18 and FY19 despite robust cash flows from operations. This includes capex of GBP1.0 billion for JLR's new facility in Slovakia with an initial capacity of 150,000 units and about INR40 billion-45 billion of annual capex for its Indian business, mainly for new launches of passenger vehicles. The increase in TML's leverage (net adjusted debt/EBITDAR) to 1.5x in FY18 is consistent with the current rating and we expect it to decline to around 1.2x over the next two years as new investments lead to higher earnings. Strategic Importance to TSOL: TML's rating benefits from a one-notch uplift due to its moderate linkages with its stronger shareholder, TSOL, as defined in Fitch's Parent and Subsidiary Rating Linkage criteria. Fitch believes TSOL is likely to continue to extend support to TML, if required, due to the latter's strategic importance to the group, and the reputational risk arising from the shared Tata brand. TSOL subscribed in full to its share of TML's INR74.3 billion rights issue in FY16 and has provided financial support to TML in the past. Any weakening of the linkages between the group and TML, or a deterioration in TSOL's ability to provide support, is likely to affect the ratings negatively. DERIVATION SUMMARY TML's standalone rating of 'BB' is well-positioned relative to peers in each major metric. TML's standalone rating is one notch lower than that of Peugeot S.A. (PSA, BB+/Positive). TML has more premium product offerings, through JLR, for which demand has generally been less cyclical than for the mass-market products of competitors, such as PSA. This is outweighed by PSA's considerably larger operating scale and its stronger financial profile. TML's premium product offerings counterbalance its small operating scale when compared with Fiat Chrysler Automobiles N.V. (FCA, BB/Positive). This, and a similar leverage profile, supports TML's standalone rating at the same level as FCA's. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer - JLR volume growth of about 5%-6% over FY19-FY20 and EBITDA margin improving to around 12%-13% due to increasing scale and higher production in low-cost countries as Slovakian operations ramp up. - India operations to see sustained volume growth; EBITDA margin to improve to around 8%. - Capex/revenue of around 14% in FY18 and around 11% thereafter. - Resumption of dividend payment, gradually increasing to INR7.0 billion by FY20. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Fitch does not expect any positive rating action in the medium term as it takes time for the group to increase scale to a level that is similar with its global peers. Positive rating action may result if the TML group materially increases the volume and breadth of its products, while maintaining profitability and a strong financial profile. Developments That May, Individually or Collectively, Lead to Negative Rating Action - A weakening of linkages between the Tata group and TML. - Consolidated net adjusted debt /EBITDAR (excluding TML's auto-financing subsidiary Tata Motors Finance Limited) exceeding 1.5x on a long-term basis due to weaker sales or profitability (either at TML or JLR ) or due to debt-funded investments that are higher than Fitch's expectations. LIQUIDITY Strong Liquidity: TML's readily available cash balance of more than INR400 billion at 31 March 2017 was adequate to meet INR135.4 billion of debt (both excluding the financial-services business) maturing in FY18. The liquidity profile is further supported by a balanced debt maturity profile and undrawn committed credit facilities - including GBP1.9 billion available to JLR and INR5 billion to TML at the end of December 2017. We expect TML's financial flexibility to remain robust as the available liquidity would have comfortably covered projected negative FCF of more than INR100 billion in FY18. TECHNICO STRIPS: CRISIL Withdraws B+ Rating on INR17.75MM Loan -------------------------------------------------------------- CRISIL has been consistently following up with Technico Strips and Tubes Private Limited (TSTPL) for obtaining information through letters and emails dated November 14, 2017, and January 17, 2018, among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 17.75 CRISIL B+/Stable (Issuer Not Cooperating; Rating Withdrawn) Letter of Credit 11.25 CRISIL A4 (Issuer Not Cooperating; Rating Withdrawn) Term Loan 9.00 CRISIL B+/Stable (Issuer Not Cooperating; 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 they are arrived at without any management interaction and are 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 TSTPL. This restricts CRISIL's ability to take a forward TSTPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB rating category or lower. Based on the last available information, the rating on bank facilities of TSTPL continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer Not Cooperating'. CRISIL has withdrawn its ratings on the bank facilities of TSTPL on the request of the company and receipt of a no objection / due certificate from its bank. The rating action is in line with CRISIL's policy on withdrawal of its ratings on bank loans. TSTPL, promoted by Mr Ajay Gupta, commenced commercial production of electric-resistance welded steel tubes in September 2008 and of cold-drawn welded steel tubes in the third quarter of fiscal 2010. VARDHMAN POLYTEX: ICRA Migrates D Rating to Not Cooperating ----------------------------------------------------------- ICRA Ratings has moved the ratings for the INR514.00-crore bank facilities of Vardhman Polytex Limited (VPL) to the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]D / [ICRA]D ISSUER NOT COOPERATING." Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term fund 159.31 [ICRA]D ISSUER NOT COOPERATING; Based facilities Rating moved to the 'Issuer Not Cash Credit Cooperating' category Long-term fund 232.31 [ICRA]D ISSUER NOT COOPERATING; Based facilities Rating moved to the 'Issuer Not Term Loan Cooperating' category Short-term non- 50.00 [ICRA]D ISSUER NOT COOPERATING; Fund based Rating moved to the 'Issuer Not Facilities Cooperating' category Long-term fund 72.38 [ICRA]D ISSUER NOT COOPERATING; Based facilities- Rating moved to the 'Issuer Not Unallocated Cooperating' category Rationale As part of its process and in accordance with its rating agreement with VPL, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information, and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating does not adequately reflect the credit risk profile of the entity. Incorporated in 1981, Vardhman Polytex Limited (VPL) primarily manufactures cotton and cotton-polyester blended spun yarn with an installed capacity of 1.95 lakh spindles across its manufacturing facilities in Ludhiana, Bathinda (both in Punjab) and Nalagarh (Himachal Pradesh). VPL also has a yarn dyeing unit in Ludhiana with an installed capacity of 15.0 tons per day (tpd), and has limited presence in garmenting with an installed capacity of manufacturing 7 lakh pieces per annum. VPL also has presence in manufacturing of yarn-dyed shirting fabric though its subsidiary, F.M. Hammerle Textiles Ltd, which has a manufacturing facility in Kohlapur (Maharashtra). F.M. Hämmerle Textiles Ltd. was referred to the Corporate Insolvency Resolution Process in June 2017. VPL had investments and loans and advances towards its subsidiaries (F.M. Hämmerle Textiles Ltd. and F.M. Hammerle Verwaltungs GmbH, Austria) worth ~Rs. 122 crore that were provisioned for in the first and second quarter of FY2018. WINNING EDGE: ICRA Keeps B+ Rating in Not Cooperating Category -------------------------------------------------------------- ICRA Ratings has moved the ratings for the INR9.75 crore bank facilities of The Winning Edge Agro Products to the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]B+ (Stable); ISSUER NOT COOPERATING." Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based- 6.00 [ICRA]B+ (Stable); ISSUER NOT Cash Credit COOPERATING; Rating moved to 'Issuer Not Cooperating' Category Fund based- 3.55 [ICRA]B+ (Stable); ISSUER NOT Term Loan COOPERATING; Rating moved to 'Issuer Not Cooperating' Category Unallocated Limits 0.20 [ICRA]B+ (Stable); ISSUER NOT COOPERATING; Rating moved to 'Issuer Not Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance and had also sent repeated reminders to the company for payment of surveillance fee that became overdue. Despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Established in 2011 by the Vidhani family, as a partnership firm, The Winning Edge Agro Products (WEAP) manufactures flattened rice (poha) from paddy at its manufacturing facility located at Navsari, Gujarat, with a production capacity of 9200 MTPA per annum. WEAP sells its product in a packing of 500gm/1000gm under "Vishalta" brand and in loose form to bulk dealers. The firm currently caters to Maharashtra and Gujarat Region through appointed dealers' network. WEAP also provides warehousing facility to store farm produce like paddy, wheat, pulses, and agro inputs like fertilizers and pesticides. ==================== N E W Z E A L A N D ==================== CBL INSURANCE: Liquidation Hearing Set for June ----------------------------------------------- Hamish Fletcher at The New Zealand Herald reports that a small army of lawyers descended on the High Court on April 27 over whether or not liquidators should stay in charge of the embattled builders risk insurer CBL Insurance. The main skirmish, however, won't happen until June. According to the report, CBL Corp appointed voluntary administrators in February after the Reserve Bank - which regulates the insurance industry - went to court to appoint an interim liquidator to its subsidiary CBL Insurance over concerns about its solvency and transferring NZ$50 million offshore. The moves came after CBL revealed that it had been under instruction by the central bank as far back as July but was subject to a confidentiality order which meant it had not told shareholders, the report says. Trading in CBL Corporation shares has been suspended for months, the Herald notes. The Herald says a fight over whether liquidators should stay in charge of CBL Insurance is expected and some three Queen's Counsel were among the lawyers who appeared in the High Court at Auckland on April 27 before Associate Judge Warwick Smith. Seb Bisley appeared for the Reserve Bank while Davey Salmon was there for CBL managing director Peter Harris and deputy chairman Alistair Hutchinson, the Herald says. Queen's Counsels Adam Ross (for CBL's main creditor) Nathan Gedye (for the interim liquidators) and Bruce Stewart (for shareholder LBC) were also in court. Associate Judge Smith set a two day hearing in June, the Herald discloses. The Herald relates that while there is anticipated to be some argument about whether Harris and Hutchinson have standing to oppose the liquidation application, the judge said that can be contested at the June hearing. The court also heard that there may be debate over whether the two directors can get access to information held by the interim liquidators or access to employees of the company, adds the Herald. As reported in the Troubled Company Reporter-Asia Pacific on Feb. 26, 2018, The New Zealand Herald said the High Court has ordered CBL Insurance be placed into interim liquidation on an application by the Reserve Bank as the insurer's prudential supervisor. In the High Court in Auckland on Feb. 23, Justice Patricia Courtney ordered the appointment of McGrathNicol's Kare Johnstone and Andrew Grenfell as interim liquidators of CBL Insurance, the Herald discloses. The application was made without notice and determined on Feb. 23, the judgment said. CBL Insurance Limited provided building and construction related credit and financial surety insurance, bonding, and reinsurance products. CBL Insurance is a subsidiary of NZX-listed CBL Corporation. ================= S I N G A P O R E ================= AVATION GROUP: Fitch Puts B+ IDR on Rating Watch Positive --------------------------------------------------------- Fitch Ratings has placed the 'B+' Long-Term Issuer Default Ratings (IDRs) of Avation PLC, and its subsidiaries, Avation Capital S.A. and Avation Group (S) Pte. Ltd., on Rating Watch Positive. Concurrently, Fitch has assigned an expected 'BB-(EXP)' rating to Avation Capital S.A.'s offering of $300 million of senior unsecured notes due 2021. Avation intends to use the net proceeds of the offering to refinance the company's existing 7.50% senior unsecured notes due 2020, to repay certain existing junior and senior secured loans, and to pay transaction related fees and expenses. KEY RATING DRIVERS - IDRs and Senior Debt The Positive Watch reflects Avation's increased financial flexibility resulting from the expected unsecured notes offering, given the increase in the proportion of unsecured debt in its capital structure and an increase in unencumbered assets. Once the notes are issued, Fitch would expect to upgrade the Long-Term IDR of Avation and its subsidiaries to 'BB-' from 'B+'. The notes offering is not expected to result in a change in leverage, as the company will use proceeds received from the unsecured bond offering to repay existing debt, including secured debt. Avation's leverage, as measured by gross debt to tangible common equity, was 4.2x at Dec. 31, 2017 and is expected to be reduced in a range of 3.5x to 4.0x in the near term due to equity built from capital retention. The expected secured debt paydown will enable Avation to unencumber a pool of narrow body and regional aircraft (A321-200 and ATR 72-600) and increase unsecured debt to 34.1% of total debt, on a pro forma basis, from 17.2% of total debt as of Dec. 31, 2017. The pro forma unsecured debt level is within Fitch's 'bb' quantitative benchmark range for balance sheet-intensive finance and leasing companies. The company's unencumbered pool is expected to grow to approximately $150 million as a portion of the debt proceeds will be used to repay secured debt. Fitch believes this issuance will improve the firm's funding flexibility and will expand its investor base. Avation's credit ratings are supported by its young average fleet age of 2.9 years (excluding finance leases) as of Dec. 31, 2017, currently supportive demand dynamics for the majority of Avation's fleet, solid profitability, reduced lessee concentration, which Fitch views as adequate; and measured fleet growth, which is expected to persist over the outlook horizon. These strengths are counterbalanced by Avation's limited economies of scale and high aircraft concentration when compared to larger lessors; the presence of turboprops in the portfolio, which Fitch views as niche aircraft; exposure to certain lower credit quality lessees, which is outsized relative to peers; elevated balance sheet leverage, as measured by gross debt to tangible common equity; a primarily secured funding profile, and potential limitations relating to management depth. Rating constraints applicable to the aircraft leasing industry more broadly include the monoline nature of the business, vulnerability to exogenous shocks, potential exposure to residual value risk, sensitivity to oil prices, reliance on wholesale funding sources and increased competition. Avation continues to reduce its fleet age and customer concentration primarily through acquisitions of new aircraft, which most recently included two ATR 72-600s, an A330-300 and a B777-300ER. As of Dec. 31, 2017, top lessees were Virgin Australia Holdings Limited (26% of lease revenue), VietJet Aviation Joint Stock Company (21%), Philippine Airlines (13%), EVA Air Corporation (10%), and Thomas Cook Airlines Limited (8%). The company has meaningfully reduced exposure to Virgin Australia in recent years, from 66% of lease revenue for the fiscal year ended June 30, 2015 to 26% for the six months ended Dec. 31, 2017. Avation's average fleet age has also improved, declining from 5.3 years to 2.9 years over the same period. Despite recent growth, the portfolio remains concentrated, with just 37 aircraft as of Dec. 31, 2017. As a result, the portfolio is more exposed to individual lessee credit events, when compared to larger peers. For example, during the first half of fiscal 2018, Avation incurred an $8 million impairment charge related to the transition of an Airbus A320-200 from Air Berlin PLC & Co. Luftverkehrs KG (Air Berlin) to EasyJet Airline Company Limited after Air Berlin's bankruptcy filing. Still, the charge was more than offset by the release of $10.5 million of maintenance reserves. Fitch anticipates that Avation will maintain adequate liquidity in the near term. As of Dec. 31, 2017, the company had $82.8 million in cash, a $30 million warehouse credit facility and a $20 million revolving credit facility. Pro forma for the offering, liquidity sources are expected to exceed uses by 1.4x over the next 12 months. While Avation has limited near term debt maturities, it has three ATR 72 turboprop aircraft on order for placement during calendar year 2018 and three aircraft to be delivered in calendar year 2019. Fitch expects that Avation's lease revenue yields will remain around 11%-12% over the next several years, indicating strong profitability prospects from contractual leases. Overall, the company's average remaining lease term was 7.9 years as of Dec. 31, 2017, supporting cash flow predictability for some time, absent material lessee bankruptcies. The expected unsecured debt rating of 'BB-(EXP)' reflects the expectation that Avation's Long-term IDR will be upgraded by one notch following the closing of the issuance. The rating also reflects modest, though improved, unsecured debt as a portion of total debt as of Dec. 31, 2017 pro forma for the notes offering, as well as an available pool of unencumbered assets, which suggest average recovery prospects for unsecured debtholders. RATING SENSITIVITIES - IDRs and Senior Debt If the company completes the notes offering, the IDRs are expected to be upgraded by one notch and the existing unsecured debt ratings, 'B+'/'RR4', are expected to be withdrawn as these obligations will be paid in full. If the company does not complete the notes offering, Fitch will remove the ratings from Rating Watch Positive, affirm the ratings with a Stable Outlook, and withdraw the expected rating on the notes offering. Upon completion of the notes offering, Fitch would not expect upward rating momentum to emerge over the near term. However, over the long term, Avation's ratings could be positively influenced by improved scale efficiencies, leverage approaching 3.0x, increased utilization of unsecured funding sources, and continued demonstration of residual-value risk management. Improved fleet, geographic and/or lessee diversification, provided such actions are undertaken at a moderate pace and do not adversely affect underwriting or pricing terms, would also be viewed positively. The ratings could be adversely affected by the credit deterioration of underlying lessees, particularly those that represent a meaningful portion of Avation's portfolio, which could result in lower revenue yields and the need to redeploy aircraft. Factors that could also lead to negative rating momentum include maintenance of leverage above 4.0x, rapid expansion that is not accompanied by consistent underwriting standards and commensurate growth in capital levels and staffing, deterioration in residual value realizations, or an inability to successfully navigate market downturns. The expected rating assigned to the senior unsecured debt is expected to be equalized with the company's Long-Term IDR upon resolution of the Positive Watch and would be expected to move in tandem. However, the unsecured debt rating could be notched below Avation's IDR should secured debt increase as a percentage of total debt, adversely affecting the unencumbered pool contracts and expected recoveries on the senior unsecured debt. Fitch has placed the following Ratings on Rating Watch Positive: Avation PLC -- Long-Term IDR 'B+'; Avation Capital S.A. -- Long-Term IDR 'B+'; -- Senior unsecured debt 'B+'/'RR4'. Avation Group (S) Pte. Ltd. -- Long-Term IDR 'B+'. Fitch has assigned the following expected rating: Avation Capital S.A. -- Senior unsecured debt 'BB-(EXP)'. According to Fitch's "Non-Bank Financial Institutions Rating Criteria", the agency typically assigns recovery ratings to issues of non-bank financial institutions with a Long-Term IDR of 'B+' or lower. Since Avation's Long-term IDRs are expected to be to upgraded to 'BB-' from 'B+' upon the resolution of the Positive Watch, Avation's expected issue level rating does not correspond with a recovery rating. Avation is a Singapore-headquartered commercial passenger aircraft leasing company focused on turboprop and jet aircraft in the Asia-Pacific and European regions. As of Dec. 31, 2017, its fleet contained 19 ATR72 500-600s, 16 narrowbody regional jets (A320-321s and F100s) and 2 widebody aircraft (A300-300 and B777-300ER). The company was incorporated in England and Wales in 2006 and is listed on the London Stock Exchange under the ticker AVAP. =============== X X X X X X X X =============== MALDIVES: Fitch Assigns Final 'B+' Rating to USD100 Million Bonds ----------------------------------------------------------------- Fitch Ratings has assigned the Maldives' USD100 million 5.5% bonds due April 26, 2023 a final rating of 'B+'. This replaces the expected rating of 'B+(EXP)' that Fitch assigned on April 25, 2018. The bond was privately placed with the Abu Dhabi Fund for Development and is listed on the Abu Dhabi Stock Exchange. KEY RATING DRIVERS The 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 ***