/raid1/www/Hosts/bankrupt/TCRAP_Public/180523.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, May 23, 2018, Vol. 21, No. 101
Headlines
A U S T R A L I A
NQR PTY: Second Creditors' Meeting Scheduled for May 29
PNC CONCRETING: Second Creditors' Meeting Set for May 29
RAG PROPERTY: Second Creditors' Meeting Set for May 29
C H I N A
CEFC SHANGHAI: Defaulted on CNY2-Bil. Bond Payments Due May 21
CHINA COMMERCIAL: Delays Filing of First Quarter Form 10-Q
SHANDONG SNTON: Fitch Cuts LT IDR & Sr. Unsec. Rating to BB
XILINHOT GEIPAISHUI: Fails to Repay $629MM Loans in Rare Default
H O N G K O N G
MELCO RESORTS: Moody's Hikes CFR & Sr. Unsec. Rating to Ba2
STUDIO CITY: Moody's Hikes CFR to B1 & Sr. Unsec. Rating to B2
I N D I A
A R CONSTRUCTIONS: CRISIL Withdraws B+ Rating on INR25MM Loan
ACTIS GENERICS: CRISIL Hikes Rating on INR6MM Cash Loan to B+
AIRCEL LTD: Pins Hopes on Release of INR750cr Bank Guarantees
AKSHAT AGRO: Ind-Ra Keeps BB- Rating in Non-Cooperating Category
AMALESWARI CONSTRUCTIONS: CRISIL Cuts Rating on INR4MM Loan to D
AVANT TRADING: CRISIL Lowers Rating on INR5MM Overdraft to B
BHAGWATI GEMS: Ind-Ra Assigns 'BB-' LT Rating, Outlook Stable
BHUSHAN STEEL: Bank of India to Get INR1,993cr From Tata Steel
ELECTROMEC ENG: Ind-Ra Migrates 'D' Rating to Non-Cooperating
EMPIRE MULTIPLACK: Ind-Ra Maintains B+ Rating to Non-Cooperating
CENTECH ENGINEERS: CRISIL Migrates Rating to Not Cooperating
CHANDRASHEKAR CHAMARAJANAGAR: CRISIL Reaffirms B+ Loan Rating
CHEMMARATHIL CASHEW: CRISIL Cuts Rating on INR23MM Loan to D
CHINTPURNI STEEL: Ind-Ra Maintains BB+ Rating in Non-Cooperating
CRBR INDUSTRIES: Ind-Ra Migrates BB- Rating to Non-Cooperating
CUSP INT'L: Ind-Ra Migrates B+ Rating to Non-Cooperating
GAUR HARI: CRISIL Assigns B+ Rating to INR12MM Proposed Loan
GMC INT'L: Ind-Ra Maintains 'D' Rating in Non-Cooperating
GOLKUNDA DIAMONDS: Ind-Ra Maintains BB+ Rating in Non-Cooperating
GUPTA AND COMPANY: CRISIL Lowers Rating on INR2.25MM Loan to B+
HMM INFRA: Ind-Ra Maintains BB Issuer Rating in Non-Cooperating
INDIRA PRIYADARSHINI: Ind-Ra Migrates D Rating to Non-Cooperating
INFOSOFT DIGITAL: Ind-Ra Maintains BB Rating in Non-Cooperating
INTERLINK FOODS: Ind-Ra Keeps BB+ Rating in Non-Cooperating Cat.
ISHAAN TPR: CRISIL Reaffirms B Rating on INR2.5MM Cash Loan
INVEST GOLD: CRISIL Reaffirms B+ Rating on INR5MM LT Loan
JAGDISH SARAN: Ind-Ra Maintains BB LT Rating in Non-Cooperating
JAY KHODIYAR: CRISIL Reaffirms B+ Rating on INR7.95MM Cash Loan
JD CONSTRUCTION: Ind-Ra Maintains BB- Rating in Non-Cooperating
JHANWAR RICE: CRISIL Withdraws B+ Rating on INR10MM Cash Loan
JTL INFRA: Ind-Ra Maintains BB Issuer Rating in Non-Cooperating
KANCHI KARPOORAM: CRISIL Cuts Rating on INR7MM Cash Loan to B+
KANDARP CONSTRUCTIONS: Ind-Ra Keeps 'D' Rating in Non-Cooperating
KSM EDUCATIONAL: Ind-Ra Assigns 'B+' LT Rating, Outlook Stable
LANCER CONTAINER: Ind-Ra Keeps B+ Rating in Non-Cooperating
LORDS ORIENTAL: Ind-Ra Migrates B+ LT Rating to Non-Cooperating
MILAN TANNERY: CRISIL Hikes Rating on INR4MM Cash Loan to B-
N.P. AGRO: CRISIL Upgrades Rating on INR24.65MM Loan to B+
PAWAN CASTINGS: Ind-Ra Assigns 'BB' LT Rating, Outlook Stable
PAYYANUR MEDICAL: CRISIL Reaffirms D Rating on INR18MM Term Loan
PUNJAB NATIONAL: Moody's Lowers Deposit Ratings to Ba1
PURBANCHAL VENEERS: Ind-Ra Assigns BB+ LT Rating, Outlook Stable
RAJU E V: CRISIL Assigns 'B' Rating to INR.5MM Standby LOC
RELIANCE COMMUNICATIONS: In Advanced Talks with Ericsson
REGENCY LINX: CRISIL Lowers Rating on INR12.6MM Loan to D
ROHAN METALS: CRISIL Reaffirms 'B' Rating on INR14MM Cash Loan
SADASIVAPET MUNICIPALITY: Ind-Ra Withdraws 'B+' LT Issuer Rating
SANGAREDDY MUNICIPALITY: Ind-Ra Withdraws B+ LT Issuer Rating
SAVITRI STEELS: CRISIL Migrates B+ Rating to Not Cooperating
SHARMA CONSTRUCTION: Ind-Ra Keeps B+ Rating in Non-Cooperating
SHIRPUR POWER: Ind-Ra Migrates D Issuer Rating to Non-Cooperating
SHREE BADRI: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating
SHREE RADHA: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating
SPONGE SALES: Ind-Ra Migrates BB Issuer Rating to Non-Cooperating
SUDALAGUNTA SUGARS: CRISIL Cuts Rating on INR92.5MM Loan to D
SURESH KUMAR: Ind-Ra Retains B+ Issuer Rating in Non-Cooperating
TANDUR MUNICIPALITY: Ind-Ra Withdraws 'B+' LongTerm Issuer Rating
TIRUMALA COMPRINTS: CRISIL Reaffirms B- Rating on INR8.8MM Loan
UTTAR BHARAT: Ind-Ra Retains BB Issuer Rating in Non-Cooperating
VIJAYNATH ROOF: CRISIL Reaffirms B Rating on INR14.5MM Loan
VIKARABAD MUNICIPALITY: Ind-Ra Withdraws 'B' LT Issuer Rating
ZAHEERABAD MUNICIPALITY: Ind-Ra Withdraws 'B' LT Issuer Rating
N E W Z E A L A N D
HYDROWORKS: Liquidators Still in Pursuit of NZ$10 Million
MILKING ON THE MOOVE: Placed Into Voluntary Liquidation
T H A I L A N D
THAI AIRWAYS: Appoints Sumeth Damrongchaitham as New President
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A U S T R A L I A
=================
NQR PTY: Second Creditors' Meeting Scheduled for May 29
-------------------------------------------------------
A second meeting of creditors in the proceedings of NQR Pty Ltd
has been set for May 29, 2018, at 11:30 a.m. at the Institute of
Chartered Accountants, Level 18, 600 Bourke Street, in Melbourne,
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 28, 2018, at 4:00 p.m.
Jeremy Joseph Nipps and Clifford Stuart Rocke of Cor Cordis were
appointed as administrators of NQR Pty on April 24, 2018.
PNC CONCRETING: Second Creditors' Meeting Set for May 29
--------------------------------------------------------
A second meeting of creditors in the proceedings of PNC
Concreting Pty Ltd has been set for May 29, 2018, at 11:00 a.m.
at Level 5, 123 Pitt Street, in Sydney NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by May 28, 2018, at 4:00 p.m.
Steve Naidenov and David Iannuzzi of Veritas Advisory were
appointed as administrators of PNC Concreting on April 23, 2018.
RAG PROPERTY: Second Creditors' Meeting Set for May 29
------------------------------------------------------
A second meeting of creditors in the proceedings of RAG Property
Group Pty Ltd, trading as Blackburns Taxi Trucks and Exalted
Property Services, has been set for May 29, 2018, at 1:00 p.m. at
Level 5, 97 Pirie Street, in Adelaide, SA.
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 28, 2018, at 4:00 p.m.
Jeremy Joseph Nipps and Clifford Stuart Rocke of Cor Cordis were
appointed as administrators of RAG Property on April 24, 2018.
=========
C H I N A
=========
CEFC SHANGHAI: Defaulted on CNY2-Bil. Bond Payments Due May 21
--------------------------------------------------------------
Bloomberg News reports that as corporate defaults pile up in
China's onshore bond market, a unit of a once-promising energy
conglomerate with $4.8 billion of debt and a checkered past said
it won't be able to meet its payment obligation May 21.
CEFC Shanghai International Group Ltd., a unit of the privately-
held CEFC China Energy Co., failed to repay CNY2 billion
($313 million) of bonds but said it will seek to pay back the
notes in six months, Bloomberg relates citing a statement on the
Shanghai Clearing House website. The unit said a week ago it may
not be able to repay the notes because its chairman's failure to
"fulfill normal responsibilities" had a huge impact on the
company's operations, according to Bloomberg.
Worries among investors about surging default rates in China are
deepening after at least four non-payments in the onshore market
over the past month. Given the magnitude of the CEFC's debt load,
market stability will hinge on how it implements a debt workout
plan, according to Fitch Ratings, Bloomberg relays.
Bloomberg says CEFC's rise and fall mirrors some of China's other
sprawling, acquisitive private companies under pressure by
President Xi Jinping's crackdown on risky loans and capital
outflows. According to Bloomberg, the firm's rapid ascent peaked
with its agreement in September to buy a $9 billion stake in
Russian oil behemoth Rosneft PJSC. That deal fell apart this
month as financial troubles emerged after its chairman, Ye
Jianming, came under investigation by Chinese authorities and
stepped down from management, Bloomberg states.
Bloomberg relates that the company relied heavily on bond sales
for funding over the past two years and its borrowing costs have
jumped since Ye was put under investigation, shutting it out from
funding in this market.
According to Bloomberg, CEFC racked up its debt pile through a
series of ever-bigger deals in recent years for energy and
finance assets across Eastern Europe and the Middle East, as well
as in China. The non-payment on May 21 will immediately trigger a
cross default on its $250 million dollar notes, according to a
bond offering circular seen by Bloomberg, and also raise
uncertainty on the rest of its outstanding debt.
"The market is generally expecting that CEFC probably won't repay
the bond due today," Bloomberg quotes Wang Ying, a senior
director at Fitch Ratings in Shanghai, as saying. "Given that
CEFC has a huge amount of outstanding bonds, an orderly and
transparent debt restructuring is required to provide fair
compensation to investors and to maintain market stability."
China's increased tolerance for company defaults comes as the
government steps up efforts to curb leverage and rein in regional
borrowings, Bloomberg notes. Finance costs for weaker companies
are on the rise. Yield premium of one-year AA- rated bonds over
AAA rated notes widened 55 basis points this quarter, the biggest
increase since 2015. S&P Global Ratings said defaults by private
companies won't necessarily trigger systemic risks so they won't
shake the government's resolve to curb leverage.
"If you want to take real efforts to curb corporate deleverage,
you will certainly go through pains and face losses," Bloomberg
quotes Christopher Lee, managing director of corporate ratings at
S&P in Hong Kong, as saying.
Bloomberg says some of the CEFC's creditors saw a glimmer of hope
after it repaid an overdue CNY85 million of debt sold on Phoenix
Finance, a local Internet finance platform ahead of a deadline
last week. CEFC has a total of CNY30.8 billion of outstanding
bonds, including the $250 million dollar bond due in November,
Bloomberg discloses.
Creditors to CEFC China Energy have formed a committee to review
its asset disposals amid rising pressure to repay debt, according
to Bloomberg. The conglomerate's largest creditor, China
Development Bank, will lead the committee that will play an
active role in the restructuring of debt and asset disposals,
people familiar with the matter had said in March, Bloomberg
relays. Any final decisions will be taken by the Shanghai
government, which has taken control of the company, the people
said.
Czech financial group J&T Private Investments has decided to take
control of the management of the CEFC Europe because of the
failure of the parent company to repay debt on time,
Bloomberg meanwhile relays citing China's official Xinhua News
Agency's May 19 report. CEFC Europe is a Czech-based European
branch of the Chinese conglomerate CEFC China Energy.
CEFC Shanghai International Group Limited operates as a
subsidiary of CEFC China Energy Company Limited.
CHINA COMMERCIAL: Delays Filing of First Quarter Form 10-Q
----------------------------------------------------------
China Commercial Credit, Inc., was unable to file its Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 2018
on a timely basis because the Company requires additional time to
work with its auditors and legal counsel to prepare and finalize
the Form 10-Q. The Company anticipates that it will file the Form
10-Q no later than the fifth calendar day following the
prescribed filing date.
About China Commercial Credit
Founded in 2008, China Commercial Credit --
http://www.chinacommercialcredit.com/-- is a financial services
firm operating in China. Its mission is to fill the significant
void in the market place by offering lending, financial guarantee
and financial leasing products and services to a target market
which has been significantly under-served by the traditional
Chinese financial community. The Company's current operations
consist of providing direct loans, loan guarantees and financial
leasing services to small-to-medium sized businesses, farmers and
individuals in the city of Wujiang, Jiangsu Province.
China Commercial incurred a net loss of US$10.69 million for the
year ended Dec. 31, 2017, compared to a net loss of US$2.58
million for the ended Dec. 31, 2016. As of Dec. 31, 2017, China
Commercial had US$7.16 million in total assets, US$12.43 million
in total liabilities and a total shareholders' deficit of US$5.27
million.
The report from the Company's independent accounting firm Marcum
Bernstein & Pinchuk LLP on the consolidated financial statements
for the year ended Dec. 31, 2017, includes an explanatory
paragraph stating that the Company has incurred significant
losses and needs to raise additional funds to meet its
obligations and sustain its operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
SHANDONG SNTON: Fitch Cuts LT IDR & Sr. Unsec. Rating to BB
-----------------------------------------------------------
Fitch Ratings has downgraded Shandong SNTON Group Co., Ltd.'s
(Snton) Long-Term Issuer Default Rating (IDR) to 'BB' from 'BB+'.
Fitch has also downgraded Snton's senior unsecured rating to 'BB'
from 'BB+'. The Outlook is Stable.
The downgrade reflects the rise in Snton's leverage in 2017 and
the lack of clarity about whether this can be reversed in the
medium term. Leverage exceeded Fitch's forecasts primarily
because capex and working capital outflow were much higher than
expected. The company's 2017 EBITDA of CNY3.5 billion was in line
with Fitch's expectations. Fitch expects Snton's FFO adjusted net
leverage to remain above 2.5x in 2020, the previous level at
which Fitch would have considered negative rating action.
KEY RATING DRIVERS
Leverage Exceeds Expectations: Snton's FFO adjusted net leverage
rose to 3.9x by end-2017 from 3.4x a year earlier. The company's
EBITDA rose by 8% yoy to CNY3.5 billion as expected, driven by
the company's core steel cord business. However, the higher capex
and working capital outflow resulted in negative free cash flow
of more than CNY2 billion and an increase in total adjusted debt
to CNY14.3 billion.
Capex Higher than Forecast: Snton spent CNY1.7 billion in 2017
with about 70% of the amount for the company's steel cord
business. Management said the company accelerated its five-year
investment plan because its production facility's utilisation
rate was about 100% and its medium-term demand outlook is
positive. The company now expects to spend about CNY2.0 billion
in 2018-2021, or CNY400 million-500 million a year. The revised
2017-2021 capex budget of about CNY3.7 billion is comparable to
management's previous five-year capex budget of CNY3.6 billion.
Fitch assumes capex of CNY1.0 billion a year from 2018 to 2020,
higher than the 2017 depreciation and amortisation of about
CNY770 million.
Working Capital Outflow: Snton's working capital outflow was more
than Fitch expected because of a jump in notes receivables, trade
receivable days and inventory days. The notes receivables are the
amount due to Snton from banks. Trade receivable days increased
to 76 days in 2017 from 71 days in 2016. Snton's working capital
requirements increased significantly when it expanded into
optical base film in 2014 due to inventory stockpiling and
favourable credit terms for new customers. Fitch expects working
capital requirements to remain high over the next two to three
years.
Gradual Deleveraging Expected: Fitch expects Snton's FFO adjusted
net leverage to remain above 2.5x at the end of 2020. Fitch
expects the company to be supported by strong EBITDA generation,
but ongoing capex and working capital outflow will limit the
company's ability to deleverage in the medium term. The company's
FCF margin has been negative on average from 2014 to 2017.
Leading Steel Cord Manufacturer: Snton is among China's top-three
steel tire cord manufacturers, with significant economies of
scale, product leadership and solid business relationships. The
domestic steel tire cord industry is concentrated, with the top-
three players accounting for more than 60% of total domestic
market share and leading the second-tier companies by a wide
margin. Snton's technological leadership, high customer loyalty
and high pricing power translate into a profitable and robust
business. Snton has higher profitability than its domestic rivals
due to better product mix and higher operating efficiency.
DERIVATION SUMMARY
Snton and China Lesso Group Holdings Limited (BB+/Stable) are
similar in EBITDA size and margin, and both are domestic industry
leaders in their respective fields. Snton has better business
diversification, which enables the company to combat industry
cyclicality while maintaining more stable overall profitability.
However, Snton has higher net leverage than Lesso and is more
comparable to 'BB' rated peers such as US-based Harsco
Corporation (BB/Stable) and Mexico's Grupo Kuo, S.A.B. de C.V.
(BB/Stable).
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
- Low single-digit revenue growth between 2018 and 2020
- EBITDA margin to remain at around 16% between 2018 and 2020
- Capex of CNY1.0 billion per year between 2018-2020
- No dividend payouts
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- Sustained decline in off-balance-sheet debt
- Sustained positive FCF
- FFO net leverage sustained below 2.5x
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- FFO net leverage above 3.5x for a sustained period
- FFO margin below 10% for a sustained period
- Significant deterioration in steel tire cord business's
market position
LIQUIDITY
Comfortable Liquidity: Snton had about CNY2.6 billion in cash
against CNY5.1 billion in short-term debt at end-2017. The
company also maintains around CNY11.3 billion in credit
facilities, of which around CNY5.5 billion was unused at 31 March
2018. Snton has secure banking relationships with the big four
domestic banks as well as smaller banks, such as Ping An Bank
Co., Ltd (BB+/Stable), Shanghai Pudong Development Bank
(BBB/Stable) and Bank of Communications Co., Ltd. (A/Stable).
Snton has reliable access to the domestic bond market but has not
accessed equity markets.
XILINHOT GEIPAISHUI: Fails to Repay $629MM Loans in Rare Default
----------------------------------------------------------------
Reuters reports that a firm controlled by a city government in
China's Inner Mongolia region has failed to make interest and
principal payments on nearly CNY4 billion (US$629 million) in
off-balance sheet loans, two sources with direct knowledge of the
matter said.
Reuters says the rare loan default highlights growing funding
strains on Chinese local governments as Beijing cracks down on
riskier types of financing and rising debt, which some outside
agencies have warned could lead to a banking crisis.
According to Reuters, analysts said officials have stepped in
repeatedly recently to steer government-linked firms which
appeared on the brink of default, highlighting the balancing act
Chinese leaders are facing as they try to rein in risks without
destabilizing the economy or the country's financial markets.
Local governments are the bedrock of China's economy, accounting
for around 90 percent of its total public spending, Reuters
notes.
Xilinhot Geipaishui Co, a local government financing vehicle
(LGFV) controlled by the city of Xilinhot, has failed to repay
loans from more than 20 mostly state-run leasing firms, Reuters
discloses citing sources, who were from two of the leasing
companies involved.
The firm is technically in default after missing payments on both
the interest and principal for more than one month, the sources,
as cited by Reuters, said.
"Sometimes payments are late by a week or two, we wouldn't
consider it a break of contract or even wouldn't charge any
penalty. But this case is different, the government is very firm
it wouldn't be able to pay back," Reuters quotes one of the
sources as saying.
Global credit rating agency Standard & Poor's had predicted in
January that China could see the first default on a bond issued
by an LGFV this year. But Christopher Lee, an S&P credit analyst
in Hong Kong, said on May 18 it was too early to tell if this
case was such a watershed moment until there is more information.
"I'm not surprised because we've been talking about this for a
while now, (but) is it really a default or a sort of delayed
payment, where the government will come back in a few days and
help this company repay?" Reuters quotes Mr. Lee as saying.
"It will be serious when a bond default by an LGFV happens,
because it would affect the funding access of that government as
well as the pricing or the implicit (official) support for the
rest of the state-owned enterprise sectors in that region."
Xilinhot Geipaishui had borrowed on behalf of the local
government to fund infrastructure construction, the sources said,
declining to be identified, according to Reuters.
Reuters relates that the companies involved have held several
rounds of talks with local officials but have yet to break the
deadlock.
Officials have insisted on rolling over the loans for another
year as the city struggles to raise revenue, the sources said.
"The government's argument is that only interest will be paid,"
one added.
Data from the Shanghai Stock Exchange shows the company repaid
the principal on two bonds worth a total of CNY150 million that
matured in February and April this year, Reuters discloses. The
coupon on those bonds was 9 percent. It repaid the principal on
the February bond early, in December 2017, adds Reuters.
================
H O N G K O N G
================
MELCO RESORTS: Moody's Hikes CFR & Sr. Unsec. Rating to Ba2
-----------------------------------------------------------
Moody's Investors Service has upgraded Melco Resorts Finance
Limited's corporate family rating (CFR) and senior unsecured
rating to Ba2 from Ba3.
The rating outlook is stable.
RATINGS RATIONALE
"The ratings upgrade reflects Melco Resorts Finance's solid
business operations and high quality assets, which have supported
its robust financial profile and strong liquidity, even during
the downturn in Macao's gaming industry during 2014-2016," says
Stephanie Lau, a Moody's Vice President and Senior Analyst.
"The upgrade also considers the improved credit profile of its
parent Melco Resorts Entertainment, which lowers the risk of cash
drainage on Melco Resorts Finance," adds Lau.
The opening of its new hotel, Morpheus in 2Q 2018, effective cost
controls and the broader Macao market's recovery will allow the
company to steadily increase earnings over the next 1-2 years.
Gross debt will also remain broadly flat, as the construction of
Morpheus completes during 2018, lowering capital spending in the
following 12-18 months.
Given these assumptions, Moody's expects Melco Resorts Finance's
financial profile to remain strong, with adjusted debt/EBITDA at
1.8x-1.9x over the next 12-18 months, similar to the rate of 1.9x
for 2017. Likewise, adjusted EBITDA/interest will remain solid at
9x-10x over the same period. Such levels appropriately position
the company in the Ba2 rating category.
Moody's also expects a lower need for cash support from Melco
Resorts Finance due to its parent's improved credit profile,
which in turn, is a result of Studio City's improved business and
financial profile.
In 2017, Studio City Finance's adjusted EBITDA grew 174% year-on-
year to USD276 million and Moody's expects the company's adjusted
EBITDA to grow further to around USD315-330 million in the next
12-18 months, driven by Macao's steady growth in gross gaming
revenue (GGR) and better cost efficiency.
Moody's projects Melco Resorts & Entertainment's EBITDA/interest
will register at around 3.9x-4.2x and adjusted debt/EBITDA to
stay stable at 3.2x-3.3x in the next 12-18 months.
The Ba2 rating, despite Melco Resorts & Entertainment's weaker
credit profile when compared with Melco Resorts Finance, also
accounts for the covenant package in the Melco Resorts Finance's
debt facilities, which limits the risk of potential cash leakage
to its parent.
On the other hand, the company's Ba2 corporate family rating is
constrained by its geographic concentration.
Melco Resorts Finance's liquidity remains strong, underpinned by
a cash balance of USD837million for the end of 2017 and projected
annual operating cash flow of around USD600-650 million in the
next 12 months. Such cash sources are sufficient cover its short-
term debt of USD44 million, capital spending and dividend payouts
in the next 12 months.
Melco Resorts Finance's senior unsecured bond rating is not
affected by subordination to claims at the operating company
level, because the latter is not seen as material especially as
Moody's expects the majority of claims will remain at the holding
company.
The stable rating outlook reflects Moody's expectation that Melco
Resorts Finance will maintain its strong financial profile over
the next 12-18 months, based on its premium mass-market business
and prudent financial management. Moreover, Moody's does not
expect the company to provide major financial assistance to its
parent.
Upward pressure on the ratings could emerge if (1) Melco Resorts
Finance improves its financial profile further, such that
adjusted debt/EBITDA stays below 1.6x-1.8x on a sustained basis;
and (2) Melco Resorts and Entertainment improves its credit
metrics, such that adjusted debt/EBITDA falls below 2.0x-2.5x on
a sustained basis.
The ratings could be downgraded if (1) the operating performances
of Melco Resorts Finance and Melco Resorts and Entertainment
significantly deteriorate, as a result of a material slowdown in
Macau's gaming market or stronger-than-expected competition; (2)
a major construction project is vested at Melco Resorts Finance,
increasing its financial risk; or (3) Melco Resorts and
Entertainment engages in significant debt-funded investments.
Metrics that will indicate a possible downgrade include adjusted
debt/EBITDA in excess of 3.0x for Melco Resorts Finance and in
excess of 3.5x for Melco Resorts & Entertainment.
The principal methodology used in these ratings was Gaming
Industry published in December 2017.
Melco Resorts Finance Limited is a wholly owned subsidiary of
Melco Resorts and Entertainment, which is in turn owned by the
Hong Kong-listed Melco International Development Ltd. All of
Melco Resorts Finance's operations are currently located in
Macao.
Melco Resorts Finance operates two wholly owned casinos in the
territory, namely, Altira Macau and City of Dreams. The company
also has non-casino-based operations at its Mocha Clubs, and
provides both gaming and non-gaming services to Studio City. The
company reported consolidated net revenue of USD4.7 billion in
2017.
Melco Resorts and Entertainment also owns 60% of Studio City
Finance Limited (B1 stable), which develops and operates the
Studio City project, an integrated gaming and entertainment
resort, which is located at Cotai in Macao.
STUDIO CITY: Moody's Hikes CFR to B1 & Sr. Unsec. Rating to B2
--------------------------------------------------------------
Moody's Investors Service has upgraded Studio City Finance
Limited's corporate family rating (CFR) to B1 from B2 and its
senior unsecured rating to B2 from B3.
At the same time, Moody's has also upgraded the senior secured
ratings of Studio City Company Limited, a wholly owned subsidiary
of Studio City Finance, to Ba3 from B1.
The rating outlooks are stable.
RATINGS RATIONALE
"The ratings upgrade reflects Studio City's improving business
profile, following its successful ramp-up and the recovery in
Macao's overall gross gaming revenue (GGR) since 3Q2016, which
has in turn enhanced its earnings and credit metrics," says
Stephanie Lau, a Moody's Vice President and Senior Analyst.
"The rating action also reflects a one-notch uplift based on
Moody's expected likelihood of extraordinary support from its
parent - Melco Resort & Entertainment Limited - given Studio
City's increasing importance to the parent and the parent's solid
financial flexibility," adds Lau.
In 2017, Studio City Finance's adjusted EBITDA grew 174% year-on-
year to USD276 million and Moody's expects the company's adjusted
EBITDA to further grow to around USD315-330 million in the next
12-18 months, driven by Macao's steady GGR growth and better cost
efficiency.
Macao's GGR increased by 20.5% year-on-year in 1Q 2018,
demonstrating seven consecutive quarters of year-on-year growth.
In particular, mass-market gaming revenue has shown a more
evident recovery since 4Q 2017, a trend that will benefit Studio
City because it focuses on mass-market gamblers and family-
oriented non-gaming activities.
The B1 rating also reflects the limited financial and execution
risks arising from Studio City's potential phase two
construction. Such a view is supported by Moody's expectation of
manageable levels of capital spending and support from phase
one's operating cash flow.
Execution risk will also be lower because of a smaller targeted
area versus the previous phase, which was a greenfield project.
Given these assumptions, Moody's projects that Studio City
Finance's adjusted debt/EBITDA will register 6.7x-7.0x and
EBITDA/interest 1.9x-2.0x over the next 12-18 months, absent the
potential IPO of Studio City Finance's holding company -- Studio
City International Holdings Ltd. -- or equity injections. These
levels of ratios are in line with its B2-level standalone credit
quality, although they are at the weak end.
As of December 31, 2017, Studio City Finance's USD351 million in
cash, in addition to adjusted operating cash flow projected at
around USD180-200 million, is sufficient to fully cover its
capital spending in the next 12 months. The company has no short-
term debt outstanding.
Studio City Finance's senior unsecured bond rating is one notch
lower than it would otherwise be because of the risk of legal
subordination. This risk reflects the fact that its sizeable
secured debt has priority over the senior unsecured bondholders
at the holding company in a bankruptcy scenario.
On the other hand, Studio City Company Limited's senior secured
rating is one notch above Studio City Finance's CFR, reflecting
the first lien on the company's major assets. This structure
means that the bonds rank ahead of other unsecured claims and
indebtedness.
The stable rating outlook reflects Moody's expectations that
Studio City's operations will continue to improve, and that its
credit metrics will remain stable over the course of its phase
two construction.
Studio City Finance's ratings could be upgraded if it enhances
its scale and financial profile. Specifically, upgrade pressure
would emerge if its debt/EBITDA declines below 5.0.x-5.5x and
EBITDA/interest rises above 3.0x on a sustained basis.
On the other hand, the ratings could be downgraded if it engages
in a) aggressive expansion and capex spending; and/or b) its
operations deteriorate, resulting in tight liquidity and high
leverage on a sustained basis.
Specifically, downgrade stress would emerge if its debt/EBITDA
exceeds 7.5x-8.0x and EBITDA/interest coverage falls below 1.8x
on a sustained basis.
Also, a decline in the ability or willingness of its parent --
Melco Resorts & Entertainment -- to provide support will also
lead to downgrade pressure.
The principal methodology used in these ratings was Gaming
Industry published in December 2017.
Studio City Finance Limited is a holding company incorporated in
the British Virgin Islands. Through its fully owned subsidiary -
Studio City Company Limited - it develops and operates the Studio
City project, an Asian-focused integrated gaming and
entertainment resort located at Cotai in Macau.
=========
I N D I A
=========
A R CONSTRUCTIONS: CRISIL Withdraws B+ Rating on INR25MM Loan
-------------------------------------------------------------
CRISIL has withdrawn its rating on the long-term bank facility of
A R Constructions (ARC) following a request from the company and
on receipt of a 'no dues certificate' from the banker. The rating
action is in line with CRISIL's policy on withdrawal of bank loan
ratings.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Long Term Loan 25 CRISIL B+/Stable (Withdrawn)
ARC is a Mumbai based real estate developer formed in the year
2006, by four partners Mr. Ramesh Nahar, Mr. Ashok Nahar, Mr.
Jiten Gala and Mr. Hiren Gala, and is currently constructing a
residential complex named 'Elanza' in Prabhadevi, Mumbai.
ACTIS GENERICS: CRISIL Hikes Rating on INR6MM Cash Loan to B+
-------------------------------------------------------------
Due to inadequate information, CRISIL, in line with Securities
and Exchange Board of India guidelines, had migrated the rating
on the bank facility of Actis Generics Pvt Ltd (Actis) to 'CRISIL
B-/Stable; Issuer not cooperating'. However, management has
subsequently started sharing information necessary for carrying
out a comprehensive review of the rating. Consequently, CRISIL is
migrating the rating on the company's bank facility from 'CRISIL
B-/Stable; Issuer not cooperating' to 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6 CRISIL B+/Stable (Migrated
from 'CRIISL B-/Stable Issuer
Not Cooperating)
Long Term Loan 2.9 CRISIL B+/Stable (Migrated
from 'CRIISL B-/Stable Issuer
Not Cooperating)
Proposed Long Term
Bank Loan Facility 3.6 CRISIL B+/Stable (Migrated
from 'CRIISL B-/Stable Issuer
Not Cooperating)
Key Rating Drivers & Detailed Description
Weakness:
* Below-average financial risk profile marked by its small
networth, high gearing, and below average debt protection
metrics: The Company has below average financial risk profile
marked by small net worth of INR 9 Cr, moderate gearing of 1.5
times as on March 31, 2018.The NCATD and Interest Coverage for
2017-18 are 0.19 times and 2 times respectively.
* Modest scale of operations in the intensely competitive bulk
drug and intermediaries industry and its large working capital
requirement: The Company has recorded revenues of INR19.6 cr for
the FY18 and GCA days are 253.The Industry is exposed to severe
competition due to the low entry barriers.
Strengths:
* Promoters' extensive experience in the pharmaceuticals
industry.
Actis is expected to benefit from promoters' extensive industry
experience. The management has extensive experience in
manufacturing of bulk drugs and intermediates. The main promoter
of the company Mr. Shivkumar Reddy has experience of more than
decade in bulk drug manufacturing industry.
Outlook: Stable
CRISIL believes Actis will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' in case of substantial and
sustained increase in revenues and profitability.. Conversely,
the outlook may be revised to 'Negative' in case of lower than
expected growth in revenues and profitability, or significant
deterioration in capital structure caused most likely by a
stretch in working capital cycle or larger than expected debt
funded capex.
Actis, based in Visakhapatnam, is engaged in manufacturing of
bulk drugs & intermediates. And also a supplier. The company's
day-to-day operations are managed by Mr. Shivkumar Reddy.
The Company has recorded provisional PAT of INR1.4 Cr on
Operating Income of INR19.6 Cr for FY2018 vis-a-vis PAT of INR0.1
Cr on Operating Income of INR11.5 Cr for FY2017.
AIRCEL LTD: Pins Hopes on Release of INR750cr Bank Guarantees
-------------------------------------------------------------
The Hindu BusinessLine reports that Aircel Ltd, which is looking
at ways to stay afloat, is pinning its hopes on the release of
bank guarantees worth INR751 crore to help it operate as a going
concern and pay salaries to its nearly 3,000 employees.
The bank guarantees, if received soon, will be the lifeblood to
continue operations for another 4-6 months, the report says.
The Department of Telecommunications (DoT) is holding about
INR751 crore as bank guarantees submitted when Aircel transferred
its Broadband and Wireless Access (BWA) spectrum to Bharti
Airtel, sources close to the development told BusinessLine.
In April 2016, Aircel transferred its BWA spectrum to Airtel, the
report recalls. However, Aircel had to pay DoT INR298 crore in
cash and INR453 crore in bank guarantees (totalling INR751 crore)
as a pre-condition for clearing the spectrum transfer. These were
arranged by Airtel, which deducted the same from the
consideration price.
BusinessLine relates that Aircel had contested DoT's demand for
INR751 crore before the Telecom Disputes Settlement and Appellate
Tribunal (TDSAT), which in a January 9, 2018, order directed that
the bank guarantees be released within four weeks. TDSAT
permitted DoT to retain INR298 crore till another issue was
settled.
Later, on February 27, Aircel filed for bankruptcy protection
with the National Company Law Tribunal (NCLT) in Mumbai, after
its Malaysian promoter, Maxis Communications, decided against
pumping additional funds into the company. Following the filing,
DoT - which had not released the funds till then - decided to
invoke all the bank guarantees, BusinessLine says. Aircel then
moved TDSAT, which rejected the case on April 23, prompting the
operator to move the Supreme Court. While DoT withdrew its letter
seeking to invoke INR453 crore bank guarantees, on May 15, the
Supreme Court admitted Aircel's appeal for a refund of INR298
crore, according to BusinessLine.
In April, Maxis Communications infused an additional INR95 crore
in Aircel to enable the telecom operator pay salaries and meet
certain expenses, BusinessLine relates. The move, which was more
of a goodwill gesture than an investment, came after the
Malaysian parent declined in February to provide any more funds.
According to the Insolvency and Bankruptcy Code (IBC), lenders
will now have to sanction additional "working capital loans" to
ensure that the company's operations are not stalled. The lenders
are yet to take a call on further infusion of funds, the report
notes.
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 (US$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.
AKSHAT AGRO: Ind-Ra Keeps BB- Rating in Non-Cooperating Category
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Akshat Agro
Milling Company Private Limited's (AAMCPL) Long-Term Issuer
Rating in the non-cooperating category. The issuer did not
participate in the rating exercise despite continuous requests
and follow-ups by the agency. Therefore, investors and other
users are advised to take appropriate caution while using these
ratings. The rating will continue to appear as 'IND BB- (ISSUER
NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are as follows:
-- INR99 mil. Term loans maintained in Non-Cooperating Category
with IND BB- (ISSUER NOT COOPERATING) rating; and
-- INR150 mil. Fund-based working capital limit maintained in
Non-Cooperating Category with IND BB- (ISSUER NOT
COOPERATING) /IND A4+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
August 19, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in February 2013, AAMCPL operates a flour mill
having an annual milling capacity of 120,000 tons.
AMALESWARI CONSTRUCTIONS: CRISIL Cuts Rating on INR4MM Loan to D
----------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Amaleswari Constructions (AC) to 'CRISIL D/CRISIL D' from 'CRISIL
B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 4 CRISIL D (Downgraded from
'CRISIL A4')
Cash Credit 2.5 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Proposed Long Term 1.5 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B+/Stable')
The ratings reflect current delays in debt servicing, the delays
have been caused by weak liquidity. The ratings also reflects
AC's modest scale of operations, risks related to tender-based
business, working capital-intensive operations. These weaknesses
are partially offset by the experience of its promoters in the
construction industry.
Key Rating Drivers & Detailed Description
Weakness
* Current delays in debt servicing: The firm has been
consistently delaying interest payment on cash credit account.
The firm has current interest overdues outstanding for more than
30 days.
* Modest scale of operations and risks related to tender-based
business: Scale remains small, leading to low bargaining power
against customers. Furthermore, since entire revenue is tender-
based, growth depends on ability to bid successfully.
* Large working capital requirement: Gross current assets are
estimated at 350 days as on March 31, 2017, due to sizeable work-
in-progress inventory and high receivables.
Strength
* Extensive experience of promoters: Presence of more than 29
years has enabled the promoters to establish strong relationship
with customers and suppliers.
Established as a partnership firm in 1988 by P. Venkata Rami
Reddy, ACS undertakes civil construction projects for government
departments. The firm is based in Hyderabad.
AVANT TRADING: CRISIL Lowers Rating on INR5MM Overdraft to B
------------------------------------------------------------
CRISIL Ratings has downgraded its rating on the long-term bank
facilities of Avant Trading Company Private Limited (ATCPL) to
'CRISIL B/Stable' from 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Overdraft 5 CRISIL B/Stable (Downgraded
from 'CRISIL B+/Stable')
Proposed Long Term 2 CRISIL B/Stable (Downgraded
Bank Loan Facility from 'CRISIL B+/Stable')
The downgrade reflects stretch in liquidity, reflected in fully
utilised working capital limit in the 12 months ended April 2018.
Expected stabilisation of operations and improvement in business
risk profile have not materialised, as indicated by decline in
revenue to an estimated INR30 crore for fiscal 2018 from INR32
crore in the previous fiscal. Profitability is likely to remain
in the modest 2.8-3.0% range.
The rating reflects ATCPL's modest scale of operations and below-
average financial risk profile on account of small net worth and
high total outside liabilities to adjusted networth (TOL/ANW)
ratio. These weaknesses are partially offset by promoters'
experience in trading.
Analytical Approach
Non-interest bearing unsecured loan of INR33.25 lakh as on
March 31, 2017, from promoters is treated as debt as the amount
has decreased continuously in the last five fiscals. In last
rating exercise, the unsecured loan was treated as neither debt
nor equity.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: With an estimated revenue of INR30
crore for fiscal 2018, scale remains small, which constrains
bargaining power against suppliers and customers and hence limits
profitability (1.2-3% in the four fiscals through 2018).
* Below-average financial risk profile: Networth is likely to be
small in the range of 2.0-2.1 crore as on March 31, 2018,
increasing marginally from INR2.01 crore a year earlier. TOL/ANW
ratio peaked at 6.42 times and the debt protection metrics were
weak, reflected in interest coverage ratio of 1.4 times as on
March 31, 2017. While TOL/ANW is expected in the range of 4.5-
5.7 times, interest coverage ratio is expected to remain muted in
the similar range over the medium term.
* Large working capital requirement: Gross current assets are
estimated at 146 days as on March 31, 2018, because of stretched
receivables of 140 days. Operations are likely to remain working
capital-intensive over the medium term.
Strength
* Experience of promoters: Before establishing ATCPL, promoters
traded in agricultural commodities through an associate entity.
They started trading in limestone under ATCPL from March 2014 and
in steel, cement, computer peripherals, quartz mineral, mobile
phones, and other electronic components from December 2014.
Outlook: Stable
CRISIL believes ATCPL will continue to benefit from promoters'
experience and funding support. The outlook may be revised to
'Positive' if a sustained and significant improvement in scale of
operations and profitability leads to higher-than-expected cash
accrual. The outlook may be revised to 'Negative' if stretched
working capital cycle or large, debt-funded capital expenditure
puts further pressure on financial risk profile.
Incorporated in 2010 in Mumbai, ATCPL trades in mobile phones,
computer peripherals, and other electronic components. It also
trades in limestone, steel, and textile goods. Operations are
managed by Mr Sudeep Kumar Saha and Mr Harsh Rajnikant Saha.
BHAGWATI GEMS: Ind-Ra Assigns 'BB-' LT Rating, Outlook Stable
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Bhagwati Gems a
Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR100 mil. Fund-based working capital facilities assigned
with IND BB-/Stable rating; and
-- INR20 mil. Term loan due on FY20-FY21 assigned with IND BB-
/Stable rating.
KEY RATING DRIVERS
The ratings reflect Bhagwati's stretched liquidity profile with
full utilization of its bank limits during the 12 months ended
April 2018 on account of high working capital requirement,
resulting from a long receivable period.
The ratings are also constrained by the firm's low EBITDA margins
and moderate credit metrics due to its presence in a highly
competitive gems and jewelry industry, which is characterized by
a large number of organized as well as unorganized players. As
per FY18 provisional financials, the EBITDA margins expanded to
4% (FY17: 3.5%) attributed to foreign exchange gains and improved
sales realization. Consequently, net leverage (net debt/EBITDA)
improved, although was weak, at 2.9x in FY18P (FY17: 3.6x).
However, interest coverage (EBITDA/interest expense) deteriorated
to 4.6x in FY18P (FY16: 4.x) owing to a rise in interest expense,
resulting from higher utilization of its working capital limits.
Ind-Ra expects Bhagwati's credit profile and liquidity position
to remain stretched over FY19-FY20 on account of high working
capital requirement and low operating profitability.
The ratings also factor in the firm's medium scale of operations
as indicated by revenue of INR2,647 million in FY18P (FY17:
INR2,703 million).
However, the ratings derive strength from the promoter's two
decades of experience in the gems and jewelry industry.
RATING SENSITIVITIES
Positive: A sustained improvement in the EBITDA margins, leading
to an overall improvement in the credit metrics and liquidity
position, could be positive for the ratings.
Negative: Any decline in the top line and/or EBITDA margins,
leading to deterioration in the credit metrics, could lead to a
negative rating action.
COMPANY PROFILE
Established in 1999, Bhagwati is a partnership firm promoted by
Mr. Bharat Kathiriya, Mr. Bhimjibhai Kathiriya, Mrs. Manishaben
Kathiriya and Mr. Kevinbhai Kathiriya. The firm is involved in
cutting and polishing of rough diamonds at its unit in Surat. It
is also engaged in the trading of rough diamonds.
BHUSHAN STEEL: Bank of India to Get INR1,993cr From Tata Steel
--------------------------------------------------------------
BloombergQuint reports that state-owned Bank of India would be
able to realise around INR1993 crore from the first successful
resolution by the National Company Law Tribunal concerning Tata
Steel and Bhushan Steel, an official said.
BloombergQuint relates that the amount would not include
haircuts, BoI Managing Director and Chief Executive Officer D
Mohapatra said. The realisation of the amount would lead to non-
performing asset reduction and increase profitability of the
bank, he said.
"The first successful NCLT resolution involving Tata Steel and
Bhushan Steel will help in realise INR1,993 crore. If there are
haircuts, the amount will be written back from provisioning,"
Mohapatra told reporters, BloombergQuint relays.
In the first list of 12 accounts sent to NCLT for resolution
under Insolvency and Bankruptcy Code, BoI's exposure was INR8,300
crore. In the second list of 27 accounts, the exposure was
INR3,000 crore, he said.
"Once all the resolutions are successfully completed who is
expected in FY 2019, the bank will see a rise in profitability,"
Mohapatra, as cited by BloombergQuint, added.
Under the Standby Letter of Credit scheme, the bank was able to
recover INR9,000 crore and some INR500 crore remains, he said.
BloombergQuint adds that Mohapatra said Punjab National Bank had
returned INR2,500 crore to BoI which it had honoured in the Nirav
Modi scam.
About Bhushan Steel
India-based Bhushan Steel -- http://www.bhushan-group.org/--
manufactures auto-grade steel.
Bhushan Steel is one of the 12 non-performing assets referred by
the Reserve Bank of India for National Company Law Tribunal
(NCLT) proceedings. NCLT admitted the bankruptcy plea against
the steel company filed by State Bank of India on July 26, 2017.
Bhushan Steel's total debt stood at around INR42,355 crore as of
March 31, 2017.
Bamnipal Steel Ltd (BNPL), a wholly-owned subsidiary of Tata
Steel, last week completed the acquisition of controlling stake
of 72.65 per cent in Bhushan Steel Ltd (BSL).
ELECTROMEC ENG: Ind-Ra Migrates 'D' Rating to Non-Cooperating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Electromec
Engineering Enterprises' Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using the rating. The rating will
now appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR35 mil. Fund-based working capital limit (Long-term/Short-
term) migrated to non-cooperating category with IND D
(ISSUER NOT COOPERATING) rating; and
-- INR32.50 mil. Non-fund-based working capital limit (Short-
term) migrated to non-cooperating category with IND D (ISSUER
NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 5, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Electromec Engineering Enterprises was established in 1988 and
manufactures power & distribution transformers and related
components.
EMPIRE MULTIPLACK: Ind-Ra Maintains B+ Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Empire
Multipack Private Limited's (EMPL) Long-Term Issuer Rating in the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
continue to appear as 'IND B+ (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR30.85 mil. Long-term loan due on October 2020 maintained
in Non-Cooperating Category with IND B+ (ISSUER NOT
COOPERATING) rating;
-- INR42.5 mil. Fund-based working capital limit maintained in
Non-Cooperating Category with IND B+ (ISSUER NOT COOPERATING)
/IND A4 (ISSUER NOT COOPERATING) rating; and
-- INR22.5 mil. Non-fund-based working capital limit maintained
in Non-Cooperating Category with IND B+ (ISSUER NOT
COOPERATING) /IND A4 (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 20, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1996, EMPL manufactures printed corrugated boxes
and rolls. It is an ISO 22000:2205 certified organization and
provides printing and packaging services mostly in and around
300km of Chandigarh.
CENTECH ENGINEERS: CRISIL Migrates Rating to Not Cooperating
------------------------------------------------------------
CRISIL has been consistently following up with Centech Engineers
Private Limited (CEPL) for obtaining information through letter
dated February 9, 2018 and March 31 2018, among others, apart
from telephonic communication. The issuer, however, remained non-
cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.75 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Cash Credit 8.5 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Letter of Credit 2 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Proposed Long Term
Bank Loan Facility 0.22 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Standby Line of
Credit 1.25 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Term Loan 1.28 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of CEPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CEPL 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 CEPL to 'CRISIL
D/CRISIL D Issuer Not Cooperating'.
CEPL was incorporated in 2006-07 (refers to financial year,
April 1 to March 31) as Contec Airflow Engineers Pvt Ltd by Mr. C
Rama Krishna. Centech designs, consults, and commissions HVAC and
mechanical, electrical, and plumbing projects. Its operations are
currently managed by Mr. C Rama Krishna's son Mr. Pawan Kumar.
CHANDRASHEKAR CHAMARAJANAGAR: CRISIL Reaffirms B+ Loan Rating
-------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable/CRISIL A4' ratings on
the bank facilities of Chandrashekar - Chamarajanagar.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1 CRISIL A4 (Reaffirmed)
Cash Credit 4 CRISIL B+/Stable (Reaffirmed)
The ratings continue to reflect modest scale of operations owing
to the presence in the single location in a highly fragmented
industry & its working capital intensive nature of its
operations. These weaknesses are partially offset by its
promoter's long standing experience in the civil construction
industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations in a highly fragmented industry
owing to the presence in the single location: Chandrasekhar's
scale of operations is modest, as reflected in its revenues of
INR9.25 crore in fiscal 2017. This is due to tender-based nature
of operations. This also results in volatility in revenue profile
and also makes the firm susceptible to volatility in operating
margins as the same vary across various tenders. Furthermore, the
firm undertakes all of its projects in Chamarajanagar district
near Mysore, limiting the scale of operations to new projects in
this district only
* Working capital intensive nature of its operations: The
construction industry is inherently working capital intensive.
Chandrasekhar's operations are working capital intensive on
account of various deposits the firm has to maintain with the
government agencies and blockage of funds as retention money and
margin money for bank guarantee. Further, Chandrashekar also has
to provide earnest money deposit of ~1 percent at the time of
bidding. On winning the tender, Chandrashekar has to provide bank
guarantee of around 2 per cent of the total project cost as
security deposit. The bank guarantees also require margin money
of 15 per cent in the form of bank deposits. The working capital
requirements are partially funded by credit from suppliers and
the balance is met through the use of bank line facilities.
Strength
* Promoter's long standing experience in the civil construction
industry: Mr. Chandrasekhar has over a 26 of experience in the
civil construction industry. The firm is an approved Class 1
contractor, which enables it apply for tenders of all sizes. The
promoter's extensive industry experience has helped Chandrashekar
to bag projects frequently from government authorities.
Chandrashekar currently has a healthy order book of around INR25
crore to be executed over the next two years.
Outlook: Stable
CRISIL expects Chandrashekar to maintain a stable business risk
profile on the back of its established presence in the civil
construction industry. The outlook may be revised to 'Positive'
if the firm reports substantial growth in its scale of operations
and profitability while improving its working capital cycle. The
outlook may be revised to 'Negative' if the firm's financial risk
profile deteriorates due to lengthening of its operating cycle or
if the firm suffers a decline in its revenues or profitability.
Chandrashekar, establish in 1991, by Mr. Chandrashekar in
Karnataka. The firm is engaged in executing road contracts
awarded by different central government, state government and
semi government agencies in Chamarajanagar district near Mysore.
CHEMMARATHIL CASHEW: CRISIL Cuts Rating on INR23MM Loan to D
------------------------------------------------------------
CRISIL has downgraded the ratings on the bank facilities of
Chemmarathil Cashew Company (CCC) to 'CRISIL D/CRISIL D' from
'CRISIL BB-/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
Packing Credit 23 CRISIL D (Downgraded from
'CRISIL A4+')
The downgrade of ratings reflects its delays in servicing of debt
obligations due to weak liquidity.
The ratings also reflect its working capital intensive
operations. This weakness is partially offset by its promoter's
extensive experience in cashew industry.
Key Rating Drivers & Detailed Description
Weakness
* Working capital intensive operations: Due to seasonal
availability of raw material, inventory requirement is large (180
days). However, credit of 30 days from suppliers and low
receivables partially offset working capital intensity.
Strength
* Promoter's extensive experience and established relationship
with customers and suppliers: More than three decades' experience
has enabled the promoters to maintain established relationship
with key customers and has led to revenues of more than INR100
crore for the last 4 years through fiscal 2017.
CCC, set up in 2008 and based in Kollam (Kerala), processes and
trades in cashew nuts. Its operations are managed by partners Mr.
Sam C K and Mr. Syam C K.
CHINTPURNI STEEL: Ind-Ra Maintains BB+ Rating in Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Chintpurni
Steel Private Limited's Long-Term Issuer Rating in the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
continue to appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR7.6 mil. Long-term loan due on March 2017 maintained in
Non-Cooperating Category with IND BB+ (ISSUER NOT
COOPERATING) rating;
-- INR150 mil. Fund-based working capital limit maintained in
Non-Cooperating Category with IND BB+ (ISSUER NOT
COOPERATING) /IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR15 mil. Non-fund-based working capital limit maintained in
Non-Cooperating Category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 16, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2004, Chintpurni Steel manufactures sponge iron
and mild steel ingots.
CRBR INDUSTRIES: Ind-Ra Migrates BB- Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated CRBR Industries
Private Limited's (CIPL) Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR10 mil. Fund-based limit migrated to Non-Cooperating
Category with IND BB- (ISSUER NOT COOPERATING) /IND A4+
(ISSUER NOT COOPERATING) rating;
-- INR55 mil. Non-fund-based limit migrated to Non-Cooperating
Category with IND A4+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 21, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1999, the company was a proprietorship firm set up
under the name Chaudhary Ram Baldev Raj. It was converted into a
private limited company in June 2016 and renamed CIPL. The
company is engaged in the trading of imported timber and
manufacturing of wooden doors and other small wooden items.
CUSP INT'L: Ind-Ra Migrates B+ Rating to Non-Cooperating
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated CUSP
International Private Limited's (CUSP) Long-Term Issuer Rating to
the non-cooperating category. The issuer did not participate in
the rating exercise despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using the rating. The rating will
now appear as 'IND B+ (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR30 mil. Fund-based limit migrated to Non-Cooperating
Category with IND B+ (ISSUER NOT COOPERATING) /IND A4 (ISSUER
NOT COOPERATING) rating; and
-- INR50 mil. Non-fund-based limit migrated to Non-Cooperating
Category with IND A4 (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
May 5, 2017. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2010, CUSP is engaged in the trading of synthetic
leather. The company is promoted by Mr. Vinod Kumar Kakar and his
family.
GAUR HARI: CRISIL Assigns B+ Rating to INR12MM Proposed Loan
------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
long-term bank facility of Gaur Hari and Co.(GHC).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Fund-
Based Bank Limits 12 CRISIL B+/Stable (Assigned)
The rating reflects the firm's modest scale of operations,
moderate working capital intensity, and below-average financial
risk profile. These weaknesses are partially offset by the
extensive experience of its proprietor in the jewelry industry.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operations in competitive segment: With
estimated revenue of INR50.9 crore in fiscal 2018, scale remains
small in the highly fragmented jewellery industry that is
dominated by unorganised players. However, scale is expected to
increase over the medium term with setting up a new outlet in
Karol Bagh in New Delhi. Demand risk is expected to be moderate.
* Moderate working capital requirement: Gross current assets are
estimated at 124 days as on march 31, 2018 on account of large
inventory of 100-120 days.
* Below-average financial risk profile: Networth is estimated to
be small at INR3.64 crore and total outside liabilities to
adjusted networth ratio high at 4.65 times, as on March 31, 2018.
Strengths
* Proprietor's extensive experience: Benefits from the nearly
three decade-long experience of the proprietor in the jewellery
industry will continue to support business risk profile.
Outlook: Stable
CRISIL believes GHC will benefit from the extensive experience of
its proprietor. The outlook may be revised to 'Positive' if a
significant and sustained improvement in revenue and operating
margin with stabilisation of operations at new showroom results
in better capital structure and debt protection metrics. The
outlook may be revised to 'Negative' if lower-than-expected
growth in revenue and margin, deterioration in working capital
cycle, or delay or cost overrun in capital expenditure (capex)
further weakens financial risk profile.
Established in 1991 as a proprietorship concern by Mr Khagendra
Jana, GHC retails and wholesales gold and diamond-studded
jewellery (necklaces, earrings, bangles, kada, rings, bracelets,
and pendants) through its single outlet in Chandni Chowk, New
Delhi. It is setting up another outlet in Karol Bagh at an
estimated capex of INR4.0 crore, primarily to be met by
proprietor's funds. The outlet is expected to become operational
in the first quarter of fiscal 2020.
GMC INT'L: Ind-Ra Maintains 'D' Rating in Non-Cooperating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained GMC
International's (GMC) Long-Term Issuer Rating in the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using the rating. The rating will
continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating action is:
-- INR95 mil. Fund-based limit (long-term) maintained in Non-
Cooperating Category with IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 11, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 2011, GMC offers a range of fresh and packed
frozen meat products. The range covers frozen boneless buffalo,
sheep, goat meat and veal meat. Its registered office is in
Meerut, Uttar Pradesh.
GOLKUNDA DIAMONDS: Ind-Ra Maintains BB+ Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Golkunda
Diamonds & Jewellery Limited's (GDJL) Long-Term Issuer Rating in
the non-cooperating category. The issuer did not participate in
the rating exercise despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using the rating. The rating will
continue to appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR350 mil. Fund-based working capital limits maintained in
Non-Cooperating Category with IND BB+ (ISSUER NOT
COOPERATING) /IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR20 mil. Non-fund-based working capital limit maintained in
Non-Cooperating Category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 16, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1960, GDJL manufactures and exports diamond
studded gold jewelry through its 500 pieces per day facility in
Mumbai. The company has been listed on leading stock exchanges
since 1992.
GUPTA AND COMPANY: CRISIL Lowers Rating on INR2.25MM Loan to B+
---------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Gupta
and Company (GC) to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB-
/Stable/CRISIL A4+'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.5 CRISIL A4 (Downgraded from
'CRISIL A4+')
Foreign Bill 7.0 CRISIL A4 (Downgraded from
Purchase 'CRISIL A4+')
Letter of Credit 1.0 CRISIL A4 (Downgraded from
'CRISIL A4+')
Letter of Credit 0.75 CRISIL A4 (Downgraded from
Bill Discounting 'CRISIL A4+')
Long Term Loan 2.25 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Packing Credit 5.00 CRISIL A4 (Downgraded from
'CRISIL A4+')
Proposed Long Term .50 CRISIL B+/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
The downgrade reflects CRISIL's belief that firm's liquidity will
remain under pressure over the medium term owing to large working
capital requirements as reflected in Gross Current Assets days
estimated at around 200 days as on March 31, 2018. The firm's
bank limits were extensively utilized over the last 12 months due
to significant dependence on debt for funding working capital
requirements owing to modest accruals.
The ratings reflect GC's modest scale of operations in a highly
fragmented industry and below-average financial risk profile.
These weaknesses are partially offset by promoters' extensive
experience in the ready-made garments (RMG) segment.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations in fragmented industry: The scale of
operations was modest with revenues of around INR40.43 crore in
fiscal 2017.Moreover, the RMG industry is highly fragmented and
the firm has to compete with many local players as well as
garment manufacturers from other Southeast Asian countries.
* Below average financial risk profile: The financial risk
profile is below average, as reflected in gearing and TOLTNW
ratio of 1.60 and 2.58 times respectively as on 31 March 2017.
The debt protection metrics were moderate, as reflected in an
interest cover of 2.4 times for fiscal 2017.
Strength:
* Extensive experience of promoters: Mr.Ashish Gupta, managing
partner has over a decade of experience in the RMG segment. Owing
to this he has established strong relationships with customers as
well as suppliers. This should continue to benefit the firm over
the medium term.
Outlook: Stable
CRISIL believes GC will continue to benefit over the medium term
from the extensive experience of its promoters. The outlook may
be revised to 'Positive' in case of a substantial increase in
revenue and profitability. The outlook may be revised to
'Negative' in case of higher-than-expected capital withdrawal or
deterioration in working capital management.
Set up as a partnership firm in 1983,GC manufactures RMG and its
operations are managed by Mr.Ashish Gupta.
HMM INFRA: Ind-Ra Maintains BB Issuer Rating in Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained HMM Infra
Limited's Long-Term Issuer Rating in the non-cooperating
category. The issuer did not participate in the rating exercise,
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
continue to appear as 'IND BB (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR115 mil. Fund-based working capital limit maintained in
non-cooperating category with IND BB (ISSUER NOT COOPERATING)
/IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR230 mil. Non-fund-based working capital limit maintained
in non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
January 15, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1996, HMM Infra manufactures heavy steel
structures.
INDIRA PRIYADARSHINI: Ind-Ra Migrates D Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Indira
Priyadarshini Hydro Power Private Limited's (IPHPPL) term loans'
rating to the non-cooperating category. The issuer did not
participate in the rating exercise, despite continuous requests
and follow-ups by the agency. Therefore, investors and other
users are advised to take appropriate caution while using the
ratings. The rating will now appear as 'IND D (ISSUER NOT
COOPERATING)' on the agency's website.
The instrument-wise rating action is:
-- INR238.4 mil. Term loans (Long-term) migrated to Non-
Cooperating Category with IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 14, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
IPHPPL is sponsored by the Ind Barath group of companies, which
is mainly engaged in the power development business. The company
is setting up a 4.8MW run-of-the-river hydel power plant on
Manuni Khad (tributary of Beas) in Kangra District, Himachal
Pradesh. The power plant is yet to be commissioned.
INFOSOFT DIGITAL: Ind-Ra Maintains BB Rating in Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Infosoft
Digital Design & Services Private Limited's (IDDS) Long-Term
Issuer Rating in the non-cooperating category. The issuer did not
participate in the rating exercise despite continuous requests
and follow-ups by the agency. Therefore, investors and other
users are advised to take appropriate caution while using these
ratings. The rating will continue to appear as 'IND BB (ISSUER
NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR50 mil. Fund-based working capital limit maintained in
Non-Cooperating Category with IND BB (ISSUER NOT COOPERATING)
/IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR120 mil. Non-fund-based working capital limit maintained
in Non-Cooperating Category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
January 8, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1997, IDDS is a diversified technology and
equipment manufacturer. The company mainly focuses on
manufacturing information display systems and security systems
such as flight information display systems, public address
systems, touch screen kiosks and computerized automatic
announcement systems.
INTERLINK FOODS: Ind-Ra Keeps BB+ Rating in Non-Cooperating Cat.
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Interlink
Foods Private Limited's Long-Term Issuer Rating in the non-
cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will continue to appear as 'IND BB+ (ISSUER NOT COOPERATING)' on
the agency's website.
The instrument-wise rating action is:
-- INR150 mil. Fund-based working capital limit maintained in
non-cooperating category with IND BB+ (ISSUER NOT
COOPERATING) /IND A4+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 5, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Interlink Foods is engaged in the processing of ready-to-eat and
weaning food under Integrated Child Development Scheme Projects
in Jharkhand.
ISHAAN TPR: CRISIL Reaffirms B Rating on INR2.5MM Cash Loan
------------------------------------------------------------
CRISIL Ratings has reaffirmed its ratings on the bank facilities
of Ishaan TPR (ITPR) at 'CRISIL B/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 2.5 CRISIL B/Stable (Reaffirmed)
Letter of Credit 7 CRISIL A4 (Reaffirmed)
Long Term Loan 1 CRISIL B/Stable (Reaffirmed)
The ratings continue to reflect the firm's weak financial risk
profile, stretched working capital cycle, and continuous decline
in profitability. These weaknesses are partially offset by the
extensive experience of the promoters and healthy return on
capital employed (RoCE).
Key Rating Drivers & Detailed Description
Weaknesses
* Weak financial risk profile: Total outside liabilities to
adjusted networth (TOLANW) ratio was 22.9 times as on March 31,
2017, and is estimated at 25 times as on March 31, 2018. Networth
was INR91 lakh as on March 31, 2017, and is estimated at INR1
crore on March 31, 2018, supported by estimated unsecured loans
of INR1.3 crore.
* Stretched working capital cycle: ITPR had gross current assets
of 519 days on March 31, 2017, due to large receivables and
inventory of 231 and 244 days respectively on March 31, 2017.
Operations will remain working capital intensive in the near
future.
* Continuous decline in profitability: Operating profitability
declined to 3% in fiscal 2017 from 8.6% in fiscal 2016, partly
due to advertisement expenses incurred for footwear brand
'Fluke'. Profitability is expected to remain low over the medium
term.
Strengths
* Extensive experience of the promoters: The promoters'
experience of more than 10 years has helped the firm maintain
good relationships with customers and suppliers along the supply
chain management, reflected in increase in turnover from INR15.4
crore in fiscal 2017 to an estimated INR50 crore in fiscal 2018.
* Healthy RoCE: The RoCE was 9% in fiscal 2017, and is estimated
to have improved to 10% in fiscal 2018. It should remain healthy
over the medium term.
Outlook: Stable
CRISIL believes ITPR will continue to benefit from its partners
extensive experience in the thermo plastic rubber (TPR) compounds
industry. The outlook may be revised to 'Positive' if operating
margin is higher than expected. The outlook may be revised to
'Negative' if the firm undertakes larger-than-expected, debt-
funded capital expenditure, or if its working capital weakens,
leading to deterioration in the financial risk profile.
About the Firm
Set up in 2015 as a partnership firm of Mr Deevik Garg, Mr Nitin
Jindal, and Mr Ankit Goyal, ITPR manufactures TPR compounds used
in soles of footwear. The firm started operations in January
2016. Its manufacturing facility is at Narela in Delhi. The firm
has also expanded into footwear which it sells under its Fluke
brand.
INVEST GOLD: CRISIL Reaffirms B+ Rating on INR5MM LT Loan
---------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long-
term bank facility of Invest Gold and General Finance Private
Limited (Invest Gold).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 5 CRISIL B+/Stable (Reaffirmed)
The rating reflects the small scale of operations and modest
asset quality. These weaknesses are partially offset by the
company's long track record of operations and adequate
capitalisation.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations: Total assets of INR11.1 crore as on
March 31, 2018, reflects the small scale of operations. Size of
the loan book grew to INR8.8 crore as on March 31, 2018, from
INR7.5 crore as on March 31, 2017. The company operates with its
head office and branches in Thrissur district in Kerala.
* Modest asset quality: Bulk of the borrowers belong to a segment
which is unbanked or underserved by the organized finance sector.
Hence, asset quality may remain vulnerable to the relatively
weaker credit profile of borrowers.
Strengths
* Long track record of operations: The promoters have been
engaged in the asset finance business for over two decades, and
Invest Gold has been operational since 1994. Long track record
has also helped the company form a loyal customer base.
* Adequate capitalisation: Capitalisation is adequate for the
planned scale of business, supported by regular equity infusions.
The networth was INR5.16 crore with a comfortable gearing of 1
time as on March 31, 2018.
Outlook: Stable
CRISIL believes Invest Gold's scale of operations will remain
small, with modest asset quality over the medium term. The
outlook may be revised to 'Positive' in case of significant
improvement in earnings and asset quality. The outlook may be
revised to 'Negative' if significant weakening of asset quality
and profitability, exert pressure on capitalisation.
Invest Gold was set up in 1994, under the Companies Act, 1956, as
an NBFC registered with Reserve Bank of India. It extends loans
against gold jewellery, consumer durables, and other movable and
immovable property. The company operates mainly in Thrissur
district in Kerala.
JAGDISH SARAN: Ind-Ra Maintains BB LT Rating in Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Jagdish
Saran's Long-Term Issuer Rating in the non-cooperating category.
The issuer did not participate in the rating exercise, despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will continue to appear as
'IND BB (ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR65 mil. Fund-based limit maintained at non-cooperating
category with IND BB (ISSUER NOT COOPERATING) /IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR200 mil. Non-fund-based limit maintained at non-
cooperating category with IND A4+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
January 21, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Jagdish Saran executed contract-based construction work.
JAY KHODIYAR: CRISIL Reaffirms B+ Rating on INR7.95MM Cash Loan
---------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B+/Stable' rating on
bank facilities of Jay Khodiyar Cotton Private Limited (JKCPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 7.95 CRISIL B+/Stable (Reaffirmed)
The ratings continue to reflect the moderate scale of operations
and vulnerability to volatile raw material prices. However, these
rating weaknesses are partially offset by extensive experience of
the promoters and the moderate liquidity.
Key Rating Drivers & Detailed Description
Weakness
* Moderate scale of operations amidst intense competition:
Turnover of INR80 crore in fiscal 2018, indicates the moderate
scale of operations. Intense competition in the cotton ginning
industry further restricts the company's bargaining power with
customers, and precludes any benefits from economies of scale.
* Exposure to volatility in raw material prices: Profitability is
linked to raw material prices, as raw material cost, mainly
cotton, accounted for 90% of operating income in fiscal 2017.
Thus, any sharp fluctuation in raw material cost can adversely
impact the operating margin.
Strengths:
* Extensive experience of promoters: The two decade-long
experience of the promoters, their strong understanding of local
market dynamics, and healthy relationships with cotton farmers,
will continue to support the business risk profile.
* Moderate liquidity: Liquidity is marked by cash accrual of
INR0.38 crore against no debt, and moderate bank limit
utilization averaging 70-80% for the 8 months through November
2017.
Outlook: Stable
CRISIL believe JKCPL will continue to benefit from the extensive
experience of its promoters. The outlook may be revised to
'Positive' if gradual increase in revenue and profitability leads
to high cash accrual and strengthens the capital structure. The
outlook may be revised to 'Negative' if low cash accrual, sizable
working capital requirement, or large debt-funded capex weakens
financial risk profile, especially liquidity.
Incorporated in 2007, JKCPL is engaged into ginning and pressing
of cotton into bales and extracting cotton seeds. Its
manufacturing facility is located at Mahuva, near Bhavnagar,
Gujarat. It is promoted by Mr. Nanabhai Kalsariya, Mr. Nagjibhai
Rathod and Mr. Mangalbhai Ladumor.
JD CONSTRUCTION: Ind-Ra Maintains BB- Rating in Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained J.D.
Construction's Long-Term Issuer Rating in the non-cooperating
category. The issuer did not participate in the rating exercise,
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
continue to appear as 'IND BB- (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR25 mil. Fund-based working capital limit maintained in
non-cooperating category with IND BB- (ISSUER NOT
COOPERATING) rating; and
-- INR80 mil. Non-fund-based working capital limit maintained in
non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 22, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2008, J.D. Construction is a civil contractor and
order supplier.
JHANWAR RICE: CRISIL Withdraws B+ Rating on INR10MM Cash Loan
-------------------------------------------------------------
CRISIL has been consistently following up with Jhanwar Rice and
Dall Mill (JRDM) for obtaining information through letters and
emails dated July 10, 2017, and August 8, 2017, among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Withdrawn)
Proposed Long Term
Bank Loan Facility 1.67 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Withdrawn)
Term Loan 1.33 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Withdrawn)
Warehouse Receipts 3 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 JRDM. This restricts CRISIL's
ability to take a forward JRDM 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 JRDM
continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
CRISIL has withdrawn its ratings on the bank facilities of JRDM
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.
JRDM was incorporated in 1979 by Mr. Kailash Jhanwar in Bundi.
The firm mills and trades in paddy and rice. Milling capacity of
6 tonne per hour is utilised at around 70 percent. Net profit and
net sales increased to INR5 million and INR387 million in 2014-15
from INR4.5 million and INR331.60 million, respectively, the
previous year.
JTL INFRA: Ind-Ra Maintains BB Issuer Rating in Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained JTL Infra
Limited's Long-Term Issuer Rating in the non-cooperating
category. The issuer did not participate in the rating exercise,
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
continue to appear as 'IND BB (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR250 mil. Fund-based working capital limit maintained in
non-cooperating category with IND BB (ISSUER NOT COOPERATING)
/IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR18.5 mil. Non-fund-based working capital limit maintained
in non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
January 8, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
JTL Infra produces black and galvanized ERW steel pipes & tubes,
hollow sections and structural steel that are extensively used in
major engineering and construction projects.
KANCHI KARPOORAM: CRISIL Cuts Rating on INR7MM Cash Loan to B+
--------------------------------------------------------------
CRISIL has been consistently following up with Kanchi Karpooram
Ltd (KKL) for obtaining information through emails and letter
dated, April 24, 2018, among others, apart from telephonic
communication. The issuer, however, remained non-cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Buyer's Credit 6 CRISIL B+/Stable (Issuer Not
Cooperating; Migrated from
'CRISIL BB-/Negative')
Cash Credit 7 CRISIL B+/Stable (Issuer Not
Cooperating; Migrated from
'CRISIL BB-/Negative')
Proposed Long Term
Bank Loan Facility 7 CRISIL B+/Stable (Issuer Not
Cooperating; Migrated from
'CRISIL BB-/Negative')
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 KKL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on KKL is
consistent with 'Scenario 2' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BBB category or
lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of KKL to 'CRISIL B+/Stable/Issuer Not Cooperating'
from 'CRISIL BB-/Negative'.
Incorporated in 1991 and promoted by Mr Suresh Shah and family,
KKL, a public limited company, manufactures camphor and its by-
products, dipentene, sodium acetate trihydrate, and pine tar.
KANDARP CONSTRUCTIONS: Ind-Ra Keeps 'D' Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Kandarp
Constructions (India) Private Limited's (KCIPL) Long-Term Issuer
Rating in the non-cooperating category. The issuer did not
participate in the rating exercise, despite continuous requests
and follow-ups by the agency. Therefore, investors and other
users are advised to take appropriate caution while using these
ratings. The rating will continue to appear as 'IND D (ISSUER NOT
COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR60 mil. Fund-based working capital limit (long-term/short-
term) maintained in non-cooperating category with IND D
(ISSUER NOT COOPERATING) rating; and
-- INR100 mil. Term loan (long-term) maintained in non-
cooperating category with IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
January 11, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Kandarp Constructions (India) is a Luck now-based firm engaged in
the business of civil and road construction works.
KSM EDUCATIONAL: Ind-Ra Assigns 'B+' LT Rating, Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated KSM Educational &
Charitable Trust's (KSMECT) bank facilities as follows:
-- INR65.20 mil. Bank loans assigned with IND B+/Stable rating.
KEY RATING DRIVERS
The rating is constrained by the trust's small scale of
operations, though its total income increased at a CAGR of 56.15%
to INR38.63 million from INR6.50 million over FY13-FY17. Also,
the trust is exposed to revenue concentration risk, as tuition
fee receipt is the primary source of income, constituting 95.24%
averagely during FY13-FY17.
The rating is also constrained by the limited student headcount
in the trust-run college, which remained in the range of 265-282
during FY14-FY18. However, a new school started by the trust in
FY16 increased the total student headcount (both college and
school) to 699 in FY18 from 275 in FY15. The capacity utilization
in college and school was 45.85% and 46.33%, respectively, in
FY18. Any unexpected fall in student headcount would affect the
revenue profile of the trust.
Moreover, KSMECT's liquidity position is tight. The available
funds (cash and unrestricted investments) during FY13-FY17 were
below INR1 million, as the trust had incurred a capex in FY13-
FY15 to create an infrastructure facility for the new school
started in FY16. In FY17, the available funds covered only 0.22%
of its total debt (FY16: 1.04%) and 1.38% of its operating
expenditure (FY16: 8.33%). However, Ind-Ra draws some comfort
from the trust's nil collection period, timely inflow of tuition
fee and nil cash credit/overdraft facilities.
The rating factors in the trust's moderate debt burden. Debt in
relation to current balance before interest and depreciation
ratio declined to 3.59x in FY17 from 4.65x in FY16, on the back
of a 39.37% yoy increase in current balance before interest and
depreciation to INR24.43 million. Ind-Ra believes that the debt
burden to remain high in the near term due to a moderate
operational performance as the school is in the nascent stage of
operations.
The ratings, however, are supported by the trust's robust
operating margins of above 43% during FY13-FY17. In FY17, it
reported operating margin of 63.17% and net operating surplus of
INR4.74 million. Ind-Ra expects these margins to remain healthy
in the near to medium term on the back of expected adequate
tuition fee income supported by increased student headcount
mainly in the school.
Also, the trust's coverage ratios are comfortable, as reflected
in its debt service coverage ratio of 1.87x in FY17 (FY16: 1.25x)
and interest service coverage ratio of 2.07x (1.95x).
RATING SENSITIVITIES
Negative: Any adverse movement in students' enrolments leading to
a decline in the operating profitability on a sustained basis
along with further stress on liquidity and debt servicing could
lead to a negative rating action.
Positive: A substantial increase in the revenue base along with a
fall in debt burden and an improvement in liquidity ratios on a
sustained basis could lead to a positive rating action.
COMPANY PROFILE
KSMECT was established in 2007 and is registered under Indian
Trust Act 1872. It started a college - Holy Trinity College of
Education - in 2008 in Kanyakumari district. The college offers
B.Ed, M.Ed and M.Phil courses. The trust has also started a CBSE
school named Holy Trinity International School in the academic
year 2015-2016 and offers K-10 education.
LANCER CONTAINER: Ind-Ra Keeps B+ Rating in Non-Cooperating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Lancer
Container Lines Private Limited's (LCLPL) Long-Term Issuer Rating
in the non-cooperating category. The issuer did not participate
in the rating exercise despite continuous requests and follow-ups
by the agency. Therefore, investors and other users are advised
to take appropriate caution while using these ratings. The rating
will continue to appear as 'IND B+ (ISSUER NOT COOPERATING)' on
the agency's website.
The instrument-wise rating actions are:
-- INR50 mil. Fund-based working capital limit maintained in
Non-Cooperating Category with IND B+ (ISSUER NOT COOPERATING)
/IND A4 (ISSUER NOT COOPERATING) rating; and
-- INR70 mil. Term loan due on March 2018 maintained in Non-
Cooperating Category with IND B+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 19, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2011, LCLPL is a multimodal transport operator
registered with DG Shipping of India. The company offers door-to-
door logistic services including non-vessel operating common
carrier, container trading, freight forwarding, road
transportation, container empty yard and container leasing.
LORDS ORIENTAL: Ind-Ra Migrates B+ LT Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Lords Oriental
Resorts Developers (Silvassa) Private Limited's (LORDSPL) Long-
Term Issuer Rating to the non-cooperating category. The issuer
did not participate in the rating exercise despite continuous
requests and follow-ups by the agency. Therefore, investors and
other users are advised to take appropriate caution while using
these ratings. The rating will now appear as 'IND B+ (ISSUER NOT
COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR126.0 mil. Term loan due on July 2020 Migrated to Non-
Cooperating Category with IND B+ (ISSUER NOT COOPERATING)
rating; and
-- INR2.5 mil. Fund-based limit migrated to Non-Cooperating
Category with IND B+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
May 18, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2011, LORDSPL operates a three-star hotel in
Silvassa.
MILAN TANNERY: CRISIL Hikes Rating on INR4MM Cash Loan to B-
------------------------------------------------------------
CRISIL Ratings has upgraded its rating on the long-term bank
facilities of Milan Tannery (ML; part of the Rathi group) to
'CRISIL B-/Stable' from 'CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit/ 4 CRISIL B-/Stable (Upgraded
Overdraft facility from 'CRISIL D')
Foreign Currency 3.2 CRISIL B-/Stable (Upgraded
Term Loan from 'CRISIL D')
Long Term Loan .5 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Proposed Fund- 1.3 CRISIL B-/Stable (Upgraded
Based Bank Limits from 'CRISIL D')
The upgrade reflects timely servicing of installments on term
loans and foreign currency term loan (FCTL) since November 2017.
The rating reflects the group's large working capital requirement
and susceptibility of operating margin to volatility in raw
material prices. These strengths are partially offset by moderate
business risk profile, supported by promoters' experience in the
engineering goods industry, established client base, diverse
product profile, and above-average financial risk profile because
of a healthy capital structure and comfortable gearing and debt
protection metrics.
Analytical Approach
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of Chemgems (India) Pvt Ltd, ML, and
Rathi Chempels Pvt Ltd. This is because all these entities,
collectively referred to as the Rathi group, have a common
management and significant operational linkages.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to intense competition: The leather goods segment is
highly fragmented with limited product differentiation, mainly
due to low entry barrier. Hence, 60-65% of players operate in the
unorganised sector. Domestic manufacturers also have to compete
with players from China, which has a larger presence in the
global market.
* Working capital-intensive operations: Gross current assets have
been over 200 days in the three years ended March 2017 due to
stretched receivables. Though credit from suppliers (80-90 days)
helps partially meet the funding gap, reliance on external
borrowing remains high, leading to fully utilised cash credit
limit in the past 12 months.
Strength
* Promoters' extensive experience: Presence of over three decades
in the leather industry and strong regional market presence have
enabled the promoters to develop healthy relationship with
suppliers and customers, bag new orders, and ramp up operations.
Outlook: Stable
CRISIL believes the Rathi group will continue to benefit from its
established market position in the leather industry. The outlook
may be revised to 'Positive' if higher-than-expected growth in
revenue and accretion to reserve, and efficient working capital
management strengthen financial risk profile. The outlook may be
revised to 'Negative' if significant decline in revenue and
profitability, increase in working capital requirement, fresh,
debt-funded capital expenditure, or capital withdrawal weakens
financial risk profile.
The Kolkata-based Rathi group is promoted by Mr Hari Narayan
Rathi and Mr Kishore Rathi. It manufactures and exports leather
bags and wallets; and trades in chemicals and dyes used in the
leather and textile industries in the domestic market. Unit in
Banthala, West Bengal, has installed capacity to process 5.10
lakh bags per month.
N.P. AGRO: CRISIL Upgrades Rating on INR24.65MM Loan to B+
----------------------------------------------------------
CRISIL has upgraded its ratings on the bank facilities of
N.P. Agro India Industries Limited (NP Agro) to 'CRISIL
B+/Stable/CRISIL A4' from 'CRISIL D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 24.65 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
Letter of Credit .35 CRISIL A4 (Upgraded from
'CRISIL D')
Proposed Long Term 5.26 CRISIL B+/Stable (Upgraded
Bank Loan Facility from 'CRISIL D')
Term Loan 1.74 CRISIL B+/Stable (Upgraded
from 'CRISIL D')
The rating upgrade is driven by NP Agro's improved liquidity
position with timely repayment of interest and principal over the
past three months ended April 2018 and sufficient expected cash
accrual generation against debt obligation over the medium term.
Furthermore, enhancement proposal in fund-based limit is under
process.
The ratings also factor in large working capital requirement and
high leverage. However, the company benefits from the promoters'
extensive experience in the plastic bags and tarpaulin industry
and their funding support.
Analytical Approach
CRISIL has treated the unsecured loans of INR28.56 crore extended
by the promoters as on March 31, 2018 as neither debt nor equity
(NDNE) because these loans are subordinated to bank debt and are
expected to remain in business over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses
* Large working capital requirement: Working capital-intensive
operations are reflected in gross current assets of 168-179 days
over the three fiscals ended March 31, 2017, driven by high
inventory (107-119 days) because of diverse range of products and
moderate debtors (47-65 days). Operations are expected to remain
working capital intensive over the medium term.
* High leverage: High reliance on external debt because of large
working capital intensity has resulted in total outside
liabilities to adjusted net worth ratio (TOLANW) of 9.3-11.7
times over the 3 fiscals ended March 31, 2017 and is expected to
remain high over the medium term.
Strengths
* Promoters' extensive experience in the plastic bags and
tarpaulin industry and their funding support: Benefits from the
two-decade long experience of the promoters have enabled the
company to establish a widespread marketing network, NP Agro's
operating income has grown with a healthy compound average growth
rate of over 14% over three fiscals ended 2018; estimated
operating income was INR115 crore in fiscal 2018. Furthermore,
promoters have also extended unsecured loans to support the
business. The promoters' experience should continue to support
the business over the medium term.
Outlook: Stable
CRISIL believes NP Agro will continue to benefit from the
extensive industry experience of its promoters and established
customer base. The outlook may be revised to 'Positive' if
better-than-expected revenue and sizeable cash accrual along with
efficient working capital management, leads to a better financial
risk profile. The outlook may be revised to 'Negative' if low
operating income and cash accrual, a stretched working capital
cycle, or any large, debt-funded capital expenditure, weakens the
capital structure or liquidity.
NP Agro was incorporated in fiscal 1998 and was taken over by the
present management headed by Mr Prateek Pasricha along with his
associates in fiscal 2009. The company manufactures high-density
polyethylene/poly propylene bags and tarpaulin, masterbatches,
and printed laminated plastic films. The manufacturing unit is in
Bareilly, Uttar Pradesh.
PAWAN CASTINGS: Ind-Ra Assigns 'BB' LT Rating, Outlook Stable
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Pawan Castings
Meghalaya Private Limited (PCMPL) a Long-Term Issuer Rating of
'IND BB'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR150 mil. Fund-based limits assigned with IND BB/Stable
rating; and
-- INR10 mil. Long-term loan due on March 2022 assigned with IND
BB/Stable rating.
KEY RATING DRIVERS
The ratings reflect PCMPL's medium scale of operations as
indicated by revenue of INR846 million in FY17 (FY16: INR1,166
million), resulting from a sharp decrease in sales during
November 2016-March 2017, owing to demonetization. As per FY18
provisional financials, the company booked revenue of INR1,253
million.
The ratings also factor in the company's modest credit metrics
attributed to low margins due to highly competitive steel
industry. The EBITDA margins increased to 4.28% in FY17 (FY16:
3.49%) due to a decline in cost of raw materials. The company
reported EBITDA margin of 3.9% in FY18P. Gross interest coverage
(EBITDA/gross interest expense) was 2.0x (FY16: 1.9x) and net
leverage (net debt/EBITDA) was 4.4x (4.7x).
However, the ratings are supported by PCMPL's comfortable
liquidity position as indicated by 92.5% average utilization of
the fund-based working capital limits during 12 months ended
April 2018.
The ratings are also benefit from the founder's experience of
over a decade in the manufacturing and casting of mild steel
billets.
RATING SENSITIVITIES
Negative: Deterioration in the overall credit profile will lead
to a negative rating action.
Positive: An improvement in the scale of operations along with an
improvement in the overall credit metrics may lead to a positive
rating action.
COMPANY PROFILE
Incorporated in 2001, PCMPL manufactures thermo-mechanically
treated bars. The company's plant is located at Burnihat,
Meghalaya and has an annual installed capacity of 54,000 metric
tons. The plant is operating at 57% capacity.
PAYYANUR MEDICAL: CRISIL Reaffirms D Rating on INR18MM Term Loan
----------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL D' rating to the bank
facilities of Payyanur Medical Service and Research Centre
Private Limited (PMCL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Long Term
Bank Loan Facility 1.5 CRISIL D (Reaffirmed)
Term Loan 18.0 CRISIL D (Reaffirmed)
CRISIL's ratings on bank facilities of PMCL continue to reflect
delays in servicing its term loan on account of stretched
liquidity. The company's liquidity is stretched because of
sluggish operating performance with slower ramp-up of operations
at its hospital. Also, high overhead expense resulted in net loss
in fiscal 2017. The scale of operations will remain suppressed
over the medium term, adversely impacting cash accrual and debt
servicing ability.
The company has small scale due to initial stage of operations,
and has a weak financial risk profile because of small networth,
high gearing, and subdued debt protection metrics. However, it
benefits from its promoters' extensive experience in the
healthcare industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations due to initial stage: The small scale
is reflected in turnover of INR10 crore for fiscal 2017. Initial
stage of operations has led to low occupancy in the hospital.
* Weak financial risk profile: Networth was at INR1.2 crore,
consequently gearing at over 10 times as on March 31, 2017. Large
losses in the past have kept debt protection metrics weak.
Strength
* Extensive experience of promoters in the healthcare industry:
The promoters have experience of over a decade in the healthcare
industry, which will benefit the company's business risk profile
over the medium term.
PMCL, incorporated in 2011, has a multispeciality hospital,
Anaamaya Medical Institute, at Payyannur in Kannur, Kerala. It
started commercial operations in April 2016.
PUNJAB NATIONAL: Moody's Lowers Deposit Ratings to Ba1
------------------------------------------------------
Moody's Investors Service has downgraded the local and foreign
currency deposit rating of Punjab National Bank (PNB) to Ba1/NP
from Baa3/P-3.
At the same time, Moody's has downgraded the bank's baseline
credit assessment (BCA) and Adjusted BCA to b1 from ba3.
These actions complete Moody's review of the bank's ratings
initiated on February 20, 2018, following the bank's announcement
of the discovery of some fraudulent and unauthorized transactions
amounting to INR144 billion ($2.2 billion) in February and March
2018.
Moody's has also downgraded PNB's foreign currency issuer rating
to Ba1 from Baa3. And, Moody's has downgraded the Counterparty
Risk Assessment (CRA) of the bank to Ba1(cr)/NP(cr) from
Baa3(cr)/P-3(cr).
The ratings outlook is stable.
RATINGS RATIONALE
DETERIORATION OF STANDALONE PROFILE IS THE KEY DRIVER OF THE
RATING ACTIONS
The downgrade of the bank's BCA and ratings reflects the negative
impact of the discovery of a number of fraudulent transactions on
the bank's standalone profile, particularly its capital position.
The rating downgrade also reflects the weak internal controls and
processes of the bank, given that the fraudulent transactions
were undetected for a number of years.
The bank's weak earnings profile - as seen by its large stock of
nonperforming loans (NPLs) and the associated credit costs - will
limit its ability to absorb the impact of the fraudulent
transactions over the next 12-18 months. Furthermore, provisions
relating to the fraudulent exposures will largely offset the
benefit the bank will receive from the Indian government's (Baa2
stable) capital infusion plan.
On February 14, 2018, PNB announced to the stock exchange that it
had discovered some fraudulent and unauthorized transactions
amounting to INR113.9 billion ($1.7 billion). Based on the bank's
subsequent announcements, PNB's total exposure to these
transactions amounts to INR144 billion ($2.2 billion).
Moody's expects that PNB will receive capital support from the
Indian government and that the bank will be able to release some
capital from the sale of its non-core assets - such as its real
estate holdings - as well as a partial stake sale in its listed
housing finance subsidiary, PNB Housing Finance Limited.
Nevertheless, these sources will unlikely prove sufficient to
restore the bank's capitalization to levels before the fraudulent
transactions were discovered.
The fraudulent transactions represented 320 basis points of the
bank's risk-weighted assets as of March 2018. In the financial
year ended March 2018 (fiscal 2018), after providing for 50% of
the fraudulent exposure, the bank reported a common equity tier 1
(CET1) ratio of 5.95% compared to 8.05% in the quarter ended
December 2017. The bank will provide for the remaining 50%
exposure in the next few quarters.
Moody's estimates that PNB will require external capital of about
INR120-INR130 billion in fiscal 2019 to meet the minimum Basel
III CET1 ratio of 8% by March 2019, including a capital
conservation buffer. This estimate takes into account the aging
basis provisions for the NPLs, the deferred provisions for the
fraud, investment losses and employee benefit expenses as well as
a reduction in risk weighted assets.
While the Indian government has budgeted an infusion of INR650
billion into the country's 21 public sector banks, Moody's
expects that the large capital shortfall will negatively impact
PNB's ability to grow its loan book over the next year.
VERY HIGH LEVEL OF GOVERNMENT SUPPORT
As the second largest public sector bank in India by total
deposits, the systemic importance of PNB is very high and Moody's
expects that the government will provide extraordinary support to
the bank's creditors and depositors when required. The systemic
importance of the bank is evidenced by the role it plays in the
corporate lending market, as well as in lending to large
infrastructure projects; with the latter forming a priority for
the Indian government.
Government support is also evidenced by the fact that the bank's
funding and liquidity profile has largely remained stable,
despite the negative reports in the media in the past few months
on the bank's fraudulent transactions. For example, PNB's low-
cost current and savings account (CASA) ratio measured 43.8% at
31 March 2018 compared to 45.5% at 31 December 2017.
Moody's assumption of a very high level of government support for
PNB in times of need results in a three-notch uplift to the
bank's ratings to Ba1 from its BCA of b1.
STABLE RATING OUTLOOK
The stable ratings outlook reflects Moody's expectation that the
negative impact of the fraudulent transactions is largely known
and is reflected in the rating actions taken.
WHAT COULD CHANGE THE RATING UP
PNB's BCA could be upgraded if the capital infusion received from
the Indian government, and or any actions taken by the
management, improves the bank's capitalization to a level which
is in line with other similarly-rated Indian public sector banks.
WHAT COULD CHANGE THE RATING DOWN:
Moody's will downgrade PNB's BCA and ratings if the bank's
capitalization worsens beyond what Moody's expects in this
ratings action. Furthermore, any indication that government
support to the bank has diminished will also lead to a ratings
downgrade.
The principal methodology used in these ratings was Banks
published in April 2018.
Punjab National Bank, headquartered in Delhi, reported total
assets of INR7.7 trillion at March 31, 2018.
PURBANCHAL VENEERS: Ind-Ra Assigns BB+ LT Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Purbanchal
Veneers (PV) a Long-Term Issuer Rating of 'IND BB+'. The Outlook
is Stable.
The instrument-wise rating actions are:
-- INR8 mil. Cash credit limits assigned with IND BB+/Stable
rating; and
-- INR100 mil. Non-fund-based working capital limits assigned
with IND A4+ rating.
KEY RATING DRIVERS
While assigning the ratings, Ind-Ra has taken a consolidated view
of the financial and operational profiles of PV, Purbanchal
Laminates Private Limited (IND BBB-/Stable), Purbanchal Lumbers
Private Limited (IND BBB-/Stable), Salazar Plywood Private
Limited,(IND BBB-/Stable) Landmark Veneers Pvt Ltd (IND BBB-
/Stable), Purbanchal Composite Panel India Private Limited (IND
BBB-/Stable) and Amul Boards Pvt Ltd. (IND BBB-/Stable) The seven
companies, together referred to as the Purbanchal group (PG), are
in the same line of business and have common promoters and
management.
The ratings are constrained by PG's weak credit metrics due to
thin margins and high debt levels. Consolidated EBITDA interest
coverage (operating EBITDA/ gross interest expenses) was low at
1.78x in FY17 (FY16: 1.79x) and net leverage (adjusted net
debt/EBITDA) was moderate 3.4x (3.6x). As per provisional results
of 9MFY18, consolidated interest coverage improved to 2.52x and
net leverage remained at 3.4x. Majority of debt comprises fund-
based working capital facilities. Ind-Ra believes that debt
levels would increase in line with revenue growth and hence
leverage is likely to remain at moderate levels although coverage
may improve with an improvement in EBITDA. As informed by the
management, there are no debt-led capex plans of the group in the
medium term.
The thin margins are a result of the group's presence in India's
highly competitive and fragmented timber industry and
susceptibility to fluctuating raw material prices. However, the
group has maintained EBITDA margins at around 4% (FY17: 4.4%;
FY16: 4.2%) by leveraging its longstanding customer and supplier
relationships. Margins increased to 6.20% in 9MFY18 (FY17: 4.4%;
FY16: 4.2%), mainly on account of the increase in top line,
leading to effective absorption of overhead costs.
The ratings are also constrained by PV's partnership nature of
business.
The ratings, however, are supported by PG's presence across the
value chain of timber processing i.e. timber trading and
manufacturing of plywood/laminates. The group's promoters have
over three decades of experience in the plywood and related
businesses. The group companies have a track record of over a
decade in timber processing. The group operates at pan-India
level and manufactures several ranges of products such as
laminates, lumbers, veneers and plywood.
Moreover, the operations are large scale, and revenue growth has
become steady since FY17 due to the ready availability of timber.
Revenue grew 14% yoy to INR2,341 million in FY17 and was INR1,951
million in 9MFY18, backed by an increase in order book size and
geographical presence. As informed by the management, PG is
likely to have achieved revenue of INR2,601 million for FY18.
Revenue growth was volatile during FY14-FY17 due to the lack of
steady availability of wood as there were sanctions on the export
of wood from the Republic of Myanmar.
The ratings also factor in PG's comfortable liquidity. PG's
average use of the fund-based and non-fund based working capital
limits was 85.8% and 71.7%, respectively, for the 12 months ended
February 2018. Although its net working capital cycle is long
(FY17: 60 days), mainly on account of high receivable days, there
have been no instances of bad debts reported in the P&L account
during FY14-FY17.
RATING SENSITIVITIES
Positive: A substantial increase in the revenue, EBITDA margins
and working capital cycle on a consolidated basis resulting in
interest coverage exceeding 2.5x on a sustained basis could lead
to a positive rating action.
Negative: Deterioration in the EBITDA margins, unplanned capex
leading to sustained deterioration in debt/EBITDA would result in
a negative rating action.
COMPANY PROFILE
PG is headed by Mr. Rakesh Agarwal, Mr. Mukesh Agarwal and Mr.
Omprakash Agarwal. PG is engaged in the trading of timber and
manufacturing and trading of laminates and plywood. Its
facilities are located in Gandhidham, Gujarat. PV manufactures
veneers.
RAJU E V: CRISIL Assigns 'B' Rating to INR.5MM Standby LOC
----------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B/Stable/CRISIL A4'
ratings to the bank facilities of Raju E V. The rating reflects
modest scale of operations , susceptibility to intense
competition from large players and limited geographical diversity
in revenue profile. These weakness are partially offset
experience of promoters in the civil construction industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Standby Line of
Credit .5 CRISIL B/Stable (Assigned)
Proposed Long Term
Bank Loan Facility .45 CRISIL B/Stable (Assigned)
Bank Guarantee 4.30 CRISIL A4 (Assigned)
Cash Credit 4.75 CRISIL B/Stable (Assigned)
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations and susceptibility to intense
competition from large players: The firm is exposed to intense
competition in the civil construction industry which is highly
fragmented with the presence of large organized players and
several unorganized players.
* Limited Geographical diversity in revenue profile: The firm's
revenue profile has limited geographically diversity. The firm
executes its projects majorly in Kerela. This geographical
diversity exposes the firm to risk arising from slowdown in
project announcement in the particular regions of the firm's
operations.
Strengths
* Experience of promoters in the civil construction industry:
Raju E V benefits from the extensive experience of its promoter
in the civil construction industry. The firm is promoted by Mr.
Raju E V who has been associated with the civil construction
industry for more than 3 decade. The promoter has established
significant relationships with suppliers who are raw material
suppliers. Further the firm has a proven track record of
execution for projects for various public entities on account of
which it derives benefits during the future tendering process of
the project.
Outlook: Stable
CRISIL believes that Raju E V will benefit over the medium term
from the experience of its promoters in civil construction
industry. The outlook may be revised to 'Positive', if the firm
increases its scale of operations and operating profitability
significantly over the medium term in a sustainable fashion there
by leading to an improvement in its financial risk profile.
Conversely, the outlook may be revised to 'Negative', if the firm
undertakes any significant debt-funded capital expenditure or if
its revenues and operating profitability decline or if its
working capital cycle elongates or there are significant capital
with drawls leading to deterioration in its financial profile.
Raju E V is a proprietorship firm involved in civil construction
works like for irrigation facilities in Kerela. The firm is being
managed by Mr Raju E V.
RELIANCE COMMUNICATIONS: In Advanced Talks with Ericsson
--------------------------------------------------------
Reuters reports that Reliance Communications said it was in
advanced talks with Ericsson to resolve "commercial issues",
after two sources indicated it was currently uncertain if the
firms' discussions over dues would lead to an out-of-court
settlement.
India's bankruptcy court last week admitted a plea by the Swedish
telecom gearmaker seeking insolvency resolution against debt-
laden Reliance Communications (RCom) over unpaid service dues,
potentially derailing the company's plans to sell assets to
larger rival Reliance Jio.
Ericsson, which signed a seven-year deal in 2014 to operate and
manage RCom's nationwide telecoms network, is seeking 11.55
billion rupees ($170 million) from RCom and two of its
subsidiaries.
"We confirm that RCom and Ericsson are at an advanced stage of
discussions to expeditiously resolve commercial issues," the
Indian company said in a securities filing on May 18, adding a
resolution would enable it to exit the bankruptcy court process,
Reuters relays.
RCom said it is also confident of "expeditiously" proceeding on
its asset sale deal agreed with Jio and the overall debt
resolution plan agreed with its creditor banks, Reuters relays.
One of the two sources who spoke to Reuters earlier on May 18
said RCom had approached Ericsson, but with a lack of clarity
around payment of dues "a settlement currently looks uncertain".
The two sources, who asked not to be named as the talks are
private, said Ericsson could withdraw its plea if an out-of-court
understanding is reached, according to Reuters.
With debt totaling INR457.33 billion ($6.73 billion) at end-March
2017, RCom is the most-leveraged of all listed telecoms carriers
in India, Reuters notes.
To raise funds, RCom announced plans late last year to sell most
of its wireless assets to mobile carrier Reliance Jio in a deal
sources said was worth about $3.8 billion. Jio, the telecoms
venture of Reliance Industries, is controlled by India's richest
man and Anil's elder brother, Mukesh Ambani, Reuters discloses.
Based in Mumbai, India, Reliance Communications Ltd (BOM:532712)
-- http://www.rcom.co.in/Rcom/personal/home/index.html-- is a
telecommunications service provider. The Company operates through
two segments: India Operations and Global Operations. India
operations segment comprises wireless telecommunications services
to retail customers through global system for mobile
communication (GSM) technology-based networks across India;
voice, long distance services and broadband access to enterprise
customers; managed Internet data center services, and direct-to-
home (DTH) business. Global operations comprise Carrier,
Enterprise and Consumer Business units. It provides carrier's
carrier voice, carrier's carrier bandwidth, enterprise data and
consumer voice services. The Company owns and operates Internet
protocol (IP) enabled connectivity infrastructure, comprising
over 280,000 kilometers of fiber optic cable systems in India,
the United States, Europe, Middle East and the Asia Pacific
region.
REGENCY LINX: CRISIL Lowers Rating on INR12.6MM Loan to D
---------------------------------------------------------
CRISIL has been consistently following up for information with
Regency Linx Exports Private Limited (RLEPL) for obtaining
information through letters and emails dated January 24, 2017 and
February 14, 2017 among others, apart from telephonic
communication. However, the issuer has remained non-cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Foreign Documentary
Bills Purchase 12.6 CRISIL D (Issuer Not
Cooperating: Downgraded
from 'CRISIL A4/Issuer Not
Cooperating')
Packing Credit 11.0 CRISIL D (Issuer Not
Cooperating: Downgraded
from 'CRISIL A4/Issuer Not
Cooperating')
Term Loan 0.4 CRISIL D (Issuer Not
Cooperating: Downgraded
From 'CRISIL B/Stable/Issuer
Not Cooperating')
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 RLEPL. 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
RLEPL is consistent with 'Scenario 1' outlined in the 'Framework
for Assessing Consistency of Information with CRISIL BB' rating
category or lower. CRISIL has downgraded its rating on the bank
facilities of (RLEPL) to 'CRISIL D/CRISIL D Issuer Not
Cooperating' from 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.
The downgrade reflects delays by the company in servicing debt.
CRISIL had discussions with the bank, which has confirmed the
delay in repayment.
RLEPL, set up in 2013 and based in Chennai, processes and exports
marine products. Operations are managed by Mr. Alagumuthu Raja.
ROHAN METALS: CRISIL Reaffirms 'B' Rating on INR14MM Cash Loan
--------------------------------------------------------------
CRISIL has reaffirmed its ratings on long-term bank facilities of
Rohan Metals Private Limited (RMPL) at 'CRISIL B/Stable'.
The rating continues to reflect moderate scale of operations and
lower profitability levels. The financial risk profile remains
below average, due to high total outside liabilities to tangible
networth (TOL/TNW). Operations remain working capital intensive,
affecting liquidity. These weaknesses are offset by the extensive
experience of promoters in the metal industry, and their
established relationships with customers.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 14 CRISIL B/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 1 CRISIL B/Stable (Reaffirmed)
Analytical Approach
For arriving at the ratings, CRISIL has considered unsecured
loans of INR2.69 crore as on March 31, 2017, extended by the
promoters as neither debt nor equity (NDNE) as they are in the
business for more than three years and should remain over the
medium term as well.
Key Rating Drivers & Detailed Description
Weakness
* Small scale of operations amidst intense competition: Intense
competition has restricted the scale of operations, with
estimated turnover of INR65.93 crore in fiscal 2018, limiting the
bargaining power of smaller players, such as RMPL, and their
profitability.
* Below-average financial risk profile: Low networth, high TOLANW
of 5.41 times as on March 31, 2018 and weak debt protection
metrics, due to low interest coverage (IC) ratio of 1.2 times for
fiscal 2018, reflect a weak financial risk profile. The IC ratio
may remain low at around 1.2 times over the medium term, owing to
high interest costs and weak operating profitability.
* Working capital-intensive operations: Operations are working
capital intensive as reflected in gross current assets of over
120 days as on March 31, 2018, led by high inventory of 90 days,
to ensure smooth production and to avail benefits of bulk
purchases. The large working capital requirement is mainly funded
via bank limit. Working capital requirement is expected to
remain high at around 120-140 days over the medium term.
Strengths:
* Extensive experience of the promoter: The four decade-long
experience of the promoter, in the metal trading and
manufacturing business, through the firm, Sunil Metal Works, has
helped the company survive through different business cycles.
Outlook: Stable
CRISIL believes RMPL will continue to benefit from the promoters'
experience in the metal industry. The outlook may be revised to
'Positive' if a significant increase in revenue and
profitability, and efficient working capital management along
with improvement in financial risk profile, strengthen the
capital structure. The outlook may be revised to 'Negative' if a
considerable stretch in the working capital cycle, or a decline
in revenue and profitability, leading to lower-than-expected cash
accrual, weakens the financial risk profile, especially
liquidity.
RMPL, incorporated in 1996, manufactures and trades in lead
alloys and lead ingots that are used in batteries. The
manufacturing unit is located at Bhiwadi, Rajasthan, and the
trading unit is based in New Delhi. The company is run by Mr.
Sunil Soni and his wife Mrs. Vandana Soni, who looks after day-
to-day activities of RMPL.
SADASIVAPET MUNICIPALITY: Ind-Ra Withdraws 'B+' LT Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Sadasivapet
Municipality's Long-Term Issuer Rating of 'IND B+'. The Outlook
was Stable.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the rating, as no
specific debt was issued against the rating.
COMPANY PROFILE
Sadasivapet is a town in the Sangareddy district of Telangana.
Sadasivpet Municipality was constituted in 1947 and has a
jurisdiction over an area of 21.70 sq. km and a population of
42,950 (as per Census of India 2011). It is 65km away from the
state capital, Hyderabad. Sadasivapet Municipality is responsible
for the provisioning and governance of civic services in the
town.
SANGAREDDY MUNICIPALITY: Ind-Ra Withdraws B+ LT Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Sangareddy
Municipality's Long-Term Issuer Rating of 'IND B+'. The Outlook
was Stable.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the rating as no
specific debt was issued against the rating.
COMPANY PROFILE
Sangareddy is a city in the Sangareddy district of Telangana.
Sangareddy Municipality was constituted in 1954 and is classified
as a first grade municipality. The city has a jurisdiction over
an area of 13.69 sq. km and a population of 72,344 (as per Census
of India 2011). It is located 50km away from the Hyderabad-
Mahatma Gandhi Bus Station and is located on Hyderabad-Mumbai
Highway (NH9). Sangareddy Municipality is responsible for the
provisioning and governance of civic services in the city.
SAVITRI STEELS: CRISIL Migrates B+ Rating to 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 Savitri Steels and Rerollings
Private Limited (SSRPL) to 'CRISIL B+/Stable Issuer Not
Cooperating'. However, management has subsequently started
sharing information necessary for carrying out a comprehensive
review of the rating. Consequently, CRISIL is migrating the
rating on the company's long term bank facility from 'CRISIL
B+/Stable Issuer Not Cooperating' to 'CRISIL B+/Stable' while
reassigned the short term rating at 'CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1 CRISIL A4 (Reassigned)
Cash Credit 13.5 CRISIL B+/Stable (Migrated from
'CRISIL B+/Stable' Issuer Not
Cooperating)
Proposed Long Term 7 CRISIL B+/Stable (Migrated from
Bank Loan Facility 'CRISIL B+/Stable' Issuer Not
Cooperating)
Long Term Loan 5 CRISIL B+/Stable (Migrated from
'CRISIL B+/Stable' Issuer Not
Cooperating)
Letter of Credit 3.5 CRISIL A4 (Reassigned)
The ratings continue to reflect SRPL's working capital-intensive
operations, susceptibility of the company's operating margin to
volatility in input costs. The ratings also factor in SRPL's
below-average financial risk profile because of high Adjusted
TOL/ Adjusted TNW ratio and modest net worth and modest interest
coverage. These ratings weaknesses are partially offset by
extensive experience of SRPL's promoters in the steel industry
and established customer and supplier relationship.
Key Rating Drivers & Detailed Description
Weakness
* Working capital-intensive operations: SSRPL's working capital
intensive nature of operations is reflected in gross current
assets (GCA) of around 270 days as on March 31, 2017 owing to
inventory of 103 days and debtors of 118 days.
* Below average financial risk profile: SSRPL had high Adjusted
TOL/ Adjusted TNW ratio (TOL/TNW) of 7.12 times and modest net
worth and INR12.49 Cr as on March 31, 2017. The interest coverage
was at 1.79 times in 2016-17.
* Susceptibility of the company's operating margin to volatility
in input costs: The commodity nature of the product makes the
company vulnerable to volatility in raw material Prices. . On
account of variation in raw material prices the operating margin
has also been volatile and ranged around 13.04 -4.42 percent
during the past four years ended 2016-17.
Strengths
* Established market position and extensive experience of the
promoters in the steel industry: The promoters have over two
decades of experience in steel manufacturing business. Over the
years, the promoter have established good relations with
suppliers and customers which has aided SSRPL to establish a
comfortable presence in the domestic market.
Outlook: Stable
CRISIL believes that the SSRPL will benefit over the medium term
from the extensive experience of its promoters and established
customer and supplier relationship. The outlook may be revised to
'Positive' in case the company reports higher-than-expected
revenue or profitability, while improving in its capital
structure and debt protection metrics. Conversely, the outlook
may be revised to 'Negative' in case of lower than expected
revenues or profitability or the company carries out a debt
funded capex, resulting in further weakening of its financial
risk profile.
SSRPL was incorporated in 2008, promoted by Mr. Kamal Kishore
Agarwal. The company has a manufacturing facility in Hyderabad
for thermo-mechanically-treated (TMT) bars.
SHARMA CONSTRUCTION: Ind-Ra Keeps B+ Rating in Non-Cooperating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Sharma
Construction Company's Long-Term Issuer Rating in the non-
cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will continue to appear as 'IND B+ (ISSUER NOT COOPERATING)' on
the agency's website.
The instrument-wise rating actions are:
-- INR62 mil. Fund-based working capital limit maintained in
non-cooperating category with IND B+ (ISSUER NOT COOPERATING)
/IND A4 (ISSUER NOT COOPERATING) rating; and
-- INR30 mil. Non-fund-based working capital limit maintained in
non-cooperating category with IND A4 (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
May 2, 2017. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
Sharma Construction Company is engaged in the business of civil
construction works.
SHIRPUR POWER: Ind-Ra Migrates D Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Shirpur Power
Private Limited's (SPPL) rupee term loan to the non-cooperating
category. The issuer did not participate in the surveillance
exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using the rating. The rating will now
appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating action is:
-- INR15,140 bil. Rupee term loan (long-term) migrated to Non-
Cooperating Category with IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The rating was last reviewed on
October 18, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the rating.
COMPANY PROFILE
SPPL, a wholly owned subsidiary of Sixvents Power and Engineering
Limited, operates a 100% imported coal-based 300MW (2 X 150MW)
subcritical thermal power plant near Dhule, Maharashtra.
SHREE BADRI: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Shree Badri
Kedar Udyog Private Limited's (SBKPL) Long-Term Issuer Rating to
the non-cooperating category. The issuer did not participate in
the rating exercise despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using the rating. The rating will
now appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating action is:
-- INR150 mil. Fund-based limits migrated to Non-Cooperating
Category with IND BB- (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 10, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
SBKPL is engaged in the trading of textiles and fabrics in the
domestic market.
SHREE RADHA: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Shree Radha
Krishna Vinimay Private Limited's (SRKVPL) Long-Term Issuer
Rating to the non-cooperating category. The issuer did not
participate in the rating exercise despite continuous requests
and follow-ups by the agency. Therefore, investors and other
users are advised to take appropriate caution while using these
ratings. The rating will now appear as 'IND BB- (ISSUER NOT
COOPERATING)' on the agency's website.
The instrument-wise rating action is:
-- INR25 mil. Fund-based limits migrated to Non-Cooperating
Category with IND BB- (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 19, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2012 by Ranchi-based Sarwagi family, SRKVPL is
involved in the trading of construction materials such as steel,
cement, electric items and sanitary ware.
SPONGE SALES: Ind-Ra Migrates BB Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sponge Sales
India Private Limited's Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using the rating. The rating will
now appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR100 mil. Fund-based limits migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) /IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR260 mil. Non-fund-based limits migrated to non-cooperating
category with IND A4+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 29, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1994, Sponge Sales India supplies raw materials
to induction furnace and arc furnace facilities in north India
and major sponge iron producers across the country.
SUDALAGUNTA SUGARS: CRISIL Cuts Rating on INR92.5MM Loan to D
-------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on the bank facilities
of Sudalagunta Sugars Ltd (SSL) to 'CRISIL D/CRISIL D' from
'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 15.05 CRISIL D (Downgraded from
'CRISIL A4')
Bill Discounting 10 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Cash Credit 92.5 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Long Term Loan 46.17 CRISIL D (Downgraded from
'CRISIL B+/Stable')
SEFASU Loan 12.37 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Warehouse Financing 24.85 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Working Capital
Demand Loan 3.34 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The downgrade reflects delays in debt servicing, owing to weak
liquidity because of insufficient net cash accrual to meet the
maturing debt and delays in realisation of receivables.
The ratings also reflect SSL's large working capital
requirements, weak financial risk profile and susceptibility to
cyclicality and regulatory risks in the sugar industry. These
weaknesses are partially offset by established regional presence
in the sugar industry aided by the promoter's extensive industry
experience and customer relationships.
Key Rating Drivers & Detailed Description
Weakness
* Large working capital requirement: Operations are working
capital intensive marked by gross current assets of 156 days,
driven by inventory of 112 days on March 31, 2017, due to
seasonal nature of the sugarcane industry. The company has to
procure cane in 4-6 months of sugarcane production. Additionally,
companies have to immediately crush the sugarcane (for maximum
recovery of sugar) and hold sugar inventory, which accounts for
the bulk of the inventory at the end of the year.
* Weak financial risk profile: Financial risk profile is
constrained by subdued debt protection metrics and a moderate
capital structure. Interest coverage was 1.41 times, while net
cash accrual to total debt ratio was 0.03 time for fiscal 2017.
Gearing ratio was 1.72 times on March 31, 2017.
* Susceptibility to cyclicality and regulatory risks in the sugar
industry: The domestic sugar industry is highly regulated because
of central and various government policies with respect to
sugarcane prices, export and import of sugar, and the sugar
release mechanism. Such stringent regulations affect the credit
quality of players in the industry. SSL will remain exposed to
such regulatory risks.
Strength
* Established regional presence aided by promoter's extensive
industry experience and established customer relationships:
Benefits of the promoter's two-decade long experience in the
sugar industry has led to established market position of SSL in
South India. The company sells its sugar through dealers mainly
in the states of Andhra Pradesh, Tamil Nadu, and Karnataka. This
is reflected in its moderate scale of operations of INR237.9
crore for fiscal 2018.
SSL was incorporated in 1994 by Mr S Jayaram Chowdary. The
company manufactures white sugar, which it sells to dealers in
the domestic market. It also exports to the Gulf countries and
Singapore.
SURESH KUMAR: Ind-Ra Retains B+ Issuer Rating in Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained M/S Suresh
Kumar and Brothers' Long-Term Issuer Rating in the non-
cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will continue to appear as 'IND B+ (ISSUER NOT COOPERATING)' on
the agency's website.
The instrument-wise rating actions are:
-- INR130 mil. Fund-based working capital limit maintained in
non-cooperating category with IND B+ (ISSUER NOT COOPERATING)
/IND A4 (ISSUER NOT COOPERATING) rating;
-- INR13.4 mil. Term loan maintained in non-cooperating category
with IND B+ (ISSUER NOT COOPERATING) rating; and
-- INR56.6 mil. Proposed fund-based limit maintained in non-
cooperating category with Provisional IND B+ (ISSUER NOT
COOPERATING) /Provisional IND A4 (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 10, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in February 2006, the firm is engaged in the business
of rice milling and packaging of basmati rice. The total
installed capacity of its plant is 4MT/year.
TANDUR MUNICIPALITY: Ind-Ra Withdraws 'B+' LongTerm Issuer Rating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Tandur
Municipality's Long-Term Issuer Rating of 'IND B+'. The Outlook
was Stable.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the rating, as no
specific debt was issued against the rating.
COMPANY PROFILE
Tandur town was constituted as Grade III municipality in 1953 and
upgraded to Grade II in 2010. Tandur is located in Vikarabad
district of the Telangana state. The jurisdiction of the civic
body is spread over an area of 5.82 sq.km. and is likely to be
extended to an area of 29.19km. There are 31 wards in the city
and the population is 65,115 (Census 2011).
TIRUMALA COMPRINTS: CRISIL Reaffirms B- Rating on INR8.8MM Loan
---------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B-/Stable' rating on
the long-term bank facilities of Tirumala Comprints Limited
(TCL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 8.8 CRISIL B-/Stable (Reaffirmed)
Term Loan 1.2 CRISIL B-/Stable (Reaffirmed)
CRISIL, dated January 25, 2018, upgraded its rating on the bank
facilities of TCL to 'CRISIL B-Stable' from 'CRISIL D'.
The rating continues to reflect working capital intensive and
modest scale of operations in an intensely competitive industry.
These weaknesses are partially offset by the extensive industry
experience of the promoters.
Key Rating Drivers & Detailed Description
Weakness
* Working capital intensive operations: TCL has working-capital-
intensive operations, as reflected in the company's estimated
high gross current assets (GCA) of around 120 days as on March
31, 2018.
* Modest scale of operations in intensely competitive industry
TCL has a modest scale of operation in the offset printing and
packaging industry (which is intensely competitive), as reflected
in its estimated revenues of around INR45.47 crores in fiscal
2018.
Strengths:
* Extensive industry experience of promoter: TCL derives
significant benefits from its promoter's extensive experience in
the printing industry. Its promoter, Mr. M Jayathirth, has domain
experience of more than two decades. Supported by its promoter's
experience, the company has developed established relations with
customers and suppliers over the years.
Outlook: Stable
CRISIL believes that TCL will continue to benefit over the medium
term from its promoters' extensive industry experience and its
established relationships with customers and suppliers. The
outlook may be revised to 'Positive' if TCL increases its scale
of operations substantially, while maintaining its profitability
and capital structure. Conversely, the outlook may be revised to
'Negative' if the company's profitability declines, or if its
capital structure weakens because of substantial debt-funded
capital expenditure, or if its liquidity weakens because of a
stretch in its working capital cycle.
TCL was originally incorporated as a private limited company in
1989, promoted by Mr. M Jayathirth; it was reconstituted as a
public limited company in 2008. TCL undertakes regular offset and
ultra-violet offset printing of packaging materials made of paper
and paperboards; its product portfolio mainly includes cartons
and leaflets. The company is based in Hyderabad (Telangana).
UTTAR BHARAT: Ind-Ra Retains BB Issuer Rating in Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Uttar Bharat
Hydro Power Private Limited's Long-Term Issuer Rating in the non-
cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will continue to appear as 'IND BB (ISSUER NOT COOPERATING)' on
the agency's website.
The instrument-wise rating action is:
-- INR1,570 bil. Term loan due on November 2020 maintained in
non-cooperating category with IND BB (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
December 12, 2014. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1991, Uttar Bharat Hydro Power has set-up three
small hydro power projects in Kapkot, Uttarakhand with a total
installed capacity of 33MW.
VIJAYNATH ROOF: CRISIL Reaffirms B Rating on INR14.5MM Loan
-----------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B/Stable/CRISIL A4'
ratings on the bank facilities of Vijaynath Roof And Wall
Cladding Systems Private Limited (VRC). The ratings reflect on
the small scale of operations, with limited value addition in the
roofing systems business and its long working capital cycle.
These rating weaknesses are partially offset by company's strong
customer base and promoter's expertise in roofing systems
industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 15 CRISIL A4 (Reaffirmed)
Cash Credit 3 CRISIL B/Stable (Reaffirmed)
Letter of Credit 5.25 CRISIL A4 (Reaffirmed)
Proposed Long Term
Bank Loan Facility 14.50 CRISIL B/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weakness
* Small scale of operations with limited value addition in the
roofing systems business: VRC is a small player with an estimated
operating income of about INR20 cr in FY 18. While the company
has been operating for above 15 years and has an established
track record, the industry is becoming competitive with the
presence of a few large players and entry of several small
players over the past five years.
In VRC's present business model, on finalization of order,
materials are supplied directly to the customer's site. The level
of value addition is limited to drawing, designing, and the
necessary fabrication leading to limited value addition.
* Long working capital cycle, on account of stretched debtors
VRC's receivables typically range around 100 - 120 days. The
company's receivables have continued to be stretched on account
of low bargaining power and long project gestation periods with
receivables greater than six months at about INR6 cr as on March
31, 2018. Further, the company inventory of about 40 to 60 days.
Strength
* Established customer relationships and promoter's expertise in
roofing systems industry: VRC's promoter, Mr. Vijaynath Shetty,
has been engaged in the roofing systems business of more than 15
years. He is assisted by a strong execution team. As the business
is human resource-intensive, VRC's strong execution team provides
the company with a competitive advantage over new entrants. The
promoter's personal involvement in execution of contracts and
managing relationship with customers has helped the company to
sustain its business risk profile. CRISIL believes that VRC will
continue to tap emerging opportunities and maintain its moderate
business risk profile over the medium term.
Outlook: Stable
CRISIL believes VRC will continue to benefit over the medium term
from its promoter's extensive industry experience and its strong
clientele. The outlook may be revised to 'Positive' if working
capital management improves significantly and sustainably,
leading to better liquidity. Conversely, the outlook may be
revised to 'Negative' if liquidity deteriorates because of
increased working capital requirement or large capex.
VRC, based in Mumbai and incorporated in 2003, was set up by Mr.
Vijaynath Shetty. The company provides consultancy and
installation services for aluminum, steel, copper, and zinc
roofing systems.
VIKARABAD MUNICIPALITY: Ind-Ra Withdraws 'B' LT Issuer Rating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Vikarabad
Municipality's Long-Term Issuer Rating of 'IND B'. The Outlook
was Stable.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the rating, as no
specific debt was issued against the rating.
COMPANY PROFILE
Formed in 1987, Vikarabad Municipality was upgraded to Grade II
municipality on 18 May 2001 by merging the following gram
panchayats: Vikarabad, Sivareddypet, Kothagadi and
Ananthagiripalli. The municipality has 28 election wards. The
jurisdiction of the civic body is spread over an area of 64
square kilometers. It had a population of 53,185 according to the
2011 census.
ZAHEERABAD MUNICIPALITY: Ind-Ra Withdraws 'B' LT Issuer Rating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Zaheerabad
Municipality's Long-Term Issuer Rating of 'IND B'. The Outlook
was Stable.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the rating, as no
specific debt was issued against the rating.
COMPANY PROFILE
Zaheerabad Municipality was constituted in 1952 and is classified
as a third-grade municipality with 24 election wards. The
jurisdiction of the civic body is spread over an area of 21.78
square kilometers with a population of 52,193 as per the 2011
census. Zaheerabad is an agricultural area, though farming has
struggled in the area due to dry lands becoming fallow and the
loss of a variety of crops such as cereals, pulses and oilseeds.
====================
N E W Z E A L A N D
====================
HYDROWORKS: Liquidators Still in Pursuit of NZ$10 Million
---------------------------------------------------------
Chris Hutching at Stuff.co.nz reports that the liquidator of
HydroWorks has confirmed the company never owned any intellectual
property, and still owes debts of more than NZ$10 million.
HydroWorks turned out to own few assets, with most of the
intellectual property and engineering plant and equipment owned
by Mace Engineering, which has continued to trade in its own
right under its original owners, according to Stuff.
Stuff notes that HydroWorks was intended to be a specialist
supplier to water turbine operators but came to grief from cost
overruns on an Australian project.
In his second report liquidator, David Webb said the claims of
unsecured creditor-suppliers came to NZ$10.1 million, with the
chances of any recovery "minimal," Stuff discloses. Preferential
claims stood at NZ$504,232.
He had made total payments of NZ$480,016 but most of this was for
fees incurred from selling assets, administration, liquidators
costs (NZ$107,000), and costs to petitioning creditor Powerhouse
Ventures (NZ$,9558). Employees had been paid NZ$93,000, which
equated to 20 cents in the dollar, Stuff relays.
According to Stuff, Mr. Webb said work completed in recent months
included returning equipment to owners, reviewing an offer for a
foundry, and clearing out the central Christchurch premises.
He had also corresponded with an unnamed company in relation to a
potential claim and was continuing to investigate any other
possible recovery of money, Stuff relates.
HydroWorks was put into liquidation in August 2017 by its
40 per cent shareholder and technology incubator Powerhouse
Ventures, Stuff discloses. In the lead up to Powerhouse's ASX
listing in late 2016 it had written high values into its accounts
for the HydroWorks stake.
According to Stuff, Powerhouse went through its own upheavals and
director and executive resignations during 2017 and belatedly
recognised the inability of HydroWorks to fund further
engineering projects.
After the liquidation Powerhouse wrote off NZ$6.8 million in the
value of its investments, and its share price remains at 20 cents
a share compared with the AUD1.07 at listing time in late 2016,
Stuff discloses.
Stuff adds that as part of the fallout Callaghan Innovation
suspended operational funding to Powerhouse for the technology
incubator pilot programme it was involved in.
Callaghan Innovation was working with Powerhouse to ensure it
continues providing incubation services as required under the
pilot programme agreement, although operational funding is still
suspended.
MILKING ON THE MOOVE: Placed Into Voluntary Liquidation
-------------------------------------------------------
Oliver Lewis at Stuff.co.nz reports that a company lauded for its
ethical and environmentally-friendly dairying approach has gone
into liquidation owing a "substantial" amount, but its founder is
"99 per cent" certain it will rise again.
Milking on the Moove Ltd, which traded as Happy Cow Milk Company,
was placed into liquidation by a special resolution of
shareholders on May 14, the report says.
Stuff relates that founder Glen Herud, who is in the process of
trying to refine and resurrect his business model, said he was
"gutted" and had told creditors he would personally repay them.
According to the report, Mr. Herud started Ohoka, North
Canterbury-based Happy Cow to provide an alternative model to
intensive dairying. Calves were kept with their mothers for up to
15 weeks and a mobile milker reduced the effluent burden by
milking cows in-paddock.
Stuff says the first liquidator's report showed, as of May 14,
the company could be left with an estimated shortfall of
NZ$575,057 once preferential creditors and creditors with
specific securities had been paid using proceeds from the sale of
the company's assets, if they met their estimated realisation.
However, the majority of this was classed as bank and credit card
debt and money owed to shareholders, comprised almost exclusively
of Mr. Herud and his family. The entrepreneur said he had sold a
piece of land that would be used to pay the bank, which would
leave, he claimed, about NZ$100,000 to pay other creditors.
Shareholders would be the last to receive anything, Stuff states.
According to Stuff, liquidator Robin Gardenbroek said he could
not comment on the NZ$100,000 figure, instead saying "we're still
quantifying what the exact position is, but there's likely going
to be a substantial shortfall". He said other creditors had come
forward since the first report was published.
Mr. Herud said he took "full responsibility" for the situation,
Stuff relays.
"It's my fault this has happened. I'm disappointed that it's gone
to liquidation. It's not what's best for the creditors."
Stuff relates that Mr. Herud said he had asked creditors to wait
until he had raised enough capital to form a new company and
resurrect the business, at which point he had planned to buy back
his original company's assets for the cost of the outstanding
debts.
However, he said one creditor had threatened to apply to the
court to place Milking on the Moove into liquidation -
effectively forcing the company to undertake the process
voluntarily, adds Mr. Herud.
===============
T H A I L A N D
===============
THAI AIRWAYS: Appoints Sumeth Damrongchaitham as New President
--------------------------------------------------------------
Nikkei Asian Review reports that Thailand's ailing flag carrier
Thai Airways International has finally appointed a new president
after a near two-year search to fill the position and more than a
year since the departure of the previous leader.
The board approved on May 18 the appointment of Sumeth
Damrongchaitham, managing director of state-owned asset
management firm Dhanarak Asset Development and former chief
operating officer of Thailand's largest entertainment company GMM
Grammy, the Nikkei discloses citing a stock exchange filing on
May 21.
Sumeth will be in the hot seat in two to three months' time,
before acting President Usanee Sangsingkeo retires in September,
a Thai Airways official said, the Nikkei relays.
According to the report, Thai Airways had been searching for a
new president since September 2016. But the process dragged on as
it was unable to find a qualified candidate, according to the
company.
The seat had been left vacant since February 2017 when former
President Charamporn Jotikasthira retired, the report notes.
Getting the airline's business back on track will be on top of
Sumeth's agenda, the Nikkei says. After posting a marginal net
profit in 2016 for the first time in four years largely owing to
cheaper fuel, the company fell back in the red again in 2017 as
oil prices picked up.
The Nikkei relates that the company has been going through a
rehabilitation program but has failed to conduct drastic cost-
cutting such as slashing routes or slimming down its workforce.
But at the same time, the airline is under pressure to cut ticket
prices due to intense competition with low-cost carriers.
With the Ministry of Finance being the largest shareholder with a
51% stake, government influence is another issue, the report
notes. Former President Charamporn, a former banker, complained
in a 2016 interview with the Nikkei Asian Review that there were
"many obstacles" in decision-making.
For Sumeth, dealing with the government may not be something
totally new, the report notes. Dhanarak Asset Development is
99.99% owned by the Ministry of Finance and it invests and
manages state property such as the government complex in Bangkok,
the Nikkei discloses.
Thai Airways International PCL (BAK:THAI) --
http://www.thaiairways.co.th/-- is the national carrier of
Thailand. The company operates domestic, regional and
intercontinental flights radiating from its home base in Bangkok
to key destinations around the world and within Thailand. During
the fiscal year ended September 30, 2007, the company owned a
total of 90 aircrafts and provided flights to 11 destinations
domestically, excluding Bangkok, and 62 destinations in 35
countries throughout the world. Through its subsidiaries, THAI
provides a variety of services, including cargo and mail
services, technical services, catering services, ground support
equipment services and ground customer services. In addition,
the company offers support services such as dispatch services,
sales on board and Thai shop.
*********
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 ***