/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/180611.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 Monday, June 11, 2018, Vol. 21, No. 114 Headlines A U S T R A L I A AUSSIE CHERRIES: Second Creditors' Meeting Set for June 14 C & J SMITH: Second Creditors' Meeting Slated for June 18 COPELAND PUBLISHING: Goes Into Liquidation GRADED INVESTMENTS: First Creditors' Meeting Set for June 20 KOOLCATS ENTERPRISES: Second Creditors' Meeting Set for June 15 METRO FINANCE 2018-1: Moody's Rates Class E Notes '(P)Ba2' SHAYE YOUNG: Second Creditors' Meeting Slated for June 15 VEHICLE WRAPS: First Creditors' Meeting Set for June 18 C H I N A GCL NEW: Moody's Reviews Ba2 CFR & Ba3 Bond Rating for Downgrade REWARD SCIENCE: Fitch Affirms B IDR, Removes Ratings from RWN I N D I A ADITYA PRECITECH: CRISIL Assigns B Rating to INR2.85MM LT Loan AIR INDIA: Seeks INR2,000cr Additional Funding From Government AMRITA SAI: Ind-Ra Moves BB Issuer Rating to Non-Cooperating BAJRANG STEEL: Ind-Ra Migrates 'BB+' LT Rating to Non-Cooperating BINJRAJKA INDUSTRIES: CRISIL Withdraws B Rating on INR6MM Loan BL CONTAINERS: Ind-Ra Migrates 'BB-' LT Rating to Non-Cooperating BRAHMAPUTRA BIOCHEM: CRISIL Withdraws D Rating on INR58.20MM Loan BRISTOL TOURIST: CRISIL Migrates D Rating to Not Cooperating BRITTO TIMBERS: CRISIL Migrates B Rating to Not Cooperating CHURU MUNICIPAL: Ind-Ra Withdraws 'BB' Long Term Issuer Rating DEORIA NAGAR: Ind-Ra Withdraws 'BB-' Long Term Issuer Rating DHOLPUR MUNICIPAL: Ind-Ra Withdraws 'BB+' Long Term Issuer Rating FATEHPUR NAGAR: Ind-Ra Withdraws 'BB-' Long Term Issuer Rating GANGAPUR MUNICIPAL: Ind-Ra Withdraws BB+ Long Term Issuer Rating GOLCHHA ENTERPRISES: CRISIL Withdraws B Rating on INR2.5MM Loan JAI KRISHNA: CRISIL Reaffirms B+ Rating on INR13MM LT Loan JAMALPUR MUNICIPAL: Ind-Ra Assigns BB- LT Rating, Outlook Stable J. N. TRADERS: CRISIL Reaffirms B Rating on INR6.5MM Cash Loan KADAMBRI HEALTHCARE: CRISIL Reaffirms B- Rating on INR13.05M Loan KASHIRATAN ENTERPRISES: CRISIL Moves B+ Rating to Not Cooperating KHAITAN ELECTRICALS: Faces Insolvency Application M S GRAPHICS: Ind-Ra Migrates BB Issuer Rating to Non-Cooperating MAHAVIR CONSTRUCTION: CRISIL Hikes Cash Credit Rating to 'B' MATHURAM SWASTHYA: Ind-Ra Migrates B+ Rating to Non-Cooperating MUNGER MUNICIPAL: Ind-Ra Assigns BB- Long-Term Issuer Rating PHTHALO COLOURS: Ind-Ra Hikes Long-Term Issuer Rating to 'BB' QUADRA INFRATEL: CRISIL Migrates B Rating to Not Cooperating QUALITY OVERSEAS: CRISIL Migrates B+ Rating to Not Cooperating RAMESHVAR IMPEX: Ind-Ra Assigns 'B+' LT Rating, Outlook Stable SAFE HANDS: CRISIL Assigns 'B' Rating to INR10MM LT Loan SATYAM SPINNERS: Ind-Ra Migrates BB LT Rating to Non-Cooperating SAVORIT LIMITED: Ind-Ra Maintains B+ LT Rating in Non-Cooperating SAWAI MADHOPUR: Ind-Ra Withdraws 'BB+' Long Term Issuer Rating SHANKER COTGIN: CRISIL Migrates D Rating to Not Cooperating Cat. SHREE JAYA: Ind-Ra Migrates BB+ Issuer Rating to Non-Cooperating SHREE VENKATESH: Ind-Ra Affirms BB Issuer Rating, Outlook Stable SHRILEKHA TRADING: CRISIL Migrates C Rating to Not Cooperating SIWAN MUNICIPAL: Ind-Ra Assigns BB- Issuer Rating, Outlook Stable SOORYA EXPORTERS: CRISIL Assigns B+ Rating to INR5MM New Loan SREE LAKSHMI: CRISIL Assigns B+ Rating to INR6.9MM Cash Loan SUJANGARH MUNICIPAL: Ind-Ra Withdraws BB Long Term Issuer Rating SWATI ENERGY: CRISIL Lowers Rating on INR5.5MM Loan to B+ TDI INFRATECH: CRISIL Withdraws B- Rating on INR164.5MM Loan TIANZHU ELECTRONICS: CRISIL Assigns B+ Rating to INR10MM LT Loan TRANS CONDUCT: Ind-Ra Migrates B Issuer Rating to Non-Cooperating UNITED TRADE: CRISIL Migrates B+ Rating to Not Cooperating Cat. UTTARAKHAND ENG'NG: Ind-Ra Migrates BB- Rating to Non-Cooperating V.R. FOUNDRIES: CRISIL Reaffirms D Rating on INR15MM Cash Loan VAIBHAVRAJ ENTERPRISES: Ind-Ra Assigns BB- Rating, Outlook Stable VAIDEHI TRENDZ: Ind-Ra Migrates BB- LT Rating to Non-Cooperating VENKATESWARA ELECTRICAL: CRISIL Cuts Rating on INR20MM Loan to B+ VISHAL INFRAGLOBAL: Ind-Ra Migrates 'D' Rating to Non-Cooperating VRG INFRA: CRISIL Migrates B+ Rating to Not Cooperating Category I N D O N E S I A PAKUWON JATI: Fitch Hikes LT IDR to BB; Outlook Stable M A L A Y S I A 1MDB: Singapore Authorities Hold Further Talks with Task Force N E W Z E A L A N D SEADRAGON LTD: Annual Loss Narrows to NZ$6.1 Million - - - - - ================= A U S T R A L I A ================= AUSSIE CHERRIES: Second Creditors' Meeting Set for June 14 ---------------------------------------------------------- A second meeting of creditors in the proceedings of Aussie Cherries Ltd has been set for June 14, 2018, at 12:00 p.m. at RACV/RACT Hobart Apartment Hotel, Stables Room, 154-156 Collins Street, in Hobart, Tasmania. 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 June 13, 2018, at 4:00 p.m. Rahul Goyal and Bryan Webster of Kordamentha were appointed as administrators of Aussie Cherries on April 9, 2018. C & J SMITH: Second Creditors' Meeting Slated for June 18 --------------------------------------------------------- A second meeting of creditors in the proceedings of C & J Smith Pty Ltd has been set for June 18, 2018, at 10:00 a.m. at the offices of Charles & Co, Suite 2, Level 1, 190 Queen 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 June 15, 2018, at 4:00 p.m. Nedin Talic and Claudio Trimboli of Charles & Co were appointed as administrators of C & J Smith on May 16, 2018. COPELAND PUBLISHING: Goes Into Liquidation ------------------------------------------ Paul Wallbank at Mumbrella reports that the publisher of free parenting publications Sydney's Child and Melbourne's Child, Copeland Publishing, has gone into liquidation. First published in 1989 by founders Joanna Love and Gillian Hund with a circulation of 20,000, the Sydney's Child concept was expanded into Melbourne in 1993 with Brisbane, Newcastle, Perth and Adelaide following later, Mumbrella discloses. In January, Australia's only childrens' newspaper, Crinkling News, shut down after a series of fund raising efforts, Mumbrella relates. According to Mumbrella, Copeland's magazines had a circulation of 248,000 copies in May's AMAA (Audited Media Association of Australia) survey with the publications distributed mainly though pharmacies, shopping centres and daycare facilities. Along with the Child titles, Copeland also published Kids in Brisbane, Sunny Days Magazin, Kids In Perth, Kids in Sydney and Sydney's Baby. The company went into liquidation on May 15 and liquidator Isabella Nieuwland of BPS Recovery would not comment to Mumbrella on whether there were any plans to sell the titles or whether June editions would be published. GRADED INVESTMENTS: First Creditors' Meeting Set for June 20 ------------------------------------------------------------ A first meeting of the creditors in the proceedings of: - Graded Investments & Developments Pty Ltd; - Sherwood Apartments Pty Ltd; - Living On Lee Street Pty Ltd; - 19 Side Street Pty Ltd; - 15 Norman Ave Pty Ltd; - 15 Alice Pty Ltd; - 7 Railway Pty Ltd; and - Derpatayl Pty Ltd will be held at the offices of Grant Thornton Australia Ltd, King George Central, Level 18, 145 Ann Street, in Brisbane, Queensland, on June 20, 2018, at 11:00 a.m. Stephen Robert Dixon and Ahmed Bise of Grant Thornton were appointed as administrators of Graded Investments on June 8, 2018. KOOLCATS ENTERPRISES: Second Creditors' Meeting Set for June 15 --------------------------------------------------------------- A second meeting of creditors in the proceedings of Koolcats Enterprises Pty Ltd, trading as Big T'z Diner, has been set for June 15, 2018, at 11:00 a.m. at Level 28, 108 St Georges Terrace, in Perth, WA. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by June 14, 2018, at 4:00 p.m. Martin Bruce Jones and Wayne Anthony Rushton of Ferrier Hodgson were appointed as administrators of Koolcats Enterprises on May 10, 2018. METRO FINANCE 2018-1: Moody's Rates Class E Notes '(P)Ba2' ---------------------------------------------------------- Moody's Investors Service has assigned provisional ratings to notes to be issued by Perpetual Corporate Trust Limited, as trustee of Metro Finance 2018-1 Trust. Issuer: Metro Finance 2018-1 Trust - AUD237.00 million Class A Notes, Assigned (P)Aaa (sf) - AUD22.80 million Class B Notes, Assigned (P)Aa2 (sf) - AUD10.50 million Class C Notes, Assigned (P)A2 (sf) - AUD6.60 million Class D Notes, Assigned (P)Baa2 (sf) - AUD11.10 million Class E Notes, Assigned (P)Ba2 (sf) The AUD12.00 million Class F Notes are not rated by Moody's. The ratings address the expected loss posed to investors by the legal final maturity. The transaction is a cash securitisation of a portfolio of Australian prime commercial auto and equipment loans and leases originated by Metro Finance Pty Limited (Metro Finance). This is Metro Finance's first auto and equipment asset backed securities (ABS) transaction. Metro Finance was established in 2011 as a commercial auto/equipment lender. It targets prime borrowers, for small- ticket auto and equipment assets in low volatility industries. Metro Finance originates its lending through the commercial auto and equipment broker and aggregator industry nationally. Significant origination growth began in 2014. RATINGS RATIONALE The provisional ratings take into account, among other factors: - The limited amount of historical loss data. The static loss data used for Moody's extrapolation analysis reflects Metro Finance's short origination history, was limited to the origination vintages between Q3 2014 and Q3 2016, and does not cover the full life cycle for any one vintage; - The evaluation of the underlying receivables and their expected performance; - The fact that 50.1% of the receivables were extended to obligors on a no-income verification basis, referred to as "streamlined"; - The 44.8% exposure to loans with a balloon payment at the end of the receivable term. The aggregate balloon exposure as a percentage of current portfolio balance is 15.0%. Loans with a balloon payment are subject to higher refinancing and, consequently, default risk; - The evaluation of the capital structure; - The availability of excess spread over the life of the transaction; - The liquidity facility in the amount of 2.00% of the note balance subject to a floor of AUD600,000; - The interest rate swap provided by National Australia Bank Limited (Aa3/P-1/Aa2(cr)/P-1(cr)). The notional balance of the swap will follow a schedule based on the amortisation of the portfolio, assuming no prepayments. Any prepayments or defaults will result in the swap becoming over-hedged. The prepayment risk is mitigated by the fact that break costs are charged to the obligors and these funds will flow through to the trust as collections; and - The fact that the servicer, AMAL Asset Management Limited, is an experienced third-party servicer and the backup servicing arrangement with Metro Finance. Initially, the Class A, Class B, Class C, Class D and Class E Notes benefit from 21.0%, 13.4%, 9.9%, 7.7% and 4.0% of note subordination, respectively. The notes will initially be repaid on a sequential basis until the credit enhancement of the Class A Notes is at least 30%. The notes will also be repaid on a sequential basis if there are any unreimbursed charge-offs on the notes or if the first call option date has occurred. At all other times, the structure will follow a pro-rata repayment profile (assuming pro-rata conditions are satisfied). MAIN MODEL ASSUMPTIONS Moody's base case assumptions are a default rate of 4.0%, coefficient of variation (CoV) of 61.9%, a recovery rate of 35.0% and a portfolio credit enhancement of 23.5%. After accounting for the seasoning of the initial portfolio (10.9 months), Moody's mean default rate assumption was adjusted to 4.4%. Moody's assumed default rate, CoV and recovery rate are stressed compared to the historical levels of 2.4%, 47.9% and 59.1% respectively. The difference between the actual and assumed default rate, CoV and recovery rate is in part explained by the addition of several stressed curves (for example, average default rate multiplied by three) to address the lack of a stressed economic environment in recent years and exposure to balloon loans (44.8%) in the portfolio. To address the limited historical loss data on Metro Finance's portfolio, Moody's has benchmarked the short historical data for Metro Finance to data from comparable Australian commercial auto and equipment ABS originators. Moody's has also overlaid additional stresses into itsdefault and CoV assumptions. The streamlined product offering has been around for almost 10 years in the auto and equipment loan space. However, through-the- cycle historical data on the performance of this product is limited. To address this risk and the fact that the portfolio has a very high proportion of streamlined (50.1%), Moody's has applied further qualitative stresses in its analysis. The fact that no-income verification is performed on these streamlined obligors is offset by the stringent requirements to access this product. These requirements include property ownership with confirmed equity greater than the loan amount or a 30% deposit for non-property owners, a satisfactory credit reference from a reputable finance company running at least 12 months, no adverse credit history, and the business being GST registered for at least 2 years continuously. Given these requirements, Moody's expects these borrowers to have a lower risk profile and better performance than the full-income verification loans in Metro Finance's portfolio. Methodology Underlying the Rating Action The principal methodology used in these ratings was "Moody's Global Approach to Rating Auto Loan- and Lease-Backed ABS" published in October 2016. Factors That Would Lead to an Upgrade or Downgrade of the Ratings Factors that could lead to an upgrade of the notes include a rapid build-up of credit enhancement, due to sequential amortization or better-than-expected collateral performance. The Australian job market is a primary driver of performance. A factor that could lead to a downgrade of the notes is worse- than-expected collateral performance. Other reasons that could lead to a downgrade include poor servicing, error on the part of transaction parties, a deterioration in the credit quality of transaction counterparties, or lack of transactional governance and fraud. Moody's Parameter Sensitivities If the default rate rises to 6.6% (1.5 times Moody's assumption of 4.4%) and the recovery rates fall to 25.0% (from Moody's assumption of 35.0%), then the model-indicated rating for the Class A Notes drops one notch to Aa1. Similarly, the model- indicated rating for the Class B Notes, Class C Notes, Class D Notes and E Notes drop two, three, three and five notches to A1, Baa2, Ba2 and Caa1 respectively under this scenario. SHAYE YOUNG: Second Creditors' Meeting Slated for June 15 --------------------------------------------------------- A second meeting of creditors in the proceedings of Shaye Young Earthmoving Pty Ltd has been set for June 15, 2018, at 11:00 a.m. at Level 40, 2 Park 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 June 14, 2018, at 4:00 p.m. John Vouris and Richard Albarran of Hall Chadwick were appointed as administrators of Shaye Young on May 10, 2018. VEHICLE WRAPS: First Creditors' Meeting Set for June 18 ------------------------------------------------------- A first meeting of the creditors in the proceedings of Vehicle Wraps Pty Ltd will be held at Level 31, Dexus Place, Waterfront Place, 1 Eagle Street, in Brisbane, Queensland, on June 18, 2018, at 11:00 a.m. Matthew Joiner and Darryl Kirkof Cor Cordis were appointed as administrators of Vehicle Wraps on June 6, 2018. ========= C H I N A ========= GCL NEW: Moody's Reviews Ba2 CFR & Ba3 Bond Rating for Downgrade ---------------------------------------------------------------- Moody's Investors Service has placed on review for downgrade the Ba2 corporate family rating (CFR) of GCL New Energy Holdings Limited and the Ba3 senior unsecured rating on its USD bond. RATINGS RATIONALE "The review for downgrade reflects the likely reduced ability of GCL-Poly Energy Holdings Limited (not rated), the parent company of GCL New Energy, to provide extraordinary support to GCL New Energy in times of need," says Ralph Ng, a Moody's Assistant Vice President and Analyst. "Such concern follows the announcement that GCL Poly has entered into an agreement to sell its majority shares of a key subsidiary and substantial cash flow contributor, namely Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.," adds Ng. GCL Poly's credit profile is also challenged by the recent policy announcement which will likely impact growth of the solar upstream sector in which GCL Poly is a key player. Given the close linkage between GCL New Energy and GCL Poly, a weakening of the parent's credit profile would directly and negatively challenge the subsidiary's ratings. The review will focus on Moody's assessment of GCL Poly's credit profile (assuming the announced transaction proceeds as contemplated), including its financial leverage, business strategy, and plans to use the proceeds of the proposed transaction. Moody's will also consider any changes to GCL New Energy's position within the GCL Poly group, as well as the extent to which its business and financial plans will change in response to the recent regulatory announcements, including any overseas expansion. On June 6, 2018, GCL Poly announced that it entered into a framework agreement with Shanghai Electric Group Company Limited (A2 stable) to dispose of a 51% equity interest in Jiangsu Zhongneng. The estimated proceeds from the disposal will total no more than RMB12.75 billion. Jiangsu Zhongneng is GCL Poly's core subsidiary, contributing 84% of its parent's revenue and 73% of reported gross profit according to Moody's calculation. Moody's says that the disposal of a major cash-contributing subsidiary will weaken GCL Poly's creditworthiness and its ability to provide extraordinary support to GCL New Energy. The potential disposal also reflects GCL Poly's business model will evolve more rapidly than Moody's had previously assessed, particularly in relation to the use of disposal proceeds. On May 31, 2018, China's National Development and Reform Commission, the Ministry of Finance and the National Energy Administration announced that targeted capacity additions for utility-scale projects in 2018 would not be determined as yet. The effect of the announcement will be to slow the new capacity growth in solar power projects in China - at least in 2018 - resulting in a weaker-than-expected demand for upstream equipment and supplies for such projects. The weaker demand will raise the level of uncertainty to production volumes and average selling prices for GCL Poly's upstream operations, which would weaken its credit quality. Moody's says that the new announcement on May 31, 2018 is credit negative for downstream power producers such as GCL New Energy, because the tariff reduction on new solar power projects will lower returns on investments, despite that the change will not affect existing projects. Nevertheless, the degree of the negative impact would depend on and could be offset by the reduction in equipment and construction cost and the potential scale-down of capacity expansion of GCL New Energy. The principal methodology used in these ratings was Unregulated Utilities and Unregulated Power Companies published in May 2017. GCL New Energy Holdings Limited is a privately owned solar power generation company in China. The company's installed capacity totaled 5.9GW in 26 provinces in China and overseas at the end of 2017. GCL New Energy was 62.28% owned by GCL Poly Energy Holdings Limited at the end of 2017. Founded in 1996, GCL Poly is an integrated solar photovoltaic company. GCL New Energy is the sole downstream platform of the parent company. REWARD SCIENCE: Fitch Affirms B IDR, Removes Ratings from RWN ------------------------------------------------------------- Fitch has affirmed China-based Reward Science And Technology Industry Group Co., Ltd.'s (Reward Group) Long-Term Foreign- Currency Issuer Default Rating (IDR) at 'B'. The Outlook is Negative. Fitch has also affirmed Reward Group's senior unsecured rating and the rating on its US dollar bond issued by Reward International Investment Co. Ltd at 'B' with Recovery Rating of 'RR4'. All ratings have been removed from Rating Watch Negative, on which they were placed on December 11, 2017. The rating actions follow Reward Group's publication of its 2017 audited accounts without material restatements of past accounts by its new auditor. The results did not materially deviate from Fitch's previous expectations. The Negative Outlook reflects Fitch's expectation that Reward Group will face a gradual reduction in its funding access amid tighter credit conditions in China and heightened margin pressure driven by fierce competition. KEY RATING DRIVERS Weak Disclosure, Governance Constrain Ratings: Fitch continues to see Reward Group's concentrated shareholding and weak financial disclosure as constraints on its ratings. The Beijing bureau of the China Securities Regulatory Commission (CSRC) raised issues with the company's disclosure and accounting quality in December 2017, and Reward Group has taken steps to address these concerns, including appointing a new auditor, providing additional accounting training to staff and submitting a written remedy report to the CSRC. Reward Group does not expect any further disciplinary action from the authorities, but the incident highlights weakness in its internal processes. Limited Funding Access: Reward Group's cash position at end-2017 was sufficient to repay its debt maturing within one year. However, the company faces difficulties in obtaining external funding, particularly as access to the domestic bond market has shrunk amid tight credit conditions in China. The company's difficulties in refinancing through banks indicate that its access to banks has also reduced, while its interest costs are likely to increase sharply under current market conditions, which would erode its FFO margin. Margin Pressure from Competition: Reward Group's market position in each of its markets is relatively weak, which makes it vulnerable to a changing competition and market conditions. Its EBITDA margin declined to 14.7% in 2017 from 21.6% in 2014 and Fitch expects further decreases driven by strong competition in the dairy and daily consumer product markets. Competition has increased from local and foreign brands and the company has responded by increasing its marketing and distribution expenses. Reward Group's daily consumer products contributed minimal cash flow compared with its dairy segment. Overseas Acquisition: Reward Group acquired few companies in the US and France, including daily consumer product brands Panrosa and Le Chartelard 1802, as well as several French farms. The acquisitions in 2017, including required capital expenditure, cost the company over CNY1.3 billion. Fitch expects Reward Group to take some time to consolidate the newly acquisitions with its existing segments. The risk of the consolidation being executed as planned is high because the group has no experience in managing overseas businesses. Moderate Leverage, Weakened Coverage: Reward Group reported FFO- adjusted net leverage of 2.0x for 2017, similar to that for 2016. FFO fixed-charge coverage weakened to 3.6x in 2017 from 4.6x in 2016 due to increasing interest costs. Fitch expects the company's leverage and coverage to continue to weaken due to lower margin, stretched working capital and higher borrowing costs in the next two years. Fitch does not expect Reward Group to have high maintenance capex in the next two years, but more intense capex in its new overseas business or bakery businesses could add pressure on the company's leverage. DERIVATION SUMMARY Reward Group is outranked by its 'B+' rated peers based on revenue and EBITDA. These peers include Agri Business Holding Miratorg LLC (B+/Stable) and Avon Products, Inc (B+/Negative). Reward Group's financial metrics are also of weaker quality than those of these higher-rated peers. Reward Group has similar revenue and EBITDA to 'B' rated peers, such as Yasar Holding A.S. (B/Stable). Reward Group has better coverage and leverage ratios, but it is rated at the same level as Yasar because of its weaker business profile. Reward Group's rating is constrained to the 'B' category due to its shareholder concentration, and poor accounting and disclosure quality. KEY ASSUMPTIONS Fitch's Key Assumptions within Its Rating Case for the Issuer - Revenue to increase by 6.4% in 2018 and 2.3% a year from 2019 - EBITDA margin to gradually decline to below 13% from 2018 - No dividend pay-outs or further major acquisitions - Capital intensity above 5% RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action Upside for Reward Group's rating is limited but a material improvement in the company's access to funding and its operating performance not meeting the negative sensitivities below for a sustained period may lead to a revision of the Outlook to Stable. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Deterioration in the company's liquidity position - EBITDA margin sustained below 12% - Funds from operations (FFO) adjusted net leverage sustained above 4x - FFO fixed-charge coverage sustained below 2x LIQUIDITY Limited Funding Access: Reward Group's access to local banks and bond markets has been limited amid the tighter credit conditions in China. The company had short-term debt of CNY4 billion (including bonds with put options that may be exercised in one year and bank drafts) at end-March 2018. Reward Group relies on its cash of CNY5.19 billion (including restricted cash of CNY623 million, mostly pledged to bank draft issuance) to repay its short-term debt obligations. FULL LIST OF RATING ACTIONS Reward Science and Technology Industry Group Co., Ltd. - Long-Term Foreign-Currency IDR affirmed at 'B', Outlook Negative, Off Rating Watch Negative - Senior unsecured rating affirmed at 'B', with Recovery Rating of 'RR4', Off Rating Watch Negative Reward International Investment Co.,Ltd - USD200 million 7.25% senior notes due 2020 affirmed at 'B', with Recovery Rating of 'RR4', Off Rating Watch Negative ========= I N D I A ========= ADITYA PRECITECH: CRISIL Assigns B Rating to INR2.85MM LT Loan -------------------------------------------------------------- CRISIL has revoked the suspension of its ratings on the bank loan facilities of Aditya Precitech Private Limited (APPL) and assigned its 'CRISIL B/Stable/CRISIL A4' rating to the facility. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 3 CRISIL B/Stable (Assigned; Suspension Revoked) Inland Guarantees 3.25 CRISIL A4 (Assigned; Suspension Revoked) Long Term Loan 2.85 CRISIL B/Stable (Assigned; Suspension Revoked) Proposed Long Term .90 CRISIL B/Stable (Assigned; Bank Loan Facility Suspension Revoked) CRISIL had suspended the ratings on Dec. 28, 2016, on account of non-cooperation by APPL with CRISIL's efforts to undertake a review of the ratings. The company has now shared the requisite information, enabling CRISIL to assign its ratings. The ratings reflect the moderate scale- and working-capital intensive- operations, and exposure to risk related to volatility in raw material prices. These rating weakness are partially offset by extensive experience of APPL's promoters in the industry Key Rating Drivers & Detailed Description Weakness: * Moderate scale- and working-capital intensive- operations: The Company has modest scale of INR18 Cr as on March 31, 2017, along with GCA days of 238 days. * Exposure to risk related to volatility in raw material prices: Raw material constitute to around 70% of the cost and any fluctuation can impact the operating margins Strengths: * Extensive experience of APPL''s promoters in the industry: The company benefits from extensive industry experience of the promoters'. The promoters Mr. K.N.Venkateswara Rao and Mr. R.V.K. Kishore have been associated with the industry for more than 2 decades. They initially started with a small capacity and over the have gradually expanded their capacity. Outlook: Stable CRISIL believes that Aditya Precitech Private Limited (APPL) will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the firm diversifies and improves its scale of operations and operating profitability on a sustainable basis, leading to improvement in its financial risk profile. Conversely, the outlook may be revised to 'Negative' in case there is a significant decline in the firm's revenues and profitability, or if the firm undertakes a larger-than-expected debt-funded capital expenditure programme, or if there is deterioration in working capital management, leading to weak financial risk profile. Incorporated in the year 1994 as a partnership firm and subsequently rechristened as Aditya Precitech Private Limited (APPL) in 2004, the company is engaged in providing engineering services. Based out of Hyderabad and promoted by Mr. K.N.Venkateswara Rao and Mr. R.V.K.Kishore, the company has its manufacturing facility in Hyderabad. The company is primarily engaged in supply of precision engineering components and related services for defence entities and private players. AIR INDIA: Seeks INR2,000cr Additional Funding From Government -------------------------------------------------------------- The Times of India reports that cash-crunched Air India, which delayed salaries for three months in a row, has sought an additional funding of around INR2,000 crore from the government to tide over the situation, a senior company official said. TOI relates that the official said the airline is expecting these funds next month when the government moves the first batch of Supplementary Demands for Grants for 2018-19 in the Monsoon session of Parliament. According to the report, the national carrier has already received more than INR26,000 crore of the 10-year INR30,231-crore bailout package announced by the former UPA government in April 2012. "We have requested the government to restore equity infusion in the airline, which was stopped because of the proposed disinvestment. We are seeking an additional INR2,000 crore funds to deal with the present situation," the official said on condition of anonymity, TOI relays. The report relates that Air India had been receiving on an average INR3,000-4,000 crore funding per year from the government till financial year 2013-14. However, the amount got substantially reduced after that. For 2018-19, the carrier was allocated only INR650 crore in view of the privatisation plan, which failed badly last month as the government did not receive even a single bid to acquire the 76 per cent stake on offer in the airline, according to the report. "It (the issue of additional funding) will be decided when the first batch of Supplementary Grants for Demands come up in the Monsoon session of Parliament next month," the official, as cited by TOI, said. Amid cash crunch, during which Air India also had to defer staff salaries, the airline borrowed INR6,250 crore from various banks between last September and this January, the report recalls. TOI relates that the carrier has already approached banks and financial institutions seeking INR1,000-crore working capital loans, which it want to avail within this month, in one or more tranches. Civil aviation minister Suresh Prabhu had said the future course of action for Air India disinvestment process will be decided by the group of ministers, the report says. He said that all alternatives will be discussed by the Air India Specific Alternative Mechanism (AISAM), headed by Union minister Arun Jaitley, adds TOI. About Air India Air India Ltd -- http://www.airindia.com/-- is the flag carrier airline of India owned by Air India Limited (AIL), a Government of India enterprise. The airline operates a fleet of Airbus and Boeing aircraft serving various domestic and international airports. It is headquartered at the Indian Airlines House in New Delhi. As reported in the Troubled Company Reporter-Asia Pacific on March 28, 2014, The Times of India said Air India got a breather in the form of INR1,000-crore equity infusion from the government on March 26, 2014. According to the report, the airline's unending financial stress had got worse as the Centre had so far given INR6,000 crore instead of the promised INR8,500 crore for the fiscal. As a result, AI had to bridge this gap by borrowing money from banks at 11%-12%, which increased its debt servicing burden, the report said. Before the infusion, the government had injected INR12,200 crore into AI and there was a shortfall in equity to the tune of INR3,574 crore -- despite the airline meeting most of the milestone-linked equity targets -- leading to a liquidity crunch, the report related. Air India has posted continuous losses since 2007, according to The Economic Times. AMRITA SAI: Ind-Ra Moves BB Issuer Rating to Non-Cooperating ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated Amrita Sai Educational Improvement Trust's bank facilities 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 BB (ISSUER NOT COOPERATING)' on the agency's website. The detailed rating action is: -- INR29 mil. Working capital facilities migrated to non- cooperating category with IND BB (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on June 8, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Amrita Sai Educational Improvement Trust serves as a not-for- profit educational institution. It has an engineering college situated about 25km from Vijayawada. BAJRANG STEEL: Ind-Ra Migrates 'BB+' LT Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Bajrang Steel and Alloys Limited's Long-Term Issuer Rating to the non- cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using the rating. The rating will now appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR140 mil. Fund-based working capital limit migrated to Non- Cooperating Category with IND BB+ (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 December 1998, Bajrang Steel and Alloys manufactures mild steel ingots and mild steel structures at its plant in Rourkela (Odisha). Moreover, the company is engaged in the trading of crushed slags, mild steel structures and mild steel scrap. The company is managed by directors Mr. Ramesh Kumar Aggarwal, Mr. Ashok Kumar Kansal and Mr. Ashok Kumar Agarwal. BINJRAJKA INDUSTRIES: CRISIL Withdraws B Rating on INR6MM Loan -------------------------------------------------------------- CRISIL has withdrawn its ratings on the bank facilities of Binjrajka Industries Private Limited (BIPL) 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. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 6 CRISIL B/Stable (Issuer Not Cooperating; Rating Withdrawn) Long Term Loan 3.13 CRISIL B/Stable (Issuer Not Cooperating; Rating Withdrawn) CRISIL has been consistently following up with BIPL for obtaining information through letters and emails dated January 27, 2017, and March 22, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 BIPL. This restricts CRISIL's ability to take a forward BIPL 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 BIPL continues to be 'CRISIL B/Stable Issuer Not Cooperating'. BIPL, based at Hyderabad and incorporated in 2014, manufactures pre-galvanised steel tubes. It is also setting up a manufacturing unit for high-frequency induction-welded carbon steel tubes. Its operations are managed by Mr. Rakesh Binjrajka and Mr. Ramesh Chandra Agarwal. BL CONTAINERS: Ind-Ra Migrates 'BB-' LT Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated B L Containers Private Limited's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR70.0 mil. Fund-based working capital limits migrated to non-cooperating category with IND BB- (ISSUER NOT COOPERATING) /IND A4+ (ISSUER NOT COOPERATING) rating; -- INR2.5 mil. Non-fund-based working capital limits migrated to non-cooperating category with IND A4+ (ISSUER NOT COOPERATING) rating; and -- INR49.5 mil. Term loans due on May 2024 migrated to non- cooperating category with IND BB- (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May 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 1991 by Mr. Pawan Bajaj, B L Containers manufactures and supplies corrugated boxes in northern India. BRAHMAPUTRA BIOCHEM: CRISIL Withdraws D Rating on INR58.20MM Loan ----------------------------------------------------------------- CRISIL has withdrawn its ratings on the bank facilities of Brahmaputra Biochem Private Limited (BBPL) 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. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 17.91 CRISIL D (Issuer Not Cooperating; Rating Withdrawn) Proposed Long Term 3.90 CRISIL D (Issuer Not Bank Loan Facility Cooperating; Rating Withdrawn) Proposed Term Loan 20.00 CRISIL D (Issuer Not Cooperating; Rating Withdrawn) Term Loan 58.20 CRISIL D (Issuer Not Cooperating; Rating Withdrawn) CRISIL has been consistently following up with BBPL for obtaining information through letters and emails dated December 22, 2017, and January 9, 2017, among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 BBPL. This restricts CRISIL's ability to take a forward BBPL 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 BBPL continues to be 'CRISIL D Issuer Not Cooperating'. Incorporated in August 2010 by Mr Jagmohan Singh Arora, Mr Kuljeet Singh Arora, Mr Hari Singh Arora, Mr Avinash Deewan and Mr Mrigaraj Das, BBPL manufactures grain-based extra neutral alcohol (ENA). The company has set up a plant in Guwahati, with a capacity to manufacture 60,000 litres of ENA per day. It also has a 2 MW cogeneration power plant and a CO2 recovery plant, with capacity of 40 MT per day. The project was commissioned and commercial operations started in the first quarter of fiscal 2017. BRISTOL TOURIST: CRISIL Migrates D Rating to Not Cooperating ------------------------------------------------------------ CRISIL has migrated the rating on bank facilities of Bristol Tourist Complex to 'CRISIL D Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 50 CRISIL D (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with Bristol Tourist Complex (BTC) for obtaining information through letters and emails dated April 24, 2018, May 14, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Bristol Tourist Complex. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Bristol Tourist Complex 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 Bristol Tourist Complex to 'CRISIL D Issuer not cooperating'. BTC was set up by Mr Gurpreet Singh and his mother, Ms Sharanjit Kaur. The firm operates a five-star hotel in Zirakpur, a satellite town near Chandigarh. BTC has tied up with Park Plaza to manage its hotel. BRITTO TIMBERS: CRISIL Migrates B Rating to Not Cooperating ----------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Britto Timbers Private Limited to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 1 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) Letter of Credit 8 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with Britto Timbers Private Limited (BTPL) for obtaining information through letters and emails dated April 12, 2018, May 14, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Britto Timbers Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Britto Timbers Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Britto Timbers Private Limited to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. Set up in 2012, and based in Kanyakumari district (Tamil Nadu), BTPL trades in and processes timber. It is promoted and managed by Mr. G Arul Shoban and his family. CHURU MUNICIPAL: Ind-Ra Withdraws 'BB' Long Term Issuer Rating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Churu Municipal Council's Long-Term Issuer Rating of 'IND BB'. The Outlook was Stable. KEY RATING DRIVERS Ind-Ra is no longer required to maintain the rating, as the issuer rating was assigned under the Atal Mission for Rejuvenation and Urban Transformation programme and no specific debt is issued against the rating. COMPANY PROFILE Churu is a city in Rajasthan. Churu Municipal Council is responsible for the provisioning and governance of civic services in the city. DEORIA NAGAR: Ind-Ra Withdraws 'BB-' Long Term Issuer Rating ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has withdrawn Deoria Nagar Palika Parishad's Long-Term Issuer Rating of 'IND BB-'. The Outlook was Stable. KEY RATING DRIVERS Ind-Ra is no longer required to maintain the rating, as the issuer rating was assigned under the Atal Mission for Rejuvenation and Urban Transformation programme and no specific debt was issued against the rating. COMPANY PROFILE The city of Deoria is located in Uttar Pradesh. It is the headquarters of the Deoria district and is well connected to most of the major Indian cities through railways. The nearest railway station is Deoria City. DHOLPUR MUNICIPAL: Ind-Ra Withdraws 'BB+' Long Term Issuer Rating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Dholpur Municipal Council's Long-Term Issuer Rating of 'IND BB+'. The Outlook was Stable. KEY RATING DRIVERS Ind-Ra is no longer required to maintain the rating, as the issuer rating was assigned under the Atal Mission for Rejuvenation and Urban Transformation programme and no specific debt was issued against the rating. COMPANY PROFILE Dholpur is located in the Dholpur district of Rajasthan and acts as district headquarter. It is surrounded by Agra in the north, Gwalior in the south, Rajakhera in East and Kauroli in the west. Dholpur Municipal Council is responsible for the provisioning and governance of civic services in the city. FATEHPUR NAGAR: Ind-Ra Withdraws 'BB-' Long Term Issuer Rating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Fatehpur Nagar Palika Parishad's Long-Term Issuer Rating of 'IND BB-'. The Outlook was Stable. KEY RATING DRIVERS Ind-Ra is no longer required to maintain the rating, as the issuer rating was assigned under the Atal Mission for Rejuvenation and Urban Transformation programme and no specific debt was issued against the rating. COMPANY PROFILE Fatehpur is a city and a municipal council in Fatehpur district, Uttar Pradesh. It is well connected with most of the major Indian cities through railways and roadways. The city is well known for its monuments and holy places. GANGAPUR MUNICIPAL: Ind-Ra Withdraws BB+ Long Term Issuer Rating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Gangapur City Municipal Council's (GcMC) Long-Term Issuer Rating of 'IND BB+'. The Outlook was Stable. KEY RATING DRIVERS Ind-Ra is no longer required to maintain the rating, as the issuer rating was assigned under the Atal Mission for Rejuvenation and Urban Transformation programme and no specific debt was issued against the rating. COMPANY PROFILE Gangapur is a city and GcMC is a municipal council in the Sawai Madhopur District of Rajasthan. GcMC is responsible for the provisioning and governance of civic services in the Gangapur city. GOLCHHA ENTERPRISES: CRISIL Withdraws B Rating on INR2.5MM Loan --------------------------------------------------------------- CRISIL has withdrawn its ratings on bank facilities of Golchha Enterprises Private Limited (GEPL) at the company's request 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 ---------- --------- ------- Bank Guarantee 2.5 CRISIL A4 (Issuer Not Cooperating; Rating Withdrawn) Cash Credit 2.5 CRISIL B/Stable (Issuer Not Cooperating; Rating Withdrawn) Foreign Letter 9.0 CRISIL A4 (Issuer Not of Credit Cooperating; Rating Withdrawn) CRISIL has been consistently following up with GEPL for obtaining information through letters and emails dated January 23, 2017 and February 13, 2017 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 GEPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for the firm is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information' corresponding to CRISIL BB rating category or lower. Based on the last available information, the rating on bank facilities of GEPL continues to be 'CRISIL B/Stable/CRISIL A4 Issuer Not Cooperating' Incorporated in 2007 and promoted by Golchha family, Jamshedpur (Jharkhand)-based GEPL trades in various chemicals, minerals, ferro alloys, and metals in the domestic market. JAI KRISHNA: CRISIL Reaffirms B+ Rating on INR13MM LT Loan ---------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facility of Jai Krishna Artec-J.V. (JKA), and reaffirmed its short-term rating at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 17 CRISIL A4 (Assigned) Long Term Loan 13 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect geographical concentration in revenue, and exposure to inherent risks and cyclicality in the real estate sector. These rating weaknesses are partially offset by extensive experience of the promoters in the real estate development business. Key Rating Drivers & Detailed Description Weakness * Geographical concentration in revenue: The firm is focused on a single project at Sonepat, Haryana. Thus, geographical concentration in operations exposes it to risks arising from variations in regional demand and government regulations. * Exposure to inherent risks and cyclicality in the real estate sector: The domestic real estate sector has several regional players. The government's low interest rate regime and increasing demand, owing to higher disposable income of customers, led to robust growth post 2001. However, the segment was adversely hit in 2008, due to the global economic slowdown, uncertainty over incomes of individuals, and anticipation of further correction in real estate prices. Strength * Extensive experience of the promoters and project diversity: The promoters, the Mittal and Wadia groups, have extensive experience in the real estate development business. They have executed projects related to residential and commercial real estate and development of townships. Outlook: Stable CRISIL believes JKA will continue to benefit from the extensive experience of its promoters in the real estate industry. The outlook may be revised to 'Positive' if substantial cash accrual and profitability, strengthen the cash buffer ratio and ensure timely completion of the project. The outlook may be revised to 'Negative' in case of a drop in cash inflow or delay in completion of the project. JKA was set up as a joint venture in August 2005, by the Mittal and Wadia groups with a 30:70 shareholding. The JV is currently developing a township, Green Wood City, comprising residential, commercial, and group housing plots at Sonepat (Sectors 26 and 27). Operations are managed by Mr Rajendra Mittal, along with his son, Mr Arun Mittal. JAMALPUR MUNICIPAL: Ind-Ra Assigns BB- LT Rating, Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Jamalpur Municipal Council (JMC) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. KEY RATING DRIVERS The rating reflects JMC's declining financial performance. Revenue receipts fell to INR37.10 million in FY17 revised estimates (RE) (FY15: INR57.24 million) owing to a decline in share of grants in revenue income. Being a municipal council, its revenue sources comprise tax and non-tax revenue. Its tax revenue comprises property and tower/other taxes. JMC reported a capital surplus of INR20.17 million in FY17 (RE). JMC's credit profile is constrained by the small proportion of its own revenue. The council is largely dependent on the government of Bihar (GoB) for revenue. The rating is constrained by Jamalpur's poor infrastructure. Although the city is well-connected with the capital state, Patna, and other cities through roads and railways, it lacks an underground sewerage system, a sewage treatment plant, and proper solid waste management and collection facilities, which hinder its growth potential. The lack of these adequate basic civic services calls for an immediate attention and affects JMC's credit profile. Although the water supply network is not fully developed, it is still better than other urban local bodies in the state. Under Atal Mission for Rejuvenation and Urban Transformation scheme, the total investment plan, estimated at INR302 million over FY16-FY20, will be incurred on water supply, parks and urban transport. However, INR17 million will be incurred to improve the civic services in the city during FY17-FY20. The share of the central government, the state government and ULB stands at INR8.50 million, INR5.10 million and INR3.40 million, respectively. The rating reflects JMC's high dependence on the state government (compensation in lieu of revenue grants and contributions) making its finances vulnerable to the latter's economic and fiscal performance. Grants coupled with compensation grants cumulatively contributed 74.4% to the total revenue income during FY15-FY17 (RE). JMC's own income to total revenue income ratio was just at 25% over FY15-FY17 (RE). JMC also incurs high establishment expenditure in the form of salaries and wages, which comprised 89.8% of total revenue expenditure in FY17 (RE) (FY15-FY16: average 84.9%). High establishment expenditure constrains the headroom available to the council to spend on key areas such as operations and maintenance of civic facilities. An upside risk is likely to emerge to this expenditure head, when the state government revises and implements a new pay structure following the central government's Seventh Pay Commission recommendations. RATING SENSITIVITIES Positive: A sustained improvement in the delivery of civic services along with a significant improvement in the revenue account will lead to a positive rating action. Negative: Lowered state government support in form of grants leading to a sustained deterioration in the revenue, will lead to a negative rating action. COMPANY PROFILE Jamalpur, located in Munger district, was constituted in 1885. JMC is mainly responsible for the administration of the city, providing and maintaining the various infrastructure facilities including roads, housing, water, solid waste management, education, health services, among others to its citizens. J. N. TRADERS: CRISIL Reaffirms B Rating on INR6.5MM Cash Loan -------------------------------------------------------------- CRISIL has reaffirmed its rating on the long-term bank facilities of J. N. Traders (JNT) at 'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 6.5 CRISIL B/Stable (Reaffirmed) Long Term Loan 2.5 CRISIL B/Stable (Reaffirmed) The rating reflects the firm's modest scale of operations and exposure to intense competition, and volatility in traded goods prices. These weaknesses are partially offset by the partners' extensive experience and established relationship with key clients with funding support and the firm's moderate financial risk profile. Analytical Approach Unsecured loans of INR7.70 crore that JNT has received from the partners as of March 2018 have been treated as neither debt nor equity. That is because the loans have increased each year, and their interest rates are lower than those of banks. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations: With revenue of INR124.3 crore in fiscal 2018, scale remains modest in the intensely competitive trading industry. The modest scale restricts bargaining power and profitability. * Volatility in traded goods prices: The products traded, mainly ferrous metal such as steel, are also susceptible to considerable price fluctuation. Strengths * Extensive experience of the partners and established relationships with customers: Benefits from the partners' experience of over two decades and their healthy relationships with clients, should continue to support the business. * Funding support from Partners: Need-based funding support from the promoters via unsecured loans (outstanding at INR7.70 crore as at March 31, 2018) is expected to continue. * Moderate Financial Risk Profile: Firm has a modest networth of INR8.5 crore, financial risk profile is also supported by moderate gearing of 0.81 time estimated as on March 31, 2018, and adequate debt protection metrics, reflected in interest coverage and net cash accrual to total debt ratios of 4.8 times and 0.24 time, respectively, in fiscal 2018. Financial risk profile will remain moderate in the absence of any debt-funded capital expenditure plans. Outlook: Stable CRISIL believes JNT will continue to benefit over the medium term from the partners' strong track record. The outlook may be revised to 'Positive' if cash accrual and liquidity improve significantly with increase in revenue and profitability. The outlook may be revised to 'Negative' if weakening of relationship with main customer results in a decline in revenue or operating profitability, or if any large, debt-funded capital expenditure further weakens financial risk profile. JNT is a partnership firm set up in 1983 by Mr Abdul Japhar, and his two brothers, and son. The firm derives around 90% of its revenue from trading in ferrous metals, mostly steel scrap, and the rest from trading in non-ferrous metal scrap, mostly copper. JNT has two warehouses, with a combined area of 40,000 square feet in Pune. KADAMBRI HEALTHCARE: CRISIL Reaffirms B- Rating on INR13.05M Loan ----------------------------------------------------------------- CRISIL has reaffirmed its rating on the long-term bank facility of Kadambri Healthcare Private Limited (KHPL) at 'CRISIL B- /Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 13.05 CRISIL B-/Stable (Reaffirmed) The rating reflects a nascent stage of operations with geographic concentration in revenue, and a below-average financial risk profile. These rating weaknesses are partially offset by the extensive experience of the management in the healthcare industry. Analytical Approach CRISIL has treated unsecured loans of INR2.40 crore (estimated) as on March 31, 2018, extended by the promoters, as debt. Key Rating Drivers & Detailed Description Weakness * Nascent stage of operations: Operations commenced only in November 2017 and operating income is estimated at just INR40 lakh for fiscal 2018. During this period occupancy has remained low at 20-25%. * Geographic concentration in revenue: Operations are small and localised, compared with companies such as Apollo Hospitals Enterprise Ltd and Fortis Healthcare Ltd. The concentration in Ghaziabad, Uttar Pradesh, renders the company vulnerable to the dynamics of a single market. The hospital will be exposed to increased local competition if big players enter the region. The image-sensitive nature of the healthcare industry further aggravates the risk of being in a single location. * Below-average financial risk profile: The networth was modest at INR1.29 crore and the total outside liabilities to adjusted networth ratio high at 5.47 times, as on March 31, 2017. However, these are expected to improve over the medium term with repayment of the term loans and no major debt-funded capital expenditure (capex) plans. Strength: * Extensive industry experience of the promoters: The promoters have been in the healthcare industry for more than a decade. They have also roped in reputed doctors such as Mr. K Ramalingam and Dr Rekha Gupta, a paediatrist and gynaecologist, respectively, operating in big hospitals such as Fortis and Max in East Delhi. Outlook: Stable CRISIL believes KHPL will continue to benefit from the industry extensive experience of its management. The outlook may be revised to 'Positive' in case of a substantial increase in sales and profitability, leading to higher cash accrual. The outlook may be revised to 'Negative' if the financial risk profile, especially liquidity, deteriorates due to a stretched working capital cycle, large, debt-funded capex, or capital withdrawal. KHPL, incorporated in 2015, is managed by Dr Nishant Tyagi and Dr Ashok Gupta. The company has set up a mother-and-child hospital at Ghaziabad, with a 50-bed capacity offering specialisation in gynaecology and paediatrics. KASHIRATAN ENTERPRISES: CRISIL Moves B+ Rating to Not Cooperating ----------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Kashiratan Enterprises to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Proposed Long Term 2 CRISIL B+/Stable (Issuer Not Bank Loan Facility Cooperating; Rating Migrated) CRISIL has been consistently following up with Kashiratan Enterprises (KE) for obtaining information through letters and emails dated April 24, 2018, May 18, 2018 and May 23, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Kashiratan Enterprises. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Kashiratan Enterprises 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 Kashiratan Enterprises to 'CRISIL B+/Stable Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. Established in 2011 as a partnership between Mr Pravin Agarwal and Mr Manish Agarwal, KE, headquartered in Indore (Madhya Pradesh), trades in cotton bales. KHAITAN ELECTRICALS: Faces Insolvency Application ------------------------------------------------- Alliance Freight Career Private Limited has filed an application with Honble National Company Law Tribunal (NCLT), Hyderabad Bench, Hyderabad for initiation of Corporate Insolvency Resolution Process against Khaitan Electricals Limited under the Insolvency and Bankruptcy Code, 2016. Khaitan Electricals Ltd. manufactures fans, pumps, lights, home appliances, cables, wires, and circuit breakers. M S GRAPHICS: Ind-Ra Migrates BB Issuer Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated M S Graphics Private Limited's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise, despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR160 mil. Fund-based limit migrated to non-cooperating category with IND BB (ISSUER NOT COOPERATING) rating; and -- INR20 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 24, 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 1991, M S Graphics is engaged in the trading of printing plates and printing ink. MAHAVIR CONSTRUCTION: CRISIL Hikes Cash Credit Rating to 'B' ------------------------------------------------------------ Due to inadequate information, CRISIL in line with SEBI guidelines had migrated the rating of Mahavir Construction Company - Mumbai (MCC; a part of the Mahavir VNC group) to 'CRISIL B+/Stable/CRISIL A4 Issuer Not Cooperating'. However, the management has subsequently started sharing requisite information, necessary for carrying out comprehensive review of rating. Consequently CRISIL is migrating the ratings on the bank facilities of MCC from 'CRISIL B+/Stable/CRISIL A4/Issuer Not Cooperating' to 'CRISIL B/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 4 CRISIL A4 (Migrated from 'CRISIL A4' Issuer Not Cooperating) Cash Credit 8 CRISIL B/Stable (Migrated from 'CRISIL B+/Stable' Issuer Not Cooperating) Proposed Long Term 10.5 CRISIL B/Stable (Migrated from Bank Loan Facility 'CRISIL B+/Stable' Issuer Not Cooperating) The ratings continue to reflect the group's weak financial risk profile because of modest networth and high gearing. The ratings also factor in susceptibility of the revenue profile to high customer concentration in the order book. These weaknesses are partially offset by extensive experience of the proprietors in the road construction industry. Analytical Approach For arriving at the ratings, CRISIL has consolidated the business and financial risk profiles of MCC with its group entity - VNC Infraprojects (VNC). This is because both these entities - together referred to as the Mahavir VNC group -- execute the same line of business. Key Rating Drivers & Detailed Description Weaknesses * Weak financial risk profile because of modest networth and high gearing: The group had a modest net worth of INR7.5 crores as on March 31, 2018. The gearing levels also were high estimated at 4.08 times as on March 31st 2018. * Susceptibility of the revenue profile to high customer concentration in the order book: Group currently has a healthy order book out of which maximum is contributed by orders from MCGM and MMRDA. This not only makes group's revenues vulnerable to progress on these projects but also exposes the business to higher counterparty risks. Delays in these projects may significantly alter group's credit risk profile. Strengths * Extensive experience of the proprietor in the civil construction industry: The business risk profile of group benefits from the extensive experience of the proprietors in the civil construction industry. Group is promoted by Shah and Jain Family and has experience of 3 decades. Outlook: Stable CRISIL believes the group will continue to benefit over the medium term from the proprietors' extensive experience. The outlook may be revised to 'Positive' if sharp growth in revenue and profitability along with stable working capital management or capital infusion strengthen the capital structure. Conversely, the outlook may be revised to 'Negative' if lower-than-expected revenue or profitability, large debt-funded capital expenditure or stretched working capital cycle weakens financial risk profile, particularly liquidity. MCC is a Mumbai-based proprietorship firm formed by Mr Kishore Shah in 1983. It undertakes civil construction activities on contract or sub contract basis for Municipal Corporation of Greater Mumbai (MCGM), Mumbai Metropolitan Region Development Authority (MMRDA) and Maharashtra Housing and Area Development Authority (MHADA). VNC is a Mumbai-based proprietorship firm formed by Mr Chirag Jain in 2008. VNC undertakes civil construction activities on contract or sub contract basis for MCGM, MMRDA, and MHADA. MATHURAM SWASTHYA: Ind-Ra Migrates B+ Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Mathuram Swasthya Evam Shikshan Sansthan's term loans' ratings 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 action is: -- INR106.50 mil. Term loans due on March 31, 2021 - September 30, 2023 migrated to non-cooperating category with IND B+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The rating was last reviewed on June 9, 2017. Ind-Ra is unable to provide an update as the agency does not have adequate information to review the ratings. COMPANY PROFILE Dr. DY Patil Pushapalata Patil International School is a social endeavor of Mathuram Swasthya Evam Shikshan Sansthan, registered under Companies Act 1956. The school was started under the guidance and patronage of renowned educationist, Padmashri Dr. D Y Patil. The school's campus is sprawled over three acres and offers CBSE curriculum to the students from Nursery to Class X. The school is situated in Kankarbagh, Patna. MUNGER MUNICIPAL: Ind-Ra Assigns BB- Long-Term Issuer Rating ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has assigned Munger Municipal Corporation (MMC) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. KEY RATING DRIVERS The rating is constrained by MMC's high revenue dependency on grants, which formed an average 50.24% of the total revenue income over FY15-FY17. This was on account of low tax revenue collections and the consequent own income reliance. MMC's own income to total revenue income ratio improved to 38.45% in FY17 from 18.44% in FY15. Also, MMC incurs high establishment expenditure, which accounted for an average 87.03% of MMC's total revenue expenditure over FY15-FY17. Consequently, allocation for key expenditure area such as operations and maintenance was low at 10.00%. The rating is also constrained by the Munger city's poor infrastructure. Although Munger is a well-connected city through roads and railways, the lack of a proper supply of water, sewerage system and solid waste management hinders potential growth. Under Atal Mission for Rejuvenation and Urban Transformation, INR621.7 million will be incurred to improve the civic services in the city during FY18-FY20. The central government will contribute INR310.9 million, followed by the state government (INR186.5 million) and MMC (INR124.3 million). The rating is further constrained by MMC's financial performance, which declined over FY15-FY17. Its revenue receipts fell to INR101.03 million in FY17 from INR152.63 million in FY15. Moreover, its revenue surplus declined to INR18.83 million in FY17 from INR47.12 million in FY15, with revenue deficit standing at INR35.37 million in FY16. However, the rating is supported by an increase in tax revenues, which rose at a CAGR of 26.56% to INR34.67 million over FY15- FY17. The increase moderated the fall in its top line accruing from a fall in other sources of income. RATING SENSITIVITIES Negative: Lowered state government support in the form of grants, leading to sustained deterioration in revenue, will lead to a negative rating action. Positive: A sustained improvement in the delivery of civic services, along with an improvement in the revenue account, will lead to a positive rating action. COMPANY PROFILE Munger is a twin city, comprising Munger and Jamalpur, in Bihar. It is the administrative headquarters of the Munger district and the Munger division. MMC is mainly responsible for the administration of the city, the provision and maintenance of various infrastructure facilities (including roads, housing, water, solid waste management, education, and health services) to the citizens. PHTHALO COLOURS: Ind-Ra Hikes Long-Term Issuer Rating to 'BB' ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Phthalo Colours & Chemicals (India) Ltd.'s (PCCIL) Long-Term Issuer Rating to 'IND BB' from 'IND B+ (ISSUER NOT COOPERATING)'. The Outlook is Stable. The instrument-wise rating actions are: -- INR107.5 mil. (reduced from INR130.0 mil.) Fund-based working capital limits upgraded with IND BB/Stable/IND A4+ rating; and -- INR211.0 mil. Term loan limits due on May 2024 assigned with IND BB/Stable rating. KEY RATING DRIVERS The upgrade reflects an improvement in PCCIL's credit metrics (too modest from weak), and a rise in revenue and EBITDA margin in FY18 over the levels in FY16. In FY18, its net leverage (Ind- Ra total adjusted net debt/operating EBITDAR) was 5.0x (FY17: 5.0x; FY16: 9.0x) and interest coverage (operating EBITDA/gross interest expense) was 1.7x (FY17: 1.1x; FY16: 0.8x). The improvement in the credit metrics was driven by an increase in absolute EBITDA and the refinancing of the term debt at a lower interest rate. Ind-Ra expects the metrics to improve in FY19-FY20 in view of scheduled debt repayment and the absence of any major debt-led capex. FY18 financials are provisional in nature. In FY18, PCCIL's revenue was INR1,355.4 million (FY17: INR1,308.0 million; FY16: INR1,271.2 million). By value, the revenue grew marginally due to decreased realization. However, by volume, the sales grew 12%. The growth was on account of repeat orders from existing customers, the addition of new customers and capacity expansion. The scale of operations continues to be medium. During the period, the EBITDA margin was 7.7% (FY17: 7.9%; FY16: 4.9%). The improvement in the margin in FY18 over the level in FY16 was driven by cost-cutting measures implemented in FY17, better absorption of fixed cost due to increased scale and a fall in raw material price. The ratings, however, are supported by PCCIL's operational track record, as well as the management's experience, of around three decades in the pigment and chemical manufacturing industry that has led to long-standing relationships with customers and suppliers. The ratings factors in PCCIL's modest liquidity, indicated by an average peak utilization of cash credit limits of 94.3% for the 12 months ended May 2018, and exposure to the forex fluctuation risk as exports account for 70% of the revenue. RATING SENSITIVITIES Negative: A decline in the revenue and/or operating profitability, leading to any deterioration in the credit metrics, on a sustained basis, will be negative for the ratings. Positive: Substantial growth in the revenue and the profitability, leading to an improvement in the credit metrics, on a sustained basis, will lead to a positive rating action. COMPANY PROFILE Incorporated in 1991, PCCIL is engaged in the manufacture of phthalocyanine pigments such as green, alpha blue and beta blue at its plant in Vapi in Gujarat. Its products are sold under the brand Rangday. It has exited from A-One Phthalo Chemicals Private Limited, a joint venture where it owned a 50% stake. QUADRA INFRATEL: CRISIL Migrates B Rating to Not Cooperating ------------------------------------------------------------ CRISIL has migrated the rating on bank facilities of Quadra Infratel Synergies Private Limited to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 3 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Cash Credit 5 CRISIL B/Stable (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with Quadra Infratel Synergies Private Limited (QISPL) for obtaining information through letters and emails dated April 24, 2018, May 16, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Quadra Infratel Synergies Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Quadra Infratel Synergies Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Quadra Infratel Synergies Private Limited to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. QISPL, a Noida-based company is an EPC contractor for telecom projects. The company provides services to telecom operators such as site acquisition, civil construction, site electrification, operations and management of telecom towers. QUALITY OVERSEAS: CRISIL Migrates B+ Rating to Not Cooperating -------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Quality Overseas Private Limited (QOPL) to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 6.5 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Proposed Cash Credit Limit 2.0 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Proposed Term Loan .5 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Warehouse Financing 3.0 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with QOPL for obtaining information through letters and emails dated February 27, 2018, May 10, 2018 and May 15, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. '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 Quality Overseas Private Limited. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Quality Overseas Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Quality Overseas Private Limited to 'CRISIL B+/Stable Issuer not cooperating'. QOPL was incorporated in 1998 as JJ Solvents Pvt Ltd, and got its present name in 2009. Its promoters are Mr Vinod Khanna, Mr Naresh Mittal, Mr Rajinder Mittal, and Mr. Manpreet Makkar. It processes paddy. Its unit is in Amritsar and has installed capacity of 6 tonne per hour. RAMESHVAR IMPEX: Ind-Ra Assigns 'B+' LT Rating, Outlook Stable -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Rameshvar Impex (RMPX) a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR70 mil. Fund-based limits assigned with IND B+/Stable/ IND A4 rating; and -- INR8.75 mil. Non-fund-based limits assigned with IND A4 rating. KEY RATING DRIVERS The ratings reflect RMPX's modest-to-weak credit metrics owing to a high debt. In FY18, its interest coverage (operating EBITDA/gross interest expense) was 2.0x (FY17: 2.4x) and net leverage (total adjusted net debt/operating EBITDAR) was 6.1x (3.7x). The deterioration in the metrics was due to a rise in debt, driven by higher working capital requirements. Moreover, it has a low profitability (FY18: 2.5%; FY17: 2.3%) owing to the intense competition in the diamond industry. FY18 financials are provisional in nature. The ratings also reflect a tight liquidity, indicated by a fund- based facility utilization of 96.4% over the 12 months ended April 2018, due to the working capital-intensive nature of business. Its working capital cycle was elongated at 103 days in FY18 (FY17: 66 days). The deterioration in the cycle was due to a decline in creditor days. The ratings, however, are supported by revenue growth. Its revenue expanded at a CAGR of 6.0% to INR481 million over FY15- FY18, driven by an increase in customer orders. The scale of operations is small. The ratings are also supported by the promoters' experience of over 10 years in the diamond industry. RATING SENSITIVITIES Negative: Any decline in the revenue and the EBITDA margin, leading to any deterioration in the credit metrics, would be negative for the ratings. Positive: Any further rise in the revenue and the EBITDA margin, leading to any improvement in the credit metrics, will be positive for the ratings. COMPANY PROFILE RMPX was formed in 2011 by Hareshbhai Jethabhai Miyani, Mukeshbhai Arjanbhai Vaghani and Hirenbhai Pravinbhai Kevadiya. The firm is engaged in the cutting and polishing of diamonds. SAFE HANDS: CRISIL Assigns 'B' Rating to INR10MM LT Loan -------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the proposed long term bank loan facility of Safe Hands Multipurpose Co- operative Society (Safe Hands). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term Bank Loan Facility 10 CRISIL B/Stable (Assigned) The rating reflects the society's small scale of operations, geographic concentration risk in revenue, and modest capitalisation. These weaknesses are partially offset by the experienced management team, and sound asset quality. Key Rating Drivers & Detailed Description Weaknesses * Small scale of operations: Scale of operations is small, as reflected in total assets of INR3.9 crore as on March 31, 2018. Furthermore, operations are in 130 villages of Dharwad and Gadag districts in Karnataka, leading to geographic concentration risk. * Modest capitalization: Networth was small at INR30 lakh, and gearing was high at 8.3 times as on March 31, 2018. The society has inherent limitations in raising equity capital. Strengths * Experienced management: Most of the board members are associated with Deshpande Foundation (a non-government organisation), which runs several projects in USA and India for sustainable and scalable enterprises that have social and economic impact. The promoter is the chief executive officer of Deshpande Foundation's India operations, and has experience of more than 15 years, which should continue to support business risk profile. * Sound asset quality: Sound systems and processes have been established for the microfinance operations. Furthermore, collection efficiency is comfortable. Loans are given to women in self-help groups after monitoring the group's saving habits, bonding, behaviour, and loan repayment. The ability to maintain a good asset quality, however, will continue to be monitored as it expands its operations in other districts in Karnataka. Outlook: Stable CRISIL believes Safe Hand's operations will remain small and geographically concentrated, and its capitalisation will remain modest over the medium term. The outlook may be revised to 'Positive' if significant improvement in scale of operations, earnings, and capitalisation, and stable asset quality strengthen key credit metrics. The outlook may be revised to 'Negative' if capitalisation is constrained significantly by deterioration in asset quality or profitability. Safe Hands is registered with the registrar of co-operative societies, Dharwad (Karnataka). It operates through its seven branches, mainly in Dharwad and Gadag districts. Deposits from the members are collected to provide loans to self-help groups. Safe Hands had 4,268 members, with assets under management of 3.7 crore as on March 31, 2018. SATYAM SPINNERS: Ind-Ra Migrates BB LT Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Satyam Spinners Pvt Ltd.'s Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR155 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 May 29, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Satyam Spinners manufactures yarn in Sendhwa. SAVORIT LIMITED: Ind-Ra Maintains B+ LT Rating in Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Savorit 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 B+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR70 mil. Fund-based limit maintained in non-cooperating category with IND B+ (ISSUER NOT COOPERATING)/IND A4 (ISSUER NOT COOPERATING) rating; -- INR97.34 mil. Non-fund-based limit maintained in non- cooperating category with IND B+ (ISSUER NOT COOPERATING) /IND A4 (ISSUER NOT COOPERATING) rating; and -- INR82.66 mil. Term loans maintained in non-cooperating category with IND B+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on March 14, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Savorit is a Chennai-based manufacturer of wheat products. Its manufacturing facilities are located in Chennai and Dindigul. SAWAI MADHOPUR: Ind-Ra Withdraws 'BB+' Long Term Issuer Rating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Sawai Madhopur Municipal Council's (SmMC) Long-Term Issuer Rating of 'IND BB+'. The Outlook was Stable. KEY RATING DRIVERS Ind-Ra is no longer required to maintain the rating, as the issuer rating was assigned under the Atal Mission for Rejuvenation and Urban Transformation programme and no specific debt was issued against the rating. SHANKER COTGIN: CRISIL Migrates D Rating to Not Cooperating Cat. ---------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Shanker Cotgin Industries to 'CRISIL D Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 6 CRISIL D (Issuer Not Cooperating; Rating Migrated) Proposed Cash 2 CRISIL D (Issuer Not Credit Limit Cooperating; Rating Migrated) CRISIL has been consistently following up with Shanker Cotgin Industries (SCI) for obtaining information through letters and emails dated March 28, 2018, April 19, 2018, May 16, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Shanker Cotgin Industries. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Shanker Cotgin Industries 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 Shanker Cotgin Industries to 'CRISIL D Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. SCI is a partnership firm set up in 2005. It gins and presses cotton, and extracts cotton oil at its unit in Sirsa (Haryana). The firm is owned and managed by Mr Ramesh Kumar and family. SHREE JAYA: Ind-Ra Migrates BB+ Issuer Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Shree Jaya Laboratories Pvt Ltd.'s Long-Term Issuer Rating 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 these ratings. The rating will now appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR90 mil. Fund-based working capital limits migrated to non- cooperating category with IND BB+ (ISSUER NOT COOPERATING) /IND A4+ (ISSUER NOT COOPERATING) rating; and -- INR60 mil. Non-fund-based working capital limits migrated to non-cooperating category with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May 31, 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 2007, Shree Jaya Laboratories manufactures chemical and intermediates, and distributes in the domestic markets. The company's manufacturing unit, located in Nalgonda, has 55-60 reactors with an installed capacity of 70 tons per month and utilizes 75% of installed capacity. SHREE VENKATESH: Ind-Ra Affirms BB Issuer Rating, Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Shree Venkatesh Realties' (SVR) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. The instrument-wise rating action is: -- INR160.00 mil. Term loan due on September 2018 affirmed with IND BB/Stable rating. KEY RATING DRIVERS The affirmation reflects the continued salability risk faced by SVR's ongoing project Lake Life in Pune. The project is being jointly developed by SVR and landowners, and has a revenue sharing of 61.8% and 38.2%, respectively. Lake Life is an 11- storey project with 161 residential, 28 commercial and six bungalow units. The booking has been slow so far. SVR has so far sold 108 units (89 residential and 19 commercial)- compared with 87 units (68 residential and 19 commercial) sold at end-April 2017 - with a total sales value of INR339.6 million. The firm has collected 57.0% of the total sales value. The ratings continue to reflect the funding risk faced by the project, as the repayment starts from June 2018 and customer advances (51%) forms the major source of funding. Ind-Ra believes any further slowdown in new bookings and/or any delays in receiving the balance amount from already booked units could lead to a cash flow mismatch. The total project cost is INR674 million, which is being funded by INR160 million in debt, INR170 million in promoter contribution and INR344 million in customer advances. As of March 2018, the promoters had infused the entire funding. The ratings, however, are supported by a low execution risk, considering the management claims that 97% of the project construction has been completed, and that the company has incurred INR291.1 million of the total construction cost of INR299.6 million. The management expects the project to be fully completed by end-June 2018. The ratings continue to be supported by the promoters' strong track record of 18 completed projects in Pune and combined experience of over two decades in real estate. RATING SENSITIVITIES Negative: A lower-than-expected sales rate and realization from the project in a timely manner could result in a negative rating action. Positive: High customer advances driven by a quick turnover of flats than Ind-Ra's expectations leading to higher cash flows available for debt servicing could result in a positive rating action. COMPANY PROFILE SVG is a Pune-based partnership firm engaged in real estate development. SHRILEKHA TRADING: CRISIL Migrates C Rating to Not Cooperating -------------------------------------------------------------- CRISIL has migrated the ratings on bank facilities of Shrilekha Trading Private Limited to CRISIL C/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Letter of Credit 120 CRISIL A4 (Issuer Not Cooperating; Rating Migrated) Letter of Credit 10 CRISIL C (Issuer Not Cooperating; Rating Migrated) CRISIL has been consistently following up with Shrilekha Trading Private Limited (STPL) for obtaining information through letters and emails dated April 26, 2018, May 11, 2018 and May 16, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 Shrilekha Trading Private Limited, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Shrilekha Trading Private Limited is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the ratings on bank facilities of Shrilekha Trading Private Limited to CRISIL C/CRISIL A4 Issuer not cooperating'. Incorporated in 2002 and promoted by Mr. Vinod Jatia and his family members, STPL primarily trades in iron and steel products such as hot- and cold-rolled coils, sheets, and plates, sponge iron lumps, and fines. SIWAN MUNICIPAL: Ind-Ra Assigns BB- Issuer Rating, Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Siwan Municipal Council (SMC) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. KEY RATING DRIVERS The rating is constrained by SMC's declining financial performance. Revenue receipts decreased to INR61.79 million in FY16 from INR123.34 million in FY15 due to a significant fall in the share of grants in revenue income. Considering SMC is a municipal council, its revenue sources comprise tax revenue and non-tax revenue. Its tax revenue comprises only holding tax and some small portion of other taxes. SMC reported a capital surplus of INR68.65 million for FY16. SMC's credit profile is constrained by the small proportion of own revenue. The council is largely dependent on the government of Bihar for revenue. The rating is also constrained by Siwan's poor infrastructure. Although Siwan is well connected with other cities through roads and railways, the city does not have an underground sewerage system and a sewage treatment plant. Also, the lack of an adequate water supply network, a drainage network, proper solid waste management and collection facilities hinders the growth potential of the city. Under Atal Mission for Rejuvenation and Urban Transformation, the total investment plan was estimated at INR509.2 million for the development of water supply, parks and urban transport over FY16-20. Of the estimated investment plan, INR131.20 million will be incurred to improve the civic services in the city during FY17-FY20. The share of central government, state government and ULB stands at INR65.6 million, INR39.4 million and INR26.2 million, respectively. The rating reflects SMC's high revenue dependence on the state government. Compensation in lieu of revenue grants and contributions reduced to INR28.4 million in FY16 from INR97.22 million in FY15. Thus, its own income to total revenue income ratio increased to 45.68% in FY16 and is likely increase over FY17-FY21 in view of declining revenue grants. However, Ind-Ra foresees SMC's dependence on government grants to take care of its capital expenditure over FY17-FY21. Moreover, SMC incurs high establishment expenditure. Salaries and wages comprised 78.8% of the total revenue expenditure in FY16 (FY15: 82.6%). High establishment expenditure constrains the headroom available to the council to spend on key areas such as operations and maintenance of civic facilities. An upside risk is likely to emerge in this expenditure head, when the state government revises and implements new pay structure following the central government's Seventh Pay Commission recommendations. However, the rating is supported by SMC's revenue surplus over FY15-FY16, albeit it fell to INR8.97 million in FY16 (FY15: INR80.16 million). Ind-Ra expects SMC's revenue surplus to gradually increase over FY17-FY21 in view of a higher revenue income growth than that in revenue expenditure. RATING SENSITIVITIES Negative: Lowered state government support in the form of grants, leading to any decline in the revenue, on a sustained basis, will lead to a negative rating action. Positive: An improvement in the delivery of civic services, along with a significant improvement in the revenue, on a sustained basis, will lead to a positive rating action. COMPANY PROFILE Siwan is the only Class-I urban center in the Siwan district. Formed in 1924, SMC is mainly responsible for the administration of the city, providing and maintaining various infrastructure facilities, including roads, housing, water, solid waste management, education and health services. SOORYA EXPORTERS: CRISIL Assigns B+ Rating to INR5MM New Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facility of Soorya Exporters and Importers (Soorya). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Bank Guarantee .4 CRISIL B+/Stable (Assigned) Proposed Cash Credit Limit 5.0 CRISIL B+/Stable (Assigned) The rating reflects customer concentration in revenue profile and small scale of operations. These weaknesses are partially offset by the extensive experience of its proprietor in the civil construction industry and moderate order book. Key Rating Drivers & Detailed Description Weakness * Small scale of operations: With an expected operating income of about INR17 crore in fiscal 2019, scale will be small in the intensely competitive civil construction segment. Also, tender based nature of operations and various requirement to bid for larger tenders like scale and net worth, will continue to constrain the scale and profitability of the company over the medium term. * Customer concentration in revenue: The firm currently has only one order from a single client, Neyveli Lignite Corporation (NLC). Delay in project execution due to any external factor could severely affect Soorya's business risk profile. Strengths: * Proprietor's extensive experience and moderate order book: Presence of over a decade in the civil construction segment has enabled the proprietor to develop healthy relationship with stakeholders in the industry and bag order worth INR26 crore from NLC. The order, to be executed over the next 12-15 months, provides moderate revenue visibility. Outlook: Stable CRISIL believes Soorya will benefit from proprietor's extensive experience. The outlook may be revised to 'Positive' if increase in scale of operations, healthy order book, and timely execution of project improves business and financial risk profiles. The outlook may be revised to 'Negative' if delay in execution of project, stretch in working capital cycle, or large, debt-funded capital expenditure further weakens financial risk profile, particularly liquidity. Set up in 2012 as a proprietorship firm by Mr Sadasivam, Soorya undertakes civil construction works in Tamil Nadu SREE LAKSHMI: CRISIL Assigns B+ Rating to INR6.9MM Cash Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISIL B+/Stable' rating to the long term bank facilities of Sree Lakshmi Solvent Extractions (SLSE). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 6.9 CRISIL B+/Stable (Assigned) Proposed Long Term Bank Loan Facility 3.1 CRISIL B+/Stable (Assigned) Rating reflects nascent stage of operations and product concentration in revenue profile. Rating also factors exposure to risk related to intense competition in edible oil industry and working capital intensive operations. Rating weaknesses are partially offset by the extensive experience of the promoters. Key Rating Drivers & Detailed Description Weaknesses: * Nascent stage of operations and product concentration in revenue profile: SLSE has limited product diversity, and it manufactures only Rice Bran Oil (RBO) and its by-product De-oiled Cake (DOC). Moreover due to nascent stage of operations the company has small scale and short track record of operations - with commercial operations started from May 2018, with revenues estimated at around INR30-35 crore in 2018-19. * Exposure to risks relating to intense competition in edible oil industry: The edible oil industry is highly fragmented, resulting in intense competition, and remains a low-margin business, given the low value addition. CRISIL believes that SLSE will remain exposed to intense competition in a highly fragmented industry over the medium term. * Working capital-intensive operations: SLSE's operations are working capital intensive mainly due to high inventory needed in the business. Due to paddy and hence rice bran being a seasonal commodity, inventory generally remains high. Moreover nascent stage of operations should limit's company's bargaining power resulting in higher debtor days and no major credit provided by the raw material suppliers. Strength: * Promoters' extensive experience in the edible oil industry: Main promoters Mr. Varakantham Vinod Reddy has extensive industrial experience with the help of other sole proprietorship firm. Moreover Mr. Varakantham Vinod Reddy and his close family relatives are engaged in the agricultural and poultry sector also. For instance Mr. Reddy's in-Laws are engaged in poultry business which support the business profile of the company as major by-product of rice bran oil production, De-oiled cake (DOC), can be sold to them. (DOC is used as poultry feedstock). Outlook: Stable CRISIL believes SLSE will continue to benefit over the medium term from promoters' extensive experience. The outlook may be revised to 'Positive' in case of a better than expected scale up of operations or significant infusion of funds by promoters thus improving the financial risk profile. The outlook may be revised to 'Negative' in case of lower than expected scale up of operations or significant deterioration in capital structure on account of sizeable working capital requirement or debt-funded capital expenditure. Incorporated in August 2017 and promoted by Sri Varakantham Vinod Reddy and his family members, SLSE manufactures rice bran oil at its plant in Pedapalli district in Telangana. Commercial operations began from May 2018. SUJANGARH MUNICIPAL: Ind-Ra Withdraws BB Long Term Issuer Rating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Sujangarh Municipal Council's Long-Term Issuer Rating of 'IND BB'. The Outlook was Stable. KEY RATING DRIVERS Ind-Ra is no longer required to maintain the rating, as the issuer rating was assigned under Atal Mission for Rejuvenation and Urban Transformation programme, and no specific debt is issued against the rating. COMPANY PROFILE Sujangarh is located in the Churu district of Rajasthan, at the southern end of the district. SuMC is responsible for the provisioning and governance of civic services in the city. SWATI ENERGY: CRISIL Lowers Rating on INR5.5MM Loan to B+ --------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Swati Energy and Projects Private Limited (SEPPL) to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB-/Stable/CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1.5 CRISIL A4 (Downgraded from 'CRISIL A4+') Cash Credit 5 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') Letter Of Guarantee 3 CRISIL A4 (Downgraded from 'CRISIL A4+') Proposed Long Term Bank Loan Facility 5.5 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') The downgrade reflects deterioration in business and financial risk profiles because of decline in scale of operations and inflow of orders in fiscal 2018. Financial risk profile remains constrained by low networth and below-average debt protection metrics. Additionally, modest cash accrual, estimated at INR0.2- 0.3 crore has added to pressure on liquidity. CRISIL believes that the business risk profile of SEPPL is expected to remain constrained due to lower revenue visibility. The company's ability to successfully bag any large order and timely execute the same will be a key monitorable over the near to medium term. The ratings continue to reflect SEPPL's established relationship with principal, Public Joint Stock Company Power Machines (PJSC Power Machines; previously known as Open Joint Stock Company Power Machines), Russia. These strengths are partially offset by limited revenue diversity and exposure to risks related to tender-based business. Analytical Approach For arriving at the rating, CRISIL has combined the business and the financial risk profiles of SEPPL and Swati Power Machines Private Limited (SPMPL; wholly owned subsidiary of SEPPL). This is because the above-mentioned entities have common owners and have significant financial and operational linkages. Key Rating Drivers & Detailed Description Strengths: * Established relationship with principal: Dealership of PJSC Power Machines' steam and hydro-turbine spares has enabled SEPPL to acquire extensive knowledge base and technical expertise. The company has a strong execution capability. Timely and efficient execution of future projects will remain a rating sensitivity factor. Weakness * Limited scale of operations and susceptibility to tender-based business: With estimated revenue of around INR6.19 crore for fiscal 2018, SEPPL remains a small player, leading to weak ability to achieve economies of scale. Revenue and profitability will remain vulnerable to tender-based operations and adverse movement in foreign exchange rates. Outlook: Stable CRISIL believes SEPPL will continue to benefit over the medium term from the extensive experience of its promoters. The outlook may be revised to 'Positive' if increase in revenue visibility because of a strong order book strengthens business risk profile. The outlook may be revised to 'Negative' if there is further decline in scale of operations or if group undertakes any debt funded capex weakening the financial risk profile. Incorporated in 1998 in Mumbai and promoted by Mr. Pravin Chheda and Mr. Muulraj Chheda, SEPPL deals in steam and hydro-turbine spares of PJSC Power Machines. The company also undertakes overhauling of turbines for which it has an exclusive arrangement in India with principal. SPMPL is a wholly owned subsidiary of SEPPL. It manufactures spare parts which it sells only to SEPPL. TDI INFRATECH: CRISIL Withdraws B- Rating on INR164.5MM Loan ------------------------------------------------------------ CRISIL has reaffirmed its ratings on the bank facilities of TDI Infratech Limited (TDI) and subsequently withdrawn the ratings at the company's request and on receipt of a no-objection certificate from the bankers. The withdrawal is in line with CRISIL's policy on withdrawal of bank loan ratings. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 20 CRISIL A4 (Ratings reaffirmed and Withdrawn) Overdraft 25 CRISIL A4 (Ratings reaffirmed and Withdrawn) Proposed Long Term 0.5 CRISIL B-/Stable (Ratings Bank Loan Facility reaffirmed and Withdrawn) Term Loan 164.5 CRISIL B-/Stable (Ratings reaffirmed and Withdrawn) Incorporated in 1999 and promoted by members of Taneja family, TDI undertakes real estate development in Punjab and Haryana. The company is currently developing two townships in Mohali and one in Panipat; and is expected to launch a new project in Sonipat, Haryana. TIANZHU ELECTRONICS: CRISIL Assigns B+ Rating to INR10MM LT Loan ---------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facility of Tianzhu Electronics Private Limited (TEPL). The rating reflects the company's exposure to intense competition in the highly competitive mobile handsets distribution business, and expected modest scale with operations to commence in June 2018. The weaknesses are partially offset by the promoter's industry experience of more than five years. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term Bank Loan Facility 10 CRISIL B+/Stable (Assigned) Key Rating Drivers & Detailed Description Weaknesses * Exposure to intense competition: With revenue expected at INR40-45 crore in fiscal 2019, TEPL's scale will be modest in the highly competitive mobile distribution business. Mobile handset manufacturers encourage more distributorships to improve penetration and sales, thereby increasing competition among distributors. * Expected modest scale with operations to commence in June 2018: The company was incorporated in March 2018 and has not generated any revenue till date. Its scale will remain small over the medium term in the competitive mobile distribution business. Strength * Promoter's experience: The promoter's experience of more than five years in the mobile distribution business has led to strong relationships with suppliers and customers. TEPL's business risk profile will benefit from the experience of the promoter. Outlook: Stable CRISIL believes TEPL will benefit from its promoter's industry experience. The outlook may be revised to 'Positive' if comfortable revenue, profitability, and working capital cycle strengthen the financial risk profile. The outlook may be revised to 'Negative' if financial risk profile weakens because of lower- than-expected cash accrual or sizeable working capital requirement, adversely affecting profitability. Incorporated in March 2018 by Mr Atul Kawade, TEPL is an authorised distributor of VIVO, Micromax, Intex, and other mobile phones. The company is based in Nashik, Maharashtra. TRANS CONDUCT: Ind-Ra Migrates B Issuer Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated M/S Trans Conduct (India)'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 B (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR65 mil. Fund-based working capital limits migrated to Non- Cooperating Category with IND B (ISSUER NOT COOPERATING)/ IND A4 (ISSUER NOT COOPERATING) rating; and -- INR40 mil. Non-fund-based working capital limits migrated to Non-Cooperating Category with IND A4 (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 4, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE M/S Trans Conduct (India) undertakes the construction of roads, buildings, waterlines, gardens and others. In addition, it undertakes repair and maintenance, mainly for Municipal Corporation of Greater Mumbai. Moreover, it undertakes works for Public Works Department, Maharashtra, and Indian Railways, and subcontracts from private contractors. UNITED TRADE: CRISIL Migrates B+ Rating to Not Cooperating Cat. --------------------------------------------------------------- CRISIL has migrated the ratings on bank facilities of United Trade And Investments to CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 4 CRISIL B+/Stable (Issuer Not Cooperating; Rating Migrated) Inland/Import 2.5 CRISIL A4 (Issuer Not Letter of Credit Cooperating; Rating Migrated) CRISIL has been consistently following up with United Trade And Investments (UTI) for obtaining information through letters and emails dated April 26, 2018, May 11, 2018 and May 16, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 United Trade And Investments, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on United Trade And Investments is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the ratings on bank facilities of United Trade And Investments to CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Established as a partnership in 2011, UTI trades in timber. The firm, based in Mumbai, is promoted by Mr. Sameer Chhapra, Mr. Khalid Chhapra and Mrs. Razia Chhapra. UTTARAKHAND ENG'NG: Ind-Ra Migrates BB- Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Uttarakhand Engineering Products 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 'ND BB- (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR40.0 mil. Fund-based limits migrated to Non-Cooperating Category with IND BB- (ISSUER NOT COOPERATING) /IND A4+ (ISSUER NOT COOPERATING) rating; and -- INR57.5 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 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 Uttarakhand Engineering Products is engaged in the trading of iron and steel and their alloys, and other allied products. V.R. FOUNDRIES: CRISIL Reaffirms D Rating on INR15MM Cash Loan -------------------------------------------------------------- CRISIL has reaffirmed its ratings on the bank loan facilities of V.R. Foundries (VRF) at 'CRISIL D/CRISIL D'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Discounting 4 CRISIL D (Reaffirmed) Cash Credit 15 CRISIL D (Reaffirmed) The rating reflects instances of delay in servicing the term debt; the delays have been caused by a weak operating performance in fiscal 2017 and large capital expenditure. Key Rating Drivers & Detailed Description Weaknesses * Weak financial risk profile: Losses in fiscal 2017 and 2018 has led to weak capital structure and debt protection metrics. * Exposure to intense competition in the highly fragmented castings and forgings industry: The industry comprises numerous players because of low entry barriers resulting from limited capital intensity; this limits pricing flexibility for mid-sized players like VRF. Strength *Extensive experience of the promoter and an established relationship with customers: The promoter, Mr V Rajendran, has domain experience of over 30 years and has established a longstanding relationship with customers across sectors. VRF was set up as a partnership firm by Mr V Rajendran and his family members in 1974. The firm, based in Coimbatore, Tamil Nadu, produces grey iron castings used in the engineering, automobile, textile, and agricultural sectors. VAIBHAVRAJ ENTERPRISES: Ind-Ra Assigns BB- Rating, Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Vaibhavraj Enterprises (VE) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR74 mil. Fund-based working capital facilities assigned with IND BB-/Stable/IND A4+ rating; -- INR26 mil. Proposed fund-based working capital facilities* assigned with Provisional IND BB-/Stable/Provisional IND A4+ rating; and -- INR150 mil. Proposed non-fund-based working capital facilities* assigned with Provisional IND A4+ rating. * The ratings are provisional and shall be confirmed upon the sanction and execution of the loan documents for the above facilities by VE to the satisfaction of Ind-Ra. KEY RATING DRIVERS The ratings reflect VE's limited track record in executing civil construction work orders and concentrated order book. Until FY17, the firm was involved in the trading and sub-contracting work; however, in FY18, it started bidding for government orders. It undertakes work orders only in Karnataka and derives all of its revenue from four projects, which are likely to complete in the next one and half years. The ratings also factor in VE's modest liquidity position as indicated by 92% average peak use of the fund-based limits during the 12 months ended May 2018. The firm had an elongated net working capital cycle of 99 days as per FY18 provisional financials (FY17: 61 days, FY16: 102 days), inherent to the construction sector. However, the ratings benefit from a surge in VE's revenue to INR305 million as per FY18 provisional financials (FY17: INR37.24 million), following the execution of work orders for the state government. As of May 2018, it had an order book of INR907.5 million, of which around 30% of the project value was executed and the remainder will be executed during the next one and half years. The firm is likely to participate in new bids across Karnataka; Ind-Ra expects this to improve its revenue visibility over the medium term. The ratings are also supported by the firm's comfortable credit metrics. Net leverage (total adjusted debt/operating EBITDAR) deteriorated to 3.2x in FY18P (FY17: 0.14x) and gross coverage (operating EBITDA/gross interest expense) to 3.7x (5.36x) owing to a decline in EBITDA margin to 7.4% (8.1%). The decline in the margins was on account of volatility in raw material prices. The ratings also draw support from VE's promoters' one and a half decades of experience in the supply and installation of submersible pumps and accessories. RATING SENSITIVITIES Positive: A substantial increase in the revenue, while maintaining the margins, leading to an improvement in the credit metrics on a sustained basis will lead to a positive rating action. Negative: Any decline in the revenue or EBITDA margins, and/or further elongation of the net working capital cycle, leading to deterioration in the credit metrics will be negative for the ratings. COMPANY PROFILE Bengaluru-based VE was established as a partnership firm in 2013 by Mr. Laxman Rathod, Mr. Shankarappa Rathod and Ms. Roopa P. The firm is engaged in the supply and installation of submersible pump sets and accessories. It also undertakes civil construction works for the state government. VAIDEHI TRENDZ: Ind-Ra Migrates BB- LT Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Vaidehi Trendz Private Limited's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR75 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 May 11, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Vaidehi Trendz executes embroidery work in polyester fibers and is based out of Surat, Gujarat. VENKATESWARA ELECTRICAL: CRISIL Cuts Rating on INR20MM Loan to B+ ----------------------------------------------------------------- Due to inadequate information, CRISIL, in line with SEBI guidelines, had migrated the rating of Venkateswara Electrical Industries Private Limited (VEIPL) to 'CRISIL BB-/Stable/CRISIL A4+; Issuer not cooperating'. However, the management has subsequently started sharing requisite information, necessary for carrying out comprehensive review of the rating. Consequently, CRISIL is migrating the rating on bank facilities of VEIPL from 'CRISIL BB-/Stable/CRISIL A4+; Issuer not cooperating' to 'CRISIL B+/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 16 CRISIL A4 (Migrated from 'CRISIL A4+ Issuer Not Cooperating') Cash Credit 20 CRISIL B+/Stable (Migrated from 'CRISIL BB-/Stable Issuer Not Cooperating') Inland/Import 7 CRISIL A4 (Migrated from Letter of Credit 'CRISIL A4+ Issuer Not Cooperating') The rating downgrade reflects weakening of VEIPL's credit risk profile, owing to decline in revenue and stretch in the working capital cycle. Revenue has declined from INR65 crore in fiscal 2016 to INR44 crore in fiscal 2018 on account of lower order flow from its key customer i.e. Tamil Nadu Electricity Board (TNEB). Gross Current Asset (GCA) days has increased from 348 as on March 31 2016 to 521 as on March 31 2018. Increase in GCA days was mainly owing to increase in receivables from 255 days to 388 days. Increase in receivables was on account of delay in realization of bills from (TNEB). As a result of large working capital requirements, the firm's bank limits have remained fully utilized. Higher than expected debt led to gearing of 2.1 times as on March 31 2018, as against 0.8 time as on March 31 2017. The migration reflects sharing of requisite information by the company. CRISIL had, on March 21 2018, migrated the rating to 'CRISIL BB-/Stable/CRISIL A4+ (issuer not cooperating) from 'CRISIL BB-/Stable/CRISIL A4+' as the client was not cooperating for the rating exercise. VEIPL has now shared the required information, enabling CRISIL to assign a revised rating to the bank facilities. The rating reflects the group's working capital intensive nature of operations and average financial risk profile. These weaknesses are partially offset by the extensive experience of the promoters in the transformer manufacturing industry and the company's established relationship with customers. Analytical Approach For arriving at the rating of VEIPL, the team has combined the business and financial risk profiles of VEIPL and Senthil Engineering Company (SECO). This is because the two entities, together referred to as the Venkateswara group, are under common management, engaged in similar lines of business and have fungible cash flows. Key Rating Drivers & Detailed Description Weaknesses: * Working capital intensive nature of operations: The operations of the group are working capital intensive, as indicated by GCA days of 521 as on March 31 2018. High GCA days is on account of large receivables and moderate inventory of 388 days and 88 days respectively. * Average financial risk profile: The group's debt protection metrics are average, marked by interest coverage ratio of less than 2 times and net cash accruals to total debt ratio of 6% in fiscal 2018. Gearing is moderate at 2.1 times as on March 31 2018. Strength: * Extensive experience of promoter and established customer relationships: The promoter Mr Siva Subramani and his family members have extensive experience of over 2 decades in the transformer manufacturing industry. The promoters have established strong relationships with government departments and suppliers over the years. CRISIL expects the group to maintain a stable business risk profile over the medium term, supported by the extensive industry experience of its promoters. Outlook: Stable CRISIL believes that the Venkateswara group will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the group's liquidity improves significantly, with enhanced collections from customers and sizeable improvement in cash accruals, driven by an increase in its scale of operations. Conversely, the outlook may be revised to 'Negative' if the group's financial risk profile deteriorates, because of low cash accruals, substantial increase in working capital requirements, or debt-funded capital expenditure (capex). VEIPL was set up in 1978 by Mr. V K Arumugam, the father of the company's current managing director, Mr. A Siva Subramani. Based in Chennai, the company manufactures a wide range of power and distribution transformers. SEC manufactures distribution transformers, mainly of low capacities. The group has its manufacturing units in Chennai. It largely derives its revenue from sales to Tamil Nadu Electricity Board. VISHAL INFRAGLOBAL: Ind-Ra Migrates 'D' Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Vishal Infraglobal Private Limited's Long-Term Issuer Rating to 'IND D' from 'IND BB-' while simultaneously migrating the rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Thus, the rating is based on the best available information. 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: -- INR190 mil. Fund-based limit (long-term) downgraded and migrated to Non-Cooperating Category with IND D (ISSUER NOT COOPERATING) rating; and -- INR390 mil. Non-fund-based limit (short-term) downgraded and migrated to Non-Cooperating Category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: Issuer did not cooperate; Based on the best available information KEY RATING DRIVERS The downgrade reflects a delay in debt servicing by Vishal Infraglobal and the company's classification by its lender as a non-performing asset since January 2018. RATING SENSITIVITIES Positive: Timely debt servicing for at least three consecutive months will be positive for the ratings. COMPANY PROFILE Gujarat-based Vishal Infraglobal undertakes the construction of roads and bridges, and is recognized as an AA class contractor by the government of Gujarat for the execution of road projects. It primarily executes project in Gujarat, with few contracts in Madhya Pradesh. VRG INFRA: CRISIL Migrates B+ Rating to Not Cooperating Category ---------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of VRG Infra Projects India LLP to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term 7 CRISIL B+/Stable (Issuer Not Bank Loan Facility Cooperating; Rating Migrated) CRISIL has been consistently following up with VRG Infra Projects India LLP (VRG) for obtaining information through letters and emails dated April 17, 2018, May 16, 2018 and May 21, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 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 VRG Infra Projects India LLP. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on VRG Infra Projects India LLP is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of VRG Infra Projects India LLP to 'CRISIL B+/Stable Issuer not cooperating'. Established in 2014, VRG, a partnership between Mr K Ravi Kumar and his friends, develops residential real estate in Visakhapatnam, Andhra Pradesh. It is constructing a residential real estate project, RVS Silver Springs, in Chinnamuridiwada, Visakhapatnam. ================= I N D O N E S I A ================= PAKUWON JATI: Fitch Hikes LT IDR to BB; Outlook Stable ------------------------------------------------------ Fitch Ratings has upgraded Indonesia-based developer PT Pakuwon Jati Tbk's (PWON) Long-Term Issuer Default Rating to 'BB' from 'BB-'. The Outlook is Stable. At the same time, the agency has upgraded PWON's senior unsecured rating and the rating on its USD250 million notes due 2024 issued by its wholly owned subsidiary, Pakuwon Prima Pte Ltd, to 'BB' from 'BB-'. The upgrade follows PWON achieving sustained positive cash flow from operations, recurring EBITDA growth to above USD120 million, and sustained recurring EBITDA/net interest expense above 3.0x, the level at which Fitch had set for positive rating action. Fitch believes PWON's risk profile is more closely aligned towards an investment-property company than a developer. Fitch thinks PWON's development business is not a drag on its overall risk profile as the company has a recent track record of prudent project execution such as a positive operating cash flow position and low leverage. PWON could undertake further investments after 2019 but Fitch believes the company would continue to adopt a conservative approach thus ensuring it maintains a financial profile consistent with its assigned rating. KEY RATING DRIVERS Attractive Investment-Property Portfolio: Pakuwon's investment portfolio contains some of Jakarta's most attractive assets, which would be difficult to replicate. These assets are in prime locations in Jakarta and Surabaya and have had consistently high occupancy, which provides strong and predictable cash flows. PWON also has a satisfactory track record in managing these assets. Its three biggest superblocks, which contribute more than 70% of recurring revenue, target upper-middle class consumers given their prime locations and tenant mix. Fitch believes this segment is more resilient in a challenging economic environment as occupancy rates have been stable and high in the past 24 months. Fitch expects PWON's recurring EBITDA to rise to USD125 million by end-2018 (2017: USD109 million), led by additional net leasable area with confirmed tenants for Tunjungan Plaza and Pakuwon Mall, and organic growth from other assets. The recurring EBITDA growth and conservative development strategy contribute to a financial profile commensurate with a 'BB' rating, characterised by recurring EBITDA/net interest of above 3.0x (2018F: 7.0x) and low leverage. Prudent Strategy, Positive Cash Flows: PWON's strong recurring base provides a comfortable cash flow cushion during periods of soft property demand. The company also has a prudent development strategy to launch only existing projects where execution risk is relatively low. PWON's positive net cash flow from operations in the past five years suggests that the company's development projects are primarily funded by customer advances, and therefore are not a drag on its recurring cash flows. The company is targeting presales of IDR2.6 trillion for 2018 (1Q18: IDR605 billion, 2017: IDR2.5 trillion) and Fitch expects presales to grow slightly over the medium term due to challenging market conditions in Indonesia and uncertainty over the presidential election in 2019. Fitch believes PWON will be able to meet these targets in light of its projects' appeal as they are part of larger and established superblock developments, which typically consist of a retail mall, office towers, a hotel and often high-quality residential developments. Most of these projects are near completion, which is also more attractive for end-users, whose demand for property Fitch believes is still strong. Manageable Capex Risk: Fitch believes execution risk is manageable since capex will primarily be used to expand existing developments. PWON's capex, totalling IDR1.7 trillion over 2018- 2019, is earmarked for the extension of Tunjungan Plaza, Pakuwon Tower offices, Pakuwon Mall, and two new hotels within Pakuwon Mall's superblock developments. These investments are critical to enhance its development profile and to support presales in each superblock. Small and Concentrated Developments: Fitch believes PWON's relatively small business scale compared with higher-rated peers in terms of its development and investment properties, and its concentrated developments are the key constraints to its rating over the medium term. Fitch believes PWON's rating is currently constrained at 'BB' unless it is able to increase its scale and improve portfolio granularity in a meaningful way without impairing its financial profile. The risk from its relatively small and concentrated investment portfolio, when compared with higher-rated peers, is mitigated by its high quality assets. Challenging Market, Resilient Profile: The Indonesian property market continues to be under pressure, especially in recent months, with a depreciating currency and rising interest rates. Demand is now increasingly driven by end-users rather than investment. Fitch believes PWON is better positioned to withstand the challenging market relative to other developers in Indonesia due to its sizeable recurring cash flows and the resultant financial profile that is more defensive against cyclicality in property demand. DERIVATION SUMMARY Fitch believes PWON's quality investment-property portfolio accounts for the one-notch difference with PT Bumi Serpong Damai Tbk (BSD, BB-/Stable). This is evident from PWON's larger recurring EBITDA base and stronger profitability margins. Fitch also thinks BSD's new investment properties have higher execution risk than those of PWON as they are mostly office towers, a sector with high supply. Fitch also believes that PWON's overall risk profile is stronger than that of Lai Fung Holdings Limited (BB-/Stable). This is supported by PWON's higher recurring base, better asset granularity, Fitch's expectations of faster deleveraging and stronger recurring cover compared with Lai Fung. KEY ASSUMPTIONS Fitch's key assumptions within Its rating case for the issuer include: - Stable occupancy at key investment property assets; gradual ramp-up for new assets - Presales from existing developments totalling IDR2 trillion- IDR3 trillion annually - Construction progresses as per management's schedule - Cash collection in two years for completed projects - Fitch assumes new capex totalling IDR2 trillion annually starting 2020. The company has not provided any guidance with respect to capex plans beyond 2019. However, Fitch believes it may opportunistically invest in new projects when market conditions improve. The capex assumed is the level that would result in broadly neutral free cash flows, reflecting a more realistic capital structure. RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action Positive rating action is not likely in the medium term. PWON would need to have a larger and more granular and mature portfolio of assets before positive rating action would be considered. Developments that May, Individually or Collectively, Lead to Negative Rating Action - Weakening in investment portfolio performance as indicated by falling occupancy rates and negative rental reversions - Evidence of increased appetite for higher-risk, Greenfield projects leading to negative net operating cash flows over an extended period - Recurring EBITDA/net interest expense falling below 3.0x on a sustained basis (2018F: 7.0x) LIQUIDITY Ample Liquidity Headroom: PWON's liquidity position is supported by high cash flow visibility from its recurring assets, and healthy cash flows from the property-development business. PWON's prudent property-development strategy has contributed to positive net operating cash flow from operations in the past five years. Liquidity is also supported by the lack of significant debt maturities until 2024 and a track record in accessing various funding avenues. Fitch also believes that PWON's low leverage profile provides additional liquidity headroom as it allows the company to raise additional borrowings, if required. =============== M A L A Y S I A =============== 1MDB: Singapore Authorities Hold Further Talks with Task Force -------------------------------------------------------------- Ng Huiwen at The Strait Times reports that the Singapore authorities have held further discussions with Malaysia's 1Malaysia Development Berhad (1MDB) task force, with both sides agreeing to continue the cooperation. The Strait Times relates that officers from the Attorney- General's Chambers (AGC), the police's Commercial Affairs Department and the Monetary Authority of Singapore (MAS) met the task force, led by Tan Sri Abdul Gani Patail, in Singapore on June 7. The task force is investigating the alleged theft of billions of dollars from state fund 1Malaysia Development Berhad, The Strait Times says. According to the report, the meeting followed an earlier one last week in Kuala Lumpur, according to a joint statement on June 8 by the AGC, the police and MAS. Since March 2015, Singapore has worked to provide Malaysia information on 1MDB-related fund flows, which Malaysia acknowledged in the meeting, the statement said, The Strait Times relays. "It was a productive meeting, with a fruitful exchange of information," the statement, as cited by The Strait Times, added. "Both sides agreed to continue this cooperation." In response to queries on the issuance of Interpol Red Notices, the authorities said in the statement that the notices for Malaysian financier Low Taek Jho and Mr Low's close business associate Tan Kim Loong were published in October 2016 at Singapore's request, according to The Strait Times. The Malaysian authorities on June 7 issued an arrest warrant against Mr Low, also known as Jho Low. He was described as the "best witness" to provide information on alleged crimes at the controversial state fund. An Interpol Red Notice is a request by a member country to locate and provisionally arrest a person based on a valid national arrest warrant, the report notes. Mr. Low and Mr. Tan are suspected to have committed offences in Singapore and cannot be located here, the statement said. According to The Strait Times, Singapore law enforcement agencies and regulatory agencies mounted investigations in March 2015 into possible money laundering and other offences pertaining to 1MDB- related fund flows. And in April and May 2016, warrants of arrest for the two men were issued. In the statement, the authorities said that Singapore does not tolerate the use of its financial system "as a refuge or conduit for illicit funds," The Strait Times relays. Strong action has been taken against financial institutions and individuals who have broken laws within Singapore's jurisdiction in connection with 1MDB-related fund flows, the statement added. Such action includes criminal charges and convictions, and large financial penalties. Investigations into several other suspects involved in 1MDB- related offences in Singapore are ongoing, The Strait Times adds. About 1MDB Kuala Lumpur-based 1Malaysia Development Bhd (1MDB) operates as a government agency. The Company offers financial assistance, analysis, and advice through investors, corporations, and consultants to startups and growth companies. 1MDB focuses on investments with strategic value and high multiplier effects on the economy, particularly in energy, real estate, tourism, and agribusiness. As reported in the Troubled Company Reporter-Asia Pacific on July 23, 2015, Reuters said Singapore Police Force has frozen two bank accounts to help with an investigation in to Malaysia's troubled state-owned investment fund 1Malaysia Development Bhd (1MDB), which is being probed by authorities in Malaysia for financial mismanagement and graft. Reuters said the freezing of the Singapore bank accounts follows a similar move in Malaysia where a task force investigating 1MDB said earlier in July that it had frozen half a dozen bank accounts following a media report that nearly $700 million had been transferred to an account of Malaysia's Prime Minister Najib Razak. The Wall Street Journal reported on July 3, 2015, that investigators looking into 1MDB had traced close to US$700 million of deposits moving through Falcon Bank in Singapore into personal bank accounts in Malaysia belonging to Najib. The TCR-AP, citing Bloomberg News, reported on Nov. 26, 2015, that 1MDB agreed to sell its power assets to China General Nuclear Power Corp. for MYR9.83 billion ($2.3 billion) as the state investment company moved one step closer to winding down operations after its mounting debt raised investor concern. Bloomberg related that the company faced cash-flow problems after a planned initial public offering of Edra faced delays amid unfavorable market conditions, President Arul Kanda said Oct. 31, 2015. The listing plan was later canceled as the company opted for a sale of the assets, Bloomberg noted. The TCR-AP, citing The Wall Street Journal, reported on April 27, 2016, that the company defaulted on a $1.75 billion bond issue, triggering cross defaults on two other Islamic notes totaling MYR7.4 billion ($1.9 billion). Asian Nikkei Review reported in June 2016 that Malaysia has replaced the board of 1Malaysia Development Berhad with treasury officials, paving the way for the dissolution of the troubled state investment fund. ==================== N E W Z E A L A N D ==================== SEADRAGON LTD: Annual Loss Narrows to NZ$6.1 Million ---------------------------------------------------- SeaDragon Limited on May 30 announced a normalised EBITDA loss for the year to March 31, 2018 of NZ$4.5 million. EBITDA losses are higher than the company signalled at the start of May 2018, when the board expected the normalised EBITDA loss to be between NZ$4.1 million to NZ$4.4 million. The change reflects the company taking a more conservative approach to the valuation of inventory. Sales for the year to 31 March 2018 fell 30% to NZ$3.0 million from NZ$4.3 million in the same period a year ago. Omega-3 product sales rose to NZ$1.0 million. Net losses after tax, which take into account interest, depreciation and other balance sheet adjustments as well as employee incentives narrowed to NZ$6.1 million from NZ$6.7 million in the same 12-month period a year ago. Chairman Colin Groves said: "A year ago, we had little supply of raw oil and few customers for our Omega-3 products. We have since taken steps to establish SeaDragon as a reliable supplier of significant quantities of Omega-3 fish oil to several major international customers and we are in negotiations with several others." SeaDragon Chief Executive Dr. Nevin Amos said: "Sales in the last financial year have established the company's credentials and provided SeaDragon with a strong foundation. The current level of orders is not yet sufficient for the company to cover its costs. "In our 2017 half year report, we said that the factory would achieve that milestone when we reached sales of 600 to 700 tonnes of fully-refined tuna oil, at the then current market prices, exchange rates and costs, in a single 12-month period. Obviously, this threshold is much higher with semi-refined oil. We are working hard to achieve this milestone." BALANCE SHEET As noted on Feb. 7, 2018, SeaDragon will require more cash to fund its medium-term cash flow requirements to achieve sales growth. As noted on May 15, 2018, major shareholders BioScience Managers and Pescado Holdings have provided the company with a short-term bridge financing facility of NZ$1 million to meet the company's estimated cash requirements up to approximately June 30, 2018. Meanwhile, negotiations with BioScience Managers and Pescado Holdings are ongoing and are aimed at providing longer-term funding to the company. SeaDragon will update the market on the proposed structure when these negotiations are completed. Directors currently anticipate that this necessary funding will require shareholder approval at the annual shareholders meeting, which the Board anticipates scheduling for late July or early August 2018. SeaDragon will advise shareholders when the date for this meeting has been determined. GOVERNANCE In the 2018 financial year Mark Stewart, who is head of SeaDragon's cornerstone shareholder Pescado Holdings, joined the Board, while long-serving director Patrick Geals retired. Meanwhile, Comvita elected to rotate its directorship with Brett Hewlett stepping down and Mark Sadd, previously an alternate director, taking a more active role in the governance of SeaDragon. Mr Sadd and Mr Stewart will stand for election to the board at the company's annual shareholders' meeting. Finally, Richard Alderton has advised SeaDragon of his intention to step down from the board later this year to return with his family to the United Kingdom. "Richard, as Interim Chief Executive and then as a Director, has made an enormous contribution to our business. The Board thanks Richard for his service and wishes him the very best. We have initiated a search process for a replacement independent director with the appropriate skills and experience. We will update the market in due course," Mr. Groves said. OUTLOOK "As part of negotiations linked to the new funding arrangements, SeaDragon is reviewing its forecasts for the 2019 financial year. It will provide the market with an update when the review is complete," Mr. Groves said. About SeaDragon Limited SeaDragon Limited -- http://www.seadragon.co.nz/-- is engaged in the manufacture of refined fish oils. The Company is a producer of refined New Zealand fish oils, which are suitable for human consumption. The Company's products include Omega-2 and Omega-3. The Company's Omega-2 product can be sourced from either animal or vegetable sources and is primarily used in the cosmetics, nutraceutical and pharmaceutical industries and also in high- grade lubrication and fiber coating. The Company produces over 80 tons of Omega-3 finished product from a range of species, including approximately 60 tons from the new refinery. The Company exports its products to various countries, which include Australia, South East and North Asia, Japan, the European Union, China, the United States and Canada. The Company's subsidiaries include Omega 3 New Zealand Limited and SeaDragon Marine Oils Limited, which are engaged in marine oil blending activities. ********* 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 ***