/raid1/www/Hosts/bankrupt/TCRAP_Public/180628.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
Thursday, June 28, 2018, Vol. 21, No. 127
Headlines
A U S T R A L I A
ALL PRO: Second Creditors' Meeting Set for July 4
MICROVATUM PTY: First Creditors' Meeting Set for July 5
NRG PIPING: First Creditors' Meeting Set for July 5
TED'S FOREST: Second Creditors' Meeting Set for July 4
WIRE NETWORKS: First Creditors' Meeting Set for July 5
C H I N A
CHINA COMMERCIAL: Signs Deal to Dispose of Unit for $500,000
CHINA SPORTS: Deloitte & Touche Appointed as Judicial Managers
FENGHUI LEASING: Fitch Affirms Then Withdraws 'B' IDR
HONG YANG: Fitch Affirms 'B' LT IDR, Alters Outlook to Positive
RENHE COMMERCIAL: S&P Affirms 'B-' ICR, Outlook Remains Stable
SHARING ECONOMY: Signs Deal to Buy Future Ocean for HK$96 Million
H O N G K O N G
LIONBRIDGE CAPITAL: S&P Alters Outlook to Neg., Affirms 'B' ICR
I N D I A
ADITYA ENTERPRISES: CRISIL Assigns B+ Rating to INR20cr Loan
ADROIT CORPORATE: CRISIL Migrates D Rating to Not Cooperating
ATHALURI SUSHMA: CARE Moves D Rating to Not Cooperating Category
BEGUSARAI MUNICIPAL: Ind-Ra Assigns BB LT Rating, Outlook Stable
DATTA MEGHE: CRISIL Withdraws 'B' Rating on INR7cr Cash Loan
FAIRY FOOD: CARE Migrates B Rating to Not Cooperating Category
FIL SEP: ICRA Withdraws B+ Rating on INR4.51cr Fund Based Loan
GOURAV ROSHNI: CRISIL Withdraws B Rating on INR5cr Cash Loan
GSK INFRASTRUCTURES: Ind-Ra Hikes Long Term Issuer Rating to 'B+'
GYANSAGAR TEXTILE: CRISIL Migrates B+ Rating to Not Cooperating
INDERA JEWELS: Ind-Ra Migrates 'BB-' LT Rating to Non-Cooperating
JEEVISHA FOODS: CRISIL Migrates B+ Rating to Not Cooperating
KAILASH HILLWAYS: CARE Assigns B+ Rating to INR3.30cr LT Loan
LANFORD CERAMIC: CRISIL Withdraws B+ Rating on INR7.12cr Loan
LOTUS HOUSEHOLD: Ind-Ra Migrates BB LT Rating to Non-Cooperating
MEHTA GOLD: CRISIL Migrates B+ Rating to Not Cooperating Category
MFL INDIA: CRISIL Lowers Rating on INR33.5cr Cash Loan to B
MIDDHA INDUSTRIES: CRISIL Migrates B Rating to Not Cooperating
MIRAJ METALS: ICRA Migrates D Rating to Not Cooperating Category
MUKTI FIRMS: CRISIL Migrates B- Rating to Not Cooperating Cat.
MULTICHEM SPECIALITIES: ICRA Moves B+ Rating to Not Cooperating
NEW ERA: CRISIL Lowers Rating on INR2cr Cash Loan to B+
NIKITA CORPORATION: CRISIL Moves B+ Rating to Not Cooperating
PAROHA DEVELOPERS: CRISIL Migrates B Rating to Not Cooperating
RAJ ISPAT: CARE Migrates B+ Rating to Not Cooperating Category
RAJ RATAN: ICRA Maintains C+/A4 Rating in Not Cooperating
RESHMA FABRICS: CRISIL Migrates B+ Rating to Not Cooperating
SAAB ENGINEERING: Ind-Ra Withdraws 'BB+' Long Term Issuer Rating
SARASWATI EDUCATION: ICRA Moves D Rating to Not Cooperating
SKR EXPORTS: CRISIL Assigns 'B' Rating to INR9.10cr LT Loan
SRI SANTHANALAKSHMI: CRISIL Withdraws B+ Rating on INR11.5cr Loan
SUNBEAM ENTERPRISES: CARE Assigns B+ Rating to INR3.21cr Loan
SWATI CHLORIDES: ICRA Withdraws B+ Rating on INR4cr Cash Loan
TEXOOL LIMTED: CRISIL Migrates B Rating to Not Cooperating
UTTAM GALVA: NCLT Admits Insolvency Petition Against Subsidiary
VANI TOBACCOS: Ind-Ra Assigns B- LT Issuer Rating, Outlook Stable
VAYAL AGRI: CRISIL Assigns B+ Rating to INR5.0cr Cash Loan
J A P A N
TOSHIBA CORP: CEO Outlines Profit-Boosting Plans at Meeting
M A L A Y S I A
1MDB: Police Seizes Handbags, Jewelry Worth US$273MM in Raid
S I N G A P O R E
DFS ASSET: Fitch Affirms 'BBsf' Rating on SGD8.2M Class C Notes
RYOBI KISO: Unit Defaults on Loan; Suspends Shares Trading
S R I L A N K A
AMANA BANK: Fitch Alters Outlook to Pos., Affirms BB(lka) Rating
V I E T N A M
HOME CREDIT: Fitch Assigns 'B+' LT IDR, Outlook Stable
- - - - -
=================
A U S T R A L I A
=================
ALL PRO: Second Creditors' Meeting Set for July 4
-------------------------------------------------
A second meeting of creditors in the proceedings of All Pro
Australia Pty Ltd has been set for July 4, 2018, at 11:00 a.m. at
Level 1, 255 Mary Street, in Richmond, 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 July 3, 2018, at 4:00 p.m.
Andrew Mattinson and Richard Rohrt of Hamilton Murphy were
appointed as administrators of All Pro Australia on May 30, 2018.
MICROVATUM PTY: First Creditors' Meeting Set for July 5
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Microvatum
Pty Ltd will be held at the offices of Jamieson Louttit &
Associates, Penfold House, Suite 72, Level 15, 88 Pitt Street, in
Sydney, NSW, on July 5, 2018, at 10:00 a.m.
Jamieson Louttit of Jamieson Louttit & Associates was appointed
as administrator of Microvatum Pty on June 27, 2018.
NRG PIPING: First Creditors' Meeting Set for July 5
---------------------------------------------------
A first meeting of the creditors in the proceedings of NRG Piping
Pty Ltd will be held at the offices of Robson Cotter Insolvency
Group, Unit 1, 78 Logan Road, in Woolloongabba, Queensland, on
July 5, 2018, at 11:00 a.m.
William Roland Robson of Robson Cotter was appointed as
administrator of NRG Piping on June 25, 2018.
TED'S FOREST: Second Creditors' Meeting Set for July 4
------------------------------------------------------
A second meeting of creditors in the proceedings of Ted's Forest
Management Pty Ltd has been set for July 4, 2018, at 11:30 a.m.
at The Branch Office, 45 Cameron Street Launceston TAS.
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 July 3, 2018, at 4:00 p.m.
Domenico Alessandro Calabretta of Mackay Goodwin were appointed
as administrators of Ted's Forest on June 22, 2018.
WIRE NETWORKS: First Creditors' Meeting Set for July 5
------------------------------------------------------
A first meeting of the creditors in the proceedings of Wire
Networks Pty Ltd will be held at the offices of Cor Cordis, One
Wharf Lane, Level 20, 171 Sussex Street, in Sydney, NSW, on
July 5, 2018, at 10:00 a.m.
Ozem Kassem and Alan Walker of Cor Cordis were appointed as
administrators of Wire Networks on June 25, 2018.
=========
C H I N A
=========
CHINA COMMERCIAL: Signs Deal to Dispose of Unit for $500,000
------------------------------------------------------------
China Commercial Credit, Inc., HK Xu Ding Co, Limited, a private
limited company duly organized under the laws of Hong Kong and
CCCR International Investment Ltd., a business company
incorporated in the British Virgin Islands with limited liability
entered into certain Share Purchase Agreement. Pursuant to the
Purchase Agreement, the HK Xu Ding agreed to purchase CCC BVI in
exchange of cash purchase price of $500,000. China Commercial
owns 100% of the issued and outstanding shares of CCCR
International.
CCC BVI is the sole shareholder of CCC International Investment
Ltd., a company incorporated under the laws of the Hong Kong
S.A.R. of the PRC, which is the sole shareholder of WFOE. WFOE,
via a series of contractual arrangements, controls Wujiang
Luxiang. CCC HK is the sole shareholder of PFL.
Upon closing of the Disposition, the Purchaser will become the
sole shareholder of CCC BVI and as a result, assume all assets
and obligations of all the subsidiaries and VIE entities owned or
controlled by CCC BVI.
The Disposition was approved by the board of directors of the
Company. Benchmark Company, LLC rendered a fairness opinion in
connection with the Disposition, indicating that the
Consideration to be received by the Company in the transaction is
fair to the Company's shareholders from a financial point of
view.
Private Placement in June
On June 19, 2018, the Company entered into certain securities
purchase agreements with certain "non-U.S. Persons" as defined in
Regulation S of the Securities Act of 1933, as amended pursuant
to which the Company agreed to sell an aggregate of 568,037
shares of its common stock, par value $0.001 per share, at a per
share purchase price of $0.78. The net proceeds to the Company
from such Offering will be approximately $443,000.
The June SPAs are part of the subscription the Company received
in a private placement offering of its Common Stock at a per
share purchase price of $0.78 up to an aggregate gross proceeds
of Two Million Dollars ($2,000,000) to "non-U.S. Persons" as
defined in Regulation S. The Offering will be on a rolling basis
until June 30, 2018 unless the Company extends for an additional
30 days at its sole discretion.
The net proceeds of the Offering will be used by the Company in
connection with the Company's operation of certain used luxurious
car leasing or other related business as approved by the board of
directors of the Company.
The parties to the June SPAs have each made customary
representations, warranties and covenants. The Shares sold
pursuant to the June SPAs are subject to certain lock-up whereby
the 40% of the Share shall be subject to a six-month lock-up from
the closing of the June SPAs, 30% of the Shares a nine-month
lock-up from the closing and the last 30% of the Shares a
twelve-months lock-up from the closing.
Background of the Disposition
China Commercial Credit had two lines of business: one is the
direct loans, loan guarantees and financial leasing services to
small-to-medium sized businesses, farmers and individuals in the
city of Wujiang, Jiangsu Province; and the other is the used
luxurious car leasing business. The direct loans and loan
guarantees business was carried out by Wujiang Luxiang Rural
Microcredit Co., Ltd., the Company's VIE entity. The financial
leasing services were carried out by the Company's indirect
subsidiary, Pride Financial Leasing (Suzhou) Co. Ltd. The
Company's recently launched used luxurious car leasing business
is carried out by the Company's VIE entity, Beijing Youjiao
Technology Limited.
Historically, the Company's core business has been the direct
loan and loan guarantee. However, since 2016, the microcredit
companies in Wujiang area went through the most difficult time
since their inceptions in 2008. Twelve of fourteen microcredit
companies in the Wujiang area went bankrupt while the remainder
are struggling with high default rates due to the poor economic
condition, especially the slow-down in the textile industry. The
operations of Wujiang Luxiang were also affected. For the year
ended Dec. 31, 2017, the Company had a loss of $5,486,667 and a
net loss of $10,699,740 compared to a revenue of $2,246,807 and
net loss of $2,580,136 in 2016, a change of 344% and an increase
of 315%, respectively. As a result of the deteriorating economic
condition, the Company experienced a substantial increase in the
amount of default loans in both its direct lending and guarantee
business.
The amount of underlying loans the Company guaranteed has been
increased by 6.7% to $11.6 million as of Dec. 31, 2017 compared
to $10.9 million as of Dec. 31, 2016. As of March 31, 2018,
eleven cases against the Company were finally adjudicated by the
Court, in which the Company was jointly liable, together with the
defaulted customers and other guarantees, to repayment the
principal, interest and penalties of $6.91 million.
Additionally, three cases against the Company have not been
adjudicated by the Court, in which the Company is jointly liable,
together with the defaulted customers and other guarantees, to
repayment the principal, interest and penalties of $2.97 million.
In addition, the Department of Finance of Wujiang region has been
evaluating the collection and performance of Wujiang Luxiang and
may initiate proceeding to revoke Wujiang Luxiangs business
license if the operation is not improved. The Company's
financial leasing business has been on hold since October 2015
after the Company signed two leasing contracts worth a total of
total $4.88 million February 2015. The Company does not
currently have further funds to deploy in the financial leasing
business and plan to hold off expansion of the leasing business.
On Feb. 28, 2018, the Company received a letter from The NASDAQ
Stock Market LLC notifying the Company that it is not in
compliance with the minimum of $35 million Market Value of Listed
Securities (MVLS) requirement for continued listing on the Nasdaq
Capital Market. Nasdaq Listing Rule 5550(b)(2) requires listed
securities to maintain a minimum MVLS. The Company was provided
one hundred and eighty calendar days, or until Aug. 27, 2018, to
regain compliance with the MVLS requirement.
The Company believed it is very difficult, if possible at all, to
make collections on the default loans and guarantee obligations
paid on behalf of guarantees. As of March 31, 2018, the Company
has a stockholder deficit (or so-called negative net asset) of
approximately $4.5 million. Management believes, if the Company
keeps operating the micro-lending, loan guarantee and financial
leasing business, the Company will not be able to achieve the
necessary minimum stockholder equity requirement or the minimum
of $35 million MVLS requirement as required by the Nasdaq Listing
Rules to regain compliance by Aug. 27, 2018. As such, the
Company has been actively seeking to dispose the micro-lending,
loan guarantee and financial leasing business while focusing on
the luxurious car leasing or engage in other more profitable
businesses.
VIE Termination Agreement
As previously disclosed, on May 10, 2018, Beijing Youjiao and its
indirect subsidiary, Wujiang Luxiang Information Technology
Consulting Co. Ltd., a limited liability company formed under the
laws of the PRC, entered into a series of contractual agreements
with the Company including, Exclusive Business Cooperation
Agreement, Exclusive Option Agreement, Share Pledge Agreement and
the Powers of Attorney.
In anticipation of the Disposition, on June 19, 2018, WFOE
entered into certain termination agreement with Beijing Youjiao
and Aizhen Li, the sole shareholder of Beijing Youjiao to
terminate the VIE Agreements by and among WFOE, Beijing Youjiao
and Aizhen Li dated June 19, 2018. The Termination Agreement
became effective immediately upon its execution.
Hao Limo VIE Agreements
On June 19, 2018, the Company's indirectly owned subsidiary Hao
Limo Technology (Beijing) Co., Ltd. entered into a series of
agreements with Beijing Youjiao and Aizhen Li, the sole
shareholder of Beijing Youjiao. The Youjiao VIE Agreements are
designed to provide Hao Limo with the power, rights and
obligations equivalent in all material respects to those it would
possess as the sole equity holder of Beijing Youjiao, including
absolute control rights and the rights to the management,
operations, assets, property and revenue of Beijing Youjiao. The
purpose of the VIE Agreements is solely to give Hao Limo the
exclusive control over Beijing Youjiao's management and
operations. Beijing Youjiao has the requisite license to carry
out used luxurious car leasing business in China.
Material terms of each of the Youjiao VIE Agreements are
described below:
Exclusive Business Cooperation Agreement
Pursuant to the Exclusive Business Cooperation Agreement between
Beijing Youjiao and Hao Limo, Hao Limo provides Beijing Youjiao
with technical support, consulting services and management
services on an exclusive basis, utilizing its advantages in
technology, human resources, and information. Additionally,
Beijing Youjiao granted an irrevocable and exclusive option to
Hao Limo to purchase from Beijing Youjiao, any or all of Beijing
Youjiao's assets at the lowest purchase price permitted under the
PRC laws. Should Hao Limo exercise such option, the parties
shall enter into a separate asset transfer or similar agreement.
For services rendered to Beijing Youjiao by Hao Limo under this
agreement, Hao Limo is entitled to collect a service fee
calculated based on the time of services rendered multiplied by
the corresponding rate, plus amount of the services fees or ratio
decided by the board of directors of Hao Limo based on the value
of services rendered by Hao Limo and the actual income of Beijing
Youjiao from time to time, which is substantially equal to all of
the net income of Beijing Youjiao.
The Exclusive Business Cooperation Agreement will remain in
effect for ten years unless it is terminated by Hao Limo with 30-
day prior written notice. Beijing Youjiao does not have the
right to terminate the agreement unilaterally. Hao Limo may
unilaterally extend the term of this agreement with prior written
notice.
Share Pledge Agreement
Under the Share Pledge Agreement among Beijing Youjiao, Aizhen Li
and Hao Limo, Aizhen Li pledged all of her equity interests in
Beijing Youjiao to Hao Limo to guarantee the performance of
Beijing Youjiao's obligations under the Exclusive Business
Cooperation Agreement. Under the terms of the agreement, in any
event of default, as set forth in the Share Pledge Agreement,
including that Beijing Youjiao or Aizhen Li breach their
respective contractual obligations under the Exclusive Business
Cooperation Agreement, Hao Limo, as pledgee, will be entitled to
certain rights, including, but not limited to, the right to
dispose of the pledged equity interest in accordance with
applicable PRC laws. Hao Limo will have the right to collect any
and all dividends declared or generated in connection with the
equity interest during the term of pledge.
The Share Pledge Agreement will be effective until all payments
due under the Exclusive Business Cooperation Agreement have been
paid by Beijing Youjiao. Hao Limo will cancel or terminate the
Share Pledge Agreement upon Beijing Youjiao's full payment of
fees payable under the Exclusive Business Cooperation Agreement.
Exclusive Option Agreement
Under the Exclusive Option Agreement, Aizhen Li irrevocably
granted Hao Limo (or its designee) an exclusive option to
purchase, to the extent permitted under PRC law, once or at
multiple times, at any time, part or all of their equity
interests in Beijing Youjiao. The option price is equal to the
capital paid in by Aizhen Li subject to any appraisal or
restrictions required by applicable PRC laws and regulations.
The agreement remains effective for a term of ten years and may
be renewed at Hao Limo's election.
About China Commercial Credit
Founded in 2008, China Commercial Credit --
http://www.chinacommercialcredit.com/-- is a financial services
firm operating in China. Its mission is to fill the significant
void in the market place by offering lending, financial guarantee
and financial leasing products and services to a target market
which has been significantly under-served by the traditional
Chinese financial community. The Company's current operations
consist of providing direct loans, loan guarantees and financial
leasing services to small-to-medium sized businesses, farmers and
individuals in the city of Wujiang, Jiangsu Province.
China Commercial incurred a net loss of US$10.69 million for the
year ended Dec. 31, 2017, compared to a net loss of US$2.58
million for the ended Dec. 31, 2016. As of March 31, 2018, China
Commercial had US$7.31 million in total assets, US$11.76 million
in total liabilities and a total shareholders' deficit of US$4.45
million.
The report from the Company's independent accounting firm Marcum
Bernstein & Pinchuk LLP on the consolidated financial statements
for the year ended Dec. 31, 2017, includes an explanatory
paragraph stating that the Company has incurred significant
losses and needs to raise additional funds to meet its
obligations and sustain its operations. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
CHINA SPORTS: Deloitte & Touche Appointed as Judicial Managers
--------------------------------------------------------------
The Strait Times reports that the High Court of Singapore has
confirmed Andrew Grimmett and Lim Loo Khoon of Deloitte & Touche
LLP as the joint and several judicial managers of China Sports
International, the sportswear maker announced on June 27.
The Strait Times relates that the duo, who were previously China
Sports' interim judicial managers, were appointed after a June 26
substantive hearing of the company's judicial management (JM)
application.
In its orders, the High Court said that the firm was to be placed
under JM to keep the company afloat, conduct arrangements or
compromises between the company and any persons, and seek a "more
advantageous realisation" of the company's assets instead of a
winding-up, the report says.
Among other things, the judicial managers are authorised to take
control of all of the company's assets, operate or close the
company's bank accounts and negotiate with the company's
creditors or potential investors, The Strait Times relays.
China Sports' shares have been suspended since Dec. 4, 2017,
after it requested a voluntary suspension until the commencement
of an audit process, adds The Strait Times.
China Sports International Limited, an investment holding
company, designs, manufactures, and sells sports fashion
footwear; and designs and sells sports fashion apparel and
accessories under the YELI brand in the People's Republic of
China. The company operates through two segments, Footwear; and
Apparels and Accessories. Its products are designed for
functional and casual use, catering to the lifestyle of its
consumer group comprising kids and young adults. China Sports
International Limited also produces footwear on an OEM basis for
various brands and exports to various countries worldwide.
FENGHUI LEASING: Fitch Affirms Then Withdraws 'B' IDR
-----------------------------------------------------
Fitch Ratings has affirmed China-based leasing company Fenghui
Leasing Co., Ltd's Long- and Short-Term Issuer Default Ratings at
'B'. The Outlook is Stable. Fitch has also affirmed the 'B'
senior unsecured rating and Recovery Rating of 'RR4' on the notes
issued by Silver Sparkle Limited, an SPV set up to issue offshore
notes on behalf of Fenghui. The notes will be due on August 10,
2019.
Simultaneously, Fitch is withdrawing the ratings as Fenghui has
chosen to stop participating in future rating processes.
Therefore, Fitch will no longer have sufficient information to
maintain the ratings. Accordingly, Fitch will no longer provide
ratings or analytical coverage for Fenghui.
KEY RATING DRIVERS
The affirmation reflects Fenghui's still moderate leverage, which
helps counterbalance its weakened asset quality and funding
profile.
RATING SENSITIVITIES
No longer relevant as the ratings have been withdrawn.
HONG YANG: Fitch Affirms 'B' LT IDR, Alters Outlook to Positive
---------------------------------------------------------------
Fitch Ratings has affirmed China-based Hong Yang Group Company
Limited's Long-Term Foreign-Currency Issuer Default Rating (IDR)
at 'B' and revised the Outlook to Positive from Stable. Fitch has
also affirmed Hong Yang's senior unsecured rating and the ratings
on its outstanding senior unsecured debt at 'B' with Recovery
Rating of 'RR4'.
The Outlook was revised to reflect Fitch's expectation that Hong
Yang will be able to keep its pace of land acquisitions in line
with growth in contracted sales, and manage its leverage, as
measured by net debt/adjusted inventory that proportionately
consolidates its joint ventures, to around 45% in 2019-2020. The
potential IPO of its wholly owned subsidiary Redsun Properties
Limited will also help to keep Hong Yang's leverage below 50%.
Hong Yang's ratings are supported by its high-quality land bank,
which is focused on Nanjing, the capital of China's Jiangsu
province, and the Yangtze River Delta. This helps support the
company's contracted sales growth and results in a better gross
profit margin than its 'B' rated peers. Hong Yang also has higher
recurring income than peers due to the larger scale of its
property rental business. The company's improving business
profile may be reined in by the pressure to build up its land
bank to sustain high sales growth. Furthermore, home purchase
restrictions that affect cities within Jiangsu create uncertainty
over whether the company can sustain its contracted sales,
although selling prices are likely to be supported by firm
demand.
KEY RATING DRIVERS
Sales to Continue to Increase: Fitch expects Hong Yang's land
acquisitions and geographical expansion to drive higher sales,
and forecasts annual attributable contracted sales to increase to
CNY30 billion-CNY44 billion in 2018-2019. Hong Yang's
attributable contracted sales rose by 18% to CNY13.6 billion in
2017 as the average selling price of contracted sales increased
8% to CNY15,261 per sq m and contracted floor space sold rose by
9% to 890,000 sq m. The company has diversified its land bank to
the cities of Xuzhou, Bozhou, Yangzhou, Taixing, Jurong,
Ma'anshan and Huzhou in Jiangsu province, as well as Wuhan in
central China and Chongqing in western China.
Niche Property Rental Business: Hong Yang's investment property
portfolio, which comprises mainly malls for retail and wholesale
of household construction and decoration materials, enjoys a
niche market position and near-full occupancy rates. The
portfolio provides a recurring EBITDA/interest coverage ratio of
0.3x-0.4x, higher than for 'B' rated peers. Fitch expects the
completion of renovation at the Nanjing Hong Yang Plaza retail
mall in 2017 and still-resilient demand from consumers for
furniture and decorations to continue supporting Hong Yang's
rental revenue growth and its ratings.
Margins to Stay Healthy: Fitch expects Hong Yang's EBITDA margins
to remain at 24%-26% in 2018-2019, as the high-margin Nanjing
projects will provide support over the next 18-24 months. This
will be partly offset by recognition of revenue from more
projects outside Nanjing that have lower margins from 2018,
possible higher operating costs on geographical expansion and the
pre-listing expenses for Redsun. Hong Yang's EBITDA margin rose
to 37% in 2017 from 31% in 2016, mainly driven by the delivery of
certain Nanjing projects acquired at low historical costs in the
early 2000s, with gross profit margins as high as 40%-70%.
Land Acquisitions Remains Controlled: In 2017, Hong Yang spent
CNY10.3 billion on land bank replenishment, or the equivalent of
0.85x of its contracted sales value (2016: 0.8x). The company's
leverage, measured by net debt to adjusted inventory that
proportionately consolidates joint ventures and associates,
increased to 44% at end-2017 from 40% at end-2016.
At end-March-2018, Hong Yang had attributable land bank of about
6.8 million sq m, which will be sufficient for four years of
development. With the larger land bank, Fitch expects the company
to control land acquisitions to keep its ratio of land
acquisitions to contracted sales value to 0.8x in the next two to
three years, and the company's leverage to stay at 45%-50% in the
next 12 months.
IPO of Property Development Business: The potential spin-off of
Redsun may improve Hong Yang's financial profile. Hong Yang has
applied to the Hong Kong stock exchange to list Redsun, currently
a wholly owned subsidiary that accounts for over 90% of Hong
Yang's profit. The application is still in the early stages and
Fitch has not taken any IPO into account in its calculations of
leverage ratios.
DERIVATION SUMMARY
Hong Yang's business profile is similar to 'B' category peers.
Ronshine China Holdings Limited (B+/Stable) and Zhenro Properties
Group Limited (B/Positive) are Hong Yang's closest peers, as both
companies focus on first- and second-tier cities in the Yangtze
River Delta region. Compared with Ronshine and Zhenro, Hong Yang
has smaller contracted sales and land bank, while its leverage,
defined by net debt/adjusted inventory, is higher than Ronshine's
but comparable to that of Zhenro. Hong Yang's leverage will,
however, fall to levels between that of Ronshine and Zhenro in
2018.
Hong Yang's significant investment property base is also a credit
strength compared with other 'B' category homebuilders. Its
investment property recurring EBITDA/gross interest of around
0.3x-0.4x is comparable with that of Yida China Holdings Limited
(B/Positive), a business park developer that generated a
significantly smaller attributable contracted sales of CNY5.6
billion in 2017.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Attributable property contracted sales of CNY30 billion
in 2018 and CNY44 billion in 2019 (2017: CNY13.6 billion)
- EBITDA margin, excluding capitalised interest from the cost
of goods sold, at 24%-26% in 2018-2019 on geographical
expansion and higher operating costs (2017: 37%)
- On average 80% of contracted sales to be spent on land
acquisitions in the next two to three years, in order to
maintain a land bank sufficient for three to four years of
development (2017: 85% of contracted sales)
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- EBITDA margin, excluding capitalised interest from the
cost of goods sold, sustained at 20% or above
- Leverage, measured by net debt/adjusted inventory that
proportionately consolidates joint ventures and associates,
sustained below 50%
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- Failure to sustain healthy attributable sales growth and
maintain the above positive rating sensitivities over the
next 12 to 18 months will lead to the Positive Outlook
reverting to Stable
LIQUIDITY
Sufficient Liquidity: Hong Yang has cash and restricted cash
balances of CNY5.5 billion and unutilised banking facilities of
CNY2.2 billion, which is sufficient to cover debt maturing within
one year of CNY7.2 billion.
Hong Seng Limited, a wholly owned subsidiary of Hong Yang, raised
USD125 million from the issue of senior notes in January 2018.
FULL LIST OF RATING ACTIONS
Hong Yang Group Limited
- Long-Term Foreign-Currency IDR affirmed at 'B'; Outlook
revised to Positive from Stable
- Senior unsecured rating affirmed 'B'; Recovery Rating of
'RR4'
Hong Seng Limited
- USD250 million 7.875% senior unsecured rating affirmed
at 'B'; Recovery Rating of 'RR4'
RENHE COMMERCIAL: S&P Affirms 'B-' ICR, Outlook Remains Stable
--------------------------------------------------------------
S&P Global Ratings said that it has affirmed its 'B-' long-term
issuer credit rating on Renhe Commercial Holdings Co. Ltd. The
outlook remains stable.
S&P said, "We affirmed the rating on Renhe because we expect the
company's cash-generative agribusiness will enable it to maintain
its financial profile post the company's acquisitions.
"However, we expect Renhe's financial leverage to significantly
increase to over 15x over the next 12 months following large
debt-funded acquisitions that amount to about Chinese renminbi
(RMB) 5.4 billion. We believe the company's land acquisitions
would increase its revenue and operating scale modestly through
asset enhancements.
"We treat the bond to fund the land acquisitions as debt over our
forecast period given the uncertainty in the bond's conversion
timing. Renhe will fund the land acquisitions through issuance of
zero coupon 10-year convertible bonds. We believe it will likely
convert the bonds into equity, provided that they meet the
listing requirements of Hong Kong's stock exchange. The current
owner of the land is the spouse of Renhe's Chairman Mr. Dai
Yongge, who is one of the company's major shareholders. The site
areas total about 1.9 million square meters (sqm).
"We believe the company will rely largely on equity financing for
any potential future acquisitions. The company has proposed share
issuances to raise about Hong Kong dollar (HK$) 2.1 billion that
will likely be completed in mid-2018. The issues are to mainly
finance its agricultural market acquisitions in Hangzhou. With
total acquisition consideration of RMB1.2 billion, Renhe will use
the remaining proceeds for capital expenditure and working
capital.
"In our view, Renhe's credit ratios will largely stay within our
expectation post the acquisitions. As a result, we have revised
our assessment of its financial policy to neutral from negative.
We believe the company is unlikely to pursue large acquisitions
in sectors outside agribusiness, and will likely look for smaller
opportunities within agribusiness for more vertical integration.
However, we continue to evaluate the company's management and
governance score as weak given its short track record of
operating its restructured business after the distressed exchange
and restructuring in early 2015."
SHARING ECONOMY: Signs Deal to Buy Future Ocean for HK$96 Million
-----------------------------------------------------------------
EC Assets Management Limited, a wholly owned subsidiary of
Sharing Economy International Inc., and Golden Value Finance
Limited, entered into a provisional agreement for purchase and
sale of the entire issued share capital of Future Ocean Limited,
the owner of House No. 74 Cedar Drive (also known as House B31)
the Redhill Peninsula Site D No. 18 Pak Pat Shan Road Hong Kong.
Pursuant to the agreement, EC Assets has agreed to purchase
Future Ocean Limited for HKD96 million. The parties intend to
negotiate in good faith to enter into a formal agreement for the
purchase and sale of the Property on or before July 31, 2018. The
closing is anticipated to occur on or before Dec. 13, 2018. There
is no guarantee that the transaction will be consummated.
A full-text copy of the Provisional Agreement is available for
free at https://is.gd/VTKenm
About Sharing Economy
Headquartered in Jiangsu Province, China, Sharing Economy
International Inc. -- http://www.seii.com/-- designs,
manufactures and distributes a line of proprietary high and low
temperature dyeing and finishing machinery to the textile
industry. The Company's latest business initiatives are focused
on targeting the technology and global sharing economy markets by
developing online platforms and rental business partnerships that
will drive the global development of sharing through economical
rental business models. Moreover, the Company will actively
pursue blockchain technology in its existing and to-be-acquired
business, enabling the general public to realize the beauty of
resource sharing.
RBSM LLP's audit opinion included in the company's Annual Report
on Form 10-K for the year ended Dec. 31, 2017 contains a going
concern explanatory paragraph stating that the Company had a loss
from continuing operations for the year ended Dec. 31, 2017 and
expects continuing future losses, and has stated that substantial
doubt exists about the Company's ability to continue as a going
concern.
RBSM has served as the Company's auditor since 2012.
Sharing Economy incurred a net loss of $12.92 million in 2017 and
a net loss of $11.67 million in 2016. As of March 31, 2018, the
company had $76.73 million in total assets, $9.05 million in
total liabilities and $67.67 million in total stockholders'
equity.
================
H O N G K O N G
================
LIONBRIDGE CAPITAL: S&P Alters Outlook to Neg., Affirms 'B' ICR
---------------------------------------------------------------
S&P Global Ratings said it has revised its outlook on Chinese
financial leasing company Lionbridge Capital Co. Ltd. to negative
from stable. At the same time, S&P affirmed its 'B/B' long-term
and short-term issuer credit ratings.
The outlook revision to negative reflects Lionbridge's faster-
than-expected asset growth over 2017, worsening its risk-adjusted
capital (RAC) ratio from S&P's original expectation of 7%-7.5% to
5%-5.5%, which is nearing its downgrade trigger of 5%. In 2017,
Lionbridge's total assets grew by approximately 65.1%, driven by
its rapidly expanding finance lease portfolio, which increased by
approximately 92%.
S&P said, "While we note flat credit growth in recent months, we
believe Lionbridge is likely to expand its lease portfolio,
focusing on heavy-duty trucks, following any capital infusion.
Should the infusion not contain sufficient equity features, the
RAC ratio, our primary measure of capitalization, could come
under further pressure.
"We note some changes in Lionbridge's portfolio mix in recent
months with greater focus on heavy-duty truck leasing, while
exiting healthcare and auto-lease business lines to better
utilize capital resources. Asset quality metrics has improved
with nonperforming loans declining to 2.2% in December 2017 from
4.67% in December 2016. We also note that Lionbridge's lease
receivables that are 90 days plus overdue dropped to 0.72% in
December 2017 from 1.1% in December 2016.
"The negative outlook on Lionbridge reflects our view that there
is a one-in-three chance that we could lower the ratings on the
company over the coming one to two years.
"We could lower the rating if: (1) Lionbridge's RAC ratio
declines below 5%. This could occur if the company grows quickly
without adequate and timely equity capital infusion; (2) the
company loosens its underwriting standards, leading to higher
credit losses than its peers; (3) its liquidity becomes
vulnerable such that it has problems meeting its financial
commitments; (4) it deviates from its strategy and aggressively
enters high-risk industries; or (5) it breaches any of its debt
covenants.
"We could revise the outlook back to stable if Lionbridge: (1)
strengthens its risk-adjusted capitalization sustainably above 5%
with equity capital; (2) demonstrates a track record of stable
asset quality metrics; (3) demonstrates a track record of
sustainable business growth; and (4) generates stable and
adequate earnings."
=========
I N D I A
=========
ADITYA ENTERPRISES: CRISIL Assigns B+ Rating to INR20cr Loan
------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term facility of Aditya Enterprises - Pune (AE).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Working
Capital Facility 20 CRISIL B+/Stable (Assigned)
The rating reflects AE's below-average financial risk profile,
and modest scale of operations. These weaknesses are partially
offset by the extensive experience of the proprietor.
Analytical Approach
CRISIL has combined the business and financial risk profiles of
AE and M/s Attharva Aqua as both have the same proprietor and the
firms have significant financial linkages.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: With estimated revenue of INR7.2
crore in fiscal 2018, scale remains modest in the intensely
competitive man power solutions business.
* Below-average financial risk profile: Networth is modest at an
estimated INR0.3 crore and gearing high at 4.34 times as on
March 31, 2018. However, debt protection metrics remained
comfortable with estimated interest coverage of 2.7 times in
fiscal 2018.
Strength
* Extensive experience of the proprietor: Benefits from the
proprietor's extensive experience and established relationship
with suppliers and customers should support the business.
Outlook: Stable
CRISIL believes AE will continue to benefit from the extensive
experience of its proprietor. The outlook may be revised to
'Positive' if increase in revenue, stable profitability, and
prudent working capital management strengthens financial risk
profile. The outlook may be revised to 'Negative' if decline in
revenue and profitability, or any delay in receivables from the
government weakens financial risk profile, especially liquidity.
Set up in 2015, AE, a proprietorship concern of Mr Ajit Padekar,
is engaged in man power solutions. Mr Padekar manages the
operations.
ADROIT CORPORATE: CRISIL Migrates D Rating to Not Cooperating
-------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Adroit
Corporate Services Private Limited (ACSPL) to 'CRISIL D Issuer
not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
Term Loan 18.53 CRISIL D (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with ACSPL for
obtaining information through letters and emails dated April 20,
2018, May 18, 2018, June 6, 2018 and June 11, 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 Adroit Corporate Services
Private Limited. Which restricts CRISIL's ability to take a
forward looking view on the entity's credit quality. CRISIL
believes information available on Adroit Corporate Services
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 Adroit Corporate Services Private Limited to
'CRISIL D Issuer not cooperating'.
Incorporated in 1994, ACSPL provides business process outsourcing
services, primarily to the banking sector. The company is also a
R&T agent. Operations are managed by Mr Sadashiva Shetty.
ATHALURI SUSHMA: CARE Moves D Rating to Not Cooperating Category
----------------------------------------------------------------
CARE Ratings has migrated the rating on bank facility of Athaluri
Sushma Sree to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.43 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from Athaluri Sushma Sree to
monitor the rating vide e-mail communications/ letters dated
April 25, 2018, May 10, 2018, May 11, 2018 and numerous phone
calls. However, despite CARE's repeated requests, the firm has
not provided the requisite information for monitoring the rating.
In the absence of minimum information required for the purpose of
rating, CARE is unable to express opinion on the rating. In line
with the extant SEBI guidelines, the rating on Athaluri Sushma
Sree'S bank facilities will now be denoted as CARE D; Issuer not
Cooperating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on October 06, 2015 the following were
the rating strengths and weaknesses:
Key Rating Weakness
Stretched liquidity position leading to delays in debt servicing
There are ongoing delays in debt servicing on account of cash
flow mismatches. FY15 (refers to the period April 1 to March 31)
was the first year of operations for the entity and the firm
recorded income of INR0.64 crore and incurred cash loss. Although
the entity completed construction in April 2013, operations
commenced only from June 2014 on account of delay in inspection
from KSWC. Meanwhile, the repayment of term loan commenced from
June 2013 which has led to cash flow mismatch. Furthermore, for
FY15, Owing to low income, the firm was unable to meet its high
debt servicing obligations which has resulted in ongoing delays.
The company has been also been availing unsecured loans from
promoters to bridge the cash flow gap, however there is a time
lag with respect to the same. Furthermore, the capital structure
of the firm is highly leveraged marked by debt equity and overall
gearing ratio of 12.16x and 13.05x, respectively, as on March 31,
2015 (Provisional). The company took long-term debt to construct
the warehouse and unsecured loan from partners to meet the
interest servingThe debt coverage indicators (like PBILDT
interest coverage, Total debt/GCA, besides others) of the firm
were also weak during FY15 (Provisional).
Constitution of the entity as a proprietorship concern: ASS,
being a proprietorship concern, is exposed to inherent risk of
the proprietor's capital being withdrawn at time of personal
contingency which will affect its capital structure and firm
being dissolved upon the death/retirement/insolvency of the
promoter.
Key Rating Strengths
Experienced promoter: ASS is promoted by Mrs Athaluri Sushma
Sree. However, the operations of the firm are looked after by Mr
A.V. Anjaneya Prasad, spouse of the promoter. He is a qualified
graduate having an experience of 20 years in construction
industry. He is one of the directors in SRC Company Infra Private
Limited (SRC). SRC is engaged in the construction of railway
bridges and tracks.
Agreement with Karnataka State Warehousing Corporation for 10
years: ASS has entered into an agreement with KSWC for leasing
the warehouse for 10 years (Yadgir and Belgaum). The firm
receives the payment from KSWC on monthly basis. The rental
income from Yadgir Godown is INR0.06 crore per month.
Ongoing project -- Advanced stage of completion
The firm is undertaking a project for construction of warehouse
at Belgaum on land area of 12 acres comprising 5 warehouse having
storage capacity of 25,000 MT each. The expansion project was
started by the firm during September 2014 and expected to be
completed by November 2015. The total cost of project is INR15.00
crore which is expected to be funded through promoter fund of
INR3.40 crore and term loan of INR11.60 crore. Financial closure
of the project has been achieved. As on September 22, 2015, the
firm has incurred expenses of INR14.00 crore and the same is
funded through promoter fund of INR2.40crore and term loan of INR
11.60 crore. Though 93% of the project has been completed, the
ability of the company to complete the project without any cost
or time over run and handing over the same to government within
prescribed time and receive lease rentals timely will remain
critical from credit risk perspective.
AthaluriSushmaSree (ASS) was established in the year 2012, as a
proprietorship concern by Mrs. AthaluriSushmaSree. The firm is
engaged in Godown leasing business. ASS has constructed Godowns
in Koiloor Village, Yadgir District, Karnataka during April 2013
for lease purpose. The firm started receiving rental income from
June 2014. The property is built on total land area of 12 acres
comprising 4Godowns (Sai Radhika Rural Godowns) having storage
capacity of 20,000 MT per Godown. ASS has entered into agreement
with Karnataka State Warehousing Corporation (KSWC) for warehouse
leasing for tenure of 10 years. The firm is undertaking a project
for construction of warehouse at Belgaum on land area of 12 acres
comprising of 5 godowns having storage capacity of 25000 MT per
godown.
BEGUSARAI MUNICIPAL: Ind-Ra Assigns BB LT Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Begusarai
Municipal Corporation (BMC) a Long-Term Issuer Rating of 'IND
BB'. The Outlook is Stable.
KEY RATING DRIVERS
The rating reflects BMC's heavy reliance on grants (66.88% of
total revenue income over FY15-FY17) on account of low tax
revenue collections. Its own income to total revenue income ratio
was below 14% over FY15-FY17.
The rating is also constrained by Begusarai's poor
infrastructure. Although the city is well-connected with roads
and railways, it lacks proper water supply, sewerage system and
solid waste management, which hinders its potential growth. Under
Atal Mission for Rejuvenation and Urban Transformation scheme,
INR77.39 million will be incurred to improve the civic services
during FY18-FY20 with the central government contributing INR31.7
million, the state government contributing INR19 million and
BMC's share being INR12.7 million.
The rating reflects BMCs high establishment expenditure, which
increased at a CAGR of 26.7% over FY15-FY17 and accounted average
83.55% of BMC's total revenue expenditure. Consequently,
allocation for key expenditure area such as operations and
maintenance was low at 11.55% during the period.
However, the rating benefits from an increase in BMC's revenue
receipts to INR370.83 million in FY17 (FY15: INR184.55 million).
Tax revenue formed a small portion of the revenue (FY15-FY17:
average 10.72%). The revenue account remained in surplus over
FY15-FY17(FY17: INR224.74 million, FY16: INR74.08 million, FY15:
INR90.87 million).
RATING SENSITIVITIES
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.
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
Begusarai town is the administrative headquarters of Begusarai
district in Bihar. BMC 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.
DATTA MEGHE: CRISIL Withdraws 'B' Rating on INR7cr Cash Loan
------------------------------------------------------------
CRISIL has withdrawn its ratings on the bank facilities of Datta
Meghe Institute of Medical Sciences (DMIMS) 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 Crore) Ratings
---------- ----------- -------
Bank Guarantee 16 CRISIL A4/Issuer Not
Cooperating (Issuer Not
Cooperating; Rating Withdrawn)
Cash Credit 7 CRISIL B/Stable (Issuer Not
Cooperating; Rating Withdrawn)
Loan Against Property 5 CRISIL B/Stable (Issuer Not
Cooperating; Rating Withdrawn)
CRISIL has been consistently following up with DMIMS for
obtaining information through letters and emails dated
February 9, 2018, and March 31, 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 entity'.
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 DMIMS. This restricts CRISIL's
ability to take a forward DMIMS 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
DMIMS continues to be 'CRISIL B/Stable/CRISIL A4 Issuer Not
Cooperating'.
Established in 1988, DMIMS is a public trust registered under the
Bombay Public Trust Act, 1950. It offers medical, engineering,
and nursing courses at its nine institutes in Sawangi, and
operates a teaching hospital.
FAIRY FOOD: CARE Migrates B Rating to Not Cooperating Category
--------------------------------------------------------------
CARE Ratings has migrated the rating on bank facility of Fairy
Food Products Private Limited (FFPPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 7.97 CARE B; Issuer not cooperating;
Facilities Based on best available
Information
Short-term Bank 41.00 CARE A4; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from FFPPL to monitor the
rating vide e-mail communications/ letters dated April 25, 2018,
May 10, 2018, May 11, 2018 and numerous phone calls. However,
despite CARE's repeated requests, the firm has not provided the
requisite information for monitoring the rating. In the absence
of minimum information required for the purpose of rating, CARE
is unable to express opinion on the rating. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of publicly available information which however, in CARE's
opinion is not sufficient to arrive at fair rating In line with
the extant SEBI guidelines, the rating on Fairy Food Products
Private Limited's bank facilities will now be denoted as CARE B;
Issuer not cooperating/CARE A4; Issuer not cooperating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
The ratings assigned to the bank facilities of Fairy Food
Products Private Limited (FFPPL) continue to remain tempered by
its weak financial profile marked by leveraged capital structure
and weak debt coverage indicators and seasonal availability of
raw material (mango, guava) resulting into working capital-
intensive nature of business, presence in the highly fragmented
and competitive food processing industry and susceptibility of
profitability to fluctuation in foreign exchange prices. The
ratings also take into account the decline in TOI during FY16 &
FY17, further deterioration in capital structure and weakening
of debt coverage indicators, elongation operating cycle and
improvement in PBILDT margins.
The ratings, however, derive strength from the established track
record and experienced promoter with certified processing
facility, moderate profitability, location advantage through
presence in major mango-cultivation area and healthy demand
outlook for processed food.
Key Rating Weakness
Highly leveraged capital structure and weak debt coverage
indicators: The capital structure continued to remain leveraged
and further deteriorated as marked by debt-equity ratio and
overall gearing at 4.82x and 5.81x as on March 31, 2016
respectively to 6.13x and 7.65x as on March 31, 2017
respectively, on account of increase in debt. The debt coverage
indicators also weakened in line, as marked by TDGCA at 31.28x as
on March 31, 2016 and 51.15x as on March 31, 2017. The PBILDT
interest coverage ratio also weakened and stood at 1.18x in FY17
as compared to 1.25x in FY16, due to increasing level of debt.
Decline in Total Operating Income (TOI) in FY16 and FY17: The
company's TOI declined in FY16 and FY17 and the same was marked
at INR 46.40 crore and INR 36.79 crore respectively.
Presence in the highly fragmented industry characterized by
intense competition: The company is engaged in processing of
fruit pulps which involves moderate value addition. Moreover, on
account of large number of units operating in similar business
along with the presence of large sized renowned entities, the
competition among the players remains very high resulting in high
fragmentation and restricts the profitability to an extent.
Seasonal availability of raw material (Mango, Guava) resulting
into working capital intensive nature of business Prices of mango
are highly volatile in nature and depend upon factors like, area
under production, yield for the year (4-5 months). The company
has to procure significantly higher volume of mango to avail bulk
discount from suppliers. Furthermore, mango being a seasonal
crop, it is available mainly from April-July, which results in a
higher inventory holding period for the business.
Profitability is susceptible to fluctuation in foreign exchange
prices: FFPPL is exporting processed products. Since the company
does not have any hedging mechanism margins are susceptible to
fluctuation in currency rates.
Key Rating Strengths
Established track record and experience of the promoters for more
than four decades: FFPPL has an established track record of more
than three decades and the promoters of the company have been
engaged in the food processing industry for more than three
decades. Mr Syed Mateen Aga, has more than four decades of
experience in this industry and is actively involved in the day
to day operations of the company. Mr Syed Tanzeem Aga, Mrs
Shahida Mateen Aga and Mr Syed Tanzil Aga have experience of 15
years in the same line of business, and looks after production,
marketing and other operational activities. All of them belong to
same family. Apart, FFPPL is associated with more than 30
(direct) and one hundred (contract) staff to assist the directors
for the business operation of the company Location advantage with
presence in major mango cultivation area resulting in easy
procurement of mangoes FFPPL is well connected to prominent mango
growing belts. The company enjoys proximity to the mango growing
areas of Karnataka. Hence, it derives benefits from lower
logistics expenditure (both on transportation and storage), easy
availability of labour and procurement of mangoes at competitive
prices, and consistent demand for finished goods resulting in
sustained revenue visibility.
Incorporated in 1983, Bengaluru-based, FFPPL was promoted by Mr.
Syed Mateen Aga,Mr. Syed Tanzeem Aga,Mrs. ShahidaMateen Aga and
Mr. Syed Tanzil Aga. The company is engaged in processing of
mango pulp, papaya pulp, guava pulp and pine apple pulp. The
company procures its entire raw material (fruits) from the local
market i.e., from local farmers and dealers. FFPPL sells its
products under the brand name Fairy both in domestic market
(across Andhra Pradesh, Maharashtra, Chennai, Kerala, Mumbai and
Karnataka states) and also exports-90% to Saudi Arabia, U.A.E and
Yemen Arab Republic. 80% of the revenue was generated through
sale of mango pulp during FY13-FY15.FFPPL is an ISO 9001:2000 and
Hazard Analysis and Critical control Point(HACCP) certified
company which gives high preference to quality standards and Food
safety.
The company's total operating income declined from INR 46.40
crore in FY16 to INR 36.79 crore in FY17. Further, the company
reported PAT of INR 0.71 crore in FY16 and INR 0.34 crore in
FY17.
FIL SEP: ICRA Withdraws B+ Rating on INR4.51cr Fund Based Loan
--------------------------------------------------------------
ICRA has withdrawn the long-term rating of [ICRA]B+, outstanding
on the INR4.51 crore fund-based facilities of FIL SEP Equipments
Private Limited (FSEPL). ICRA has also withdrawn the short-term
rating of [ICRA]A4, outstanding on the INR7.00 crore non-fund-
based facility of FSEPL.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limits 4.51 [ICRA]B+; Withdrawn
Non-Fund based limits 7.00 [ICRA]A4; Withdrawn
Rationale
The long-term and short-term ratings assigned to FIL SEP
Equipments Private Limited have been withdrawn at the request of
the company, based on the no due certificate provided by its
banker.
FSEPL, started as a proprietorship concern in 1996, is promoted
by Mr. Aalap Shirish Derasary and was engaged in trading of
filter cartridges. It later ventured into manufacturing of
filtration vessels and lubrication skids. In 2009, FSEPL was
incorporated as a private limited company to take over the
business of the proprietorship. FSEPL has its manufacturing
facility at GIDC, Vadodara and is engaged in design, engineering,
manufacturing, fabrication and supply of Lubrication & Fluid
Systems and Filtration & Separation Systems.
GOURAV ROSHNI: CRISIL Withdraws B Rating on INR5cr Cash Loan
------------------------------------------------------------
CRISIL has withdrawn its rating on the long-term bank facility of
Gourav Roshni Limited (GRL) following a request from the company
and on receipt of a 'no dues certificate' from the banker. The
rating action is in line with CRISIL's policy on withdrawal of
bank loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B/Stable (Withdrawn)
GRL was incorporated in 2010, and is based at Sahibabad in
Ghaziabad, Uttar Pradesh. It is currently managed by Mr Pankaj
Khanna. The company manufactures switches, LED (light emitting
diode) lights, fans, and miniature circuit breakers under the
Gkon brand.
GSK INFRASTRUCTURES: Ind-Ra Hikes Long Term Issuer Rating to 'B+'
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded GSK
Infrastructures (GSK)'s Long-Term Issuer Rating to 'IND B+' from
'IND D'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR10 mil. Fund-based working capital facilities upgraded
with IND B+/Stable/IND A4 rating; and
-- INR60 mil. Non-fund-based working capital facilities upgraded
with IND A4 rating.
KEY RATING DRIVERS
The upgrade reflects GSK's timely debt servicing for three
consecutive months ended May 2018, growth in revenue and
improvement in the credit metrics. As per FY18 unaudited
financials, revenue grew 17.3% yoy to INR529 million (FY17:
INR451 million) owing to an increase in orders. However, the
scale of operations remained medium. As of FY18, GSK had an order
book of INR1,089 million (2.0x of FY18P revenue).
The ratings also factor in GSK's volatile EBITDA margins, which
ranged between 8.5% and 10% during FY14-FY17 owing to
fluctuations in raw material prices. The EBITDA margins improved
to 12.2% in FY18P (FY17: 8.5%) on account of lower cost of
materials consumed. Consequently, interest coverage (operating
EBITDA/gross interest expense) improved to 8.8x in FY18P (FY17:
5.5x), while net leverage (total debt/operating EBTIDA) was
stable at 0.7x (0.7x).
However, the ratings are constrained by GSK's tight liquidity
position with full utilization of the fund-based limit over the
12 months ended May 2018.
The ratings are, however, supported by the promoter's a decade-
long experience in executing engineering, procurement, and
construction contracts.
RATING SENSITIVITIES
Positive: A substantial growth in the top line and an improvement
in the EBITDA margin, leading to a sustained improvement in the
credit metrics will lead to a positive rating action.
Negative: Any decline in the EBITDA margin, resulting in a
further stress on the liquidity position and deterioration in the
credit metrics on a sustained basis will lead to a negative
rating action.
COMPANY PROFILE
Incorporated in 2007, GSK Infrastructures is an engineering,
procurement, and construction contractor engaged in government
projects. The firm undertakes civil construction of sewerage and
water pipelines in Andhra Pradesh and Telangana. Since February
2017, the company started manufacturing of mild steel pipes on
job work basis.
GYANSAGAR TEXTILE: CRISIL Migrates B+ Rating to Not Cooperating
---------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Gyansagar
Textile Private Limited (GTPL) to 'CRISIL B+/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 0.15 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
Term Loan 2.85 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with GTPL for obtaining
information through letters and emails dated April 24, 2018,
May 8, 2018, June 6, 2018 and June 11, 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 Gyansagar Textile Private
Limited. Which restricts CRISIL's ability to take a forward
looking view on the entity's credit quality. CRISIL believes
information available on Gyansagar Textile 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 Gyansagar Textile Private Limited to 'CRISIL
B+/Stable Issuer not cooperating'.
GTPL, was incorporated in 2009, is engaged in manufacturing of
Gray fabrics. The company was promoted by Sumit Wadhwa and its
manufacturing plant is located at Bhiwandi (Maharashtra).
INDERA JEWELS: Ind-Ra Migrates 'BB-' LT Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Indera Jewels
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:
-- INR170 mil. Fund-based limit migrated to non-cooperating
category with IND BB- (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
June 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 2006, Indera Jewellers is a Tanishq franchise.
The company has its registered office in Rourkela, Odisha.
JEEVISHA FOODS: CRISIL Migrates B+ Rating to Not Cooperating
------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Jeevisha
Foods Private Limited (JFPL; part of the Hari Om group.) to
'CRISIL B+/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 0.93 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
Term Loan 4.07 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with Jeevisha Foods for
obtaining information through letters and emails dated April 24,
2018, May 9, 2018, June 6, 2018 and June 11, 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 Jeevisha Foods Private
Limited. Which restricts CRISIL's ability to take a forward
looking view on the entity's credit quality. CRISIL believes
information available on Jeevisha Foods 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 Jeevisha Foods Private Limited to ' CRISIL
B+/Stable Issuer not cooperating'.
For arriving at the ratings, CRISIL has consolidated the business
and financial risk profiles of Hari Om Foods (HOF) and its group
company, JFPL as these companies, together referred to as the
Hari Om group, are engaged in a similar line of business, have
business synergies and common promoters.
JFPL is a private limited company, which was set up in 2014 by
Mr. Amarjit Chhabra and family. The company is engaged in milling
and processing of basmati and non-basmati rice. The production
facilities are situated in Kaithal, Haryana.
HOF was incorporated as a partnership firm in 2009 by Mr. Amarjit
Chhabra and family. The firm is engaged in the milling and
processing of basmati and non-basmati rice. The production
facilities are situated in Kaithal, Haryana.
KAILASH HILLWAYS: CARE Assigns B+ Rating to INR3.30cr LT Loan
-------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Kailash Hillways Engineering Associates (KHEA), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 3.30 CARE B+; Stable Assigned
Long-term/Short- 3.50 CARE B+; Stable/ CARE A4
Term Bank Assigned
Facilities
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of KHEA are primarily
constrained by its small and fluctuating scale of operations with
low partners' capital base and leveraged capital structure.
Further, the ratings are also constrained by risk associated with
constitution of the entity being a partnership firm, highly
competitive industry along with business risk associated with
tender-based orders.
The ratings, however, draws comfort from experienced management,
moderate profitability margins and operating cycle. Going
forward; ability of KHEA to profitably increase its scale of
operations while improving its capital structure and its ability
to successfully execute projects in timely manner shall be the
key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small and fluctuating scale of operations with low partners'
capital base: KHEA is a small regional player involved in
executing civil construction contracts. The ability of the firm
to scale up to larger-sized contracts having better operating
margins is constrained by its comparatively small capital base of
INR2.97 crore as on March 31, 2017 and total operating income of
INR21.36 crore in FY17 (refers to the period April 1 to March
31). The small scale of operations in a competitive industry
limits the bidding capability, pricing power and benefits of
economies of scale.
The firm's total operating income has been fluctuating over the
past three years (FY15-FY17) owing to tender driven nature of
business. During FY18 (refers to April 1 to March 31; based on
provisional results), the firm has achieved the total operating
income of INR16.00 crore.
Leveraged capital structure: The capital structure of the firm
marked by overall gearing stood leveraged at ~2x on the past
three balance sheet dates ending March 31, '15-'17 on account of
low partners' capital base coupled with high dependence on
external borrowings to meet the working capital requirements of
the business. The average utilization of working capital limits
remained almost fully utilized for past 12 months ending April,
2018.
Highly competitive industry: KHEA faces direct competition from
various organized and unorganized players in the market. There
are number of small and regional players and catering to the same
market which has limited the bargaining power of the firm and has
exerted pressure on its margins. Business risk associated with
tender-based orders: The firm majorly undertakes government
projects, which are awarded through the tender-based system. The
growth of the business depends on its ability to successfully bid
for the tenders and emerge as the lowest bidder. Further, any
changes in the government policy or government spending on
projects are likely to affect the revenues of the firm.
Key Rating Strengths
Experienced management: KHEA is a family run business and its
operations are currently being managed by Mr. Bachan Singh
Pokhriyal, Mr. Ramesh Singh Pokhriyal and Mr. Chanderveer Singh
Pokhriyal. All the partners are post graduates by qualification
and have extensive experience varied up to two decades,
respectively in the construction industry through their
association with this entity.
Moderate profitability margins and operating cycle: The
profitability margins of the firm largely depend upon nature of
contract executed. The PBILDT and PAT margin of the firm stood at
around 10% and 5.50% respectively for past three financial years
(FY15-FY17) owing to execution of contracts having moderate
profitability levels. Subsequently; the debt service coverage
indicators as marked by interest coverage and total debt to GCA
stood moderate at 2.90x and 4.52x during FY17. The operating
cycle of the firm stood moderate as marked by 46 days for FY17.
The company raises bills on milestone basis on the completion of
certain percentage of work and thereon which gets acknowledge by
customer after necessary inspection of work done. Also, all the
dues relating to billing normally gets cleared from departments
before financial year closure. The firm maintains minimum
inventory in the form of raw materials and work in progress at
different sites for smooth execution of contracts which leads to
average inventory period of 2 months. Further, the firm receives
credit period of around 10-15 days from its suppliers.
Tehri Garhwal, Uttarakhand based KHEA was established in
September, 2001 as a partnership firm. It is currently managed by
Mr. Bachan Singh Pokhriyal, Mr. Ramesh Singh Pokhriyal & Mr.
Chanderveer Singh Pokhriyal sharing profit and losses in the
ratio of 34%, 33% and 33% respectively. The firm is engaged in
civil construction works such as construction of roads and
bridges mainly for government undertakings like Public Works
Department (PWD), (Roads, Bridges & Irrigation Division),
Uttarakhand and other local government bodies. The firm has two
associate concerns namely; "Hotel Vasundhara Palace" (established
in 2006) and "Hotel Great Ganga" (established in 2001) engaged in
hospitality business, respectively.
LANFORD CERAMIC: CRISIL Withdraws B+ Rating on INR7.12cr Loan
-------------------------------------------------------------
CRISIL has withdrawn its ratings on the long-term bank facility
of Lanford Ceramic Private Limited (LCPL) following a request
from the company and on receipt of a 'no dues certificate' from
the banker. The rating action is in line with CRISIL's policy on
withdrawal of bank loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1.5 CRISIL A4 (Withdrawn)
Cash Credit 6 CRISIL B+/Stable (Withdrawn)
Proposed Long Term
Bank Loan Facility 3 CRISIL B+/Stable (Withdrawn)
Term Loan 7.12 CRISIL B+/Stable (Withdrawn)
LCPL is a Morbi, Gujarat based company which was incorporated in
2013 and commenced commercial operations from July, 2014 onwards.
The company manufactures glazed ceramic porcelain (non-vitrified)
floor tiles and has a capacity of 4,000 boxes per day. LCPL is
promoted by Mr Nilesh Desai, Mr Jayeshbhai Desai, Mr. Jayantilal
Desai, and Mr Parthkumar Godhani'all belonging to the promoter
family.
Net profit was INR0.06 crore on net sales of INR38.8 crore for
fiscal 2016, against a net profit of INR0.07 crore on net sales
of INR8.80 crore for fiscal 2015.
LOTUS HOUSEHOLD: Ind-Ra Migrates BB LT Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Lotus Household
Products 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 actions are:
-- INR40.0 mil. Fund-based limit migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) /IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR9.9 mil. Term loans due on March 2018 migrated to non-
cooperating category with IND BB (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
June 21, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in June 2012 by Gajendra Singh, Dharmendra Kumar and
Niraj Dubey, Lotus Household Products manufactures mosquito
coils, insect mats, and mosquito and insect repellents.
MEHTA GOLD: CRISIL Migrates B+ Rating to Not Cooperating Category
-----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Mehta Gold
to 'CRISIL B+/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 14 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 5 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
CRISIL has been consistently following up with MG for obtaining
information through letters and emails dated April 25, 2018,
May 9, 2018, June 6, 2018 and June 11, 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 Mehta Gold. Which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on Mehta
Gold 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 Mehta Gold to 'CRISIL B+/Stable Issuer not
cooperating'.
Set up in 2003 as a proprietorship firm by Mr. Dilip Mehta, a
first-generation entrepreneur, MG manufactures gold ornaments and
jewellery for the wholesale market. It sells to retailers in
South India and Maharashtra.
MFL INDIA: CRISIL Lowers Rating on INR33.5cr Cash Loan to B
-----------------------------------------------------------
CRISIL has downgraded the ratings of MFL India Limited to 'CRISIL
B/Stable/CRISIL A4' Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1 CRISIL A4 (ISSUER NOT
COOPERATING; Migrated
from 'CRISIL A4+')
Cash Credit 33.5 CRISIL B/Stable (ISSUER NOT
COOPERATING; Migrated from
'CRISIL BB/Stable')
Line of Credit 3.75 CRISIL B/Stable (ISSUER NOT
COOPERATING; Migrated from
'CRISIL BB/Stable')
Proposed Long Term
Bank Loan Facility 1.75 CRISIL B/Stable (ISSUER NOT
COOPERATING; Migrated from
'CRISIL BB/Stable')
CRISIL has been consistently following up with MFL for obtaining
information through mails and letter dated June 1, 2018 and
June 11, 2018. 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 the company. This restricts
CRISIL's ability to take a forward-looking view on its credit
quality. CRISIL believes information available on MFL is
consistent with 'Scenario 4' outlined in the 'Framework for
Assessing Consistency of Information', Based on the last
available information, CRISIL has migrated the ratings to 'CRISIL
B/Stable/CRISIL A4' Issuer Not Cooperating'.
MFL was incorporated in 1981 as a public limited company and
listed on the Bombay Stock Exchange. The company was subsequently
acquired by Dynamic Movers Pvt Ltd (DMPL), promoted by Mr Anil
Thukral, and merged with DMPL in April 2010. MFL provides
transportation services to various industries such as automobile,
cement, infrastructure, and construction, and to integrated metal
players.
MIDDHA INDUSTRIES: CRISIL Migrates B Rating to Not Cooperating
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Middha
Industries (MI) to 'CRISIL B/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with MI for obtaining
information through letters and emails dated April 25, 2018,
May 9, 2018, June 6, 2018 and June 11, 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 Middha Industries. Which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Middha 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 Middha Industries to 'CRISIL B/Stable Issuer not
cooperating'.
MI was established in 2001 as a partnership between Mr Amin
Chand, Mr Mukesh Kumar, and Mr Gourav Middha. The firm processes
basmati rice at its plant in Jalalabad. It has a total milling
capacity of 3 tonne per hour (tph) and sorting capacity of 4 tph.
MIRAJ METALS: ICRA Migrates D Rating to Not Cooperating Category
----------------------------------------------------------------
ICRA has moved the long-term and short-term ratings for the bank
facilities of Miraj Metals to the 'Issuer Not Cooperating'
category. The rating is now denoted as "[ICRA]D ISSUER NOT
COOPERATING". The rating takes into account continued delays in
debt servicing by the entity. As part of its process and in
accordance with its rating agreement with Miraj, ICRA has been
trying to seek information from the entity so as to monitor its
performance, but despite repeated requests by ICRA, the entity's
management has remained non-cooperative. The current rating
action has been taken by ICRA basis limited information on the
issuers' performance. Accordingly, the lenders, investors and
other market participants are advised to exercise appropriate
caution while using this rating as the rating may not adequately
reflect the credit risk profile of the entity.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term-fund 2.00 [ICRA]D ISSUER NOT COOPERATING;
based limits Rating moved to the 'Issuer Not
Cooperating' category
Short term-non- 13.00 [ICRA]D ISSUER NOT CO-OPERATING;
fund based Rating moved to the 'Issuer Not
limits Cooperating' category
In the absence of requisite information, ICRA is unable to take a
definitive rating action. In the absence of requisite
information, and in line with SEBI's Circular No.
SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's
Rating Committee has taken a rating view based on the best
available information.
Established in August 2010, Miraj Metals (Miraj) is a
proprietorship concern, promoted by Mr. Hiten D Mehta and is
engaged in the business of trading of non-ferrous metal scrap.
The concern has its registered office in Vile Parle, Mumbai, a
branch office in Bhavnagar and a godown in Bhiwandi.
MUKTI FIRMS: CRISIL Migrates B- Rating to Not Cooperating Cat.
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Mukti Firms
Private Limited (MFPL) to 'CRISIL B-/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.5 CRISIL B-/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Long Term Loan 4.9 CRISIL B-/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Working Capital
Facility 0.5 CRISIL B-/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with MFPL for obtaining
information through letters and emails dated April 25, 2018,
May 9, 2018, June 6, 2018 and June 11, 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 Mukti Firms Private Limited.
Which restricts CRISIL's ability to take a forward looking view
on the entity's credit quality. CRISIL believes information
available on Mukti Firms 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 Mukti Firms Private Limited to 'CRISIL B-/Stable
Issuer not cooperating'.
Established in March 2017, MFPL, promoted by Mr Kalpana Kundu and
Mr Sanjib Pal, provides cold storage facilities for potato
storage and trades in potatoes. The company has taken over an
existing unit named Ceramist Multipurpose Cold Storage having
capacity of 15,000 tonne per annum.
MULTICHEM SPECIALITIES: ICRA Moves B+ Rating to Not Cooperating
---------------------------------------------------------------
ICRA has moved the long-term and short-term ratings for the bank
facilities of Multichem Specialities Private Limited to the
'Issuer Not Cooperating' category. The rating is now denoted as
"[ICRA]B+ (Stable)/[ICRA]A4 ISSUER NOT COOPERATING."
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Fund- (4.00) [ICRA]B+ (Stable) ISSUER NOT
Based COOPERATING; Rating moved
Interchangeable to the 'Issuer Not
Cooperating' category
Short-term Non- 19.00 [ICRA]A4 ISSUER NOT
fund-based COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
Short-term 1.00 [ICRA]A4 ISSUER NOT
Unallocated COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA,
the entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the
rating may not adequately reflect the credit risk profile of the
entity.
Incorporated in 2007, MSPL is a family managed business, promoted
by Mr. Manish Karnani and is engaged in the business of trading
in speciality chemicals which are primarily used in the
pharmaceutical industry and for waste water treatment purposes.
Till 2004, the company carried out trading by procuring the
chemicals primarily from the domestic market. As of today, the
company sources a significant portion of its supplies from USA
and China. The company sells the chemicals in smaller quantities
to various pharmaceutical and chemical companies, stockiest and
traders.
NEW ERA: CRISIL Lowers Rating on INR2cr Cash Loan to B+
-------------------------------------------------------
CRISIL has downgraded the ratings on the bank facilities of New
Era Industries (NEI; part of the New Era group) to 'CRISIL BB-
/Stable/CRISIL A4+ Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 6 CRISIL A4 (Migrated from
'CRISIL A4+ ISSUER NOT
COOPERATING')
Cash Credit 2 CRISIL B+/Stable (Migrated from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
Import Letter 4 CRISIL A4 (Migrated from
of Credit Limit 'CRISIL A4+ ISSUER NOT
COOPERATING')
Detailed Rationale
Due to inadequate information and in line with Securities and
Exchange Board of India guidelines, CRISIL had migrated the
ratings on the bank facilities of New Era Industries (NEI; part
of the New Era group) to 'CRISIL BB-/Stable/CRISIL A4+ Issuer Not
Cooperating'. However, management has subsequently shared
requisite information for carrying out a comprehensive review of
the ratings. Hence, CRISIL is migrating the ratings from 'CRISIL
BB-/Stable/CRISIL A4+ Issuer Not Cooperating' to 'CRISIL
B+/Stable/CRISIL A4'.
The ratings reflect the New Era group's working capital-intensive
and modest scale of operations, and exposure to intense
competition. These weaknesses are partially offset by the
extensive experience of promoters in the exterior decor industry.
Analytical Approach
For arriving at the ratings, CRISIL has combined the business and
financial risk profiles of NEI and its wholly owned subsidiary,
New Era Living Deco FZE (NEL). This is because the two firms,
together referred to as the New Era group, have the same
management and promoters, and significant business synergies.
Unsecured loans of INR2.39 crore from promoters have been treated
as neither debt nor equity since these are expected to remain in
business.
Key Rating Drivers & Detailed Description
Weakness
* Working capital-intensive operations: Gross current assets are
estimated at over 250 days as on March 31, 2018, because of
sizeable inventory of 130-150 days.
* Exposure to intense competition and modest scale of operations:
The exterior decor industry is highly fragmented with many
organised players offering various substitutes to ceramic
cladding. Availability of cheaper substitutes (such as
architectural wall panels, glass, and low-quality wooden
flooring) reduces the group's bargaining power with customers.
Moreover, group's scale of operations is modest. In fiscal 2018,
revenues declined to an estimated INR9.6 crore. This is
compounded by small size of projects undertaken and absence of
high-value projects. Modest scale also restricts ability to bid
for large projects and limits bargaining power with customers.
Strength:
* Extensive experience of promoters: The group has been in the
exterior decor business for more than 15 years and provides
solutions to corporates as well as high-networth individuals.
Promoters have also established a strong clientele.
Outlook: Stable
CRISIL believes the New Era group will continue to benefit from
the extensive experience of its promoters. The outlook may be
revised to 'Positive' if significant improvement in scale of
operations and profitability leads to considerably higher cash
accrual. The outlook may be revised to 'Negative' in case of a
further decline in revenue and profitability or pressure on
working capital management.
NEI, based in Delhi, was set up as a partnership firm in the
early 1980s by Mr Anil Khanna and Ms Manju Khanna. The firm
imports and installs exterior cladding, surfacing, and finishes.
NEL, based in Dubai, was established by Mr Aman Khanna. The firm
buys terracotta, wooden, and metal cladding from suppliers and
resells to customers in South Asia and India.
NIKITA CORPORATION: CRISIL Moves B+ Rating to Not Cooperating
-------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Nikita
Corporation (Nikita) to 'CRISIL B+/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8.5 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with Nikita for
obtaining information through letters and emails dated April 25,
2018, May 9, 2018, June 6, 2018 and June 11, 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 Nikita Corporation. Which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Nikita Corporation 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 Nikita Corporation to 'CRISIL B+/Stable Issuer not
cooperating'.
Nikita, a partnership firm set up in 2014 by Mr. Basant J Munot,
Mr. Sorab S Munot and Ms. Indu B Munot, develops residential real
estate projects, mainly in Navi Mumbai. It is undertaking a
project, Indra Riverside, in New Panvel.
PAROHA DEVELOPERS: CRISIL Migrates B Rating to Not Cooperating
---------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Paroha
Developers Private Limited (PDPL) to 'CRISIL B/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 25 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
CRISIL has been consistently following up with PDPL for obtaining
information through letters and emails dated May 8, 2018, June 6,
2018, and June 11, 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 Paroha Developers Private
Limited. Which restricts CRISIL's ability to take a forward
looking view on the entity's credit quality. CRISIL believes
information available on Paroha Developers Private Limited is
consistent with 'Scenario 2' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BBB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Paroha Developers Private Limited to 'CRISIL
B/Stable Issuer not cooperating'.
PDPL is presently developing a project 'Vision Jabalpur'. The
project comprises of 298 luxury apartments along with club &
other facilities and a commercial tower over 3.70 acres of land
area at Vijay Nagar in Jabalpur (Madhya Pradesh).
PDPL was incorporated in 2015 by Mr Mohan Paroha. The land for
the project has been taken from Mr Jitendra Vishwakarma and Kamal
Singh Chandel through joint development agreement, under which
PDPL will develop the 298 flats and retain 60 percent of these
for marketing to the public while the remaining will be handed
over to the Mr Jitendra Vishwakarma and Kamal Singh Chandel.
RAJ ISPAT: CARE Migrates B+ Rating to Not Cooperating Category
--------------------------------------------------------------
CARE Ratings has migrated the rating on bank facility of Raj
Ispat Udyog (RIU) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 7.00 CARE B+; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from RIU to monitor the
rating(s) vide e-mail communications/letters dated May 28, 2018
and numerous phone calls. However, despite CARE's repeated
requests, the firm has not provided the requiste information for
monitoring the ratings. In the absence of minimum information
required for the purpose of rating, CARE is unable to express
opinion on the rating. In line with the extant SEBI guidelines
CARE's rating on Raj Ispat Udyog's bank facilities will now be
denoted as CARE B+/ CARE A4; ISSUER NOT COOPERATING. Users of
this rating (including investors, lenders and the public at
large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of rating in February, 2016 the following were the
rating strengths and weaknesses:
Key rating Weaknesses
Declining scale of operations with low net worth base: The firm's
scale of operations declined from INR37.14 crore in FY13 to
INR26.84 crore in FY15 (Prov.) (refers to the period April 1 to
March 31). Furthermore, the firm's GCA was relatively small at
INR0.14 crore for FY15 (Prov.) and tangible net worth stood at
INR1.29 crore as on March 31, 2015.
Leveraged capital structure: The firm has a leveraged capital
structure marked by long term debt equity and overall gearing
ratio of 0.86x and 7.36x, respectively, as on March 31, 2015.
Weak debt coverage indicators: The debt coverage indicators of
the firm remained weak as reflected by interest coverage ratio
and total debt to GCA of 1.11x and 67.20x respectively for FY15.
Working capital intensive nature of oeprations: The operations of
the firm are working capital intensive in nature as reflected by
average operating cycle of 126 days, as on March 31, 2015 The
average utilization of the working capital limits stood around
95% for 12 months period ended September, 2015.
Partnership nature of its constitution: RIU's constitution as a
partnership firm has the inherent risk of possibility of
withdrawal of the partner's capital at the time of personal
contingency and firm being dissolved upon the
death/retirement/insolvency of partners.
Key Rating Strengths
Experienced partners: Mr. Raj Kumar and Mr. Anil Kumar have
gained experience of around three decades and two decades
respectively in steel industry through their association as
partner with Raj Ispat Udyog (established in 1988) and Raj Steel
Industries (associate concern, established in 1984) which is
engaged in trading and manufacturing of iron and steel products.
Mr. Sunny Kumar has gained experience of more than half decade in
steel industry through his association as partner with RIU and
RSI.
Moderate Profitability margins: The profitability margins of the
firm stood moderate marked by PBILDT margin and PAT margin of
4.95% and 0.11%, respectively, in FY15 (Prov., FY refers to
April 1 to March 31).
Raj Ispat Udyog (RIU) was established in 1988 as a partnership
firm by Raj Kumar (aged 55 years), Mr. Anil Kumar (aged 47 years)
and Mr. Sunny Kapoor (aged 32 years) with profit/loss sharing
ratio of 4:4:2 respectively. The firm is engaged in trading of
steel products and the servicing facility is located at Ludhiana,
Punjab. The traded items include C.R Coils, HR Sheet, plate,
straight angles, channel and joint etc. which find their
application in steel and allied products industry. The traded
goods are procured from associate concern, RSI and sold to
dealers and wholesalers in Punjab, Chandigarh and J&K. RIU has
other group concern viz. Raj Steel Industries (RSI), established
in 1884 and engaged in manufacturing and trading of steel items.
RAJ RATAN: ICRA Maintains C+/A4 Rating in Not Cooperating
---------------------------------------------------------
The rating for the INR18.50 crore bank facilities of Raj Ratan
Smelter Limited continues to remain in the 'Issuer Not
Cooperating' category. The rating is denoted as
"[ICRA]C+/[ICRA]A4 ISSUER NOT COOPERATING."
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/Short 18.50 [ICRA]C+/ [ICRA]A4 ISSUER
Term-Fund based/ NOT COOPERATING; Rating
Non Fund Based continues to remain in the
'Issuer Not Cooperating'
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA,
the entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuers' performance. Accordingly the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit risk profile of the entity.
Raj Ratan Smelter Limited was incorporated by the Khatri family
in 2007 and is involved in the manufacture and sale of mild steel
bars. Its plant, located in Kanpur (UP), has a capacity of 36,000
metric tonnes (MT) per annum.
RESHMA FABRICS: CRISIL Migrates B+ Rating to Not Cooperating
------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Reshma
Fabrics Ltd (RFL) to 'CRISIL B+/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.5 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 1.0 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
Term Loan 6.5 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with RFL for obtaining
information through letters and emails dated May 22, 2018,
June 6, 2018 and June 11, 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 Reshma Fabrics Ltd. Which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Reshma Fabrics Ltd is consistent with 'Scenario 1' outlined in
the 'Framework for Assessing Consistency of Information with
CRISIL BB' rating category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Reshma Fabrics Ltd to 'CRISIL B+/Stable Issuer not
cooperating'.
RFL was incorporated in 1993. In December 2014, the management
was taken over by Mr. D N Patel, who has an experience of more
than 20 years in the industry. RFL currently undertakes weaving
of grey cloth on a job-work basis at its facility in Ahmedabad
(Gujarat).
SAAB ENGINEERING: Ind-Ra Withdraws 'BB+' Long Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn SAAB
Engineering's Long-Term Issuer Rating of 'IND BB+ (ISSUER NOT
COOPERATING)'.
The instrument-wise rating actions are:
-- The IND BB+ rating on the INR92.31 mil. Fund-based working
capital limits is withdrawn;
-- The IND BB+ rating on the INR10 mil. Non-fund-based working
capital limits is withdrawn; and
-- The IND BB+ rating on the INR96.785 mil. Long-term loans is
withdrawn.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the ratings for the
above bank facilities, as the agency has received no objection
certificates from the lenders. This is consistent with the
Securities and Exchange Board of India's circular dated March 31,
2017 for credit rating agencies. Ind-Ra will no longer provide
analytical and rating coverage for SAAB Engineering.
COMPANY PROFILE
Established in 1992, Bengaluru-based SAAB Engineering was founded
by Ajay K Balagopal and Sanjiv K Balgopal. The firm manufactures
automobile components such as alternator pulleys, spark plug
housings, sintered gears, synchronizer hubs and forged gears.
SARASWATI EDUCATION: ICRA Moves D Rating to Not Cooperating
-----------------------------------------------------------
ICRA has moved the long-term rating for the bank facilities of
Saraswati Education Society Kharghar to the 'Issuer Not
Cooperating' category. The rating is now denoted as "[ICRA]D
ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Fund 41.25 [ICRA]D ISSUER NOT COOPERATING;
Based-Term Loans Rating moved to the 'Issuer Not
Cooperating' category
Long-term Fund 8.75 [ICRA]D ISSUER NOT COOPERATING;
Based-Cash credit Rating moved to the 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA,
the entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available/dated/
limited information on the issuers' performance. Accordingly the
lenders, investors and other market participants are advised to
exercise appropriate caution while using this rating as the
rating may not adequately reflect the credit risk profile of the
entity.
Saraswati Education Society (SES) is a public charitable trust,
incorporated in the year 1997. The trust began its operation
in the field of education with Saraswati College of Engineering
in 2004 in Maharashtra. Since then, the society has established
and acquired various other educational institutions such as
ReVera Institute of Technology, Kharghar and Dongarai Shikshan
Sanstha, Kadepur. These institutes, recognized and affiliated to
concerned authorities, are spread across two campuses in the
state of Maharashtra.
SKR EXPORTS: CRISIL Assigns 'B' Rating to INR9.10cr LT Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to
the bank facilities of SKR Exports India Private Limited (SKR).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 4.9 CRISIL B/Stable (Assigned)
Proposed Short Term
Bank Loan Facility 1.0 CRISIL A4 (Assigned)
Proposed Cash
Credit Limit 5.00 CRISIL B/Stable (Assigned)
Proposed Long Term
Bank Loan Facility 9.10 CRISIL B/Stable (Assigned)
The rating reflects exposure to timely stabilisation and
commensurate ramp-up in sales from newly acquired facility during
the initial phase of operation and expected below-average
financial risk profile. These rating weaknesses are partially
offset by the experience of the promoters in seafood industry and
strategic location of facility ensuring ample availability of
shrimps and other fishes.
Analytical Approach
Unsecured loans received from promoters are treated as debt.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to stabilisation and off take risks: Processing of
fishes and seafood is expected to commence from August, 2018.
Stabilisation of operations and ramp-up in sales during the
initial phase remains critical. Further the operations remain
exposed to intense competition in sea-food industry, marked by
the presence of several small players operating in India's
coastal areas and competition from neighboring countries.
* Below-average financial risk profile: Debt funding of facility
purchase and expected debt funding of working capital
requirements shall lead to moderate debt and leveraged capital
structure for the company. Nonetheless, the fund support from
promters in the form of unsecured loans partly cushions the
financial risk profile.
Strength
* Promoter' extensive experience in seafood business: SKR should
benefit from its promoters' industry experience of over 2 decades
and their knowledge of local procurement and relations with
prospective customers.
* Strategic location ensuring availability of raw material: SKR
is located in west coast in Ratnagiri, Maharashtra. The strategic
location supports availability of seafood.
Outlook: Stable
CRISIL believes SKR would benefit over the medium term from
promoter' extensive experience in seafood business. The outlook
may be revised to 'Positive' if the firm ramps-up its sales and
achieves moderate profitability leading to adequate cash accruals
during the initial phase.
The outlook may be revised to negative if lower than expected
sales and profitability or stretched working capital requirements
exert pressure on liquidity and financial risk profile.
Incorporated in 2018 by Mr Sureshkumar Khadilkar and his wife
Mrs. Asha Khadilkar, SKR has recently acquired seafood processing
facility at Ratnagiri, Maharashtra. The commercial operations are
expected to commence from August 2018.
SRI SANTHANALAKSHMI: CRISIL Withdraws B+ Rating on INR11.5cr Loan
-----------------------------------------------------------------
CRISIL has withdrawn its ratings on the bank facilities of Sri
Santhanalakshmi Spinners Private Limited (SSPL) 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 Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.2 CRISIL A4 (Issuer Not
Cooperating; Rating Withdrawn)
Cash Credit 3.0 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Withdrawn)
Proposed Long Term .08 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating; Rating Withdrawn)
Term Loan 11.50 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Withdrawn)
CRISIL has been consistently following up with SSPL for obtaining
information through letters and emails dated July 17, 2017, and
August 14, 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 entity'.
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 SSPL. This restricts CRISIL's
ability to take a forward SSPL 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 SSPL
continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'.
SSPL, incorporated in 2011 and based at Pallipalayam (Tamil
Nadu), operates a spinning unit to manufacture viscose yarn. It
is promoted by Mr. P Shanmugam and Mr. S Sivasubramaniam.
SUNBEAM ENTERPRISES: CARE Assigns B+ Rating to INR3.21cr Loan
-------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Sunbeam Enterprises (SBE), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 3.21 CARE B+; Stable Assigned
Long/Short-term
Bank Facilities 1.29 CARE B+; Stable/CARE A4
Assigned
Short-term Bank
Facilities 5.50 CARE A4 Assigned
Detailed Rationale and key rating drivers
The ratings assigned to the bank facilities of SBE are
constrained by its small scale of operations, leveraged capital
structure, working Capital Intensive nature of operations and
constitution of the entity being a partnership firm. The ratings
are further constrained on account of competitive nature of
industry and foreign exchange exposure. The ratings, however,
draw comfort from experienced partners, moderate profitability
and coverage indicators.
Going forward, the ability of the company to increase the scale
of operations while maintaining its profitability margins and
capital structure with effective working capital management shall
be key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weakness
Small scale of operations: The scale of operations of the firm
has remained small marked by total operating income and gross
cash accruals of INR25.41 crore and INR1.35 crore respectively
during FY17( refers to the period April 1 to March 31).The small
scale limits the firm's financial flexibility in times of stress
and deprives it from scale benefits. The total operating income
of the company grew by 8.46%% in FY17 owing to higher quantity
sold. Further during 8MFY18 (refers to the period April 1 to
November 30; based on provisional results) the firm has achieved
a total operating income of INR14.48 crores.
Leveraged capital structure: The capital structure of the company
stood leveraged on account of higher dependence on the external
borrowing coupled with small capital base. The overall gearing
ratio stood above 3x as on the balance sheet date of the past
three financial years i.e. FY15-FY17.
Working Capital Intensive nature of operations: The operations of
the company are working capital intensive in nature as reflected
by higher average utilization of its sanctioned working capital
limits. The operating capital cycle however appears to be
comfortable primarily as the company receives a high payable
period of around 2-3 months from its suppliers. The company
generally maintains inventory of around two months in the form of
raw material for smooth production process and finished goods to
meet the immediate demand of its customers resulting in an
average inventory holding of 45 days for FY17. The company offers
a credit period of around 2 months to its customers resulting in
an average collection period of 55 days for FY17. The average
working capital borrowings of the company remained 90% utilized
during the past 12 months ending November 30, 2017.
Foreign exchange exposure: The firm is mainly focused in the
export market and its export contribution to total sales stood at
70% for FY17. The raw material is completely procured from
domestic markets. With initial cash outlay for procurement in
domestic currency and significant chunk of sales realization in
foreign currency, the firm is exposed to the fluctuation in
exchange rates. Constitution of the entity being a partnership
firm SBE's constitution as a partnership firm has the inherent
risk of possibility of withdrawal of the partner's capital at the
time of personal contingency and firm being dissolved upon the
death/retirement and insolvency of partners. Moreover,
partnership firms have restricted access to external borrowing,
as credit worthiness of partners would be the key factors
affecting credit decision for the lenders.
Competitive nature of industry: SBE faces direct competition from
various organized players in the market due to low entry barriers
and lower capital requirements. There are number of small and
regional players and catering to the same market which can exert
pressure on its margins.
Key Rating Strengths
Experienced Partners: The operations of the firm are currently
being managed by Mr. Aditya Mohan Chhabra, Mr. Amit Mohan
Chhabra, Mr. Nitin Mohan Chhabra and Ms. Ruby Chhabra. All the
partners are graduate by qualification and have an experience of
around two decades in the manufacturing industry through their
association with SBE.
Moderate profitability margins and coverage indicators: The
profitability margins of the firm stood moderate as marked by
PBILDT and PAT margin of around 9% and 1% respectively for the
past two financial years i.e. FY16-FY17. Owing to moderate
profitability resulting in moderate GCA the debt coverage
indicators stood moderate as marked by interest coverage and
total debt to GCA of around 2.50x and 7x respectively for the
past two financial years i.e.FY16-FY17.
Delhi based Sunbeam Enterprises (SBE) was established in 1994 as
a partnership firm and is currently being managed by Mr. Aditya
Mohan Chhabra, Mr. Amit Mohan Chhabra, Mr. Nitin Chhabra and Ms.
Ruby Chhabra sharing profit and losses equally. The firm is
engaged in manufacturing of metal products and components used in
health care industry, automobile accessories and office
furniture; at its manufacturing facility located in Gurgaon
(Haryana). The products manufactured by firm are exported and
also sold domestically to distributors of Suzuki, Omaxe. The firm
procures the raw-material such as cold rolled coils, plastic and
rubber components from local suppliers of Faridabad & Manesar.
SWATI CHLORIDES: ICRA Withdraws B+ Rating on INR4cr Cash Loan
-------------------------------------------------------------
ICRA has withdrawn the long-term rating of [ICRA]B+ with a Stable
outlook and the short-term rating of [ICRA]A4 assigned to the
INR7.10 crore bank facilities of Swati Chlorides Private Limited.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based-
Cash Credit 4.00 [ICRA]B+ (Stable); Withdrawn
Fund based-
Term Loan 2.95 [ICRA]B+ (Stable); Withdrawn
Non Fund based-
Bank Guarantee 0.15 [ICRA]A4; Withdrawn
Rationale
The ratings assigned to Swati Chlorides Private Limited have been
withdrawn at its request based on the no objection certificate
provided by its banker.
Swati Chlorides Private Limited (SCPL) (earlier known as Swati
Chemical Industries) was incorporated in 2009 by Mr. Om Prakash
Jain. SCPL is engaged in manufacturing technical which are used
in agrochemical and pharmaceutical industries. The product
profile of the company majorly consists of Chloro Acetyl Chloride
(CAC), 2,4-Dichlorophenoxy Acetic Acid (2,4-D), 2,4-D Sodium salt
and 2,4-D Amine.
TEXOOL LIMTED: CRISIL Migrates B Rating to Not Cooperating
----------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Texool
Limited (Texool) to 'CRISIL B/Stable/CRISIL A4 Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bill Discounting 0.5 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Foreign Bill 3.0 CRISIL B/Stable (ISSUER NOT
Purchase COOPERATING; Rating Migrated)
Packing Credit 6.0 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with Texool for
obtaining information through letters and emails dated April 26,
2018, May 11, 2018, June 6, 2018 and June 11, 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 Texool Limited. Which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Texool 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 Texool Limited to 'CRISIL B/Stable/CRISIL A4 Issuer
not cooperating'.
Texool is an export-oriented unit (EOU) with a facility in Kandla
SEZ, Gujarat. The company is engaged in manufacturing and sales
of shoddy yarns and rendered unserviceable used clothing.
Currently, operations are managed by Mr Surinder Sajdeh.
UTTAM GALVA: NCLT Admits Insolvency Petition Against Subsidiary
---------------------------------------------------------------
Livemint reports that the Mumbai bench of the National Company
Law Tribunal (NCLT) on June 26 admitted an insolvency petition
filed by State Bank of India (SBI) against Uttam Value Steel Ltd,
a listed subsidiary of Uttam Galva Steels Ltd.
Presiding officer M.K. Shrawat also approved Rajiv Chakraborty as
interim resolution professional (IRP), the report says. According
to Livemint, the tribunal will rule on the bankruptcy plea
against another subsidiary Uttam Galva Metallics on July 11.
Uttam Value Steel and Uttam Galva Metallics owe banks INR3,200
crore and INR2,200 crore, respectively. SBI had approached the
dedicated bankruptcy court after Uttam Value Steel had defaulted
on INR334 crore. Livemint relates that presiding officer Shrawat
said the bench had noted that banks were not recalling loans
after declaring them as non-performing. "We will ask the
resolution professional (RP) about what has transpired in such
accounts," he said in the oral order.
Meghna Rajadhyaksha, partner of law firm Shardul Amarchand
Mangaldas representing SBI informed the tribunal that after the
declaring NPA, there wasn't any enhancement of loans, the report
relates.
According to Livemint, the development comes a day after the
National Company Law Appellate Tribunal (NCLAT) refused to direct
the NCLT to defer its order on the two companies.
A person close to the development said that the firm intends to
exhaust all the remedies including challenging the order in
higher courts, the report relays.
Livemint adds that the subsidiaries of debt-laden Uttam Galva
Steels had earlier argued that Ziraat Ban, the second-largest
state-owned bank of Turkey, had written to SBI that one of their
high-net worth clients were interested in acquiring their assets.
Earlier, on June 6, another bench of NCLT had adjourned the
insolvency plea of Uttam Galva Steel to July 16, following
requests from the company as well as its lenders.
About Uttam Galva
Uttam Galva Steels Limited is engaged in manufacturing downstream
value added steel products, such as Cold Rolled (CR) coils and
sheets, and galvanized products consisting of Galvanized Plain
(GP) and Galvanized Corrugated (GC) coils and sheets, and Color
Coated products. The Company is in the business of procuring Hot
Rolled Steel (HR) and processing it in to CR and further in to GP
and Prepainted Galvanized Iron (PPGI). The CR not used for
galvanizing is converted to value added grades in Cold Rolled
Closed Annealed (CRCA) coils and Cut to Length (CTL) Sheets, and
sold as Full Hard CR in Domestic and Overseas markets. The
Company offers various brands, which include Uttam Suraksha GC
(Galvanized Corrugated Roofing Sheets) brand in the Construction
segment, and Uttam Tarang, which includes a range of products
under Color Coated Roofing products. It caters to various
markets, such as appliance, general engineering, automotive,
construction, packaging, sandwich panels and others.
Uttam Galva Steels is a part of the Reserve Bank of India's
second list of cases, which will be referred to the bankruptcy
tribunal for insolvency proceedings after lenders failed to
resolve the account by December 2017.
VANI TOBACCOS: Ind-Ra Assigns B- LT Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Vani Tobaccos
(VT) a Long-Term Issuer Rating of 'IND B-'. The Outlook is
Stable.
The instrument-wise rating actions are:
-- INR75 mil. Fund-based working capital limits assigned with
IND B-/Stable/IND A4 rating; and
-- INR25 mil. Proposed fund-based working capital limit*
assigned with Provisional IND B-/Stable/Provisional IND A4
rating.
* The ratings are provisional and shall be confirmed upon the
sanction and execution of loan documents for the above facilities
by VT to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The ratings reflect VT's small scale of operations, weak credit
metrics and volatile EBITDA margin. VT's revenue improved
marginally to INR144.1 million in FY17 (FY16: INR102.5 million),
driven by an increase in order execution. Its EBITDA margin was
volatile at 3.0%-7.5% over FY14-FY17 due to raw material price
fluctuations. Meanwhile, the firm's interest coverage (operating
EBITDA/interest) slightly improved to 1.6x in FY17 (FY16: 1.3x),
driven by a rise absolute EBITDA and a fall in interest expense.
On the other hand, its net financial leverage (adjusted net
debt/operating EBITDA) deteriorated to 16.4x in FY17 (FY16: 4.2x)
due to higher utilization of the fund-based working capital
limits at year-end.
The ratings also reflect VT's modest liquidity, indicated by an
average 71% utilization of the fund-based limits for the 12
months ended May 2018. It had an elongated working capital cycle
of 196 days in FY17 (FY16: 73 days) due to a high inventory
holding period (116 days; 69 days).
However, the ratings are supported by the proprietor's two-decade
experience in tobacco trading.
RATING SENSITIVITIES
Negative: Any further elongation of the working capital cycle
leading to a stretched liquidity position could be negative for
the ratings.
Positive: A significant increase in the revenue and the operating
profitability, leading to an improvement in the credit metrics,
on a sustained basis, would be positive for the ratings.
COMPANY PROFILE
Formed in 1999, VT is a proprietorship concern founded by Mr.
Nimmala Siva Koteswara Rao that is engaged in the trading of
tobacco.
VAYAL AGRI: CRISIL Assigns B+ Rating to INR5.0cr Cash Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facilities of Vayal Agri Trading Company (Vayal).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 0.4 CRISIL B+/Stable (Assigned)
Proposed Cash
Credit Limit 5.0 CRISIL B+/Stable (Assigned)
Proposed Long
Term Bank Loan
Facility 4.6 CRISIL B+/Stable (Assigned)
The rating reflects the firm's nascent stage of operations, and
exposure to risks related to stabilisation and demand. These
weaknesses are partially offset by proprietor's entrepreneurial
experience and funding support.
Key Rating Drivers & Detailed Description
Weaknesses
* Nascent stages of operations and risks related to
stabilization:
Since operations began around February 2018, the firm is still in
start-up phase. Hence, revenue, profitability, and working
capital management will be closely monitored.
* Exposure to demand risk: Demand for products could be subdued
in the initial phase, but is likely to pick up as the firm
strengthens its presence.
Strengths
* Entrepreneurial experience of proprietor and funding support:
Proprietor's five-year experience in the agricultural commodity
industry and need-based funding support will benefit business
risk profile.
Outlook: Stable
CRISIL believes Vayal will benefit from proprietor's experience.
The outlook may be revised to 'Positive' if ramp up in scale and
operating margin leads to higher-than-expected cash accrual and a
better financial risk profile. The outlook may be revised to
'Negative' if delay in stabilisation of operations or stretch in
working capital cycle weakens debt protection metrics.
Established in February 2018 as a proprietorship firm by Ms
Maheswari R, Vayal trades in agri commodities such as paddy and
pulses.
=========
J A P A N
=========
TOSHIBA CORP: CEO Outlines Profit-Boosting Plans at Meeting
-----------------------------------------------------------
Jiji Press reports that Toshiba Corp. Chairman and CEO Nobuaki
Kurumatani outlined the company's plans to improve earnings when
he met with shareholders at an annual meeting on June 27.
During the meeting, which was held at the Makuhari Messe
convention center in the city of Chiba, Mr. Kurumatani said the
major electronics- and machinery-maker will carry out procurement
reforms and radical expense reductions, Jiji Press relates.
He also said that the company aims to generate a profit stream
from information analysis services, as well as sales of devices
and parts, on a medium- to long-term basis, according to Jiji
Press.
The report notes that Toshiba has faced excessive debt due to
massive losses at its U.S. nuclear plant operations and narrowly
escaped being delisted from the Tokyo Stock Exchange.
It sold new shares worth JPY600 billion to investment funds and
others in December last year. The company also sold Toshiba
Memory Corp., its prized flash memory unit, for some JPY2
trillion on June 1, the report says.
While Toshiba's financial condition has improved considerably,
its earning power has been sharply impaired by the sale of its
flash memory business, which was the company's big moneymaker,
Jiji Press notes.
Jiji Press says some shareholders said that Toshiba's plans did
not contain anything new, while some called on Mr. Kurumatani and
others to be more specific about their ideas for growth.
A 71-year-old shareholder said that he plans to pay more
attention to which operations will help rebuild the company now
that the primary source of revenue has gone, the report relays.
All proposals, including the appointments of Mr. Kurumatani and
other board members, were approved during the meeting, which
lasted about two hours, adds Jiji Press.
Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is
a Japan-based manufacturer involved in five business segments.
The Digital Products segment offers cellular phones, hard disc
devices, optical disc devices, liquid crystal televisions, camera
systems, digital versatile disc (DVD) players and recorders,
personal computers (PCs) and business phones, among others. The
Electronic Device segment provides general logic integrated
circuits (ICs), optical semiconductors, power devices, large-
scale integrated (LSI) circuits for image information systems and
liquid crystal displays (LCDs), among others. The Social
Infrastructure segment offers various generators, power
distribution systems, water and sewer systems, transportation
systems and station automation systems, among others. The Home
Appliance segment offers refrigerators, drying machines, washing
machines, cooking utensils, cleaners and lighting equipment. The
Others segment leases and sells real estate.
As reported in the Troubled Company Reporter-Asia Pacific on
June 20, 2018, Moody's Japan K.K. upgraded Toshiba Corporation's
corporate family rating and senior unsecured debt rating to B1
from Caa1, and its subordinated debt rating to B3 from Ca.
The rating outlook is stable. At the same time, Moody's has
affirmed Toshiba's commercial paper rating of Not Prime.
This rating action concludes the review for upgrade initiated on
May 18, 2018.
===============
M A L A Y S I A
===============
1MDB: Police Seizes Handbags, Jewelry Worth US$273MM in Raid
------------------------------------------------------------
Bloomberg News reports that Malaysia's police seized about
MYR1.1 billion ($273 million) of items that included Hermes
International handbags, Rolex watches and cash in raids linked to
former Prime Minister Najib Razak amid investigations into
troubled state fund 1MDB.
Luxury goods such as a MYR6.4 million diamond necklace, MYR51.3
million worth of Hermes bags and more than 200 sunglasses valued
at MYR374,000 were taken from five residences and an office
linked to Najib, Amar Singh, commercial crime investigation
department director at the police, told reporters on June 27,
Bloomberg relates.
"I think this is the biggest seizure in Malaysian history," he
said, referring to the more than 12,000 items that were taken in
the raids, Bloomberg relays. "So now you can understand why we
couldn't do the counting at the premises itself? Because the
numbers were just too huge."
Bloomberg says the objects were found alongside cash in various
currencies when the police searched the properties last month. A
spokesman for Najib, who has consistently denied wrongdoing,
couldn't immediately comment after the police briefing, Bloomberg
notes.
According to Bloomberg, Mr. Singh said the police had to form
eight teams consisting of more than 150 officers to analyze the
items for weeks, even working through the Eid al-Fitr Muslim
holiday. Valuations may increase as not all items seized have
been analyzed.
Prime Minister Mahathir Mohamad is seeking to recoup $4.5 billion
of funds potentially lost through troubled state company 1MDB,
which has spawned global probes from the U.S. to Switzerland,
Bloomberg says. Attorney-General Tommy Thomas is studying
investigation papers for possible criminal or civil proceedings,
with Mahathir previously saying that Najib would be charged with
bribery and embezzlement of public funds, according to Bloomberg.
Bloomberg relates that the police will be calling in Najib and
his wife Rosmah Mansor to give statements "soon," Mr. Singh said,
adding that they have recorded statements from about 30 people as
part of the 1MDB probe. Najib, who has been questioned by the
Malaysian Anti-Corruption Commission, called the revived
investigation a "politically motivated" move.
Najib has taken to social media to defend his record, posting
statements on Facebook to criticize the government's policies
while sharing regular pictures of him with his supporters,
Bloomberg states. Photographs circulating on social media showed
Najib, his wife and children attending an event to celebrate Eid
al-Fitr, with the former premier belting out Cliff Richards' "The
Young Ones" and "Sha-La-La-La-La" by Danish rock band the
Walkers.
In a few of these posts, Najib maintained that funds weren't
misappropriated from 1MDB, Bloomberg states.
1MDB's auditor KPMG has told the state fund not to rely on its
reports over three years as they don't show "true and fair"
assessment for finances. KPMG retracted the audit reports for
financial years ended March 2010, 2011 and 2012, as it didn't
have access to relevant documents that Malaysia's new government
has since declassified, 1MDB said in a statement on June 26, adds
Bloomberg.
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.
=================
S I N G A P O R E
=================
DFS ASSET: Fitch Affirms 'BBsf' Rating on SGD8.2M Class C Notes
---------------------------------------------------------------
Fitch Ratings has affirmed DFS Asset Purchase Company Pte. Ltd.'s
(DFS) working capital facility, standby liquidity facility and
notes. The transaction is a securitisation of credit-card and
charge-card receivables in Singapore originated by Diners Club
(Singapore) Private Limited (DCS).
The rating actions are as follows (balances as of May 23, 2018):
SGD10 million (outstanding balance of SGD10 million facility)
working capital facility due September 2019 affirmed at 'A-sf';
Outlook Stable
SGD0 million (outstanding balance of SGD5 million facility)
standby liquidity facility due September 2019 affirmed at 'A-sf';
Outlook Stable
SGD100 million Class A1 fixed-rate notes due September 2021
affirmed at 'A-sf'; Outlook Stable
SGD19.8 million Class A2 floating-rate notes due September 2021
affirmed at 'A-sf'; Outlook Stable
SGD9.9 million Class B floating-rate notes due September 2021
affirmed at 'BBBsf'; Outlook Stable
SGD8.2 million Class C floating-rate notes due September 2021
affirmed at 'BBsf'; Outlook Stable
KEY RATING DRIVERS
Stable Performance of Card Receivables: The delinquencies,
defaults, payment rates and excess spread of the transaction have
been stable since last review. All of them stand well away from
the respective early amortisation trigger levels. No losses on
the notes have been realised since closing.
Sufficient Credit Enhancement: The transaction is supported by
sufficient credit enhancement, both from subordination and excess
spread. From subordination, transaction CE has remained constant
at 24% for the working capital facility, standby liquidity
facility and class A notes, 18% for the class B notes and 13% for
the class C notes. For excess spread, the monthly net yields for
the transaction averaged 2.71% and ranged from 2.07% to 3.56%.
Overall credit enhancement is sufficient to support the ratings
for the transaction.
Rating Cap; Interest Rate Risk: The transaction is capped at an
'Asf' category due to DCS's small market share in Singapore and
high dependency of the ongoing underwriting and collection
practices of the originator in the revolving period. Moreover,
the interest-rate risk arising from the fixed-rate return on the
assets and the variable interest payments for some of the notes
in the transaction makes it incompatible with a high investment
grade.
Stable Asset Outlook: Singapore's 'AAA' rating with a Stable
Outlook is supported by exceptionally strong external finances,
sound fiscal framework and high per capital income levels; we
think the economic conditions in Singapore continue to support
the steady performance of the credit card sector in the country.
However, DCS's market share has been declining due to stiff
competition in the credit card industry, which is evident from
the fall in its eligible receivable balances.
RATING SENSITIVITIES
Increasing the base case default rate by 50% may result in a one-
notch downgrade of the ratings on the working capital facility,
standby liquidity facility and class A notes to 'BBB+sf', a two-
notch downgrade of the rating on class B to 'BB+sf', and a three-
notch downgrade of the rating on class C to 'Bsf'.
Decreasing the base case payment rate by 25% may result in a
four-notch downgrade of the ratings on the working capital
facility, standby liquidity facility and class A notes to
'BB+sf', a six-notch downgrade of the rating on class B to 'Bsf',
and class C will be downgraded to below 'Bsf'.
Decreasing the base case gross yield by 35% does not result in a
change to the ratings of the working capital facility, standby
liquidity facility and class A notes, but a two-notch downgrade
of the rating on class B to 'BB+', and a two-notch downgrade of
the rating on class C to 'B+sf'.
This transaction has a rating cap at the 'Asf' category. As the
transaction is still in its revolving period, the credit
enhancement for the rated classes will not change, and the
ratings on the rated classes are likely to remain the same from
the closing.
RYOBI KISO: Unit Defaults on Loan; Suspends Shares Trading
----------------------------------------------------------
Business Times reports that Ryobi Kiso's subsidiary Ryobi Kiso
(S) Pte Ltd has defaulted on its repayment obligations to
"certain bank lenders" and is in breach of the corresponding
banking facilities, the firm announced on June 27 in an exchange
filing.
As a result, Ryobi Kiso has requested a voluntary suspension of
its mainboard-listed shares and has appointed
PricewaterhouseCoopers (PwC) as an independent financial adviser
to assist in the matter, BT relays.
BT relates that PwC will help to establish the group's current
financial position and projections, and design a restructuring
proposal in concert with bank lenders, to enable the group to
continue operations and tide over the current situation, Ryobi
Kiso said in its filing.
"The occurrence of the matters above may trigger cross default
provisions in other banking facilities and project contracts of
the group," Ryobi Kiso, as cited by BT, warned. "The company,
together with PwC and its legal advisers, is assessing the
financial impact of the matters above on the banking facilities
and project contracts of the group."
In its latest fiscal third-quarter results for the period ended
March 31, 2018, the group was hit by a lower value of work
undertaken in the period and prolonged work phases of several
projects (leading to higher operating costs incurred), which saw
it swing to a loss of SGD6.5 million attributable to equity
holders from a profit of just SGD106,000 in the previous year-ago
period, BT discloses.
The group's revenue for Q3 was SGD28 million, a fall of 29.5 per
cent or SGD11.7 million from SGD39.7 million in the previous
corresponding period.
Its current liabilities excluding borrowings stand at SGD63.02
million, and it recorded cash and cash equivalents of SGD13.51
million, down from SGD21.98 million nine months ago, according to
BT.
The group had a SGD168.9 million order book as at March 31, 2018,
comprising projects from public infrastructure, public housing,
residential, commercial and geoservices, BT discloses.
It was "unlikely that there will be an improvement in the group's
financial performance in the next reporting period", the group
cautioned, with the construction sector set to remain
challenging, adds BT.
"External factors such as keen competition, rising costs and the
tight labour market will continue to add pressure on the group's
performance."
Ryobi Kiso Holdings Ltd. -- http://www.ryobi-kiso.com/-- an
investment holding company, provides ground engineering solutions
in Singapore, Australia, Malaysia, Vietnam, and Indonesia. Its
Bored Piling segment offers piling works to carry heavy vertical
loads from structures, such as buildings and bridges; and
horizontal loads in earth retaining structures for deep
excavation, including MRT tunnels and basements of buildings.
================
S R I L A N K A
================
AMANA BANK: Fitch Alters Outlook to Pos., Affirms BB(lka) Rating
----------------------------------------------------------------
Fitch Ratings Lanka has revised the Outlook on Amana Bank PLC to
Positive from Stable and has affirmed its National Long-Term
Rating at 'BB(lka)'. The agency has also affirmed the National
Long-Term Rating of Union Bank of Colombo PLC (UB) with a
Positive Outlook and the National Long-Term Ratings of Nations
Trust Bank PLC (NTB), Pan Asia Banking Corporation PLC (PABC) and
SANASA Development Bank PLC (SDB) with a Stable Outlook.
KEY RATING DRIVERS
NATIONAL RATINGS
The rating actions follow Fitch's periodic review of Sri Lanka's
small- and mid-sized bank peer group. The agency has maintained
the negative outlook on Sri Lanka's banking sector, as Fitch
expects challenging operating conditions to persist in 2H18.
Fitch expects capital raising to remain difficult for small- and
mid-sized banks, which are required to meet the higher minimum
capital requirement of LKR20 billion by end-2020. Towards this
end, PABC and Amana will need to almost double their capital
bases, despite already raising capital in 2017. Profitability
headwinds are likely to persist in 2018 due to higher credit
costs with the implementation of SLFRS 9, weaker asset quality
and lower pre-provision buffers relative to larger peers.
The Outlook revision on Amana takes into account Fitch's
expectation that the bank will continue to improve its financial
profile on better profitability metrics and enhanced capital
position arising from future capital raising. The bank's rating
reflects its small and developing franchise and high-risk
appetite that stems from its focus on SME and retail segments,
which accounted for 74% of gross loans at end-2017. Amana began
operations in 2011 and accounted for 0.6% of banking-sector
assets at end-March 2018. It is Sri Lanka's only fully Sharia-
compliant bank.
Amana's profitability metrics have consistently improved since
the bank became profitable in August 2014, with the exception of
2016, when it was affected by a one-off impairment loss on an
equity investment. Its operating profit/risk-weighted assets
ratio rose to 2.5% in 1Q18 (2017: 2.1%, 2016: 0.6%) and Fitch
sees room for further improvement as lending volume increases.
This should help offset potentially higher credit costs. The
bank's net interest margin (NIM) is the highest among its peer
group due to its high share of low-cost current account saving
accounts (46% of deposits), which has been sustained despite
rising deposit rates.
Amana's capital ratios improved in 2017 following a rights issue
that doubled its capital base to LKR10 billion. Fitch expects the
bank's Fitch Core Capital (FCC) ratio to moderate to 15%-16% in
the medium term, from 21% at end-1Q18, owing to balance sheet
growth, but to still remain higher than that of most peers. The
bank's capital ratios are well above the regulatory requirements
for non-domestic systemically important banks (D-SIB) under Basel
III.
Increased defaults from the SME segment amid difficult operating
conditions and the seasoning of its loan book saw Amana's asset
quality metrics deteriorate through 2017, in line with Fitch's
expectations for the bank as well as the industry. Fitch believes
asset quality pressures are likely to persist, but the risk
stemming from increasing non-performing loans (NPL) should be
somewhat offset by the bank's enhanced capital buffers following
further capital infusions.
UB's rating reflects its higher capitalisation, improving risk
profile in terms of a more diversified loan book, but lower
profitability relative to higher-rated peers. Fitch expects UB to
maintain a more diversified loan book than in the past;
corporate, SME and retail loans accounted for 46%, 35% and 19%,
respectively, of loans at end-2017. Exposure to the more
profitable retail and SME segments could increase in the medium-
term, similarly to the trend across peers.
UB has sustained above-industry growth, with loans expanding by
26% in 2017. Fitch expects loan expansion to remain high in the
medium-term and believes it could offset enhancements to risk
management and pressure asset quality if not managed.
The bank's asset quality is likely to see some pressure through
2018, similar to Fitch's expectations for the sector amid a
challenging operating environment. UB's reported gross NPL ratio
rose to 3.0% at end-March 2018, from 2.7% at end-2017, similar to
industry trends. NPLs from its subsidiary, UB Finance Co. Ltd,
accounted for 30% of group NPLs and remain a significant drag on
group asset quality. Notwithstanding this, Fitch does not expect
a significant deviation in UB's asset quality metrics relative to
similarly rated peers.
UB's capital position remains stronger than most similarly rated
peers. Its Tier 1 and total capital adequacy ratios of 19.3% at
end-March 2018 are higher than the 8.5% and 12.5%, respectively,
of the end-point minimum regulatory requirement for non-D-SIBs.
Fitch believes the bank's stronger capitalisation somewhat
compensates for its low reserve coverage of impaired loans.
UB's profitability metrics remains lower than those of similarly
rated peers, despite rapid loan expansion. Its increased focus on
NIM could support better profitability. The bank's cost/income
ratio remains high, but has decreased and Fitch expects this
trend to continue as scale efficiencies continue to accrue.
NTB is a mid-sized licensed commercial bank with a modest
franchise, accounting for 2.7% of banking-sector assets at end-
March 2018. It ratings reflect its higher-than-peer product
concentration, with leasing and credit cards forming 20% and 10%,
respectively, of its loan book at end-March 2018, and slight
increase in capitalisation. NTB's exposure to the SME segment had
risen to 30% by end-March 2018 and Fitch expects the bank to
remain largely exposed to the consumer, retail and SME segments
in the short to medium term.
NTB's Tier 1 and total capital adequacy ratios of 12.4% and
15.1%, respectively, at end-March 2018 (2017: 10.8% and 13.9%)
are above 8.5% and 12.5% end-point minimum regulatory requirement
for non D-SIBs. The rights issue of LKR3.2 billion in 1Q18
arrested the decline in NTB's capitalisation.
NTB paid 2017 dividends entirely in the form of scrip, which also
supported its capitalisation. Its core capital base is above the
minimum LKR20 billion capital requirement for licensed commercial
banks applicable from end-2020, in contrast to its small and mid-
sized peers. Fitch expects the bank's capitalisation to moderate
on rapid loan growth, but for it to retain adequate capital
buffers commensurate with it risk profile.
NTB sustained a strong 24.5% increase in loans in 2017, against
16.1% for the sector. Fitch expects loan expansion to remain
above the sector in the medium term. The bank's reported gross
NPL ratio rose to 2.6% at end-March 2018, from 2.3% at end-2017,
mainly due to weakness in consumer and SME loans. This is likely
to persist in the short to medium term.
NTB's profitability, as measured by operating profit/risk-
weighted assets, is likely to remain stronger than that of peers,
supported by better NIMs and improving cost efficiency that
should offset higher credit costs stemming from asset-quality
pressure and the implementation of SLFRS 9.
PABC's rating reflects potential pressure on the bank's improved
capital position from its still-weak asset quality and higher
share of unprovisioned NPLs relative to better-rated peers. The
bank's Tier 1 ratio improved to 11.4% at end-2017, from 8.4% in
2016, following its LKR2.1 billion rights issue in early 2017,
but remains the lowest among this peer group. The rating also
reflects earnings pressure from higher impairment charges, both
from deteriorating asset quality and SLFRS 9 implementation.
Fitch expects further capital raising to meet regulatory minimum
capital requirements. Fitch believes higher capital buffers are
warranted, given the bank's higher risk appetite, as seen through
its predominant exposure to retail and SME segments, which, in
its view, are susceptible to deteriorating economic conditions.
PABC's asset quality metrics are likely to remain under pressure
in 2018 due to difficult operating conditions, which could limit
the repayment capacity of the bank's key borrowing segments.
Therefore, Fitch does not expect a marked improvement in its NPL
ratio, despite focused recovery efforts. PABC's asset quality
metrics remain weaker than those of peers, with a reported gross
NPL ratio of 4.4% at end-March 2018. This stems from the bank's
predominant exposure to retail and SMEs.
SDB's rating captures its high-risk appetite in light of the
bank's significant exposure to retail, lower-end SMEs and
cooperative segments, which are susceptible to economic and
interest-rate cycles. The rating also captures potential pressure
on SDB's capitalisation due to the bank's aggressive growth
expectation, which compels regular capital infusions to maintain
adequate capital buffers commensurate with its risk profile.
The improvement in SDB's FCC ratio to 12.6% at end-2017, from
11.9% at end-2016, was attributable to capital infusions by three
strategic investors totalling LKR1.5 billion and better earning
retention through scrip dividends. Nevertheless, SDB's FCC ratio
declined to 12.2% at end-March 2018 alongside moderate loan
growth.
SDB's credit standards have been improved since 2H17, supported
through the implementation of systems and processes; the results
of which should become visible in the medium term. Nevertheless,
SDB's reported gross NPL ratio increased to 2.4% at end-March
2018, from 2.1% at end-2017, due to the seasoning of loans. SDB's
loans have expanded rapidly over last several years.
DEBT RATINGS
NTB's Basel II Sri Lanka rupee-denominated subordinated
debentures and Basel III compliant Tier II Sri Lanka rupee-
denominated subordinated debentures are rated one notch below the
bank's National Long-Term Rating to reflect their subordinated
status relative to senior unsecured creditors. The Basel III
compliant debentures contain a non-viability trigger upon the
occurrence of a trigger event, as determined by the Monetary
Board of Sri Lanka.
PABC's senior debentures carry the same rating as its National
Long-Term Rating, as they rank equally with its other unsecured
obligations.
PABC's Basel II Sri Lanka rupee-denominated subordinated debt is
rated one notch below its National Long-Term Rating to reflect
the subordination to senior unsecured creditors.
RATING SENSITIVITIES
NATIONAL RATINGS
Sustained improvement in Amana's financial profile, characterised
by a sustained period of better profitability relative to higher-
rated peers, alongside an enhanced franchise, could lead to an
upgrade of the bank's National Long-Term Rating. An increase in
risk appetite, such as excessive growth above management's
forecasts, leading to deterioration in loss-absorption buffers,
could put downward pressure on the rating.
UB's rating could be upgraded if the bank is able to manage risks
from continued high loan expansion without undermining its
capital position and asset quality. Improvement in its financial
profile in terms of its profitability could also support an
upgrade. Capital impairment risk, stemming from sustained rapid
loan expansion and asset-quality deterioration could pressure
UB's rating.
Increased capital impairment risk through sustained rapid loan
expansion or asset-quality deterioration could result in a
downgrade of NTB's rating, while an upgrade is contingent upon
lower product concentration, higher capitalisation and a more
stable funding profile, alongside progress in building a stronger
commercial-banking franchise.
PABC's rating would be downgraded if loss-absorption buffers were
to deteriorate, either through a greater share of unprovisioned
NPLs, aggressive loan-book growth or weaker internal capital
generation. Fitch does not see any near-term upside for PABC's
rating, as the bank may face difficulty in sustaining adequate
capital buffers in line with the experience of higher-rated
peers.
SDB's rating could be downgraded if there is a continued
deterioration in capitalisation, either through aggressive loan
growth or greater unprovisioned NPLs. An upgrade would be
contingent on moderation of its risk appetite and sustainable
asset quality and profitability improvements.
DEBT RATINGS
Subordinated debt ratings will move in tandem with NTB and PABC's
National Long-Term Ratings. Senior debt ratings will move in
tandem with PABC's National Long-Term Rating.
The rating actions are as follows:
Amana Bank PLC
National Long-Term Rating affirmed at 'BB(lka)'; Outlook revised
to Positive from Stable
Union Bank of Colombo PLC
National Long-Term Rating affirmed at 'BB+(lka)'; Positive
Outlook
Nations Trust Bank PLC
National Long-Term Rating affirmed at 'A(lka)'; Stable Outlook
Basel II-compliant subordinated debentures affirmed at 'A-(lka)'
Basel III-compliant subordinated debentures affirmed at 'A-(lka)'
Pan Asia Banking Corporation PLC
National Long-Term Rating affirmed at 'BBB-(lka)'; Stable Outlook
Senior debenture rating affirmed at 'BBB-(lka)'
Subordinated debenture rating affirmed at 'BB+(lka)'
SANASA Development Bank PLC
National Long-Term Rating affirmed at 'BB+(lka)'; Stable Outlook
=============
V I E T N A M
=============
HOME CREDIT: Fitch Assigns 'B+' LT IDR, Outlook Stable
------------------------------------------------------
Fitch Ratings has assigned Home Credit Vietnam Company Limited
(HCV) a Long-Term Issuer Default Rating (IDR) of 'B+' and a
Short-Term IDR of 'B'. The Outlooks are Stable.
HCV is the first non-bank financial institution (NBFI) in Vietnam
that Fitch has rated and the first in the country to receive an
international credit rating.
KEY RATING DRIVERS
HCV's ratings are based on Fitch's assessment of the company's
standalone credit profile. The ratings reflect the company's
financial performance and its position in a growing but less-
developed market that is more prone to business and economic
volatility. Its business model is not well-tested through the
cycle and is susceptible to less-predictable risks that may arise
from regulation and operations.
The company commands a 17% share of total consumer financing
industry receivables in Vietnam. The ratings consider its
relative weakness in funding and liquidity, although this is
balanced by its adequate management with a focused market
strategy and effective execution, strong market position,
satisfactory asset quality within a higher-risk market segment,
strong profitability, and rising but currently adequate leverage.
HCV relies on short-term wholesale funding, mostly from
Vietnamese and foreign banks, which tends to be more sensitive to
market conditions.
HCV has operated in Vietnam since 2009 and it is one of the three
largest financing companies in Vietnam, along with Fe Credit and
HD Saison. The three companies together control 76% of Vietnam's
consumer financing receivables. HCV has representative offices in
10 provinces that serve 7.2 million customers. It has a network
of more than 9,000 retail outlets in all 63 cities and provinces
across Vietnam.
HCV has maintained a healthy capitalisation with its debt-to-
equity leverage ratio managed well below 4x to date since 2013.
Nevertheless, the company has grown its receivables at a faster
pace than its internal capital generation in recent years.
Receivables rose by 52% in 2017 (2016: 67%). Fitch expects growth
to exceed internal capital generation, measured by the ratio of
net income less dividends and net share repurchases to prior-
period equity, in the near to medium term, which may push
leverage up from a debt-to-equity ratio of 3.5x at end-2017.
Management has a policy to limit leverage to below 6x.
The company has a satisfactory reported asset quality, with non-
performing receivables at a low 2.1% of its total portfolio in
2017 and 2.6% in 2016. HCV has maintained reserves at more than
twice its non-performing receivables in the last two years, and
Fitch believes it has the ability to write off non-performing
receivables after 180 days due to its high pre-provision income.
ROA stood at a high 11.0 % in 2017 (2016: 11.7%), supported by a
very high net interest margin of 30.3%, which may gradually
decrease as the market matures.
RATING SENSITIVITIES
Fitch may upgrade the rating if HCV is able to significantly
strengthen its profile in terms of market share and absolute size
while maintaining a satisfactory risk profile. Strengthening the
funding profile by extensively diversifying sources and
lengthening the maturity profile would also support positive
rating actions. Changes in the Vietnam sovereign rating
(BB/Stable) that reflect changes in the operating environment for
HCV can lead to ratings adjustment for the company.
Downward pressure on HCV's rating may result from deterioration
in its asset quality or capitalisation, which would be evident
from a significant increase in the company's non-performing
receivables or debt-to-equity ratio. A perceived increase in risk
appetite, perhaps characterised by higher-than-expected growth
for an extended period of time, would also be negative for its
rating.
*********
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 ***