/raid1/www/Hosts/bankrupt/TCRAP_Public/180727.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Friday, July 27, 2018, Vol. 21, No. 148
Headlines
A U S T R A L I A
AM LABOUR: First Creditors' Meeting Set for August 3
BIS INDUSTRIES: Moody's Withdraws Caa1 CFR on Insufficient Data
DICK SMITH FOODS: Set to Close Door; Founder Blames Aldi
DANFX TRADE: ASIC Obtains Orders v. Investment Scheme Operator
KARALUNDI ABORIGINAL: First Creditors' Meeting Set for Aug. 2
MASTER ENGINEERS: Second Creditors' Meeting Set for Aug. 6
P. B. ACTIVATE: First Creditors' Meeting Set for August 2
SIX KEYS: Second Creditors' Meeting Set for August 7
TRITON TRUST 8 2018-1: S&P Assigns BB+(sf) Rating on Cl. E Bonds
VILLAGE RESTAURANT: Second Creditors' Meeting Set for Aug. 7
C H I N A
CHINA FORTUNE: Fitch Rates New Senior US Dollar Notes 'BB+(EXP)'
SUNAC CHINA: Moody's Rates New Sr. Unsec. Notes B3, Outlook Pos.
I N D I A
AURANGABAD GYMKHANA: CRISIL Migrates B Rating to Not Cooperating
CHITIZ METALS: CRISIL Moves B Rating to Not Cooperating Category
CLASS RESTAURANT: CRISIL Migrates B- Rating to Not Cooperating
D D INTERNATIONAL: CRISIL Moves B Rating to Not Cooperating
EFFIMAC EQUIPMENTS: Insolvency Resolution Process Case Summary
ELECTROSPARK: Ind-Ra Maintains 'BB+' LT Rating in Non-Cooperating
GDJD EXPORTS: ICRA Reaffirms B+ Rating on INR8cr Fund Based Loan
IDBI BANK: Moody's Reviews B1 LT Deposit Ratings for Upgrade
IE TRADING: Insolvency Resolution Process Case Summary
IL & FS TRANSPORTATION: Ind-Ra Lowers LT Issuer Rating to 'BB'
JAL EXPORTS: ICRA Hikes Rating on INR11.50cr LT/ST Loan to B
JASMER PACK: Ind-Ra Migrates BB Issuer Rating to Non-Cooperating
JAY DURGA: CRISIL Migrates B+ Rating to Not Cooperating Category
JYOTI STRUCTURES: Set to Go Into Liquidation as NCLT Rejects Plan
K MANIAR: Ind-Ra Affirms 'BB' LT Issuer Rating, Outlook Stable
K. S. BIGILI: CRISIL Lowers Rating on INR5cr Cash Loan to D
KAKATIYA CONSTRUCTIONS: CRISIL Assigns B+ Rating to INR3cr Loan
LAXMI LAL: ICRA Migrates B+ Rating to Not Cooperating Category
M. M. PROJECTS: CRISIL Maintains D Rating in Not Cooperating
MAHAKALESHWAR INFRATECH: Ind-Ra Rates INR2M Fund-Based Limits BB+
MAJESTIC IMPEX: Ind-Ra Assigns 'B+' Issuer Rating, Outlook Stable
MONAD EDUKASIONAL: Ind-Ra Maintains BB Rating in Non-Cooperating
MOTIL DEVI: CRISIL Maintains B Rating in Not Cooperating Category
MOULIKA INFRA: CRISIL Migrates C Rating to Not Cooperating
MTAR TECHNOLOGIES: CRISIL Maintains C Rating in Not Cooperating
NAGPAL WAREHOUSE: CRISIL Reaffirms B Rating on INR6cr Term Loan
NATIONAL RICE: CRISIL Maintains B Rating in Not Cooperating
NAUVATA ENGINEERING: CRISIL Keeps B- Rating in Not Cooperating
NEO BUILDERS: CRISIL Maintains D Rating in Not Cooperating
NGRT SYSTEMS: CRISIL Maintains B Rating in Not Cooperating
NOBLE MOULDS: CRISIL Maintains B Rating in Not Cooperating
PAVANSUT POLYTEX: ICRA Raises Rating on INR4.75cr Loan to B+
PONDY VENKATESWARA: CRISIL Maintains B Rating in Not Cooperating
PUSH INTEGRATED: Insolvency Resolution Process Case Summary
PVSRSN ENTERPRISE: CRISIL Maintains D Rating in Not Cooperating
R.B. GEARS: CRISIL Maintains B+ Rating in Not Cooperating
RAYFAM ENTERPRISES: CRISIL Keeps B Rating in Not Cooperating
SHARMA CARS: ICRA Reaffirms B+ Rating on INR25.73cr Cash Loan
SHIVALI UDYOG: CRISIL Maintains B Rating in Not Cooperating
SHIVALIK CONTAINERS: CRISIL Maintains B Rating in Not Cooperating
SHIVAM MASALA: CRISIL Maintains B- in Not Cooperating Category
SHREE BALAJI: Ind-Ra Maintains 'BB+' LT Rating in Non-Cooperating
SHREE COTEX: ICRA Raises Rating on INR7cr Cash Loan to B+
SHRI LAL: CRISIL Maintains B+ Rating in Not Cooperating Category
SRI VENKATESWARA: CRISIL Maintains B Rating in Not Cooperating
SULAKSHANA AGENCIES: CRISIL Maintains B Rating in Not Cooperating
TARA HEALTH: CRISIL Maintains D Rating in Not Cooperating
TEEKAY MARINES: ICRA Maintains B Rating in Not Cooperating
TRIBHAWAN AND CO: CRISIL Maintains B Rating in Not Cooperating
UNIFLEX INDUSTRIES: ICRA Reaffirms B+ Rating on INR5cr Loan
UNITED ELECTRICAL: CRISIL Maintains C Rating in Not Cooperating
VAGAD ENTERPRISES: ICRA Withdraws B+ Rating INR17cr LT Loan
VANTAGE MOTORS: CRISIL Hikes Rating on INR4.5cr Loan to B+
WORLD WELFARE: CRISIL Maintains B Rating in Not Cooperating
M A C A U
VIVA MACAU: Loans Made in Good Faith, Secretary for Economy Says
N E W Z E A L A N D
NUFARM LTD: S&P Affirms 'BB' ICR, Alters Outlook to Negative
RAUKURA WAIKATO: Finance Manager Gets Jail Term for fraud
S I N G A P O R E
OBIKE: Liquidators to Hold Meeting with Users on August 2
S O U T H K O R E A
CAFFE BENE: Gets Creditors' Nod to Start Rehabilitation Scheme
T H A I L A N D
IRPC PUBLIC: Moody's Alters Outlook to Positive & Affirms Ba1 CFR
PC AIR: Sale of Aircraft Fails to Attract Bidders
X X X X X X X X
MALDIVES: Moody's Alters Outlook to Negative on Debt Burden Rise
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A U S T R A L I A
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AM LABOUR: First Creditors' Meeting Set for August 3
----------------------------------------------------
A first meeting of the creditors in the proceedings of AM Labour
Hire Pty Ltd will be held at Level 5, 11 Mounts Bay Road, in
Perth, WA, on Aug. 3, 2018, at 10:00 a.m.
Samuel John Freeman and Marcus Willam Ayres of Ernst & Young were
appointed as administrators of AM Labour on July 25, 2018.
BIS INDUSTRIES: Moody's Withdraws Caa1 CFR on Insufficient Data
---------------------------------------------------------------
Moody's Investors Service has withdrawn Bis Industries Group
Ltd.'s Caa1 corporate family rating and negative outlook.
RATINGS RATIONALE
Moody's has decided to withdraw the rating because it believes it
has insufficient or otherwise inadequate information to support
the maintenance of the rating.
BACKGROUND
Bis Industries Group Ltd. is a market leader in the Australian
mining off-road load and haul industry. In addition, Bis provides
specialized logistics management, site services and specialist
underground services.
DICK SMITH FOODS: Set to Close Door; Founder Blames Aldi
--------------------------------------------------------
Dominic Powell at SmartCompany reports that after 19 years as one
of Australia's most well-known food brands, Dick Smith Foods is
set to close down, with owner and entrepreneur Dick Smith saying
he's unable to compete with the "extreme capitalism" of Aldi and
Amazon.
Dick Smith Foods will likely stir fond memories for many
Australians, with the company's range of peanut butter, tomato
sauce, and breakfast spreads introduced in 1999 to provide a
locally sourced and owned alternatives to big-name food brands,
SmartCompany says.
According to SmartCompany, the company has had a tumultuous past,
finding itself in numerous legal cases with international food
companies such as Heinz and Arnott's, and in the five years
leading up to 2011, the company's revenue reportedly dropped from
AUD80 million to AUD8 million.
Speaking to SmartCompany, Mr. Smith blamed retailers such as Aldi
for the decline of Dick Smith Foods, saying the German discount
grocer had "forced him out of business".
"They'll send us into bankruptcy within two years, they'll send
us broke," SmartCompany quotes Mr. Smith as saying.
"Aldi has a formula - they've come here and imported most of
their products while employing virtually no staff, they have 20%
of the staff of the major supermarkets. That means they can sell
at a really low cost.
"Aldi is now the most trusted brand in Australia, and they've
completely outmaneuvered us."
Mr. Smith is appreciative of the support from supermarkets such
as Coles and Woolworths, which have kept the Dick Smith Foods
brands on shelves. However, he says his peanut butter used to
account for 12% of peanut butter sales in Australia, and today
accounts for just 2%.
SmartCompany notes that the brand's assets will not be sold, with
Mr. Smith giving the Dick Smith Food brand assets to his
suppliers at "no charge" so they can choose to carry on the
products if they want. He said the supplier will have 12 months
to gradually change their processes.
"Dick Smith Foods was designed to support Aussie farmers, but
that's not possible with modern day extreme capitalism. Aldi not
only has virtually no staff, but they're not on the stock
exchange, so they can even share their wealth with Australians,"
Mr. Smith told SmartCompany.
While the 74-year-old founder said it's a sad day for him, he
says he's not complaining or suggesting Aldi has acted
inappropriately, saying the company has complied with all laws,
SmartCompany relates. Dick Smith Foods was the last of
Mr. Smith's owned ventures to exist, with the entrepreneur
selling Dick Smith Electronics and Australian Geographic in the
late 20th century, adds SmartCompany.
DANFX TRADE: ASIC Obtains Orders v. Investment Scheme Operator
--------------------------------------------------------------
The Australian Securities and Investments Commission has obtained
final orders in the Supreme Court of Queensland against Daniel
Farook Ali, former director of DanFX Trade Pty Ltd.
ASIC commenced proceedings in 2017 alleging that Mr. Ali, through
DanFX, operated an unregistered managed investment scheme known
as the Daniel Ali Scheme, which raised approximately AUD13
million from more than 200 investors.
On July 23, 2018, the Court found that:
* Mr. Ali, DanFX and two related companies operated the Daniel
Ali Scheme, which was a managed investment scheme that was
required to be registered under the Corporations Act but was
not so registered;
* Mr. Ali contravened the Corporations Act by operating the
Daniel Ali Scheme without holding an Australian financial
services licence; and
* Mr. Ali contravened the Corporations Act by managing DanFX
and two related companies, despite being disqualified from
managing corporations due to a prior conviction for fraud.
The Court permanently restrained Mr. Ali from managing
corporations.
ASIC's investigation in relation to Mr. Ali is continuing.
On Nov. 14, 2017, ASIC obtained orders in the Supreme Court of
Queensland appointing Mr. Anthony Castley of William Buck as
receiver over the assets of Mr. Ali, DanFX and related companies
DanFX Investment Holdings Pty Ltd and D&S Ali Properties Pty Ltd.
A copy of Mr. Castley's affidavit sworn on Jan. 29, 2018,
detailing his investigations into the affairs of the Daniel Ali
Scheme can be accessed here. On the basis of that affidavit, ASIC
considered that there was no evidence that sufficient funds
existed to repay investors.
On May 9, 2018, ASIC successfully applied for the winding up of
the Daniel Ali Scheme, DanFX, DanFX Investment Holdings and D&S
Ali Properties. Mr. Castley was appointed by the Court as the
receiver of the scheme and the liquidator of the companies.
ASIC has also permanently banned Mr. Ali from providing financial
services or engaging in credit activity as a result of fraud
charges brought by the Queensland Director of Public Prosecutions
in 2012. Mr. Ali was sentenced to two and half years'
imprisonment, to be suspended after the first six months in
prison. This fraud conviction is unrelated to ASIC's civil
proceedings.
KARALUNDI ABORIGINAL: First Creditors' Meeting Set for Aug. 2
-------------------------------------------------------------
A first meeting of the creditors in the proceedings of Karalundi
Aboriginal Education Community Aboriginal Corporation will be
held at the offices of Pitcher Partners, Level 11, 12-14 The
Esplanade, in Perth, WA, on Aug. 2, 2018, at 10:30 a.m.
Daniel Johannes Bredenkamp and Renee O'Driscoll of Pitcher
Partners were appointed as administrators of Karalundi Aboriginal
on July 23, 2018.
MASTER ENGINEERS: Second Creditors' Meeting Set for Aug. 6
----------------------------------------------------------
A second meeting of creditors in the proceedings of Master
Engineers Pty Ltd has been set for Aug. 6, 2018, at 11:00 a.m. at
Level 7, 616 St Kilda Road, in Melbourne, Victoria.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Aug. 5, 2018, at 4:00 p.m.
Gideon Isaac Rathner and Matthew Brian Sweeny of Lowe Lippmann
were appointed as administrators of Master Engineers on July 4,
2018.
P. B. ACTIVATE: First Creditors' Meeting Set for August 2
---------------------------------------------------------
A first meeting of the creditors in the proceedings of P. B.
Activate Pty Ltd will be held at Boardroom of Servcorp, Level 2,
710 Collins Street, in Docklands, Victoria, on Aug. 2, 2018, at
3:00 p.m.
Gavin Moss and Trent McMillen of Chifley Advisory were appointed
as administrators of P. B. Activate on July 23, 2018.
SIX KEYS: Second Creditors' Meeting Set for August 7
----------------------------------------------------
A second meeting of creditors in the proceedings of Six Keys Pty
Ltd has been set for Aug. 7, 2018, at 2:00 p.m. at the offices of
Worrells Solvency & Forensic Accountants, Level 15, 114 William
Street, in Melbourne, Victoria.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Aug. 6, 2018, at 5:00 p.m.
Matthew Jess of Worrells Solvency was appointed as administrator
of Six Keys on July 3, 2018.
TRITON TRUST 8 2018-1: S&P Assigns BB+(sf) Rating on Cl. E Bonds
----------------------------------------------------------------
S&P Global Ratings assigned its ratings to 11 classes of prime
residential mortgage-backed securities (RMBS) issued by Perpetual
Corporate Trust Ltd. as trustee for Triton Trust No.8 Bond Series
2018-1.
The ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including the fact that this is a closed
portfolio, which means no further loans will be assigned to
the trust after the closing date.
-- S&P views that the credit support is sufficient to withstand
the stresses it applies. This credit support comprises
mortgage insurance covering 56.4% of the loans in the
portfolio, accrued interest, and reasonable costs of
enforcement, as well as note subordination for all rated
notes.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including an amortizing
liquidity facility equal to 1.2% of the invested amount of
all notes, principal draws, a yield reserve, and a loss
reserve that builds from excess spread, are sufficient under
its stress assumptions to ensure timely payment of interest.
-- The extraordinary expense reserve of AUD250,000, funded from
day one by Columbus Capital Pty Ltd., available to meet
extraordinary expenses. The reserve will be topped up via
excess spread if drawn.
-- The benefit of a fixed-to-floating interest-rate swap
provided by National Australia Bank Ltd. (NAB) to hedge the
mismatch between receipts from any fixed-rate mortgage loans
and the variable-rate RMBS.
-- The benefit of a cross-currency swap provided by NAB to hedge
the mismatch between the Australian dollar receipts from the
underlying assets and the U.S. dollar payments on the class
A1-US notes.
RATINGS ASSIGNED
Class Rating Amount (mil.)
A1-MM AAA (sf) A$71.00
A1-US AAA (sf) US$100.00
A1-AU AAA (sf) A$330.00
A1-5Y AAA (sf) A$65.00
A2 AAA (sf) A$35.00
A3 AAA (sf) A$28.70
AB AAA (sf) A$11.90
B AA (sf) A$14.00
C A+ (sf) A$8.75
D BBB+ (sf) A$2.80
E BB+ (sf) A$1.75
F NR A$2.10
NR--Not rated.
VILLAGE RESTAURANT: Second Creditors' Meeting Set for Aug. 7
------------------------------------------------------------
A second meeting of creditors in the proceedings of Village
Restaurant & Bar Pty Ltd has been set for Aug. 7, 2018, at 10:30
a.m. at the offices of Worrells Solvency & Forensic Accountants
Level 15, 114 William Street, in Melbourne, Victoria.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Aug. 6, 2018, at 5:00 p.m.
Matthew Jess of Worrells Solvency was appointed as administrator
of Village Restaurant on July 3, 2018.
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C H I N A
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CHINA FORTUNE: Fitch Rates New Senior US Dollar Notes 'BB+(EXP)'
----------------------------------------------------------------
Fitch Ratings has assigned city-district developer China Fortune
Land Development Co., Ltd.'s (CFLD, BB+/Stable) proposed senior
US dollar notes a 'BB+(EXP)' expected rating. The proposed notes,
to be issued by subsidiary, CFLD (Cayman) Investment Ltd., are
rated at the same level as CFLD's senior unsecured rating as they
will be unconditionally and irrevocably guaranteed by CFLD.
CFLD's ratings are supported by its leading position in the
industrialisation and urbanisation of large districts and key
economic regions in China's less-developed counties, such as the
pan-Beijing region, Yangtze River Delta, central China, Sichuan-
Chongqing Zone and Pearl River Delta. The company's business
model is differentiated from most Chinese homebuilders, as it
uses operating cash flow derived from housing sales to fund
district development, including investments in primary land
development and infrastructure. CFLD also brings investments into
business parks that it manages within the districts. Local
governments compensate the company using a fixed formula; 15%
mark-up for district development and 45% of completed investments
that it brings into the districts. The industry service segment
enjoys a high profit margin of over 90%.
CFLD's ratings are constrained by its exposure to China's
volatile housing market, high geographical concentration in the
pan-Beijing region and poor information disclosure on its 62
massive development projects, each covering 2 square kilometres
to 200 square kilometres and which had accumulated CNY461 billion
in investment commitments at end-2017, of which over CNY110
billion have been completed.
KEY RATING DRIVERS
Strong Project Performance: Fitch estimates that district
development and industry services revenue and receipts from the
government rose to CNY28.5 billion and CNY19.4 billion,
respectively, representing a CAGR of 51% and 50% between 2012 and
2017. Our cash receipt estimate is marginally lower than CFLD's
publicly disclosed figure of CNY20.5 billion. CFLD's projects
take at least three years to turn cash flow positive, as
stabilising housing sales start supporting the additional
investment required to attract businesses to its parks. The
company had 13 mature projects by end-2017, from nine at end-
2016. Mature projects need time to become established
developments with vibrant industries that generate healthy tax
revenue before CFLD benefits from higher industry services
revenue.
Positive Housing Cash Flow: Land sales proceeds and taxes related
to housing sales generated by CFLD are important sources of local
government receipts. CFLD's 51% CAGR in contracted housing sales
is closely matched by revenue growth from local government. Fitch
estimates CFLD's contracted housing sales collections exceeded
its land and property development expenditure in most years, with
a net cash inflow of CNY22.6 billion between 2011 and 2017. This
was despite a net outflow of CNY13 billion in 2017 as sales
collection fell to 48%, from a historical average of 78% between
2012 and 2016, due to more stringent home purchase policies.
However, Fitch expects sales collections will improve from 2018
and normalise by 2020.
Growth in Industry Services: CFLD's industry services revenue
rose by a strong CAGR of 72% between 2012 and 2017, outstripping
the 51% CAGR for revenue from local governments. This reflects
the pace of commitments in the business parks - which rose to
CNY165 billion in 2017, from CNY112 billion in 2016 and CNY54
billion in 2015 - being converted into actual investments. The
ratio of accumulated industry services revenue/accumulated
investment commitments rose to 10.7% in 2017, from a low of 6.9%
in 2013. This segment, with a gross margin of more than 90%, has
made a strong positive impact on CFLD's business profile. The
company only incurs expenditure to maintain an industry
development team of over 3,000 to attract investment, which
should rise along with the number of projects.
Healthy Credit Metrics: CFLD's leverage of 50% at end-2017, as
measured by net debt/district-related inventory, was at our
negative sensitivity threshold because of slower cash collection.
Fitch believes the high leverage is temporary and will improve as
cash collections normalise. CFLD's leverage averaged 39% between
2012 and 2016. The company's net debt is low against its district
investments, which are made up almost entirely of primary land
development expenditure and infrastructure investments, and can
be recouped from government over time. The value that CFLD can
recoup is highly certain, even though the assets cannot be
immediately liquidated.
Strong sales efficiency and cash flow are important for CFLD's
financial flexibility in light of the illiquid nature of its
assets. CFLD's sales efficiency, as measured by district
contracted sales/net debt, was still healthy at 2.2x in 2017
despite higher net debt, although this was stronger at 6.2x in
2012 when its net debt was at the lowest. This ratio compares
with Fitch-rated homebuilders' average contracted sales/gross
debt of around 1.2x. CFLD's cash flow, as measured by net
debt/cash receipts from government, was 2.6x in 2017, against a
historical average of 1.8x. Fitch expects net debt to peak in
2019, although overall credit metrics will be stronger than in
2017.
High Geographical Concentration Risk: CFLD's dependency on
housing sales exposes it to the volatility of China's housing
market, which is subject to policy risk, as there have been
frequent changes in the previous few years. This was demonstrated
in CFLD's poor cash collection in 2017. Revenue is concentrated
in the pan-Beijing region, which contributes 84% of total
revenue. The proportion of contracted housing gross floor area
sold in the region fell to 55% in 1H18, from 69% in 2017,
although this was higher than the 44% in 1Q18. However, most of
CFLD's government revenue still comes from this region and it
will be years before a more balanced regional business mix can be
formed.
Higher Ping An Stake Rating Neutral: CFLD's ratings will not be
affected in the short term by Ping An Insurance (Group) Co.,
raising its stake in CFLD to 19.9% in July 2018, from 0.2%,
through its asset management unit. The transaction, valued at
CNY13.8 billion, involved existing shares and did not improve
CFLD's financial profile. This transaction is not yet uncompleted
as not all conditions, including the appointment of two directors
selected by Ping An, have been met. Following the transaction
completion, Fitch will monitor operational cooperation between
the entities belonging to the two groups; any business profile
enhancement to CFLD will have to come from significantly improved
collaboration over and above their current co-investments in
CFLD's projects. Ping An has invested in CFLD's projects and is
familiar with its businesses.
Weak Information Disclosure: CFLD has weak information
disclosure, especially for its district park development, as it
has devoted greater disclosure to its property business in line
with most China-listed homebuilders. This means investors treat
CFLD similarly to other homebuilders and led to a Shanghai Stock
Exchange (SSE) request in April 2018 for an explanation of CFLD's
business operations and accounting treatment, which saw its bond
and share prices suffer. However, the company has provided Fitch
with sufficient information for our credit analysis and is
cooperative and responsive to our information requests. Fitch
believes CFLD can improve its disclosure, especially since its
district park development includes large project investments.
DERIVATION SUMMARY
CFLD's business model remains dependent on China's housing market
and its large pan-Beijing housing market exposure constrains its
ratings below investment grade. CFLD does have non-property
income from government contracts and is thus less subject to
counterparty credit risk, especially as its business model
involves paying land premiums and taxes to local government,
which are in turn used to pay CFLD. This significantly
strengthens its business profile relative to other homebuilders,
as it does not need to lock up capital in holding land reserves
that it does not immediately need for development.
CFLD's business is unique and there are no similar peers.
However, given the asset trading/liquidation nature of its
business, Fitch has compared CFLD to Chinese homebuilders. CFLD
has higher leverage than 'BB-' and 'BBB-' rated homebuilders and
has strong earnings from industry services, giving it an interest
cover ratio that is 2x-3x higher than that of Shimao Property
Holdings Limited's (BBB-/Stable) recurring EBITDA/interest cover
of 0.5x and Sino-Ocean Group Holding Limited's (BBB-/Stable;
standalone: BB+/Stable) 0.3x. The recoverable value of CFLD's
inventory is highly assured, despite its higher leverage of 50%
versus Shimao's 28% and Sino-Ocean's 36%.
KEY ASSUMPTIONS
Fitch's key assumptions within our rating case for the issuer
include:
- Housing sales gross floor area to increase by 20% in 2018 and
10% per annum thereafter
- Districted-related inventory to increase by 25% in 2018 and
2019
- New investment commitments to rise by 15% per annum and
accumulated completed investments to increase to 30%, from
25%, of accumulated commitments between 2018 and 2021
- Gross margin of 40% in 2018, dropping by 2 pp a year
thereafter
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- Sustained neutral to positive cash flow from operation
- Greater geographical diversification of its businesses and
cash flow
- More detailed and publicly available disclosure of its
businesses and operational information
- Maintaining a healthy financial profile, with low leverage
and strong cash flow/debt ratios
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- Large decline of housing contracted sales
- Net debt/district-related inventory above 50% for a sustained
period
- District contracted sales/net debt below 2x for a sustained
period
- Changes to government policies affecting CFLD's rights in its
projects
LIQUIDITY
Adequate Liquidity for Expansion: CFLD's available cash of CNY64
billion at end-2017 was sufficient to meet its short-term debt
obligations of CNY34 billion and our expectation of negative free
cash flow of CNY9 billion. Slower cash collection from more
restrictive home purchase policies in its key pan-Beijing area
housing market led to negative operating cash flow, but CFLD has
built sufficient liquidity to manage this transitory period.
Fitch expects this trend to reverse from 2020 and for CFLD's cash
flow from operation to become more neutral against the large
CNY21 billion outflow in 2017, which has continued in 2018.
SUNAC CHINA: Moody's Rates New Sr. Unsec. Notes B3, Outlook Pos.
----------------------------------------------------------------
Moody's Investors Service has assigned a B3 senior unsecured
rating to Sunac China Holdings Limited's (B2 positive) proposed
USD notes.
The rating outlook is positive.
The company plans to use the proceeds from the issuance to
refinance existing debt and for other general corporate purposes.
RATINGS RATIONALE
"The proposed notes are unlikely to materially impact Sunac's
debt leverage because we expect the company will use the proceeds
mainly to refinancing existing debt," says Franco Leung, a
Moody's Senior Vice President and also Moody's Lead Analyst for
Sunac.
Specifically, Moody's expects that any incremental debt from
Sunac's proposed notes issuance will not be material relative to
the company's total reported debt of around RMB219 billion at
year-end 2017.
Moody's expects Sunac's adjusted debt leverage - as measured by
revenue/adjusted debt and after adjustments for its joint
ventures and associates - will improve to 55%-70% over the next
12-18 months from around 35% at the end of December 2017. In
addition, Moody's expects that its interest coverage - as
measured by adjusted EBIT/interest and after adjustments for its
joint ventures and associates - will improve towards 2.0x-2.3x
over the next 12-18 months from around 1.6x in 2017.
This expected improvement will be driven by (1) strong revenue
growth on the back of robust growth in contracted sales; (2)
reduced spending on land, which in turn will contain debt; and
(3) an expected increase in its gross profit margin to 22%-24%
from 20.7% in 2017.
The company achieved a 76% year-on-year increase in contracted
sales to RMB192 billion for 1H 2018, after 141% and 121% year-on-
year increases in 2017 and 2016 respectively. It also issued a
positive profit alert and indicated that 1H 2018 revenue is
likely to increase by more than 200% year on year.
Sunac's B2 corporate family rating mainly reflects the company's
strong sales execution, its leading brand and market position in
its key tier 1 and tier 2 cities, as well as the good quality of
its land bank and good liquidity profile.
However, the rating is constrained by the improving but still
high debt leverage resulting from Sunac's rapid expansion plans
and acquisitive appetite.
The B3 rating on the proposed notes reflects the risk of
structural subordination, given the fact that the majority of
claims are at the operating subsidiaries and have priority over
claims at the holding company in a bankruptcy scenario.
The positive outlook reflects Moody's expectation that Sunac will
deleverage, improve its profitability and control its investments
in non-property businesses within the next 12-18 months.
The rating could be upgraded if Sunac (1) demonstrates its
ability to exercise restraint in its non-core business
investments; (2) maintains its solid liquidity position; and (3)
improves its credit metrics, such that adjusted revenue/debt is
at least 60%-70% and adjusted EBIT/interest is above 2.0x-2.5x on
a sustained basis.
On the other hand, the outlook could be revised to stable if the
company's performance and credit metrics are unlikely to reach
levels that justify an upgrade of the rating over the next 12-18
months.
The principal methodology used in this rating was Homebuilding
And Property Development Industry published in January 2018.
Listed on the Hong Kong Stock Exchange in 2010, Sunac China
Holdings Limited is an integrated residential and commercial
property developer with projects in China's main economic
regions.
At year-end 2017, the company's gross land bank totaled 141.73
million square meters, and its attributable land bank totaled
approximately 107.12 million square meters.
=========
I N D I A
=========
AURANGABAD GYMKHANA: CRISIL Migrates B Rating to Not Cooperating
----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Aurangabad
Gymkhana Club Private Limited (AGCPL) to 'CRISIL B/Stable Issuer
not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Overdraft 9.5 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 0.5 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
CRISIL has been consistently following up with AGCPL for
obtaining information through letters and emails dated April 20,
2018, May 18, 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 Aurangabad Gymkhana Club
Private Limited. Which restricts CRISIL's ability to take a
forward looking view on the entity's credit quality. CRISIL
believes information available on Aurangabad Gymkhana Club
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 Aurangabad Gymkhana Club Private Limited to 'CRISIL
B/Stable Issuer not cooperating'.
AGCPL, incorporated in 1995, and promoted by Mr. Surendra K
Surana, operates a sports club, Aurangabad Gymkhana, in
Aurangabad (Maharashtra). The company is a part of the Surana
group, which includes Surana Constructions Chembur, Surana
Constructions Wadala, Surana Infrastructure Pvt Ltd, Class
Restaurant (rated 'CRISIL B-/Stable'), Surana Housing Pvt Ltd,
and Surana Hotels & Resorts Pvt Ltd.
CHITIZ METALS: CRISIL Moves B Rating to Not Cooperating Category
----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Chitiz
Metals & Minerals Trading Private Limited (CMPL) to 'CRISIL
B/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8.7 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Cash 4.3 CRISIL B/Stable (ISSUER NOT
Credit Limit COOPERATING; Rating Migrated)
CRISIL has been consistently following up with CMPL for obtaining
information through letters and emails dated April 23, 2018,and
May 8, 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 Chitiz Metals & Minerals
Trading Private Limited. Which restricts CRISIL's ability to take
a forward looking view on the entity's credit quality. CRISIL
believes information available on Chitiz Metals & Minerals
Trading 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 Chitiz Metals & Minerals Trading Private Limited to
'CRISIL B/Stable Issuer not cooperating'.
CMPL was set up in 2010 by Mr. Birendra Krishna Bajaj and Mr.
Sumit Sarawagi. Till 2014, the company traded only in coal, but
now also trades iron and steel materials such as thermo-
mechanically treated bars, angles, channels, flats, billets and
ingots. The company is based out of Kolkata.
CLASS RESTAURANT: CRISIL Migrates B- Rating to Not Cooperating
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Class
Restaurant (Class) to 'CRISIL B-/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 9 CRISIL B-/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 1 CRISIL B-/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
CRISIL has been consistently following up with Class for
obtaining information through letters and emails dated April 23,
2018, May 8, 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 Class Restaurant. Which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Class Restaurant 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 Class Restaurant to 'CRISIL B-/Stable Issuer not
cooperating'.
Class Restaurant, set up in 1998, is a proprietorship firm of Mr.
Surendra Kumar Surana. It operates a restaurant, The Class Thali,
at Juhu in Mumbai. The firm is a part of the Surana group, which
includes Surana Constructions, Surana Infrastructure Pvt Ltd,
Aurangabad Gymkhana Club Pvt Ltd (CRISIL B/Stable/CRISIL A4
(Imp), Surana Housing Pvt Ltd, and Surana Hotels & Resorts Pvt
Ltd.
D D INTERNATIONAL: CRISIL Moves B Rating to Not Cooperating
-----------------------------------------------------------
CRISIL has migrated the rating on bank facilities of D D
International (DDI) to 'CRISIL B/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with DDI for obtaining
information through letters and emails dated April 23, 2018 and
May 18, 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 D D International. Which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
D D International 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 D D International to 'CRISIL B/Stable Issuer not
cooperating'.
Formed in 1990 as a proprietorship firm, DDI trades in dry
fruits, including almonds, cashews, apricots, dates, and others.
EFFIMAC EQUIPMENTS: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: Effimac Equipments Private Limited
W-8-A Green Park (Main) New Delhi
110016
Insolvency Commencement Date: July 19, 2018
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: January 15, 2019
Insolvency professional: Ashish Kumar Batta
K.G. Somani & Co.
Interim Resolution
Professional: Asish Kumar Batta
3/15, 4th Floor, Asaf Ali Road,
New Delhi - 110002
E-mail: ashishbatta@gmail.com
kgs.effimacequipments@gmail.com
Last date for
submission of claims: August 2, 2018
ELECTROSPARK: Ind-Ra Maintains 'BB+' LT Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Electrospark's
Long-Term Issuer Rating in the non-cooperating category. The
issuer did not participate in the rating exercise despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will continue to appear as
'IND BB+ (ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR50 mil. Fund-based facilities maintained in non-
cooperating category with IND BB+ (ISSUER NOT COOPERATING)/
IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR13.17 mil. Term loan due on December 2017 maintained in
non-cooperating category with IND BB+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
May 9, 2016. Ind-Ra is unable to provide an update, as the agency
does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1995 at Manesar, Haryana, Electrospark is one of
India's leading manufacturers of display fixtures with an annual
installed capacity of 1.20 million units.
GDJD EXPORTS: ICRA Reaffirms B+ Rating on INR8cr Fund Based Loan
----------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ for the
INR8.00-crore fund-based facility of GDJD Exports (GDJD). ICRA
has also re-affirmed the short-term rating of [ICRA]A4
outstanding on the INR1.40-crore unallocated facilities of the
firm. The outlook on the long-term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based limit 8.00 [ICRA]B+(Stable); Reaffirmed
Unallocated facility 1.40 [ICRA]A4; Reaffirmed
Rationale
The reaffirmation of ratings continues to factor in the extensive
experience of the promoters, and the firm's established supplier
base spread across India, which enables steady supply of high
quality yarn. ICRA notes GDJD's negligible inventory levels with
majority of the orders directly shipped to the client location
and its consequent positive impact on the holding costs and the
overall working capital intensity. The ratings are, however,
constrained by the firm's weak financial profile characterised by
thin profit margins owing to the trading nature of the business,
and the stretched capitalisation and coverage metrics due to an
increase in debt levels as on March 31, 2018. Due to the small
scale of operations in a highly fragmented industry and the
limited value additive nature of its trading business, the firm
has limited pricing flexibility. The profitability of the firm
remains susceptible to volatility in yarn prices and to foreign
exchange fluctuations. GDJD also remains exposed to demand
volatility in key importing regions and has high customer churn
rates, although its ability to add new customers and enter new
geographies every year provide some comfort. The ratings are also
constrained by the risks of capital withdrawals associated with a
partnership firm.
Outlook: Stable The Stable outlook reflects ICRA's expectations
that GDJD will continue to benefit from the extensive experience
of its partners. The outlook may be revised to Positive if
substantial and sustainable growth in revenue and profitability
and better working capital management strengthen the financial
risk profile of the company. The outlook may be revised to
Negative if cash accrual is lower than expected, or any stretch
in the working capital cycle, weakens liquidity.
Key rating drivers
Credit strengths
Significant experience of the promoters spanning over 25
years:Established in 1990, the promoters have significant
experience, spanning over more than two decades in the textile
markets.
Diversified and established supplier base ensures supply of high
quality yarn: The firm chooses its suppliers (only indigenous)
for each variety of yarn required based on a range of factors
including quality of yarn, adherence to delivery schedules,
pricing premium charged, and suitability of counts manufactured
by the supplier to GDJD. The firm has shortlisted a supplier base
of over 40 mills pan India for cotton yarn, another 10 mills for
viscose yarn and ~4-5 mills for polyester / polycot yarn. A
diversified and established supplier base ensures supply of high
quality yarn.
Negligible inventory levels save on holding costs for the firm: A
major portion of the orders are shipped directly to the customer
locations, which results in considerable savings on holding and
inventory costs for the firm.
Credit challenges
Financial profile characterised by thin margins, stretched
capitalisation and coverage indicators: The firm operates in a
segment characterised by low value addition and low product
differentiation, resulting in thin margins. As on March 31, 2018,
the debt level was higher at INR13.3 crore against INR7.7 crore
as on March 31, 2017. Consequently, the gearing increased to 3.3
times as on March 31, 2018 from 1.9 times as on March 31, 2017.
Additionally, with higher debt levels, the coverage metrics
stretched further.
High customer churn rates and high geographic concentration: The
top-ten customers for the firm have been different each year in
the last few years with high churn rates and volatility in
revenue from individual customers. The firm also faces
significant geographic concentration risks with 36% and 49% of
the revenues derived from China during FY2017 and 5MFY2018
respectively.
Intense competition in a highly fragmented industry structure and
low product differentiation limit pricing flexibility: The firm
operates in a segment characterised by low value addition and low
product differentiation. This coupled with the fragmented
industry structure exposes GDJD to intense competition from other
domestic and international yarn manufacturers/traders and
restricts GDJD's pricing flexibility and keeps margins under
pressure.
Margins exposed to foreign exchange fluctuations and volatility
in yarn price movements although hedging and order back
procurement mechanisms mitigate risks to an extent: GDJD remains
exposed to forex fluctuations and volatility in yarn price
movements since entire revenues are derived from export sales.
However, the risk is mitigated to an extent through the order-
backed procurement mechanism. Besides, the working capital
borrowings are made through foreign currency based packing credit
facilities.
Risks of capital withdrawals associated with partnership nature
of the firm: The firm is exposed to the risks arising out of the
partnership nature of GDJD Exports, such as withdrawal of
capital, limited ability to raise capital among others.
GDJD Exports, established in 1990 as an offshoot of Gocooldoss
Jumnadoss and Co., trades in varieties of yarn such as cotton
yarn, polycot yarn, polyester yarn and viscose yarn, apart from
small quantities of fabrics. Cotton yarn constitutes over 80% of
GDJD's sales. The firm procures raw materials from spinning mills
across India and supplies the yarn to customers in several
overseas markets, including China, Bangladesh, Sudan, and Korea
besides others. GDJD has 11 employees and is managed by three
partners -- Mr. Bharat Kumar Shah, Mrs. Hema Bharat Shah and Mr.
Tapan Tanmay B Shah.
The firm reported a profit before tax of INR0.2 crore on an
operating income of INR150.2 crore in FY2017 compared to a profit
before tax of INR0.1 crore on an operating income of INR101.1
crore in the previous year.
IDBI BANK: Moody's Reviews B1 LT Deposit Ratings for Upgrade
------------------------------------------------------------
Moody's Investors Service has placed on review for upgrade all
long-term ratings of IDBI Bank Ltd and all long-term ratings of
the bank's Dubai International Financial Centre (DIFC) branch
(IDBI Bank Ltd, DIFC Branch).
Moody's has also placed on review for upgrade the baseline credit
assessment (BCA) and adjusted BCA of IDBI, and the long-term
counterparty risk assessment of IDBI and its DIFC branch.
At the same time, Moody's has affirmed all short-term ratings of
the bank and its DIFC branch.
The outlooks for both the entities have been changed to ratings
under review.
RATINGS RATIONALE
The primary driver for the review is the announcement by IDBI
Bank on July 17 that Life Insurance Corporation of India (LIC)
has expressed interest in acquiring a 51% controlling stake in
the bank through the preferential allotment of shares/an open
offer.
The review for upgrade will focus on: (1) the exact amount of
fresh equity that LIC will inject into the bank and its impact on
IDBI's capitalization, and (2) the presence of any regulatory
limitations on LIC's ability to provide further support, and
particularly on it ability to raise its stake above 51%.
In order to build a 51% stake LIC will subscribe to new shares,
which will be positive for the bank's capitalization and
consequently its BCA.
Moody's will review if the bank will benefit from affiliate
support if LIC takes a majority stake. Specifically, in assessing
whether to incorporate affiliate support into the bank's rating,
Moody's will consider LIC's relatively strong credit profile, its
controlling ownership as well as the reputational risks involved
if IDBI Bank were to fail.
At the same time, Moody's assessment of affiliate support will
also consider the relatively low strategic importance of IDBI
Bank to LIC, and the fact that the proposed investment will be
funded by policyholder funds rather than LIC's own funds.
The use of policyholder funds for this investment means that the
company's authority to make investment decisions is constrained
by investment guidelines for insurance companies in India. Even
for this transaction, LIC had to obtain special exemption from
India's insurance regulator as insurance companies are prohibited
from taking more than a 15% stake in any company when investing
policyholder funds.
Currently, Moody's assumes a 'very high' level of support from
the government for the bank, in line with all Indian public
sector banks. Moody's assumes that the government will support
all the public sector banks in equal measure as the failure of
any of them would pose a significant risk to systemic stability.
However, upon completion of the transaction, in contrast to other
public sector banks, the Government of India (Baa2 stable) will
no longer be the controlling shareholder in the bank. Hence,
Moody's will also review its assumptions for government support.
WHAT COULD CHANGE THE RATING UP
IDBI's long-term ratings and BCA could be upgraded if, upon
finalization of the terms of the transaction, there is a
significant improvement in the bank's CET1 capital.
In addition, the long-term ratings and BCA could be upgraded if
the bank reports significantly higher operating profitability
which offsets the high level of credit costs, thereby enabling
the bank to return to net profitability on a sustainable basis.
WHAT COULD CHANGE THE RATING DOWN
Given the review for upgrade, a downgrade of the bank's long term
ratings is unlikely. Nevertheless, the long-term ratings could be
downgraded in the event of a significant and unexpected increase
in net non-performing loan formation that further strains the
bank's capitalization.
In addition, any indication of a lower level of support from LIC
than currently expected by Moody's could also lead to a downgrade
of the long-term ratings.
The principal methodology used in these ratings was Banks
published in July 2018.
IDBI Bank Ltd, headquartered in Mumbai, reported total assets of
INR3.5 trillion as of March 31, 2018.
LIST OF AFFECTED RATINGS:
Issuer: IDBI Bank Ltd
Adjusted Baseline Credit Assessment, Placed on Review for
Possible Upgrade, currently caa1
Baseline Credit Assessment, Placed on Review for Possible
Upgrade, currently caa1
Long-term Counterparty Risk Assessment, Placed on Review for
Possible Upgrade, currently Ba3(cr)
Long-term Counterparty Risk Rating (Local Currency), Placed on
Review for Possible Upgrade, currently Ba3
Senior unsecured Medium-Term Note Program (Foreign Currency),
Placed on Review for Possible Upgrade, currently (P)B1
Junior subordinated Medium-Term Note Program (Foreign Currency),
Placed on Review for Possible Upgrade, currently (P)Caa2
Subordinated Medium-Term Note Program (Foreign Currency), Placed
on Review for Possible Upgrade, currently (P)Caa1
Senior Unsecured Regular Bond/Debenture (Foreign Currency),
Placed on Review for Possible Upgrade, currently B1, outlook
changed to RUR from POS
Long-term Deposit Rating (Foreign Currency), Placed on Review for
Possible Upgrade, currently B1, outlook changed to RUR from POS
Long-term Deposit Rating (Local Currency), Placed on Review for
Possible Upgrade, currently B1, outlook changed to RUR from POS
Short-term Counterparty Risk Assessment, Affirmed NP(cr)
Short-term Counterparty Risk Rating (Local Currency), Affirmed NP
Short-term Deposit Rating (Foreign Currency), Affirmed NP
Short-term Deposit Rating (Local Currency), Affirmed NP
Outlook, Changed To Rating Under Review From Positive
Issuer: IDBI Bank Ltd, DIFC Branch
Long-term Counterparty Risk Assessment, Placed on Review for
Possible Upgrade, currently Ba3(cr)
Long-term Counterparty Risk Rating (Local Currency), Placed on
Review for Possible Upgrade, currently Ba3
Senior unsecured Medium-Term Note Program (Foreign Currency),
Placed on Review for Possible Upgrade, currently (P)B1
Junior subordinated Medium-Term Note Program (Foreign Currency),
Placed on Review for Possible Upgrade, currently (P)Caa2
Subordinated Medium-Term Note Program (Foreign Currency), Placed
on Review for Possible Upgrade, currently (P)Caa1
Senior Unsecured Regular Bond/Debenture (Foreign Currency),
Placed on Review for Possible Upgrade, currently B1, outlook
changed to RUR from POS
Short-term Counterparty Risk Assessment, Affirmed NP(cr)
Short-term Counterparty Risk Rating (Local Currency), Affirmed NP
Outlook, Changed To Rating Under Review From Positive
IE TRADING: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: IE Trading Company Private Limited
A-119, Okhla Industrial Area, Phase-II,
New Delhi 110049
Insolvency Commencement Date: July 13, 2018
Court: National Company Law Tribunal, Principal Bench
Estimated date of closure of
insolvency resolution process: January 9, 2019
(180 days from commencement)
Insolvency professional: Sanjay Agrawal
Interim Resolution
Professional: Sanjay Agrawal
Sanjay Monika & Associates,
Plot No 39, Pocket - 1, Jasola,
New Delhi - 110025
E-mail: ska9001@gmail.com
Mobile No.: 9810376790
Tel.: 01149868255
Last date for
submission of claims: August 3, 2018
IL & FS TRANSPORTATION: Ind-Ra Lowers LT Issuer Rating to 'BB'
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded IL&FS
Transportation Networks Limited's (ITNL) Long-Term Issuer Rating
to 'IND BB' from 'IND A' and maintained it on Rating Watch
Negative (RWN).
The instrument-wise rating actions are:
-- INR1.19 mil. Long-term loan due on December 31, 2018
downgraded; maintained on RWN with IND BB/RWN rating;
-- INR8 mil. Non-convertible debentures (NCDs)* downgraded;
maintained on RWN with IND BB/RWN rating;
-- INR3.1 mil. Commercial papers (CPs)* downgraded; maintained
on RWN with IND A4+/RWN rating;
-- INR7 mil. Proposed NCDs** downgraded; maintained on RWN with
Provisional IND BB/RWN rating; and
-- INR4.31 mil. Proposed term loans** downgraded; maintained on
RWN with Provisional IND BB/RWN rating.
*Details in annexure
** The rating is provisional and shall be confirmed upon the
execution of the loan documents for the above facility by ITNL to
the satisfaction of Ind-Ra.
The downgrade reflects a delay in ITNL's deleveraging plans and
weakening of its linkages with its parent, Infrastructure Leasing
& Financial Services Limited (IL&FS, 'IND AAA'/Stable).
KEY RATING DRIVERS
ITNL's credit metrics are likely to remain stretched, in view of
delays in its deleveraging initiatives as against the timelines
indicated during February 2018. These initiatives were likely to
alleviate near-term refinancing requirements. At end-FY18, ITNL's
gross leverage (debt/EBITDA) was 6.9x (FY17: 7.3x) and interest
coverage was 1.2x (1.1x).
ITNL has strong operational and strategic linkages with its
parent. ITNL is one of the largest investments of IL&FS and
shares the IL&FS brand name. However, IL&FS' ability to support
ITNL's operations has reduced significantly, given the increase
in overall debt levels of the IL&FS group. Hence, the agency has
removed the notching support for ITNL from IL&FS.
Amid weak liquidity due to delays in the realization of pending
claims from various government authorities, among other reasons,
ITNL has managed its debt servicing through refinancing its
obligations with IL&FS group support. However, with the weakening
of support from IL&FS, the ability to manage its obligations
remains to be seen. Hence, Ind-Ra has maintained the ratings on
RWN.
Five of ITNL's subsidiaries reported defaults in servicing debt
obligations for June 2018. However, ITNL did not extend any
tangible support to these entities. According to the management,
the company has initiated the process for termination of projects
under these special purpose vehicles.
RATING SENSITIVITIES
The RWN indicates that rating may be either affirmed or
downgraded upon resolution. Ind-Ra will monitor the refinancing
of ITNL's debt over the next two quarters. Inability to refinance
its obligations without support from IL&FS would be negative for
the ratings.
COMPANY PROFILE
ITNL is a surface transportation infrastructure company and the
largest private sector road operator in India under the build-
operate-transfer model.
JAL EXPORTS: ICRA Hikes Rating on INR11.50cr LT/ST Loan to B
------------------------------------------------------------
ICRA has upgraded the long-term rating to [ICRA]B from [ICRA]B-
and reaffirmed the short-term rating of [ICRA]A4 for the
INR12.50-crore fund-based and non-fund based limits of Jal
Exports. The outlook on the long-term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term/Short- 11.50 [ICRA]B(Stable)/Upgraded
term: Fund based from [ICRA]B-(Stable);
[ICRA]A4 Reaffirmed
Short-term: Non-
fund based 1.00 [ICRA]A4 Reaffirmed
Rationale
The upgrade in the long-term rating takes into account the
healthy growth in operating revenues and improved profitability
of the firm in FY2018 compared to the previous two fiscals. The
ratings continue to factor in the extensive experience and
established track record of the firm's partners in the garment
export business and their established relationships with reputed
customers in the international market.
The ratings, however, remain constrained by high customer
concentration risk since the bulk of its revenues are driven by
its top three players. Its stretched capital structure and weak
debt coverage indicators, along with high working capital
intensity of operations, resulting from a typically high
inventory holding period, are other rating concerns. ICRA notes
that the profitability of the firm remains exposed to adverse
fluctuations in raw material prices and foreign currency risks,
given that the firm hedges only ~60% of its export receivables.
The firm witnesses intense competition by virtue of the highly
fragmented industry structure, which limits its pricing power
with customers.
Outlook: Stable
ICRA believes JE will continue to benefit from the extensive
experience of its partners, new customer additions and the
healthy demand outlook for garments in the exports markets. The
outlook may be revised to Positive if consistent growth in
revenues along with notable improvement in profitability, and
efficient working capital management, strengthen its financial
risk profile. The outlook may be revised to Negative if cash
accrual is lower than anticipated or strain on the working
capital cycle or any further leveraging of the capital structure,
weakens its liquidity.
Key rating drivers
Credit strengths
Extensive experience and established track record of partners in
the garment exports: JE was incorporated in 1976 by the Thakkar
family, which has over three decades of experience in the textile
manufacturing business. The current partners, Mr. Vishal Thakkar
and Mr. Chirag Thakkar, have been actively engaged in the firm's
operations. The partners are actively associated with other Group
entities like V.C. Enterprises, Pat International, Thakersey
Exports Pvt. Ltd. and Jal Exports Pvt. Ltd.
Reputed customer base including private label brands: The firm
primarily sells its products to private label brands in the
international markets, mainly USA, Europe and Mexico. The brands
the firm caters to include Michael Brandon, Forever 21, Spykar,
Mufti, and Lee Cooper, etc.
Improved financial risk profile with healthy revenue growth and
improved profitability in FY2018: The operating revenues of the
firm increased by 44% YoY in FY2018 after a dip of 14% in FY2017
over the previous fiscal, supported by the addition of new
customers. The profitability margins also improved to 3.8% in
FY2018 (as per provisional estimates) compared to 1.2% in the
previous fiscal on account of increase in scale and better
distribution of fixed costs. The firm reported profit before tax
of INR0.27 crore in FY2018 compared to losses of INR1.72 crore
and INR0.53 crore in FY2016 and FY2017, respectively.
Credit challenges
High customer and geographic concentration risk: The customer
concentration risk continues to remain high with the top five
customers accounting for 81% of total sales in 9M FY2018 (59% in
FY2017). Further, exports constitute ~80% of total sales of the
firm, while domestic sales constitute the remaining 20%. The key
export market for the firm is USA, which generated ~66% of total
sales in 9M FY2018 (30% in FY2017), followed by France at 20%
(23% in FY2017) implying high geographic concentration risk.
Stretched capital structure and weak debt coverage indicators:
The firm's capital structure remained stretched, as the gearing
increased to 1.93 times as on March 31, 2018 compared to 1.58
time as on March 31, 2017 due to higher working capital
borrowings to support revenue growth. The debt coverage
indicators, although improved over the previous fiscal, continued
to remain weak with interest cover of 1.29 times (P.Y.3-0.45
time), NCA/TD of 4% (P.Y.-3%) and TD/OPBDITA of 8.85 time (P.Y.-
30.97 times) as on March 31, 2018, due to high working capital
borrowings.
High working capital intensity of operations: The working capital
intensity of the firm continues to remain high as reflected by
NWC/OI of 46% as on March 31, 2018 (51% as on March 31, 2017) due
to JE's high inventory holding period. The firm maintains high
inventory levels as it works on ~300 SKU's4 at any given point of
time and due to longer processing cycle of 90-100 days. Further,
it maintains a large portfolio of its own designs, created in-
house.
Profitability exposed to adverse fluctuations in raw material
prices and foreign exchange currency risk: The firm's
profitability remains exposed to adverse fluctuations in raw
material prices, given the high inventory holding period.
Further, the firm hedges ~60% of its foreign receivables by way
of forward covers, thus profits remain exposed to currency risk
for the unhedged portion. JE reported forex gain of INR0.38 crore
in FY2017 (forex loss of INR1.23 crore in FY2015 and INR0.78
crore in FY2016) highlighting its exposure to forex risk.
Intense competition owing to high fragmentation limits pricing
power: The textile industry is characterised by high levels of
competition across the value chain, due to high fragmentation and
low entry barriers. The company faces competition from numerous
small organised and unorganised players in the domestic as well
as international markets, which limits its pricing power with
customers.
Incorporated in 1976 as a partnership firm, Jal Exports is a
Government recognised Star Export House engaged in the
manufacture and exports of high fashion readymade garments
(mainly casual shirts for men and children's wear) catering to
the export markets of Europe, South America and USA. The firm's
registered office is located in Mumbai, and its manufacturing
facility is in Karnataka, with an annual production capacity of
3.60 lakh pieces of ready-made garments. The firm primarily sells
its products to private label brands like Lee Cooper and Forever
21 in the international markets. The firm also carries out
trading of fabrics on a small scale.
JE reported a net loss of INR0.53 crore on an operating income
(OI) of INR28.09 crore in FY2017 as compared to a net loss of
INR1.72 crore on an OI of INR32.54 crore in FY2016. Further, as
per the key provisional financials for FY2018, the firm has
reported OI of INR40.53 crore and a Profit before tax (PBT) of
INR0.27 crore.
JASMER PACK: Ind-Ra Migrates BB Issuer Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Jasmer Pack
Limited's Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using the rating. The rating will now
appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR165.0 mil. Fund-based limit migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) / IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR2.3 mil. Non-fund-based limit migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) / IND A4+
(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
June 26, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Jasmer Pack manufactures corrugated boxes and rolls. It primarily
caters to companies from the fast-moving consumer goods,
pharmaceutical and consumer product sectors.
JAY DURGA: CRISIL Migrates B+ Rating to Not Cooperating Category
----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Jay Durga
Enzymatic Private Limited (JDEPL) to 'CRISIL B+/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 3 CRISIL B+/Stable(ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
Term Loan 2 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with JDEPL for
obtaining information through letters and emails dated April 24,
2018 and May 9, 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 Jay Durga Enzymatic Private
Limited, which restricts CRISIL's ability to take a forward
looking view on the entity's credit quality. CRISIL believes
information available on Jay Durga Enzymatic 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 Jay Durga Enzymatic Private Limited to 'CRISIL
B+/Stable Issuer not cooperating'.
JDEPL, incorporated in 2012, manufactures wall putty and cement
paints, and trades in white cement. The company is based in
Cuttack, Odisha, and has production capacity of 10 tonne per day
for cement paints and 3 tonne per day of wall putty. Operations
are handled by Mr. Kailash Prusty and Mr. Deepak Prusty.
JYOTI STRUCTURES: Set to Go Into Liquidation as NCLT Rejects Plan
-----------------------------------------------------------------
Livemint.com reports that Jyoti Structures Ltd has earned the
dubious distinction of being the first among the 12 large
corporate defaulters identified for insolvency resolution under a
new law to head for liquidation after a bankruptcy court rejected
the resolution plan submitted by a group of wealthy investors.
The Mumbai bench of the National Company Law Tribunal (NCLT) on
July 25 rejected the plan submitted by resolution professional
(RP) Vandana Garg and ordered her to file a liquidation report.
According to Livemint, the Mumbai-based contractor received only
one bid from a consortium of wealthy investors led by Sharad
Sanghi, CEO of Netmagic Solutions. The resolution plan involved
an upfront payment of INR170 crore, the report says. The balance
amount was to be repaid over 15 years. Livemint notes that the
construction firm owes around INR7,625 crore to a group of
lenders, including INR1,961 crore to State Bank of India. Under
the Insolvency and Bankruptcy Code, a resolution plan has to be
arrived at within 270 days, failing which the firm goes into
liquidation. So far, resolution plans for three major firms,
Electrosteel Steels, Monnet Ispat & Energy and Bhushan Steel have
been accepted by NCLT from the list of 12 companies referred by
the Reserve Bank of India for resolution, the report notes.
Livemint relates that Ms. Garg said she has not received a copy
of the order and would decide the future course of action after
discussions with her legal counsel.
Considering that the resolution plan entailed a deep haircut, it
initially failed to garner the required 75% of votes from
creditors in favor of the plan during an online voting on
March 26, Livemint recalls. On April 2, the last day of the 270-
day period, the RP filed a plea in NCLT seeking an extension of
the deadline, as some creditors could not participate in online
voting and wanted to send their votes for consideration.
Some lenders who had rejected the plan were willing to reconsider
their stance. By April 6, the RP was able to garner 81% of votes,
the report notes.
One of the secured lenders DBS Bank moved NCLT in May opposing
the plan, the report recalls. DBS has a share of around 0.84% of
the total secured debt.
Jyoti Structures Limited operates as an engineering, procurement,
tower testing, manufacturing, and construction company in the
transmission lines, substations, and distribution sectors in
India and internationally.
K MANIAR: Ind-Ra Affirms 'BB' LT Issuer Rating, Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed K Maniar's (KM)
Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable.
The instrument-wise rating action is:
-- INR353.285 mil. (reduced from INR500 mil.) Long-term loan due
on February 28, 2021 assigned with IND BB/Stable rating.
* The final ratings have been assigned following the receipt of
sanction letter by Ind-Ra.
KEY RATING DRIVERS
The affirmation reflects risk of time and cost overruns in its
ongoing residential project, Sethia Grandeur. As of June 2018,
88% of the total construction work was completed and the
remaining 12% is likely to be completed by December 2018. The
ratings continue to be constrained by the partnership structure
of the firm.
The ratings, however, remain supported by KM's partners' more
than one decade of experience in the real estate sector and the
project's favorable location in Bandra East, Mumbai, with
proximity to schools, colleges and markets. So far 66 of the 92
flats have been sold and the firm has received 75.91% of the
total project cost as customer advances.
RATING SENSITIVITIES
Positive: Sale of substantial number of housing units leading to
strong cash flow visibility will be positive for the ratings.
Negative: Any slowdown in the flat bookings leading to a
shortfall in cash flow will be negative for the ratings.
COMPANY PROFILE
KM commenced construction of the building, Sethia Grandeur in
March 2016.
K. S. BIGILI: CRISIL Lowers Rating on INR5cr Cash Loan to D
-----------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of K. S.
Bigili (KSB) to 'CRISIL D/CRISIL D Issuer Not Cooperating' from
'CRISIL B-/Stable/CRISIL A4'.
The downgrade reflects delays by the firm in servicing debt. The
same was on account of stretch in receivables.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL D (ISSUER NOT
COOPERATING: Downgraded
from 'CRISIL B-/Stable')
Letter of Credit 1 CRISIL D (ISSUER NOT
COOPERATING: Downgraded
from 'CRISIL A4')
Proposed Long Term 4 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING: Downgraded
from 'CRISIL A4')
CRISIL has been consistently following up for information with
KSB for obtaining information through letters and emails dated
May 31, 2018 and June 30, 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 KSB. This restricts CRISIL's
ability to take a forward-looking view on the credit quality of
the entity. CRISIL believes that the information available for
KSB is consistent with 'Scenario 1' outlined in the 'Framework
for Assessing Consistency of Information with CRISIL BB' rating
category or lower.
KSB is based out of Kollam, Kerala and is engaged in civil
construction work for various Government departments.
KAKATIYA CONSTRUCTIONS: CRISIL Assigns B+ Rating to INR3cr Loan
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to
the bank facilities of Kakatiya Constructions (KC).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term
Bank Loan Facility 1.1 CRISIL B+/Stable (Assigned)
Bank Guarantee 2.4 CRISIL A4 (Assigned)
Cash Credit 3.0 CRISIL B+/Stable (Assigned)
The ratings reflect the long experience of its promoters in the
civil constructions industry and moderate financial risk profile,
marked by moderate gearing and debt protection metrics. These
strengths are partially offset by small scale of operations in
the competitive civil construction industry and working capital
intensive operations.
Key Rating Drivers & Detailed Description
Weakness
* Small scale of operations in a competitive civil constructions
industry: Scale of operations is modest as reflected in revenue
of INR7.08 crore in fiscal 2018. Revenue is expected to remain
around INR13 crores over the medium term. Small scale limits
bargaining power with customers, resulting in moderate operating
margin.
Moreover, KC is exposed to intense competition in the civil
construction industry which is highly fragmented, with the
presence of large organised players and several unorganised
players.
* Working capital intensive nature of operations: The company had
gross current assets (GCA) days of 322 days as on March 31, 2018,
indicating working capital intensive nature of operations.
Strengths
* Long experience of promoter in the constructions industry: The
business risk profile benefits from its promoters' extensive
experience in the civil construction industry. Over the past 10
years, Mr. Sesha Reddy, the key promoter, has developed a keen
understanding of the civil construction industry dynamics,
enabling the company to execute projects efficiently. Their
experience helped establish healthy relationships with key
stakeholders, thereby ensuring a steady order flow.
* Moderate financial risk profile: The financial risk profile is
moderate, supported by moderate gearing of 1,49 time, networth of
INR2.20 crore as on March 31, 2018 and debt protection metrics as
reflected in interest coverage and net cash accrual to total
debt ratios of 2.22 times and 0.13 times, respectively, in fiscal
2018.
Outlook: Stable
CRISIL believes KC will continue to benefit from the long
experience of promoter in the constructions industry. The outlook
may be revised to 'Positive' if sustained growth in scale of
operations and profitability, resulting in improvement in its
financial risk profile. Conversely, the outlook may be revised to
'Negative' in case of a sharp decline in revenues or
profitability or stretch in its working capital cycle, or if any
larger-than expected, debt-funded capital expenditure weakens the
financial risk profile.
KC was established in 2009 as a partnership firm by Mr. Shesha
Reddy. It undertakes Civil Construction primarily buildings.
LAXMI LAL: ICRA Migrates B+ Rating to Not Cooperating Category
--------------------------------------------------------------
ICRA has migrated the ratings for the INR11.00 crore bank
facilities of Laxmi Lal Patel (LLP) to '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-Overdraft COOPERATING; Moved to 'Issuer
Not Cooperating' category
Short Term: Non- 7.00 [ICRA]A4 ISSUER NOT
Fund Based-Bank COOPERATING; Moved to 'Issuer
Guarantee 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 and
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.
LLP was established as a proprietorship firm in 1990. The firm is
engaged in construction of roads awarded under Pradhan Mantri
Gram Sadak Yojna (PMGSY). The firm majorly executes contracts
from PWD Udaipur Zone, PWD Division Salumber, Divisiom Khertwara,
Division Vallabhnagar and other sub divisions. The firm is
registered as class AA contractor which enables it to bid for
contracts of any value across state.
M. M. PROJECTS: CRISIL Maintains D Rating in Not Cooperating
------------------------------------------------------------
CRISIL has been consistently following up with M. M. Projects
(MMP) for obtaining information through letters and emails dated
December 31, 2017 and June 29, 2018 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1.5 CRISIL D (ISSUER NOT COOPERATING)
Cash Credit 1 CRISIL D (ISSUER NOT COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of MMP, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on MMP 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 ratings on bank
facilities of MMP continues to be CRISIL D/CRISIL D Issuer not
cooperating'.
MMP was set up in 2007 as a proprietorship firm by Mr. Mutchu
Mithi. The firm undertakes construction of roads and bridges and
is based in Itanagar, Arunachal Pradesh.
MAHAKALESHWAR INFRATECH: Ind-Ra Rates INR2M Fund-Based Limits BB+
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Mahakaleshwar
Infratech Private Limited's (MIPL) additional bank facilities the
following ratings:
-- INR2 mil. Fund-based limits assigned with IND BB+/
Negative/IND A4+ rating; and
-- INR128 mil. Non-fund-based limits assigned with IND A4+
rating.
RATING SENSITIVITIES
Negative: Any decline in the order book or lack of revenue
visibility and the inability to tap working capital limit will be
negative for the ratings.
Positive: MIPL's ability to achieve revenue as per Ind-Ra's
expectations, an increase in and timely execution of order book,
and the ability to tie up additional working capital limit will
be positive for the ratings.
COMPANY PROFILE
MIPL undertakes engineering, procurement and construction
contracts, primarily road construction for various government
departments such as Uttar Pradesh Public Work Department and
National Highways Authority of India ('IND AAA'/Stable).
MIPL's registered office is in Lucknow. It is promoted by
directors Mr. Anuj Singh, Mr. Manish Singh Chandel and Mr. Sunil
Dewavidi.
MAJESTIC IMPEX: Ind-Ra Assigns 'B+' Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Majestic Impex
(MI) a Long-Term Issuer Rating of 'IND B+' The Outlook is Stable.
The instrument-wise rating actions are:
-- INR7.6 mil. Term loan due on March 2019 assigned with
IND B+/Stable rating;
-- INR35 mil. Fund-based facilities assigned with
IND B+/Stable/IND A4 rating; and
-- INR21 mil. Non-fund-based facilities assigned with IND A4
rating.
KEY RATING DRIVERS
The ratings reflect MI's small scale of operations as indicated
by revenue of INR107 million in FY18 (FY17: INR106 million). The
firm's RoCE was 11% and profitability margins were modest at
11.7% in FY18 (FY17: 11.2%). The margins ranged between 10.8% and
11.4% during FY13-FY18 due to raw material price fluctuations. In
FY18, the improvement in the margins was driven by a reduction in
variable cost. FY18 financials are provisional in nature.
The ratings also factor in MI's modest credit metrics as
indicated by interest coverage (operating EBITDA/gross interest
expense) of 2.2x in FY18 (FY17: 2.3x) and net financial leverage
(total adjusted net debt/operating EBITDAR) of 3.3x (2.7x). The
deterioration in the net leverage was on account of an increase
in debt to INR48 million in FY18 (FY17: INR40 million) to fund
its working capital requirement.
The ratings are also constrained by the firm's partnership nature
of the business.
However, the ratings are supported by MI's comfortable liquidity
position as reflected by 49.7% average utilization of its fund-
based facilities during the 12 months ended June 2018.
The ratings also benefit from the promoters' more than a decade-
long experience in the manufacturing of notebooks and diaries.
RATING SENSITIVITIES
Positive: An improvement in the revenue while maintaining the
profitability margins, leading to an improvement in the credit
metrics on a sustained basis would be positive for the ratings.
Negative: Deterioration in the revenue and profitability margins
leading to deterioration in the overall credit metrics on a
sustained basis would be negative for the ratings.
COMPANY PROFILE
MI manufactures notebooks, diaries calendar papers and wrappers
as per customer specification. It has an annual production
capacity of 200 million quires.
MONAD EDUKASIONAL: Ind-Ra Maintains BB Rating in Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Monad
Edukasional Society's bank facilities' ratings in the non-
cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will continue to appear as 'IND BB (ISSUER NOT COOPERATING)' on
the agency's website.
The instrument-wise rating actions are:
-- INR74.43 mil. Term loans maintained in non-cooperating
category with IND BB (ISSUER NOT COOPERATING) rating; and
-- INR110 mil. Fund-based working capital facility maintained in
non-cooperating category with IND BB (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
July 27, 2016. Ind-Ra is unable to provide an update as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Monad Edukasional Society, established in April 2007, offers
diploma, post-graduation, graduation, Ph.D. and other courses
over a wide range of subjects.
MOTIL DEVI: CRISIL Maintains B Rating in Not Cooperating Category
-----------------------------------------------------------------
CRISIL has been consistently following up with Motil Devi Organic
Food Industries Private Limited (MDO) for obtaining information
through letters and emails dated December 31, 2017 and June 29,
2018 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Term Loan 5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of MDO, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on MDO 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 ratings on bank
facilities of MDO continues to be CRISIL B/Stable Issuer not
cooperating'
Incorporated in 2013, MDO manufactures ice-creams under the brand
Mental. The company has a manufacturing plant in Raipur
(Chhattisgarh). Its operations are managed by Mr. Deepak Wadhwani
and Mr. Harish Wadhwani.
MOULIKA INFRA: CRISIL Migrates C Rating to Not Cooperating
----------------------------------------------------------
CRISIL has been consistently following up with Moulika Infra
Developers (India) Limited (Moulika) for obtaining information
through letters and emails dated December 31, 2017 and June 29,
2018 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Bank Guarantee 3.5 CRISIL A4 (ISSUER NOT
COOPERATING)
Cash Credit 7.5 CRISIL C (ISSUER NOT
COOPERATING)
Proposed Long Term 4.0 CRISIL C (ISSUER NOT
Bank Loan Facility COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Moulika, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on Moulika
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 ratings on bank
facilities of Moulika continues to be CRISIL C/CRISIL A4 Issuer
not cooperating'
Incorporated in the year 2010 as a partnership firm, Moulika
Infra Developers (India) Limited (Moulika) was converted into a
limited company in February 2014. The company was promoted by Mr.
Jayant Patel, Mr. Arvind Patel, Mr. Raja Gopal Reddy and Mr.
Pratap Reddy. The company is involved in undertaking civil
construction works like construction of Canals and Bridges.
MTAR TECHNOLOGIES: CRISIL Maintains C Rating in Not Cooperating
---------------------------------------------------------------
CRISIL has been consistently following up with MTAR Technologies
Private Limited (MTAR) for obtaining information through letters
and emails dated December 31, 2017 and June 29, 2018, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ---------- -------
Bank Guarantee 85 CRISIL A4 (ISSUER NOT
COOPERATING)
Cash Credit 30 CRISIL C (ISSUER NOT
COOPERATING)
Letter of Credit 5 CRISIL A4 (ISSUER NOT
COOPERATING)
Standby Line of 5 CRISIL A4 (ISSUER NOT
Credit COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of MTAR Technologies Private
Limited. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for MTAR Technologies Private
Limited 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 MTAR continues to be CRISIL C/CRISIL A4 Issuer not
cooperating.
MTAR, established in 1970, is promoted by Mr. P Ravindra Reddy,
Mr. K Satyanarayana Reddy, and Mr. P Jayprakash Reddy. The ISO
9001-2000-certified company manufactures precision machined parts
and major equipment for ISRO, DAE, Nuclear Power Corporation of
India Ltd, defence organisations, and overseas clients. MTAR has
seven manufacturing units in Balanagar in Hyderabad (Telangana).
NAGPAL WAREHOUSE: CRISIL Reaffirms B Rating on INR6cr Term Loan
---------------------------------------------------------------
CRISIL has been consistently following up with Nagpal Warehouse
Inc. (NWI) for obtaining information through letters and emails
dated December 31, 2017 and June 29, 2018 among others, apart
from telephonic communication. However, the issuer has remained
non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 6 CRISIL B/Stable (Reaffirmed)
(Issuer Not Co-operating)
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 NWI, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on NWI 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 NWI continues to be 'CRISIL B/Stable Issuer not
cooperating'
NWI, a partnership firm set up in 2012, is promoted by Mr.
Kanhaiya Nagpal and his son Mr. Ajay Nagpal. The firm has a
warehouse on 226,512 square feet (sq ft) of land to facilitate
storage of agriculture-based products in Sonepat (Haryana).
NATIONAL RICE: CRISIL Maintains B Rating in Not Cooperating
-----------------------------------------------------------
CRISIL has been consistently following up with National Rice Mill
(NRM) for obtaining information through letters and emails dated
December 31, 2017 and June 29, 2018 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.89 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Proposed Long Term 1.62 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of NRM, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on NRM 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 NRM continues to be 'CRISIL B/Stable Issuer not
cooperating'
Formed in 2006 as a partnership concern, NRM mills and processes
par boiled rice. Its rice mill is in Hooghly (West Bengal). Its
operations are managed by the promoter Mr. Bansi Badan Dey.
NAUVATA ENGINEERING: CRISIL Keeps B- Rating in Not Cooperating
--------------------------------------------------------------
CRISIL has been consistently following up with Nauvata
Engineering Pvt Ltd (NEPL) for obtaining information through
letters and emails dated December 31, 2017 and June 29, 2018
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Working Capital 9 CRISIL B-/Stable (ISSUER NOT
Term Loan COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of NEPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on NEPL 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 NEPL continues to be 'CRISIL B-/Stable Issuer not
cooperating'
Nauvata is a leading engineering and project management company.
It mainly provides engineering, designing, and project management
services to oil and gas companies worldwide. It is privately
owned and is based in Bengaluru. The company was originally set
up in 2005 by Mr. Ashwin D Raikar and his wife Ms. Meghana Raikar
as Silicon Designs (M) India Pvt Ltd. In 2008, this company was
renamed; 2008-09 (refers to financial year, April 1 to March 31)
was Nauvata's first year of operations.
NEO BUILDERS: CRISIL Maintains D Rating in Not Cooperating
----------------------------------------------------------
CRISIL has been consistently following up with Neo Builders and
Developers (NBD) for obtaining information through letters and
emails dated December 31, 2017 and June 29, 2018, among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 20 CRISIL D (ISSUER NOT
COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Neo Builders and Developers.
This restricts CRISIL's ability to take a forward looking view on
the credit quality of the entity. CRISIL believes that the
information available for Neo Builders and Developers 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 NBD continues to be CRISIL D Issuer not
cooperating.
NBD was setup in 2005, as a sole proprietorship concern of Mr.
Naresh Mehta. The firm is engaged in residential real estate
development in Mumbai. The firm is currently undertaking
redevelopment project at Girgaon, Mumbai.
NGRT SYSTEMS: CRISIL Maintains B Rating in Not Cooperating
----------------------------------------------------------
CRISIL has been consistently following up with Ngrt Systems
Private Limited (NSPL) for obtaining information through letters
and emails dated December 31, 2017 and June 29, 2018 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL B/Stable (ISSUER NOT
COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of NSPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on NSPL 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 ratings on bank
facilities of NSPL continues to be CRISIL B/Stable Issuer not
cooperating'
NSPL was set up in 2011 by Mr. Shantanu Gadre and Mrs. Pranoti
Gadre. The company operates a chain of Apple Premium Reseller
stores, and sells all product categories of Apple India Pvt Ltd.
The company has three stores in Nagpur, Indore, and Bhopal. It
also provides services in areas of professional audio and video
solutions.
NOBLE MOULDS: CRISIL Maintains B Rating in Not Cooperating
----------------------------------------------------------
CRISIL has been consistently following up with Noble Moulds
Private Limited (NMPL) for obtaining information through letters
and emails dated December 31, 2017 and June 29, 2018, among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Medium Term Loan 1 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Open Cash Credit 14 CRISIL B/Stable (ISSUER NOT
COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Noble Moulds Private Limited.
This restricts CRISIL's ability to take a forward looking view on
the credit quality of the entity. CRISIL believes that the
information available for Noble Moulds Private Limited 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 NMPL continues to be CRISIL B/Stable Issuer not
cooperating'.
NMPL, set up in 1999, manufactures mouldings and other plastic
products used in electronic goods such as televisions, washing
machines, and refrigerators. Its facilities are in Noida (Uttar
Pradesh).
PAVANSUT POLYTEX: ICRA Raises Rating on INR4.75cr Loan to B+
------------------------------------------------------------
ICRA has upgraded the long-term rating to [ICRA]B+) from [ICRA]B
for the INR4.75-crore term loan and the INR3.50-crore cash credit
facility of Pavansut Polytex Private Limited. The outlook on the
long-term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based
Term Loan 4.75 [ICRA]B+ (Stable); Upgraded
from [ICRA]B (Stable)
Fund-based
Cash Credit 3.50 [ICRA]B+ (Stable); Upgraded
from [ICRA]B (Stable)
Rationale
The rating upgrade considers the stablisation of the company's
operations along with the ramp up of sales volumes in Q1FY2019.
The rating also positively factors in the adequate experience of
the promoters in the packaging industry. The rating, however,
remains constrained by PPPL's average financial risk profile,
which is marked by leveraged capital structure, below average
debt coverage indicators and high working capital intensity
because of high inventory level and receivables days. The rating
also factors in the firm's small scale of operations in a highly
fragmented industry, characterised by the presence of large
number of small players; the limited product differentiation,
which leads to intense competition; and the exposure of
profitability to fluctuations in key raw material prices, which
are primarily crude oil derivatives.
Outlook: Stable
ICRA expects PPPL to continue to benefit from the experience of
its promoters. The outlook may be revised to Positive if the
company reports healthy revenue and profitability and ensures
efficient working capital management along while regular debt
repayments. The outlook may be revised to Negative if cash
accruals are lower than expected, or any delay in debt repayments
or stretch in working capital cycle weakens the liquidity
position of the company.
Key rating drivers
Credit strengths
Experience of promoters: Established in 2016, PPPL manufactures
polypropylene (PP) woven sack fabric and bags. Its key promoters,
Mr. Pankaj Kanabar, Mr. Krupal Chandibhamar, Mr. Bimal
Chandibhamar and Mr. Romil Chandibhamar, have five years of
experience in the packaging operation. The extensive experience
of promoter's helps the company to garner orders from final
customers.
Stablisation of operation: The company commenced commercial
operation from July 2017. The company has been able to scale up
post stabilisation of its operations as reflected from its
revenues of INR5.77 crore in 3M FY2019 as against INR5.75 crore
in 8MFY2018 (provisional figures).
Credit challenges Limited track record of operations with average
financial risk profile: The company reported an operating profit
of INR0.85 crore and a net loss of INR0.09 crore, as per the
provisional figures in 8MFY2018. The company's financial risk
profile remained average, marked by leveraged capital structure.
The gearing level was high at 3.48 times as on March 2018. The
company's capital structure and debt coverage indicators are
expected to remain at the average levels, with estimated gearing
of 3.46 times, interest coverage at 2.63 times and TD/OPBDITA at
4.31 times as on March 31, 2019, because of high interest
expenses and impending debt repayment obligations in the initial
years of operations. Its liquidity position also remained modest,
as evident from the modest utilisation (~68%) of working capital
limits in the last 11 months.
Intense competition and limited product differentiation: (PP)
woven fabric industry has a fragmented structure, with presence
of numerous small scale players, as the industry needs low
capital investment and has limited entry barriers. This has led
to intense competition among the players.
Profitability to remain susceptible to volatility in raw material
prices: PP granules is a derivative of crude oil, which is a
volatile commodity. The prices of PP granules mirror the crude
oil prices to some extent and hence the profitability of the
company remains exposed to any adverse fluctuations in crude oil
prices.
Pavansut Polytex Pvt. Ltd. (PSC) was established as a private
limited company by Mr. Pankaj Kanabar and his family members in
April 2016. The company manufactures PP woven sack fabric and
bags. The commercial operations commenced from July 2017. Its
manufacturing facility is located at Tankara in Morbi District,
Gujarat. It has an installed capacity to produce 1,00,000 PP
woven bags and 10000 kilogram of PP woven fabric per day.
PONDY VENKATESWARA: CRISIL Maintains B Rating in Not Cooperating
----------------------------------------------------------------
CRISIL has been consistently following up with Pondy Venkateswara
Modern Rice Mill (Pondy) for obtaining information through
letters and emails dated December 31, 2017 and June 29, 2018
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Proposed Long Term 0.5 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of PONDY, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on PONDY 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 PONDY continues to be 'CRISIL B/Stable Issuer not
cooperating'
Established as a proprietorship firm in 1992 and based in
Ariyankuppam (Puducherry) under the proprietorship of Mrs. P
Premavati, Pondy is engaged in milling and processing of paddy
into rice, rice bran, broken rice and husk. The day to day
operations are managed by Mr. Govindaraju who is the son of the
proprietor, Mrs.P Premavathi.
PUSH INTEGRATED: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Push Integrated Communications Private Limited
16/70 Harisankar Road Tharekkad Palakkad
Kerala 678 001
Insolvency Commencement Date: July 13, 2018
Court: National Company Law Tribunal, Chennai Bench
Estimated date of closure of
insolvency resolution process: January 9, 2019
(180 days from commencement)
Insolvency professional: Prashant Mohan
Interim Resolution
Professional: Prashant Mohan
39 Sreyas, Chettiparambil Lane,
Choorakkad, Thekkumbhagom,
Tripunithura P.O., Ernakulam District,
Kerala - 682 301.
E-mail: prashant.cacs@gmail.com
Last date for
submission of claims: July 31, 2018
PVSRSN ENTERPRISE: CRISIL Maintains D Rating in Not Cooperating
---------------------------------------------------------------
CRISIL has been consistently following up with PVSRSN Enterprise
Private Limited (PVSRSN) for obtaining information through
letters and emails dated December 31, 2017 and June 29, 2018
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 10 CRISIL D (ISSUER NOT
COOPERATING)
Cash Credit 15 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Long Term 5 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of PVSRSN, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on PVSRSN
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 PVSRSN continues to be CRISIL D/CRISIL D Issuer not
cooperating'
PVSRSN was set up as a proprietorship firm in 2003 by Mr. P V
Sita Rama Swamy Naidu. The firm was reconstituted as a closely
held company in 2008. PVSRSN undertakes civil construction
activities entailing irrigation and roadwork, and has implemented
projects in Andhra Pradesh.
R.B. GEARS: CRISIL Maintains B+ Rating in Not Cooperating
---------------------------------------------------------
CRISIL has been consistently following up with R.B. Gears Private
Limited (RBGPL) for obtaining information through letters and
emails dated December 31, 2017 and June 29, 2018 among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3 CRISIL B+/Stable (ISSUER NOT
COOPERATING)
Term Loan 5 CRISIL B+/Stable (ISSUER NOT
COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of RBGPL, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on RBGPL 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 RBGPL continues to be 'CRISIL B+/Stable Issuer not
cooperating.
RBGPL was incorporated in 2009 by Punjab based Mr. Sanjeev Garg
and his wife Mrs. Renu Garg. RBGPL is engaged in manufacturing of
auto components mainly gears, shafts etc., for tractors industry.
RAYFAM ENTERPRISES: CRISIL Keeps B Rating in Not Cooperating
------------------------------------------------------------
CRISIL has been consistently following up with Rayfam Enterprises
Private Limited (PVSRSN) for obtaining information through
letters and emails dated December 31, 2017 and June 29, 2018
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Overdraft 1 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Proposed Working 4 CRISIL B/Stable (ISSUER NOT
Capital Facility COOPERATING)
Working Capital 5 CRISIL B/Stable (ISSUER NOT
Facility COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of PVSRSN, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on PVSRSN
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 PVSRSN continues to be 'CRISIL B/Stable Issuer not
cooperating'
REPL is a holding company, established in 1996, for managing
investments of its group companies in various sectors. The
company's corporate office is in Delhi.
SHARMA CARS: ICRA Reaffirms B+ Rating on INR25.73cr Cash Loan
-------------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ for the
INR25.73-crore long-term fund based cash credit facility of
Sharma Cars Private Limited (SCPL). ICRA has also reaffirmed the
long-term rating of [ICRA]B+ and the short-term rating of
[ICRA]A4 for SCPL's unallocated limits of INR9.96-crore. The
outlook on the long-term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based 25.73 [ICRA]B+ (Stable); reaffirmed
Cash Credit
Unallocated 9.96 [ICRA]B+ (Stable)/A4;
Reaffirmed
Rationale
The ratings reaffirmation continues to take into account the
SCPL's weak capital structure, stemming from high reliance
on working capital borrowings for maintaining vehicle
inventories. This along with weak profitability and low accruals
has led to below satisfactory coverage indicators. The ratings
are also constrained by the high degree of competition among
dealers of various automobile companies and the company's
exposure to the cyclicality of the Indian passenger vehicle
industry. The ratings also take into account the commission
structure decided by the principal, which keeps the company's
margins under check.
The ratings, however, favorably take into account the promoters'
extensive experience in the automobile dealership business and
SCPL's established market position in Ahmedabad as an authorised
dealer of Hyundai Motors India Limited (HMIL).
Outlook: Stable
ICRA expects SCPL to continue to benefit from the experience of
its promoters in the auto dealership industry as well as from the
company's established position in Ahmedabad. The outlook may be
revised to Positive if substantial growth in scale and
profitability, and better working capital management strengthen
the overall financial risk profile. The outlook may be revised to
Negative if any significant decline in scale and profitability
leads to lower-than-expected cash accruals, or any major debt-
funded capital expenditure or stretch in working capital
deteriorates the capital structure and weakens the overall
liquidity position.
Key rating drivers
Credit strengths
Extensive experience of promoters in auto-dealership business:
SCPL's promoters have over two decade-long experience in the
automobile dealership business.
Established position as authorised dealer of HMIL in Ahmedabad:
The company is among the leading and oldest dealers of HMIL in
Ahmedabad, dealing in the entire range of passenger vehicles. It
operates two showrooms with 3S (sales, service and spares)
facilities, one showroom with only sales facility and one
showroom with second hand car selling facility.
Credit challenges
Highly leveraged capital structure with weak coverage indicators:
The company's total debt level has remained high over the past
few years on account of the increase in working capital borrowing
to fund the inventory requirements. Moreover, it also availed
term loans/unsecured loans to fund its expansion initiatives.
High external borrowings have resulted in a particularly
leveraged capital structure (gearing of 8.55 times and TOL/TNW of
10.13 times in FY2017) with weak coverage indicators (OPBDIT/I&F
ratio of 1.13 times, TD/OPBIDT of 8.12 times and the NCA/debt
ratio of 2% in FY2017).
Inherently low margins due to low value-adding business and
principal-regulated commission structure: The operating profit
margin of auto dealers, including SCPL, is inherently low because
of the high-volume and low-margin business. Moreover, as the OEMs
decide the commission structure, the margins of the auto dealers
are restricted to a significant extent.
Intense competition in automobile dealership industry: SCPL
enjoys a strong competitive position. However, it faces stiff
competition from dealers of other four-wheeler OEMs besides,
other five HMIL-authorised dealers in Ahmedabad. The rising
competition forces the dealers to pass on higher discounts,
thereby lowering the profitability.
Incorporated in 1998, Sharma Cars Private Limited (SCPL) is
involved in the automobile dealership of Hyundai Motors India
Limited's (HMIL) passenger vehicles. The company is promoted by
Mr. Narendra Sharma, Mr. Surendra Sharma and Mr. Subashchandra
Sharma, who have experience in manufacturing bus coaches. SCPL
has presence in Ahmedabad (Gujarat), through two 3S (sales,
service and spares) showrooms, one 1S (sales) showroom and one
true value outlet.
In FY2017, the company reported a net profit of INR0.36 crore on
an operating income of INR246.00 crore, as compared to a net
profit of INR0.33 crore on an operating income of INR232.84 crore
in FY2016. In 9MFY2018 (unaudited financials), the company
reported a net profit of INR0.24 crore on an operating income of
INR233.96 crore.
SHIVALI UDYOG: CRISIL Maintains B Rating in Not Cooperating
-----------------------------------------------------------
CRISIL has been consistently following up with Shivali Udyog
India Limited (SUIL) for obtaining information through letters
and emails dated December 31, 2017 and June 29, 2018 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.15 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Proposed Long Term 21.23 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
Working Capital 7.20 CRISIL B/Stable (ISSUER NOT
Demand Loan COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SUIL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SUIL 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 SUIL continues to be 'CRISIL B/Stable Issuer not
cooperating'.
SUIL, based in Raipur (Chhattisgarh), was acquired by its current
promoters, Mr. Vinod Agrawal and Mr. Ashok Agrawal, in March
2002. The promoters have experience of more than three decades in
the iron and steel industry. The company produces mild steel (MS)
wire rods, MS rounds, thermo-mechanically treated bars, and hard
bright (HB) wires. Its facilities have capacity of 41,000 tonnes
per annum (tpa) for HB wires and rolling capacity of 100,000 tpa.
SHIVALIK CONTAINERS: CRISIL Maintains B Rating in Not Cooperating
-----------------------------------------------------------------
CRISIL has been consistently following up with Shivalik
Containers Private Limited (SCPL) for obtaining information
through letters and emails dated December 31, 2017 and June 29,
2018 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Term Loan 1 CRISIL B/Stable (ISSUER NOT
COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SCPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SCPL 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 SCPL continues to be 'CRISIL B/Stable Issuer not
cooperating'
Incorporated in 1997 by Mr. Sardana, SCPL manufactures corrugated
boxes, Rolls, Sheets. The company is engaged in the manufacturing
of 5 ply corrugated boxes with a total manufacturing capacity of
1500 tonnes per month.
SHIVAM MASALA: CRISIL Maintains B- in Not Cooperating Category
--------------------------------------------------------------
CRISIL has been consistently following up with Shivam Masala
Private Limited (SMPL) for obtaining information through letters
and emails dated December 31, 2017 and June 29, 2018 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SMPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SMPL 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 SMPL continues to be 'CRISIL B-/Stable Issuer not
cooperating'
SMPL, incorporated in 1999 and promoted by Mr. Venugopal Khanna
and his family members, processes and distributes spices and
pickles under its registered brand, Paras.
SHREE BALAJI: Ind-Ra Maintains 'BB+' LT Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Shree Balaji
Alumnicast Private Limited's Long-Term Issuer Rating in non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using the rating. The rating will
continue to appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR120 mil. Long-term loan maintained in Non-Cooperating
Category with IND BB+ (ISSUER NOT COOPERATING) rating;
-- INR150 mil. Fund-based limit maintained in Non-Cooperating
Category with IND BB+ (ISSUER NOT COOPERATING) rating; and
-- INR1.050 mil. Non-fund-based limit maintained in Non-
Cooperating Category with IND A4+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
May 18, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2007, Shree Balaji Alumnicast supplies aluminum
alloy ingots to major die cast component producers.
SHREE COTEX: ICRA Raises Rating on INR7cr Cash Loan to B+
---------------------------------------------------------
ICRA has upgraded the long-term rating to [ICRA]B+ from [ICRA]B
for the INR9.10-crore fund-based bank facilities of Shree Cotex.
The outlook on the long-term rating is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Cash Credit 7.00 [ICRA]B+(Stable); upgraded
from [ICRAB(Stable)
Unallocated 1.69 [ICRA]B+(Stable); upgraded
from [ICRAB(Stable)
Term Loan 0.41 [ICRA]B+(Stable); upgraded
from [ICRAB(Stable)
Rationale
The upgrade in the rating factors in the gradual improvement in
gearing level over a period of time, coupled with its limited
debt repayment obligation, going forward. The rating continues to
derive comfort from the extensive experience of SC's partners in
the cotton ginning industry and the proximity of the firm's
manufacturing unit to raw materials (raw cotton), easing
procurement.
The rating, however, remains constrained by the moderate scale of
operations and weak financial profile characterised by low
profitability, average coverage indicators and high inventory
holding. The rating also factors in the vulnerability of the
firm's profitability to any fluctuations in raw material prices
in the inherently low value-added ginning business and high
competitive intensity which pressurises the margins. ICRA also
notes the potential adverse impact on the net worth and the
gearing levels in case of substantial withdrawal from capital
accounts.
Outlook: Stable
ICRA believes SC will continue to benefit from the past
experience of its partners in the cotton industry. The outlook
may be revised to Positive if it firm witnesses healthy
improvement in scale of operations and profitability or
substantial infusion of capital or better working capital
management strengthens the capital structure and liquidity
profile. The outlook may be revised to Negative if firm reports
substantial de-growth in scale and profitability leading to
inadequate net cash accruals to repay the debt obligations or if
any debt funded capital expenditure leads to deterioration in
capital structure or any further capital withdrawals which may
weaken the overall liquidity position of the firm.
Key rating drivers
Credit strengths
Experience of partner in the cotton industry: SC was established
in 2014, with the partners having extensive experience through
their association in other entities in the cotton business.
Location specific advantage: The firm benefits in terms of lower
transportation cost and easy access to quality raw material, due
to its proximity to raw material suppliers.
Improvement in capital structure over the years: The total debt
of the firm declined from INR8.27 crore as on March 31, 2016 to
INR7.11 crore as on March 31, 2017 and further to INR6.73 crore
as on March 31, 2018 supported by its term loan repayments.
Hence, lower debt coupled with net-worth of INR6.13 crore, the
gearing level stood at 1.10 times as on March 31, 2018 improved
from 1.22 times as on March 31, 2016 and 1.55 times as on
March 31, 2016.
Credit challenges
Weak financial risk profile: SC's scale of operations has
remained stagnant and moderate with ~2% growth in FY2018 to
INR38.54 crore from INR37.94 crore in FY2017. The profitability
has also continued to remain low at 2.65% due to low value
additive nature of business and intense competition in cotton
ginning business. The net margin stood low at 0.32% in FY2018.
The total debt of the firm declined to INR6.73 crore as on
March 31, 2018 from INR7.11 crore as on March 31, 2017 on account
of reduced term loan. Lower debt coupled with improvement in net-
worth to INR6.13 crore in FY2018 from INR5.81 crore in FY2017,
the gearing level resulted to 1.10 times as on March 31, 2018
from 1.22 times as on March 31, 2017. The coverage indicator
remained average with interest coverage ratio of 1.64 times and
NCA/Debt of 6% in FY2018 due to low profitability. The working
capital intensity stood high at 27% in FY2018 due to high
inventory holding as on March 31, 2018.
Profitability remains vulnerable to agro-climatic condition and
regulatory changes: The cotton ginning business is low value
additive in nature and the profit margins are also exposed to
fluctuations in the raw material (raw cotton) prices, which
depend upon various factors like seasonality, climatic
conditions, international demand and supply situation, export
policy, etc. Further, it is also exposed to the regulatory risks
with regards to the Minimum Support Price (MSP), which is set by
the Government.
Intense competition and fragmented industry: The firm faces stiff
competition from other small and unorganised players in the
industry, which limits its bargaining power with customers and
suppliers and hence, exerts pressure on its margins.
Adverse impact on net-worth: SC, being a partnership firm, is
exposed to adverse capital structure risk in case of substantial
withdrawal from its capital accounts.
Established in 2013 as a partnership firm, Shree Cotex (SC) is
involved in the business of ginning and pressing of raw cotton to
produce cotton bales and cottonseeds. SC's manufacturing
facility, located at Rajkot in Gujarat, is equipped with 36
ginning machines, 1 pressing machine with an installed capacity
of 13,759 MT per annum. The firm commenced operations on July
2014. The partners of the firm have extensive experience in the
cotton industry.
SHRI LAL: CRISIL Maintains B+ Rating in Not Cooperating Category
----------------------------------------------------------------
CRISIL has been consistently following up with Shri Lal Bahadur
Shastri Research and Training Institute (SLBS) for obtaining
information through letters and emails dated December 31, 2017
and June 29, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2 CRISIL B+/Stable (ISSUER NOT
COOPERATING)
Proposed Long Term 3 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
Term Loan 2 CRISIL B+/Stable (ISSUER NOT
COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SLBS, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SLBS 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 SLBS continues to be 'CRISIL B+/Stable Issuer not
cooperating'
Established in 2000, SLBS is a registered society which runs 10
education institutions including one school and nine institutions
offering various courses in engineering, nursing, teacher
training and animal husbandry. These institutions are located in
Jodhpur and Jaipur (both in Rajasthan).
SRI VENKATESWARA: CRISIL Maintains B Rating in Not Cooperating
--------------------------------------------------------------
CRISIL has been consistently following up with Sri Venkateswara
Rice Mill (SVRM) for obtaining information through letters and
emails dated December 31, 2017 and June 29, 2018 among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Working Capital 13 CRISIL B/Stable (ISSUER NOT
Facility COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SVRM, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SVRM 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 SVRM continues to be 'CRISIL B/Stable Issuer not
cooperating'.
SVRM is engaged in milling and processing of paddy into rice,
rice bran, broken rice and husk. The firm is promoted by
Mr.T.Sura Reddy and his family members. The firm is based in
Komaripalem, Andhra Pradesh.
SULAKSHANA AGENCIES: CRISIL Maintains B Rating in Not Cooperating
-----------------------------------------------------------------
CRISIL has been consistently following up with Sulakshana
Agencies (Sulakshana) for obtaining information through letters
and emails dated December 31, 2017 and June 29, 2018 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL B/Stable (ISSUER NOT
COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Sulakshana, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on
Sulakshana 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 Sulakshana continues to be 'CRISIL B/Stable Issuer
not cooperating'.
Sulakshana was originally established as a proprietorship firm in
1994 by Mr. Sridhar Kamath; it was reconstituted as a partnership
firm in 2010. Sulakshana, based in Mangaluru (Karnataka), is
currently engaged in distribution of the Samsung brand of
consumer durables over three districts of Karnataka' Dakshina
Kannada, Udupi, and North Kanara.
TARA HEALTH: CRISIL Maintains D Rating in Not Cooperating
---------------------------------------------------------
CRISIL has been consistently following up with Tara Health Foods
Limited (THFL) for obtaining information through letters and
emails dated December 31, 2017 and June 29, 2018 among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 217.54 CRISIL D (ISSUER NOT
COOPERATING)
Term Loan 84.46 CRISIL D (ISSUER NOT
COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of THFL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on THFL 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 THFL continues to be 'CRISIL D Issuer not
cooperating'.
THFL was incorporated in 1977 and was acquired in 2004 by the
current promoter. The company is currently owned and managed by
Mr. Balwant Singh, managing director, who is a first-generation
entrepreneur with about nine years of experience in the cattle-
feed industry. THFL produces and supplies compounded cattle feed
and refines and processes edible oil, including olive oil and
blended oil, primarily in northern India.
TEEKAY MARINES: ICRA Maintains B Rating in Not Cooperating
----------------------------------------------------------
ICRA said the ratings for the bank facilities of Teekay Marines
Private Limited (TMPL) continue to remain under 'Issuer Not
Cooperating' category. The ratings are now denoted as "[ICRA]B
(Stable)/[ICRA]A4 ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund based-Export 10.00 [ICRA]B (Stable) ISSUER NOT
Packing Credit COOPERATING; Rating
(EPC) continues to remain under
'Issuer Not Cooperating'
category
Fund based-Foreign 3.00 [ICRA]B (Stable) ISSUER NOT
Bill Discounting COOPERATING; Rating
(FBD) continues to remain under
'Issuer Not Cooperating'
category
Fund based-Standby 1.50 [ICRA]B (Stable) ISSUER NOT
Line of Credit (SLC) COOPERATING; Rating
continues to remain under
'Issuer Not Cooperating'
category
Non-fund based- 0.30 [ICRA]A4 ISSUER NOT
Credit Exposure Limit COOPERATING; Rating
continues to remain under
'Issuer Not Cooperating'
Category
ICRA has been trying to seek information from the entity so as to
monitor its performance, but despite repeated requests by ICRA,
the entity's management has remained non-cooperative. The current
rating action has been taken by ICRA basis best available
information on the issuer's performance. Accordingly the lenders,
investors and other market participants are advised to exercise
appropriate caution while using this rating as the rating may not
adequately reflect the credit-risk profile of the entity.
TMPL was incorporated in April, 2001 and is involved in the
processing and export of different varieties of shrimp and other
seafood. The company's processing facility is located at the
Chandaka Industrial Estate in Bhubaneswar, Odisha. TMPL is
promoted by Mr. T. K. Narayanan and his family.
TRIBHAWAN AND CO: CRISIL Maintains B Rating in Not Cooperating
--------------------------------------------------------------
CRISIL has been consistently following up with Tribhawan and Co.
(TAC) for obtaining information through letters and emails dated
December 31, 2017 and June 29, 2018 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Warehouse Receipts 10 CRISIL B/Stable (ISSUER NOT
COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of TAC, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on TAC 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 TAC continues to be 'CRISIL B/Stable Issuer not
cooperating'.
TAC is a proprietorship firm promoted by Mr. Anil Jain. It trades
in paddy and rice (Basmati and Parmal), and has been in this
business for a few decades.
UNIFLEX INDUSTRIES: ICRA Reaffirms B+ Rating on INR5cr Loan
-----------------------------------------------------------
ICRA has reaffirmed the long-term rating of [ICRA]B+ for the
INR5-crore fund-based and the short-term rating of [ICRA]A4 for
the INR5-crore non-fund based bank facilities of Uniflex
Industries Private Limited. The outlook on the long-term rating
is Stable.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Fund-based-
Working Capital 5.00 [ICRA]B+ (Stable); Reaffirmed
Non-fund Based
Limits 5.00 [ICRA]A4; Reaffirmed
Rationale
The rating reaffirmation takes into account the deterioration in
operating income (OI) and profitability in FY2017 and FY2018 on
account of increased competition and lack of supply of raw
material from Gas Authority of India Limited (GAIL) and
Brahmaputra Crackers and Polymers Limited (BCPL). However, UIPL
is expected to perform well in the current fiscal on account of
improvement in supply of raw materials from GAIL and BCPL.
The ratings continue to be constrained by the company's modest
scale of operation in consignment stockiest (CS) business as well
as the modest financial profile as reflected in its low net
worth, high gearing and moderate debt protection indicators. The
ratings also continue to be impacted by the company's exposure to
counterparty risks (default on payments would be borne by UIPL
for GAIL and BCPL) and the susceptibility of its profitability to
interest income from debtors, given the interest spread against
borrowing cost. The ratings, however, continue to take into
account the company's long track record in the polymers
distribution business, the healthy demand prospects for polymer
products marketed by it, and its diversified customer profile.
ICRA also notes that margins are protected against commodity
price movements as most of the sales are made on commission
basis, with fixed margins per tonne for the company.
Going forward, the company's ability to improve its scale of
operations and profitability while managing its working capital
in an optimal manner will remain the key rating sensitivity from
the credit perspective.
Outlook: Stable
ICRA believes that UIPL will continue to benefit from the
extensive experience of promoters in the polymer trading industry
and the increasing demand of polymer-based products in the
domestic markets. The outlook may be revised to Positive if
significant improvement in revenues and profitability strengthen
the company's financial risk profile. The outlook may be revised
to Negative if revenues and cash accruals are lower than expected
or stretch in the working capital cycle weakens liquidity.
Key rating drivers
Credit strengths
Experienced management and established track record: UIPL's
management has been involved in the business for a long period of
time and has gained a thorough knowledge of the polymer industry.
The company's well-established presence in the industry has
helped it in developing a strong network of suppliers and
customers. The company is one of the leading distributors of GAIL
and BCPL in eastern UP.
Positive demand outlook: There has been a healthy and increasing
demand for the various polymer products and chemicals such as
high-density polyethylene (HDPE), linear low-density polyethylene
(LLDPE), polypropylene (PP) etc. The rising demand of plastic-
based products and growing plastic processing industries and end-
user industries augur well for the company.
Credit weaknesses
Intensely competitive and fragmented industry: The fragmented
nature of the industry leads to intense competition for the
company from various players along with the fixed nature of
commission income from GAIL and BCPL. The company faces
competition from the CSs of GAIL and Oil and Natural Gas
Corporation Limited (ONGC).
Decline in revenues and profitability in FY2017 and FY2018: The
revenues and profitability declined in FY2017 and FY2018 due to
increased competition and lack of raw material supply from GAIL
and BCPL. This apart, ONGC appointed a CS in the same region,
which impacted UIPL's revenues and profitability.
Weak financial risk profile: UIPL has a weak financial profile as
depicted by moderate interest cover, low debt coverage indicators
and highly leveraged capital structure. The gearing was high 3.40
times as on March 31, 2018, due to the low net worth and high
working capital borrowings. Exposure of default risk - The
company is exposed to default risk on payments from customers
since the credit risk is transferred by GAIL and BCPL to UIPL,
the latter being in the CS business.
UIPL, incorporated in 1997, is the CS for GAIL and BCPL for
distribution of polymer products in eastern UP. The company makes
sales from a stock point in Kanpur and ex-factory unit at Pata in
Auraiya, Uttar Pradesh.
UNITED ELECTRICAL: CRISIL Maintains C Rating in Not Cooperating
---------------------------------------------------------------
CRISIL has been consistently following up with United Electrical
Industries Limited (UEIL) for obtaining information through
letters and emails dated December 31, 2017 and June 29, 2018
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Cr) Ratings
---------- -------- -------
Bank Guarantee 3 CRISIL A4 (ISSUER NOT
COOPERATING)
Cash Credit 4 CRISIL C (ISSUER NOT
COOPERATING)
Proposed Cash 6 CRISIL C (ISSUER NOT
Credit Limit COOPERATING)
Proposed Short Term 7 CRISIL A4 (ISSUER NOT
Bank Loan Facility COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of UEIL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on UEIL 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 ratings on bank
facilities of UEIL continues to be 'CRISIL C/CRISIL A4 Issuer not
cooperating'.
Set up in 1950, UEIL manufactures energy meters. GoK holds an
equity stake of 97.2 per cent in the company. UEIL sells its
products under the Unilec brand, with Kerala State Electricity
Board as its biggest customer.
VAGAD ENTERPRISES: ICRA Withdraws B+ Rating INR17cr LT Loan
-----------------------------------------------------------
ICRA has withdrawn the long-term rating of [ICRA]B+; ISSUER NOT
CO-OPERATING assigned to the INR17.00 crore fund-based bank limit
of Vagad Enterprises.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term fund- 17.00 [ICRA]B+ ISSUER NOT
based limit CO-OPERATING; Withdrawn
Rationale
The rating assigned for bank facilities of the company has been
withdrawn at the request of the company and on the basis of no
objection certificate provided by its banker.
Established as a partnership firm in 2010, Vagad Enterprises
commenced the development of its first residential real estate
project viz. Akshar Evvora in June 2014. The project is located
at Dronagiri, Navi Mumbai and comprises two towers of 117 two BHK
apartments with a total saleable area of 1,20,285 sq. ft.
Vagad Enterprise is a part of the Akshar group which has a strong
and established presence in the Navi Mumbai real estate market.
VANTAGE MOTORS: CRISIL Hikes Rating on INR4.5cr Loan to B+
----------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facilities
of Vantage Motors LLP (VML) to 'CRISIL B+/Stable' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Channel Financing 4.5 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Long Term Loan 2.4 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects improvement in the firm's business risk
profile on account of timely implementation of project and ramp-
up of operations. Revenue was INR18.16 crore in fiscal 2018 and
operating margin was moderate at 3.7%. The upgrade also factors
in CRISIL's belief that the business risk profile will remain
healthy over the medium term on account of the promoters'
experience in the automotive dealership business.
The rating reflects weak financial risk profile because of small
networth and high total outside liabilities to tangible networth
(TOLTNW) ratio. The rating also factors in exposure to risks
related to nascent stage of business and to intense competition
in the area of operations. These weaknesses are partially offset
by the promoters' extensive experience in the business.
Key Rating Drivers & Detailed Description
Weakness
* Exposure to risks related to nascent stage of business: Fiscal
2018 was VML's first year of operations. The firm is likely to
take a couple of years to develop goodwill and reputation in the
region for its dealership of Hyundai Motor India Ltd ('CRISIL
A1+'). Hence, it will remain exposed to risks related to nascent
stage of operations over the medium term.
* Weak financial risk profile: The financial risk profile is
constrained by small networth, estimated at INR1.86 crore, and
high TOLTNW ratio of 4.41 times as on March 31, 2018, due to
initial bank funding for the business. Debt protection metrics
are weak, with interest coverage estimated at 1.3 times and net
cash accrual to adjusted debt ratio at 0.03 time in fiscal 2018.
The financial risk profile should improve with gradual repayment
of term loan, but will remain weak on account of modest networth.
Strength
* Promoters' extensive experience in the automotive dealership
business: Mr. Abhijit Kumar has experience of around a decade in
the automotive dealership business, and Mr. Kumar Adya Nandan has
experience of above 5 years. Their experience has helped VML
quickly start business and stabilise operations. The promoters'
experience will support the firm's business over the medium term.
Outlook: Stable
CRISIL believes VML will continue to benefit from its promoters'
extensive experience. The outlook may be revised to 'Positive' if
revenue and profitability increases, while financial risk profile
improves due to increase in cash accrual. The outlook may be
revised to 'Negative' if the financial risk profile and liquidity
deteriorate due to lower-than-expected cash accrual, larger-than-
expected working capital requirement, or significant, debt-funded
capital expenditure.
Established in 2016 as a partnership between Mr. Abhijeet Kumar
and Mr. Kumar Aadya Nandan, VML is an authorised dealer of HMIL
for sale and service of Hyundai cars, and commenced operations in
April 2017 with a showroom-cum-workshop in Hajipur, Bihar.
WORLD WELFARE: CRISIL Maintains B Rating in Not Cooperating
-----------------------------------------------------------
CRISIL has been consistently following up with World Welfare
Society (WWS) for obtaining information through letters and
emails dated December 31, 2017 and June 29, 2018 among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Fund- 1 CRISIL B/Stable (ISSUER NOT
Based Bank Limits COOPERATING)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of WWS, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on WWS 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 WWS continues to be 'CRISIL B/Stable Issuer not
cooperating'.
WWS, a not-for-profit society, is managed by its secretary Mr.
Virendra Tripathi, vice president Mr. Hanuman Prasad, and
president Mr. Rajdutt Tiwari. The society's head office is in the
Lucknow district (Uttar Pradesh). It is engaged in various
schemes operated by the state and central governments in
Shravasti, Lucknow, and surrounding areas. Services include
providing hot cooked food in anganwadi centres under the
Integrated Child Development Services Scheme, free meals under
the Mid-Day Meal Scheme, amenities under the Swachh Bharat
Mission and others.
=========
M A C A U
=========
VIVA MACAU: Loans Made in Good Faith, Secretary for Economy Says
----------------------------------------------------------------
Macau Business reports that the Secretary for Economy and
Finance, Lionel Leong Vai Tac, said on July 25 that the loans
totalling MOP212 million (US$26.2 million) granted to the
bankrupt airline Viva Macau Sociedade de Aviacao, Limitada by the
Industrial and Commercial Development Fund (FDCI) were made 'on
the principle of good faith.'
In a statement released on July 25, Mr. Leong added that the
aviation industry underwent a crisis in 2008 and 2009 and that it
was 'international practice' to provide loans for airlines,
citing that Switzerland had granted its own airlines a loan of
HK$2 billion during the crisis, while Mainland China had
similarly spent more than RMB10 billion in aiding its airlines,
according to Macau Business.
Macau Business relates that the Secretary, who was said to be
speaking to media from Zhuhai on an official visit, said that
legal help is being sought in order to pursue guarantor
liabilities.
Mr. Leong also denied that Viva Macau was given favorable
treatment when the loans were granted, saying that Air Macau was
also given assistance during this period, adding that since 2015
the Economic Services Bureau (DSEC) have improved the checks and
balances for loans granted by the FDCI, the report relays.
On July 24, two legislators proposed a plenary debate on the five
loans granted to Viva Macau - amounting to MOP212 million lent to
the Fund - after the Court of First Appeal (TJB) ruled on the
archival of the company's bankruptcy proceedings, says Macau
Business.
The debate has not yet been approved by Ho Iat Seng, the
president of the Legislative Assembly (AL) in Macau, Macau
Business adds.
In March 2010, Viva Macau had its license revoked by Macau's
aviation regulator after failing to offer assistance to
passengers stranded by flight cancellations, according to
Bloomberg News. The carrier cancelled services on March 26,
2010, because of "fuel payment issues" and didn't cooperate to
help passengers.
Viva Macau Airlines was Macau's first budget airline.
====================
N E W Z E A L A N D
====================
NUFARM LTD: S&P Affirms 'BB' ICR, Alters Outlook to Negative
------------------------------------------------------------
S&P Global Ratings said that it has revised the outlook on its
'BB' long-term issuer credit rating on Nufarm Ltd. to negative
from stable. At the same time, S&P affirmed the 'BB' issuer
credit rating on Nufarm.
S&P said, "We have also affirmed the long-term issue rating of
'BBB-' on Nufarm's A$645 million senior secured bank facility
(recovery rating of '1'), the long-term issue rating of 'BB-' on
the US$475 million senior unsecured notes (recovery rating of
'5'); and the 'B+' rating on Nufarm's subordinated NSS hybrid
notes (recovery rating of '6')."
Based in Australia, Nufarm is a global producer of crop
protection products with operations across diverse geographical
locations.
S&P said, "We revised the outlook to negative to reflect our
expectations that Nufarm will generate weak cash flows and incur
higher debt in the year ended July 31, 2018. A buildup of
inventories will likely substantially increase Nufarm's working
capital. In addition, we consider that Nufarm may find it
difficult to restore its financial metrics during fiscal 2019 due
to prolonged dry conditions and potential integration risks
related to its recent acquisitions.
"Although we did not previously anticipate any meaningful
deleveraging until fiscal 2019, the weaker operating performance
in fiscal 2018 has exacerbated Nufarm's weakened financial
profile due to recent acquisitions. As a result, Nufarm's path to
deleverage to a level that is commensurate with the 'BB' rating
now depends on: (1) integration of the European product portfolio
(2) a return to normalized conditions for Australia in fiscal
2019.
"We acknowledge the seasonal nature of the business and
challenging weather conditions that are beyond management's
control. However, Nufarm's weakened financial profile makes it
sensitive to any further external shocks. At the 'BB' rating
level, Nufarm is operating with no rating buffer over the next 12
months. We also consider competitive market dynamics, such as
those in Australia, may limit the recovery of Nufarm's margins."
Poor weather conditions have significantly reduced demand for
crop protection products in Australia and delayed seasons in
Nufarm's other key markets. This has led to increased competition
and high levels of inventory in the company's respective sales
channels. Seasonal conditions have also shifted the mix of
products sold, whereby growers have opted to purchase lower-
margin foundational products over higher-margin differentiated
products.
In recent years, Nufarm's management has demonstrated a prudent
operating strategy that includes a more disciplined approach to
working capital, operational performance, and product mix. This
includes a willingness to operate within our thresholds of the
'BB' rating. For the current 'BB' rating level, S&P would expect
this commitment to be demonstrated in light of the current
weakness in Nufarm's credit metrics.
The 'BB' issuer credit rating continues to reflect Nufarm's solid
position in select global crop-protection markets and its
geographically diverse operations. Tempering these strengths are
the company's small scale and narrow product focus of
predominantly crop-protection products compared with its major
global competitors.
S&P said, "The negative outlook reflects our view that Nufarm may
face challenges in restoring its metrics in line with our
expectations for the 'BB' rating, if there are prolonged dry
weather conditions or integration risks associated with Nufarm's
recent acquisitions.
"We could lower the rating to 'BB-' if Nufarm is unable to reduce
adjusted debt to EBITDA to about 3.5x. We could also lower the
rating if the company does not generate meaningful positive free
operating cash flow metrics or its liquidity deteriorates during
the next 12 months." This could occur if:
-- Difficult weather conditions persist in Australia or any of
Nufarm's other key jurisdictions in 2019, and Nufarm is
unable to mitigate the impact through reducing working
capital or other cost-cutting initiatives; or
-- Nufarm undertakes a large debt-funded acquisition before
restoring its credit metrics; or
-- Material execution risk occurs associated with the European
acquisition.
S&P may revise the outlook to stable if Nufarm were to restore
its metrics and demonstrate its commitment to sustaining its
metrics in line with its expectations for the rating. An adjusted
debt to EBITDA of about 3.5x, and a return to generating
meaningful positive free operating cash flow will indicate
metrics in line with the rating. A revision to stable would also
require a sustained improvement in working capital management to
mitigate its exposure to the volatile agribusiness sector.
RAUKURA WAIKATO: Finance Manager Gets Jail Term for fraud
---------------------------------------------------------
Radio New Zealand reports that a former manager of a Hamilton-
based social services provider has been jailed for nearly two and
half years for fraud.
According to the report, the Serious Fraud Office (SFO) said Hemo
Kerewai Thompson, 58, stole about NZ$175,000 from the Raukura
Waikato Social Services Trust over a four year period to February
2015.
She pleaded guilty to 167 charges of theft in a special
relationship and one of obtaining by deception - laid by the SFO,
Radio NZ says.
Ms. Thompson was sentenced in the Hamilton District Court on
July 19, the report notes.
Radio NZ relates that the SFO said Thompson disguised her
activities as genuine expenditure.
"Ms Thompson's offending came at a cost to Raukura and the people
that the social services provider helped," the report quotes SFO
director Julie Read as saying. "Thompson abused her position of
authority . . . she had control over Raukura's funds and knew the
appropriate way to deal with the funds.
"She intentionally departed from those terms for her own personal
benefit while Raukura struggled to make ends meet."
Raukura Waikato Social Services Trust is in liquidation, Radio NZ
notes.
=================
S I N G A P O R E
=================
OBIKE: Liquidators to Hold Meeting with Users on August 2
---------------------------------------------------------
The Strait Times reports that the provisional liquidators of
beleaguered bike-sharing firm oBike will hold a meeting on
Aug. 2 at 3:00 p.m. which will be open to oBike users who have
yet to receive a refund of their deposit, among other creditors.
The meeting, by business advisory firm FTI Consulting, will take
place at the Shine Auditorium at 100 Beach Road, #03-01 Shaw
Tower, said the firm on July 23, the report relays.
According to the report, FTI Consulting will provide an update on
oBike's winding up there, and the relevant details and necessary
forms for the creditors' meeting can be downloaded from
www.obikedepositholders.com.
The Strait Times relates that oBike owes its roughly 220,000
deposit holders in Singapore almost $9 million. After oBike
suddenly ceased operations here last month, company chairman Shi
Yi said unreturned deposits amounted to about $6.3 million.
As of July 22, 6,286 deposit holders had submitted their claims
online, totalling $287,337.60, said FTI Consulting, the report
relays.
Those who want to attend and vote at the meeting must submit
their claims by noon, Aug. 1. They can submit their claims
through the same website listed above.
However, those who do not attend the meeting can still submit
their claims afterwards and will not lose any of their rights.
Those who want a proxy to attend the meeting on their behalf can
submit a proxy form, found in the downloadable document in the
liquidator's website above.
Registration for the meeting will commence at 2:00 p.m. on Aug 2,
the report adds.
As reported in the Troubled Company Reporter-Asia Pacific on
June 26, 2018, the Strait Times said bicycle-sharing operator
oBike announced on June 25 that it will cease operations
immediately in Singapore. In a statement shared via its app,
oBike cited difficulties in meeting the new requirements and
guidelines by the Land Transport Authority (LTA) to curb
indiscriminate parking.
Headquartered in Singapore, oBike is a stationless bicycle-
sharing system with operations in several countries.
====================
S O U T H K O R E A
====================
CAFFE BENE: Gets Creditors' Nod to Start Rehabilitation Scheme
--------------------------------------------------------------
The Business Times reports that Food Empire Holdings on July 20
updated that its associated company, Caffe Bene Co, had
successfully obtained consent by the majority of its creditors to
commence the court-approved rehabilitation scheme.
Caffe Bene is in the coffee house franchise business in South
Korea, the report discloses.
Food Empire's 51-per-cent owned subsidiary, Hallyu Ventures, owns
44.8 per cent shareholdings in Caffe Bene. In January, Caffe Bene
had filed for a court-led corporate rehabilitation process due to
excessive debts assumed prior to Food Empire's investment in the
company.
Now, under the rehabilitation scheme, Hallyu Ventures's
shareholdings in Caffe Bene will be adjusted to about 2.24
million shares representing 37.61 per cent, and Caffe Bene will
remain as Food Empire's associated company, the Business Times
discloses.
The report adds that the rehabilitation scheme is not expected to
have any material impact on Food Empire's consolidated net
tangible assets and earnings per share for the current financial
year, it said.
===============
T H A I L A N D
===============
IRPC PUBLIC: Moody's Alters Outlook to Positive & Affirms Ba1 CFR
-----------------------------------------------------------------
Moody's Investors Service has changed IRPC Public Company
Limited's rating outlook to positive from stable.
Moody's has also affirmed IRPC's Ba1 corporate family rating
(CFR).
RATINGS RATIONALE
"The change in rating outlook to positive reflects the structural
improvement in IRPC's profitability owing to its higher operating
margins and refinery utilization since the completion of its
large-scale upgrading program," says Rachel Chua, a Moody's
Assistant Vice President and Analyst.
IRPC's $1.5 billion capital expenditure program was completed in
phases during 2016-17. The Thai refiner is now able to upgrade
its loss-making fuel oil into higher-margin petroleum and
petrochemical products. According to the company, its refinery
complexity has improved to 8.6 from 6.6.
IRPC's gross integrated margin (GIM) - the difference between the
selling price of its products and a barrel of crude feedstock -
strengthened to $13.0 per barrel in 2016 and $14.5 per barrel in
2017 from $7.0 per barrel in 2013.
"Moreover, we expect IRPC will sustain the improvement in its
leverage during 2018-19, with retained cash flow/adjusted debt of
18%-20% and adjusted debt/EBITDA below 3.0x," adds Chua, who is
also Moody's Lead Analyst for IRPC.
Moody's projections assume IRPC's GIM will stay at $14.0-$14.5
per barrel through 2019, thereby supporting annual adjusted
EBITDA generation of around THB24 billion.
IRPC's Ba1 CFR incorporates a one-notch uplift that reflects
Moody's expectation that its parent, PTT Public Company Limited
(Baa1 stable), will provide extraordinary support to IRPC in a
distress scenario, given the close integration between the two
companies.
IRPC's underlying credit strength is underpinned by its moderate
refining scale and downstream petrochemical integration, the
long-term feedstock supply and product offtake agreements with
PTT, as well as the improvement in its credit metrics following
the completion of its upgrading program.
At the same time, the rating is constrained by IRPC's
concentration risk given its single-site operations, the short
operating track record of the upgraded refinery, its weak
liquidity profile and the exposure to the inherent cyclicality in
the refining and petrochemical sector.
The positive rating outlook incorporates Moody's expectations
that IRPC will sustain the improvement in its credit metrics over
the next 12-18 months, supported by stable operational
performance at its upgraded facilities and healthy operating cash
flow generation. Moody's also expects the company will maintain a
prudent approach towards funding future investments and
shareholder distributions.
IRPC's rating could be upgraded if the company maintains stable
operations at its upgraded refinery and petrochemical plants,
such that it generates healthy operating cash flow and margins.
Specific metrics Moody's would consider for an upgrade include
retained cash flow/adjusted debt above 25%, adjusted debt/EBITDA
below 3.0x and EBIT/interest above 4.5x-5.0x on a sustained
basis.
IRPC's Ba1 CFR will be downgraded if: 1) PTT's rating is
downgraded; or 2) PTT's ownership in IRPC falls or PTT's control
of IRPC is reduced by some other means, which would require a
reassessment of the level of parental support incorporated into
IRPC's rating.
IRPC's rating outlook could return to stable if: 1) the refining
and petrochemical operating environment deteriorates materially;
2) its upgraded plant faces material operational disruptions; 3)
it makes material debt-funded acquisitions or investments; or 4)
engages in aggressive shareholder distributions.
Specific credit metrics that Moody's would consider in revising
the outlook to stable include retained cash flow/adjusted debt
below 25%, adjusted debt/EBITDA above 3.0x-3.5x and EBIT/interest
below 4.5x.
The principal methodology used in this rating was Refining and
Marketing Industry published in November 2016.
Listed on the Thailand stock exchange, IRPC Public Company
Limited is an integrated refinery and petrochemical operator in
Thailand. It owns the third largest refinery in the country with
a nameplate capacity of 215,000 barrels per day. The company is a
producer of naphtha and reformate-based petrochemicals, and is
also a leading producer of styrenics in Thailand.
At March 31, 2018, IRPC was 48.05% owned by PTT Public Company
Limited (Baa1 stable), which was in turn 51.11% owned by the
Thailand government (Baa1 stable).
PC AIR: Sale of Aircraft Fails to Attract Bidders
-------------------------------------------------
Bangkok Post reports that the Legal Execution Department (LED) on
July 18 put up for auction three aircraft, including one owned by
a bankrupt airline that left 400 passengers stranded in Korea six
years ago.
Two of them owned by Orient Airlines Co, are Boeing 737-3Z0 with
the auction's starting price of 18 million baht each, said LED
director-general Ruenvadee Suwanmongkol, the report relates.
Bangkok Post relates that the auction took place at an aircraft
disassembly facility of Don Mueang airport.
Another airplane is an Airbus A310-222, with a starting price of
THB15.75 million. Bidders were required to place THB2.5 million
in cash or cheques as collateral. The bid winner is obliged to
pay the parking fee for Airports of Thailand Plc (AoT) from the
date when the aircraft was bought until it is moved out, said Ms.
Ruenvadee, according to Bangkok Post.
Bangkok Post says the aircraft belonged to Thai owned PC Air,
which made headlines in October 2012 when its plane was refused
permission to take off from Incheon International Airport,
leaving 400 Thais stranded at the site. The refusal was said to
have been triggered by a financial conflict between PC Air and
its South Korean sales agent, Skyjet, over unpaid bills for
airport charges and jet fuel, reportedly amounting to more than
THB10 million, the report relays.
Bangkok Post relates that PC Air also drew attention at that time
as it was billed as the world's first to employ the third gender
as cabin attendants. The airline later declared bankruptcy and
its assets were put up for auction, the report notes. According
to Bangkok Post, the aircraft was put up for five rounds of
auction last year but it failed to draw interest by buyers
although the starting price was pushed down from THB30 million to
THB21 million.
As of July 18, no one had placed a bid, the report notes. LED
will hold the auction another two times, adds Bangkok Post.
===============
X X X X X X X X
===============
MALDIVES: Moody's Alters Outlook to Negative on Debt Burden Rise
----------------------------------------------------------------
Moody's Investors Service changed the outlook on the Government
of Maldives' issuer rating to negative from stable and affirmed
the B2 issuer and senior unsecured bond ratings.
The decision to change the outlook to negative reflects liquidity
and external vulnerability risks stemming from a sharp rise in
the government's debt burden that is expected to extend at least
until the beginning of the next decade when a large scale
infrastructure program is scheduled to complete.
The government's liquidity risks reflect limited financing
sources, including the domestic banking system and external
investors, to meet sizeable gross financing needs required by the
infrastructure program, at a time when, according to Moody's
assumptions, the government will continue to need financing for
current spending. These risks could rise in the run-up to
repayments on a sovereign bond that are due in 2022. In addition,
the strain on Maldives' fragile external position could increase
in the next few years, if large imports as part of the investment
projects are not fully financed by capital inflows in a timely
manner and/or the exchange rate appreciates again in real
effective terms.
The decision to affirm the B2 rating is supported by the
improvement in growth potential that infrastructure development
is likely to bring, balanced by a rising debt burden and
declining debt affordability as the Maldives reduces the
proportion of concessional funding in its funding mix.
The local-currency bond and deposit ceilings are unchanged at
Ba1. The foreign currency bond ceiling is unchanged at Ba3 and
the foreign currency deposit ceiling is unchanged at B3.
RATINGS RATIONALE
RATIONALE FOR THE NEGATIVE OUTLOOK
PRESSURE ON GOVERNMENT LIQUIDITY MAY INCREASE IN THE RUN UP TO
REPAYMENTS
Largely as a result of its investment program, and ahead of a
sizeable debt maturity in 2022, the government's borrowing needs
will rise, albeit from moderate levels. The size of the upcoming
borrowing needs depends on future revenue and expenditure, while
some financing sources also depend on sustained robust revenue
growth, raising risks to the government's liquidity position if
fiscal targets are not achieved.
Moody's expects the government's gross borrowing needs will
increase to 8.3% of GDP by 2019 from around 7.1% of GDP in 2017.
Although needs should remain contained around these levels until
2022, Moody's estimates that they will rise to 9.1% in that year,
when the repayment on the sovereign bond comes due.
In order to meet these needs, the government will likely rely on
the domestic banking system to absorb treasury bill issuances,
while simultaneously aiming to secure external financing.
Prospects for further domestic financing may become constrained
if some banks reach internal limits for holding government
securities, leading to pressures on refinancing costs.
The availability and cost of external financing will depend on
market appetite for Maldives' bonds, as well as the government's
ability to access consistent sources of bilateral funding. In
particular, tighter global liquidity conditions suggest that the
Maldives will only be able to access market financing at rates
likely to worsen debt affordability.
As mentioned, the rise in borrowing requirements is largely
driven by government spending on the Public Sector Infrastructure
Program, which includes infrastructure projects that will enhance
Maldives' economic competitiveness, particularly in the tourism
sector; improve the basic provision of services, including
health, water and sanitation; and facilitate relocation for
portions of the population for better service delivery.
Infrastructure projects are to cumulatively amount to MVR 33.8
billion ($2.2 billion or around 38% of estimated 2020 GDP) in
2016-2020. In 2016-17, projects worth MVR 12.2 billion were
already embarked upon.
Implementation of these infrastructure projects has also required
foreign exchange funding, leading to the issuance of $250 million
sovereign bond in 2017, and the private placement of a $100
million bond in April 2018, both with five-year maturities.
According to Moody's, part of the borrowing needs will also be
driven by recurrent expenditures, which may not decelerate
according to government projections.
One alleviating factor for the government's liquidity position is
the recent creation of a Sovereign Development Fund for repayment
of the upcoming debt obligations on the 2017 sovereign bond
issuance and other infrastructure-related debt. However, the size
of the fund is still small (around 1.6% of GDP estimated in 2018)
and its growth will depend on continued robust revenue growth.
Historically, revenue collections have been volatile. A one-off
negative shock to revenue would leave a gap in the financing
sources to repay the sovereign bond in 2022 in particular.
Should liquidity strains intensify, the key policy options
available to the government would be to turn to bilateral funding
or slow investment spending. However, a weak institutional
framework suggests that the speed and effectiveness of the policy
response may be limited.
RISKS TO MACROECONOMIC STABILITY FROM EXCHANGE RATE APPRECIATION
AND LOW RESERVES ADEQUACY
A marked appreciation of the exchange rate in real effective
terms in recent years, wide current account deficits and low
reserve adequacy suggest that risks could escalate in the event
of a disruption to funding. The fixed exchange rate regime
constrains the capacity of the central bank to respond to
potentially rising external imbalances.
Current account deficits have averaged about 7% of GDP between
2011-15 and widened significantly in recent years, to 19% of GDP
in 2017. These have been primarily financed by foreign direct
investment (FDI), and loans (primarily project-related),
resulting in an overall accretion to reserves. However, reserve
coverage remains low and would not be sufficient to meet imports
payment and external debt commitments in the event of delayed FDI
flows or an inability to access external financing at affordable
costs.
RATIONALE FOR THE RATING AFFIRMATION
At B2, the rating reflects some credit strengths on the economic
side, combined with relatively low fiscal strength and latent
political risk.
Economic strength stems from an improvement in growth potential
that the infrastructure ramp-up is likely to bring. Vulnerability
to climate change, including to natural disasters that could have
a large impact on economic activity, weighs on Maldives' economic
strength.
On the fiscal side, owing to the infrastructure build-up, the
Government of Maldives' debt burden has increased by about 7
percentage points, to 61.1% of GDP in 2017 from 54.1% in 2015.
Moody's expects it to increase further to 68.7% of GDP by 2020.
A rising proportion of non-concessional funding has led to a
deterioration in debt affordability. The ratio of interest
payments to revenues stood at 6.3% at end 2017. Pressure on
external debt servicing costs is partly offset by the still
sizeable proportion of concessional borrowing. But debt
affordability metrics would remain under pressure as the
government's market-driven funding needs grow. As of end 2017,
foreign currency debt comprised about 38% of total government
debt, an increase from about 31% in 2015. This share should
continue to increase going forward.
The B2 rating also takes into consideration moderate political
risks, arising from potential conflicts that could depress
tourism activity, investment and growth.
WHAT COULD CHANGE THE RATING UP
While an upgrade is unlikely in the near term given the negative
outlook, Moody's would consider stabilizing the outlook if (1) a
more gradual implementation of the infrastructure development
program entails a less pronounced increase in the debt burden and
funding needs than it presently expects; and/or (2) access to
external and domestic funding sources looks increasingly secure
and likely to pose less of a strain on debt affordability.
WHAT COULD CHANGE THE RATING DOWN
A rating downgrade would likely result from (1) a more pronounced
deterioration in fiscal and debt metrics and debt affordability
than Moody's currently expects; (2) marked strains on debt and
deficit financing resulting in significantly higher debt costs;
and/or (3) a lasting shock to the tourism sector, such as through
natural disasters or political events that will ultimately result
in a sharp fall in foreign exchange earnings.
GDP per capita (PPP basis, US$): 19,167 (2017 Actual) (also known
as Per Capita Income)
Real GDP growth (% change): 7.1% (2017 Actual) (also known as GDP
Growth)
Inflation Rate (CPI, % change Dec/Dec): 1.3% (2017 Actual)
Gen. Gov. Financial Balance/GDP: -3.1% (2017 Actual) (also known
as Fiscal Balance)
Current Account Balance/GDP: -19% (2017 Actual) (also known as
External Balance)
External debt/GDP: 38.0% (2017 Estimate)
Level of economic development: Low level of economic resilience
Default history: No default events (on bonds or loans) have been
recorded since 1983
On 23 July 2018, a rating committee was called to discuss the
rating of the Maldives, Government of. The main points raised
during the discussion were: The issuer's fiscal or financial
strength, including its debt profile, has materially decreased.
The issuer has become increasingly susceptible to event risks.
The principal methodology used in these ratings was Sovereign
Bond Ratings published in December 2016.
The weighting of all rating factors is described in the
methodology used in this credit rating action, if applicable.
*********
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 ***