/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/180730.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Monday, July 30, 2018, Vol. 21, No. 149 Headlines A U S T R A L I A AM LABOUR: First Creditors' Meeting Set for August 3 BROOKFIELD RIVERSIDE: ASIC Winds Up 5 Land Banking Companies HOTR AUSTRALIA: First Creditors' Meeting Set for August 6 MIGME LIMITED: Second Creditors' Meeting Set for August 3 ROSSAIR CHARTER: Second Creditors' Meeting Set for August 3 SHARMA HOLDINGS: First Creditors' Meeting Set for August 3 SIRENS BY THE BAY: First Creditors' Meeting Set for Aug. 6 H O N G K O N G NOBLE GROUP: Expected to Post Q2 Net Loss of Up to US$140MM NOBLE GROUP: PT Alhasanie Files $20MM Lawsuit Against Subsidiary YIHUA ENTERPRISE: S&P Alters Outlook to Negative & Affirms B ICR I N D I A AAKASH DEVELOPERS: Ind-Ra Places BB LT Issuer Rating on RWN ADILABAD EXPRESSWAY: CARE Lowers Rating on INR268.88cr Loan to D BALAJI OIL: CRISIL Migrates B Rating in Not Cooperating Category BINANI CEMENT: CARE Migrates D Rating to Not Cooperating Category BNK ENERGY: CARE Assigns B+ Rating to INR2cr Long-Term Loan CHEEKA RICE: CARE Downgrades Rating on INR8cr LT Loan to B COMMERCIAL CARRIERS: CARE Migrates D Rating to Not Cooperating DHROOV RESORTS: CARE Migrates D Rating to Not Cooperating ECO RICH: Insolvency Resolution Process Case Summary GRANNY'S SPICES: CARE Lowers Rating on INR6cr LT Loan to D INCOM CABLES: Ind-Ra Maintains 'D' LT Rating in Non-Cooperating INDIAN ACRYLICS: Ind-Ra Withdraws 'D' Long Term Issuer Rating INNOTECH EDUCATIONAL: CARE Migrates D Rating to Not Cooperating KOHINOOR HATCHERIES: Ind-Ra Affirms BB+ LT Rating, Outlook Stable LAVANYA PUREFOOD: CARE Lowers Rating on INR13.32cr Loan to C MAHALAXMI ROLLER: CARE Cuts Rating on INR5.84cr LT Loan to B MANGALDEEP RICE: CRISIL Maintains 'D' Rating in Not Cooperating METRO AGRI: CARE Lowers Rating on INR13.84cr LT Loan to D MEVADA OIL: CARE Lowers Rating on INR14.60cr LT Loan to D N.S.R. MILLS: CRISIL Maintains 'B' Rating in Not Cooperating NATURAL AGRITECH: Ind-Ra Hikes Long Term Issuer Rating to 'B+' NAVEEN POULTRY: CRISIL Maintains D Rating in Not Cooperating NEW HORIZON: CARE Lowers Rating on INR6.40cr LT Loan to B NICE POULTRY: CRISIL Maintains B- Rating in Not Cooperating NIKKI STEELS: CARE Lowers Rating on INR12cr LT Loan to B- ODYSSEY ADVANCED: Ind-Ra Moves BB- Rating to Non-Cooperating PERTH CERAMIC: CRISIL Maintains B+ Rating in Not Cooperating RAJ ARCADE: Ind-Ra Affirms 'BB' LT Issuer Rating, Outlook Stable RELISHAH EXPORT: Ind-Ra Affirms B+ Issuer Rating; Outlook Stable RICHU MAL: CARE Lowers Rating on INR5cr Long-term Loan to B ROLTA INDIA: Bondholders Oppose Debt Restructuring Plan SARASWATI TRADING: CARE Reaffirms B+ Rating on INR4.5cr LT Loan SHREE DATT: Ind-Ra Lowers Long Term Issuer Rating to 'BB+' SHYAM CORPORATION: CRISIL Maintains B Rating in Not Cooperating STONE INDIA: Insolvency Resolution Process Case Summary SUMERU DEVELOPERS: CRISIL Migrates B Rating in Not Cooperating SUNSTAR OVERSEAS: Insolvency Resolution Process Case Summary TATA MOTORS: S&P Cuts Issuer Credit Rating to BB; Outlook Stable U. K. PAPER: CRISIL Maintains 'B-' Rating in Not Cooperating VISHNU CARS: Ind-Ra Maintains B Issuer Rating in Non-Cooperating M A L A Y S I A ASIA BRANDS: Auditor Raises Going Concern Doubt S I N G A P O R E MULHACEN PTE: S&P Assigns B+/B ICRs, Outlook Stable S O U T H K O R E A DOOSAN BOBCAT: S&P Raises Senior Secured Term Loan Rating to 'BB' SAMSUNG SECURITIES: Faces KRW1 Billion Fine Over Trading Error SAMSUNG SECURITIES: Suspends Partial Operations Until Jan. 26 - - - - - ================= A U S T R A L I A ================= 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, West Australia, 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. BROOKFIELD RIVERSIDE: ASIC Winds Up 5 Land Banking Companies ------------------------------------------------------------ The Federal Court of Australia has made orders winding up five companies for their role in the operation of two land banking schemes known as: - Hermitage Bendigo (formerly Acacia Banks) located at Midland Highway, Bagshot, Victoria; and - Veneziane, located at Brooklyn Park Drive and Balmer Grange, Brookfield. The following four companies (the Project Companies) entered into contracts for the purchase of land for rezoning and were involved in the promotion of the schemes and received money from investors: -- Brookfield Riverside Pty Ltd -- Bilkurra West Pty Ltd -- Bilkurra South Pty Ltd, and -- Gillies Road Pty Ltd. The fifth company, Project Management (Aust) Pty Ltd (PMA), entered into project management agreements with each of the Project Companies that required the Project Companies to deposit all project revenues into bank accounts maintained by PMA. This enabled PMA to exercise control over the Project Companies' finances Nicholas John Martin -- nicholas.martin@bdo.com.au -- and Andrew Thomas Sallway -- Andrew.Sallway@bdo.com.au -- of BDO Australia were appointed liquidators of PMA and the Project Companies. ASIC sought these orders as it was concerned that the Project Companies were insolvent, that money raised from investors (more than AUD15 million) had been transferred between companies without any apparent concern for obligations owed to investors and that the majority of funds raised from investors had been dissipated. The Court found that the case for winding up each of the Project Companies was compelling and that there was a clear case for both the Project Companies and PMA to be wound up in the public interest and to enable completion of investigations in the existing liquidations of other companies that had also been operating the land banking schemes. The Project Companies were wound up on the basis that they were insolvent and that it was just and equitable to do so. PMA consented to the winding up order being made. In concluding that it was appropriate to wind up PMA on the just and equitable ground the Court found that its financial affairs were inextricably bound up with those of the Project Companies; that PMA had control over investor monies; it had intermingled funds and used them across the various land banking schemes; it had maintained poor documentation; and it took management fees out of the investor funds released to it. ASIC Commissioner John Price said, 'ASIC will take action against entities that run schemes where investor monies are put at risk. Investors should be very careful in ensuring that they understand the risks associated with land banking schemes and should ensure that they obtain independent legal and financial advice before making any such investments.' ASIC filed its application to wind up PMA and the Project Companies on March 26, 2018. This application also seeks to disqualify Michael Grochowski and Ian Edward Stephens from managing corporations. This application will be heard by the Court on Sept. 17, 2018 at 10:15 a.m. This proceeding is part of ASIC's wider and ongoing investigation into land banking schemes. ASIC has already taken action in respect of Midland Hwy Pty Ltd (Midland) and Bilkurra Investments Pty Ltd (Bilkurra) operating the Hermitage Bendigo scheme; and Foscari Holdings Pty Ltd (Foscari) operating the Foscari scheme in respect of land at 99 Palmers Road, Truganina. ASIC provided funding from its Assetless Administration Fund to the liquidators of Midland, Bilkurra and Foscari to enable the liquidators to conduct further investigations, including public examinations of individuals associated with those companies. The liquidators also provided assistance to ASIC in its application to wind up the Project Companies and PMA. Land banking is a real estate investment scheme involving the acquisition of large blocks of land by a promoter or developer of the scheme, often in undeveloped rural areas, who then offer portions of the land to investors. Land banking companies typically promote the investment with representations of high potential returns if the land is developed, or if plans for rezoning and development are finalised. Investors either purchase a lot in the land, or acquire an option to purchase a lot of land in an unregistered plan of subdivision. Investors should be vigilant when investing in such schemes and seek independent legal and financial advice. Investors should also assess their risk tolerance for this type of scheme. ASIC notes that many of the promoters of land banking schemes offer access to lawyers and financial advice, but is concerned that those advisors may not be independent. These types of investments may constitute a managed investment scheme and/or a financial product. Developers and promoters should therefore hold an Australian Financial Services Licence and register these schemes with ASIC. Further information on land banking is located on ASIC's MoneySmart website at www.moneysmart.gov.au. HOTR AUSTRALIA: First Creditors' Meeting Set for August 6 --------------------------------------------------------- A first meeting of the creditors in the proceedings of: * Hotr Australia Pty Limited; * Hotr Campbelltown Pty Limited; * Hooters Campbelltown; * Hotr Gold Coast Pty Limited; * Hooters Gold Coast; * Hotr Parramatta Pty Limited; * Hooters Parramatta; * Hotr Penrith Pty Limited; will be held at Level 5, 123 Pitt Street, in Sydney, NSW, on Aug. 6, 2018: * Hotr AUS: 11:00 a.m., * Hotr Campbelltown: 11:10 a.m., * Hotr Gold Coast: 11:20 a.m., * Hotr Parramatta: 11:30 a.m., * Hotr Penrith: 11:40 a.m. David Iannuzzi and Vincent Pirina of Veritas Advisory were appointed as administrators of the group on July 25, 2018. MIGME LIMITED: Second Creditors' Meeting Set for August 3 --------------------------------------------------------- A second meeting of creditors in the proceedings of Migme Limited has been set for Aug. 3, 2018, at 10:00 a.m. at Level 21, 140 St Georges Terrace, in Perth, West Australia. 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. 2, 2018, at 4:00 p.m. Simon Guy Theobald and Melissa Humann of PPB Advisory of Migme Limited were appointed as administrators of Migme Limited on June 9, 2018. ROSSAIR CHARTER: Second Creditors' Meeting Set for August 3 ----------------------------------------------------------- A second meeting of creditors in the proceedings of Rossair Charter Pty Ltd and AE Charter Services Pty Ltd has been set for Aug. 3, 2018, at 9:00 a.m. at the offices of Ernst & Young Level 12, 121 King William Street, in Adelaide, SA. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Aug. 2, 2018, at 4:00 p.m. Henry Kazar and Lachlan Abbott of Ernst & Young were appointed as administrators of Rossair Charter on July 3, 2018. SHARMA HOLDINGS: First Creditors' Meeting Set for August 3 ---------------------------------------------------------- A first meeting of the creditors in the proceedings of Sharma Holdings Foods Pty Ltd will be held at the offices of SV Partners, 22 Market Street, in Brisbane, Queensland, on Aug. 3, 2018, at 10:30 a.m. Terrence John Rose of SV Partners was appointed as administrator of Sharma Holdings on July 24, 2018. SIRENS BY THE BAY: First Creditors' Meeting Set for Aug. 6 ---------------------------------------------------------- A first meeting of the creditors in the proceedings of Sirens By The Bay Pty Ltd will be held at the offices of Mackay Goodwin 9/440 Collins Street, in Melbourne, Victoria, on Aug. 6, 2018, at 12:30 p.m. Domenico Alessandro Calabretta and Grahame Robert Ward of Mackay Goodwin were appointed as administrators of Sirens By The Bay on July 25, 2018. ================ H O N G K O N G ================ NOBLE GROUP: Expected to Post Q2 Net Loss of Up to US$140MM ----------------------------------------------------------- Channel News Asia reports that Noble Group said it expected to post a loss in the second quarter, citing restructuring expenses and net finance costs. According to the report, the company forecast a net loss of about US$115 million to US$140 million for the period. It expects to report restructuring expenses of about US$95 million along with net finance costs and tax of US$70 million to US$80 million for the quarter, CNA relates. While operating income from supply chains improved in the quarter, Noble's performance continued to be hit by constraints on liquidity and availability of competitive trade finance to support its operations, along with the impact of restructuring expenses, Noble, as cited by CNA, said. Last month, the company won over a key shareholder with a sweetened equity offer for its US$3.4 billion debt restructuring plan that it sees as crucial to its survival, the report recalls. The company has sold billions of dollars of assets, taken hefty writedowns and cut hundreds of jobs over the past three years to slash debt, CNA states. On July 26, it also said more than 86 per cent of its senior creditors supported the debt plan. The company said it would not be paying the coupon on its 2020 bond due on July 30, the report relays. Noble had reported a quarterly loss of US$1.75 billion in the year-ago period and had recorded a net loss of US$72 million in the first quarter of this year, CNA discloses. About Noble Group Hong Kong-based Noble Group Limited (SGX:N21) -- http://www.thisisnoble.com/-- engages in supply of agricultural, industrial and energy products. The Company supplies agricultural and energy products, metals, minerals and ores. Agriculture products include grains, oilseeds and sugar to palm oil, coffee, and cocoa. Energy business includes coal, gas and liquid energy products. In metals, minerals and ores (MMO), it supplies iron ore, aluminum, special ores and alloys. The Company operates nearly in 140 locations. It supplies growth demand markets in Asia and Middle East. Alcoa World Alumina and Chemicals is the subsidiary of this company. As reported in the Troubled Company Reporter-Asia Pacific on March 23, 2018, S&P Global Ratings lowered its long-term issuer credit rating on Noble Group to 'D' from 'CC'. S&P said, "We lowered the ratings because Noble has missed the principal and coupon payment for its 2018 notes due March 20, 2018. Noble also missed the coupon payment on its 2022 notes due March 9, 2018. In addition, the company said it would not make the payments despite being given 30-day grace periods to meet both obligations. The failure to make these payments will trigger cross-defaults on the company's other obligations. We do not expect Noble to meet any outstanding obligations as the company preserves its assets during the restructuring process." Noble is undergoing a debt restructuring, which management expects to be completed by the end of July. S&P will conduct another review the company's credit profile after the restructuring is complete. NOBLE GROUP: PT Alhasanie Files $20MM Lawsuit Against Subsidiary ---------------------------------------------------------------- The Business Times reports that a lawsuit which is seeking damages of over US$20 million from a subsidiary of Noble Group has been filed in the District Court of South Jakarta by PT Alhasanie, which is a subsidiary of PT Atlas Resources Tbk. The lawsuit is against both Noble's unit, PT Pinang Coal Indonesia (PCI), and PT McMahon Mining Services, which is not related to Noble, according to the report. In a filing to the Singapore Exchange on July 25, Noble said that the lawsuit was served on PT PCI on July 9 and is related to the alleged breach of a technical services and management consulting agreement dated June 30, 2015, BT relates. "The company is of the view that the lawsuit is completely without merit. PT PCI is not liable as alleged or at all, and will defend the claim vigorously. It appears the lawsuit was filed as a response to a legal demand which PT PCI's external solicitors had sent to PT Alhasanie previously," Noble, as cited by BT, said. It added that PT PCI will be submitting its claim to Singapore arbitration, BT relays. About Noble Group Hong Kong-based Noble Group Limited (SGX:N21) -- http://www.thisisnoble.com/-- engages in supply of agricultural, industrial and energy products. The Company supplies agricultural and energy products, metals, minerals and ores. Agriculture products include grains, oilseeds and sugar to palm oil, coffee, and cocoa. Energy business includes coal, gas and liquid energy products. In metals, minerals and ores (MMO), it supplies iron ore, aluminum, special ores and alloys. The Company operates nearly in 140 locations. It supplies growth demand markets in Asia and Middle East. Alcoa World Alumina and Chemicals is the subsidiary of this company. As reported in the Troubled Company Reporter-Asia Pacific on March 23, 2018, S&P Global Ratings lowered its long-term issuer credit rating on Noble Group to 'D' from 'CC'. S&P said, "We lowered the ratings because Noble has missed the principal and coupon payment for its 2018 notes due March 20, 2018. Noble also missed the coupon payment on its 2022 notes due March 9, 2018. In addition, the company said it would not make the payments despite being given 30-day grace periods to meet both obligations. The failure to make these payments will trigger cross-defaults on the company's other obligations. We do not expect Noble to meet any outstanding obligations as the company preserves its assets during the restructuring process." Noble is undergoing a debt restructuring, which management expects to be completed by the end of July. S&P will conduct another review the company's credit profile after the restructuring is complete. YIHUA ENTERPRISE: S&P Alters Outlook to Negative & Affirms B ICR ---------------------------------------------------------------- S&P Global Ratings revised its outlook on Yihua Enterprise (Group) Co. Ltd. (Yihua) to negative from stable. S&P said, "At the same time, we affirmed our 'B' long-term issuer credit rating on the company. We also affirmed our 'B-' long-term issue rating on the senior unsecured notes that Yihua guarantees. Yihua Overseas Investment Ltd. issued the notes." Yihua primarily engages in the manufacture and distribution of furniture globally. The company's other businesses include hospital management and elderly care services, real estate, capital management, and hotel management in China. S&P said, "We revised the outlook to negative because we believe Yihua's liquidity buffer and capital structure could deteriorate if the company remains aggressive in making capital investments and the volatility in China's capital market persists. "Debt-funded expansion could continue to diminish Yihua's liquidity buffers over the next 12 months. We expect the company to continue to rely on acquisitions and capital investments to expand its hospital services and elderly care business over the next two to three years, albeit at a slower pace. We therefore revised our assessment of Yihua's liquidity to less than adequate from adequate. "Our base case assumes that Yihua's annual acquisition spending will remain high at Chinese renminbi (RMB) 1.0 billion-RMB2.0 billion in 2018 and 2019. The company acquired 12 hospitals across China in 2017 for a total consideration of about RMB1.2 billion. It also invested RMB2.0 billion in an industrial fund in 2017. "In our view, Yihua's capital structure could weaken over the next 12 months if the company has to rely on short-term financing to repay its debt maturities. Tightened domestic funding conditions following the Chinese government's focus on deleveraging has already posed refinancing challenges to some highly leveraged private companies. As of March 31, 2018, Yihua has short-term debt maturities of about RMB7.9 billion, compared to a cash balance of about RMB5.5 billion. The company also has domestic corporate bonds that will become puttable over the next 12 months." Yihua's sales of part of its four property projects to Poly Real Estate Group Co. Ltd. and holding of a substantial amount of liquid investments temper the liquidity risk. S&P said, "Our base case estimates that Yihua will receive RMB2.0 billion-RMB3.0 billion of cash from Poly in 2018 and RMB1.0 billion-RMB2.0 billion in 2019. Our assumptions do not include sharing of cash flows from future contract sales of the four projects, given that both the amount and timing are uncertain." The two companies announced the cooperation in April 2018 and intend to complete the shareholding transfer by the end of this year. Yihua's large balance of liquid equity investments also adds to its financial and liquidity cushion. As of March 31, 2018, the company has total liquid equity investments of about RMB3.6 billion. S&P said, "We affirmed the rating because we expect Yihua to maintain its market position as the largest wood furniture exporter in China, good business diversity, and high profit margin over the next 12 months. Yihua's full integration of soft furniture maker HTL International Holdings Ltd. has enlarged its operating scale and enhanced product and geographic diversity. Also, Yihua's hospital management and elderly care business has grown rapidly and continuously improved margins over the past three years. In our view, Yihua's overall competitive position remains relatively better than that of peers with a similar business risk profile. "The rating affirmation also reflects our expectation that Yihua's debt leverage will stabilize, but remain high with the debt-to-EBITDA ratio materially above 5.0x, over the next 12 months. The company's rising discipline in its capital spending and gradual exit from the property development business underpins our view. We expect Yihua's debt-to-EBITDA ratio to be 7.0x-9.0x in 2018 and 2019, compared with 7.8x in 2017. "We do not expect the escalated trade tensions between China and the U.S. at their current stage to materially affect Yihua. Most of the company's furniture product exports to the U.S. are not included on the tariff list yet, according to the management. American timber is not yet on China's tariff list either. We believe Yihua's more diversified product portfolio and geographic presence after the integration with HTL, and good cost position due to its vertically integrated supply chain will help mitigate the risks. "The negative outlook reflects our view that Yihua's liquidity buffer is diminishing. It also reflects our expectation that the company's capital structure could weaken if it remains aggressive in capital investments and relies on short-term debt to repay its debt maturities over the next 12 months. "We could lower the rating if Yihua's liquidity or capital structure weakens over the next 12 months. That could happen if: (1) Yihua's disposal of property projects to Poly is slower or operating cash flows are weaker than we expect; (2) Yihua's capital investment or shareholder returns are more aggressive; (3) the company's banking relationships or access to the equity or credit markets significantly erodes; or (4) it relies more on short-term debt financing. "We could also lower the rating if Yihua's competitive position deteriorates materially over the next 12 months, as indicated by weakening profit margin or loosening working capital management. This could happen if: (1) the company's market position in the furniture industry erodes due to escalated Sino-U.S. trade tensions or intense competition; or (2) its exposure to the healthcare services segment rises substantially without effective execution control. "We could revise the outlook to stable if Yihua proactively manages its capital structure and reduces its reliance on short- term debt financing, such that its liquidity buffer improves." ========= I N D I A ========= AAKASH DEVELOPERS: Ind-Ra Places BB LT Issuer Rating on RWN ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has placed Aakash Developers' (AD) Long-Term Issuer Rating of 'IND BB' on Rating Watch Negative (RWN). The Outlook was Stable. The instrument-wise rating action is: -- INR150 mil. (reduced from INR500 mil.) Long-term loan* due on August 31, 2021 assigned and placed on RWN with IND BB/RWN rating. * The final rating has been assigned following the receipt of the executed financing documents by Ind-Ra. KEY RATING DRIVERS The RWN follows delays in the commencement of AD's residential project owing to a delay in permission from Slum Rehabilitation Authority, Maharashtra. The permission is likely to be granted by mid-August 2018 and the construction is likely to commence in September 2018. Any further delay in the permission may affect the liquidity position of AD and, thus, the repayment of the interest payment obligations. RATING SENSITIVITIES Ind-Ra expects to resolve the RWN after the authority grants permission to AD to start project construction. Any delay in the approval beyond August 2018 may lead to a downgrade. COMPANY PROFILE AD will develop a residential project in Kandivali East, Mumbai. The firm was founded by Mr. Ram Kumar Pal. Basantraj Sethia and Rajesh Pal is the other partners. ADILABAD EXPRESSWAY: CARE Lowers Rating on INR268.88cr Loan to D ---------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Adilabad Expressway Private Limited (AEPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 268.88 CARE D Revised from CARE BB+; Facilities Stable Detailed Rationale & Key Rating Drivers The revision in the ratings assigned to the bank facilities of AEPL is primarily on account of delays in debt servicing due to stretched liquidity position of the company. Detailed description of the key rating drivers Key rating Weaknesses Delays in repayment of debt obligations: AEPL is eligible for semi-annual annuity from National Highway Authority of India (NHAI), each in May and November of every year. However, due to delay in first cycle of Major Maintenance works, NHAI withheld portion of semi-annual annuity which was due during May, 2018 resulting in liquidity issues for the company. Consequently, there were delays in debt servicing. Interest rate risk: In November 2012, the company opted for partial refinancing of the term debt through take-out finance. Given that interest rates can be reset every two years from the date of COD, the company continues to be exposed to interest rate risks during the life of the concession period. Any significant increase in interest cost could impact the prevalent moderate debt coverage indicators also. Further, the company also has sub- debt outstanding at a higher rate of interest. Non-creation of DSRA and MMRA: The company does not maintain DSRA and MMRA as the same is not stipulated in the CLA. The same has strained the cash flows of the company in the year of major maintenance and also resulted in delay in repayment of debt obligations. Operations & maintenance risk: AEPL is mandated to operate and maintain the road as per specifications set out in the CA, non- compliance of which could result in penalties being levied by NHAI. The routine maintenance & operations is carried out by Soma Enterprises Limited (SEL). Weak credit profile of principal sponsor: AEPL is a SPV promoted by SEL for the design, construction, development, finance, operation and maintenance of a 55 km road stretch on NH-7 on a build, operate and transfer (BOT) Annuity basis. SEL is the ultimate holding company of AEPL. Out of that, 67.70% beneficial ownership vests with its subsidiary company i.e. Soma Tollways Private Limited. Key rating Strengths Successful completion of first cycle of MM: AEPL has successfully completed its first cycle of MM during FY17-H1FY18. The company had entered into fixed price contract with SEL for completing the first MM cycle and the same has been completed within the cost envisaged. The Sponsors have provided the requisite financial support in the form of equity and unsecured loans (Rs.14.13 crore) and the company availed additional debt to fund the MM expenses. Operational annuity-based road project providing stability of the cash flow: The project is an operational annuity based project and is thus not exposed to any traffic risk. AEPL is eligible for semiannual annuities. Adilabad Expressway Private Limited (AEPL) is a special purpose vehicle (SPV) promoted by Soma Enterprise Limited (SEL) (88.70% holding) for the design, construction, development, finance, operation and maintenance of a 55 km road stretch on NH-7 on a build, operate and transfer (BOT) Annuity basis. The scope of work involves developing the 55 km road stretch to four lane divided carriageway standards including strengthening of the existing two lane road. The project is located in Andhra Pradesh (close to the AP Maharashtra border) and is part of the North- South Corridor of National Highways Development Project (NHDP)- Phase 2. The concession term is 20 years starting from November 2007 (including a two year construction period). Against a scheduled commercial operation date (COD) of November 2009, the project had achieved provisional COD for the complete stretch in June 2010. BALAJI OIL: CRISIL Migrates B Rating in Not Cooperating Category ---------------------------------------------------------------- CRISIL has been consistently following up with Balaji Oil Industries (BOI) 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. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 6 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Balaji Oil Industries. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Balaji Oil Industries is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of Balaji Oil Industries to 'CRISIL B/Stable Issuer not cooperating'. Established in 2005 as a partnership firm by Mr. Sunita Dilip Sarda and Mr. Vishnu Dhondiba Telap, BOI gins and presses cotton and also extracts cotton seed oil at its unit in Tirthpuri, Maharashtra. BINANI CEMENT: CARE Migrates D Rating to Not Cooperating Category ----------------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Binani Cement Limited to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 2,304.27 CARE D; Issuer not cooperating; Facilities Based on best available information. Short term Bank 436.00 CARE D; Issuer not cooperating; Facilities Based on best available information. Detailed Rationale & Key Rating Drivers Binani Cement Limited has not paid the surveillance fees for the rating exercise agreed to in its Rating Agreement. In line with the extant SEBI guidelines, CARE's rating on Binani Cement Limited's bank facilities will now be denoted as CARE D ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The ratings take into account ongoing delays in servicing of its debt obligation to banks. Detailed description of the key rating drivers As mentioned above, The Company is facing severe liquidity issues as a result of continuing losses as well as delay in sanctioning of working capital limits by banks. On July 26, 2017, Insolvency petition filed by one of the bank has been accepted by NCLT. Binani Cement is currently discussed under IBC. Initially, it had received takeover bids from Dalmia Bharat group-backed consortium with the bid amount of INR6350 Crore in March. However, Binani Industries Ltd reportedly signed a bilateral agreement with UltraTech to sell the company which led to Dalmia Bharat writing to the Reserve Bank of India (RBI) to examine the case for violation of Insolvency and Bankruptcy Code (IBC) process. Dalmia Bharat, who emerged the highest bidder in the first round, questioned the lenders' decision to vote in favor of UltraTech Cement when the bankruptcy court was yet to announce its final decision on UltraTech Cement's eligibility to bid. On June 5, 2018, The Supreme Court rejected an appeal by Dalmia Bharat in the second round of bidding, to stay the resolution process of Binani Cement. The court, however, said it will hear Dalmia Bharat's plea soon. On July 2, 2018, The Supreme court directed NCLAT to adjudicate upon all issues in this case, including Ultratech's eligibility as well legality of the bid, at the earliest. Binani Cement Limited (BCL), the flagship company of the Binani Group, commenced operations in April 1997 with an installed capacity of 1.65 million tonnes per annum (mtpa). The company has, over the years, enhanced its installed capacity and as on March 31, 2013, had an installed capacity of 6.25 mtpa in India and a consolidated capacity of 11.25 mtpa (includes Dubai- 2 mtpa and China-3 mtpa). BNK ENERGY: CARE Assigns B+ Rating to INR2cr Long-Term Loan ----------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of BNK Energy Alternatives (BNK), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 2.00 CARE B+; Stable Assigned Short-term Bank Facilities 3.00 CARE A4 Assigned Detailed Rationale and key rating drivers The ratings assigned to the bank facilities of BNK is constrained by small though growing scale of operations, leveraged capital structure and working capital intensive nature of operations. The ratings are further constrained on account of Stiff competition from large number of unorganized players, business risk associated with tender-based orders and Operations exposed to climatic conditions and technological risks. The ratings, however, continue to draw comfort from experienced partners and moderate profitability margins and coverage indicators. Going forward; ability of the firm to scale up its operations while managing its working requirements and improvement in capital structure shall be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Small though growing scale of operations: The firm is a small regional player involved in installation and commissioning of solar power plants. The ability of the firm to scale up to larger-sized contracts having better operating margins is constrained by its comparatively low capital base of INR1.05 crore as on March 31, 2017 and total operating income of INR7.31crore in FY17 (refers to the period April 1 to March 31). Though, the risk is partially mitigated by the fact that the scale of operation is growing continuously. For the period FY15- FY17, BNK's total operating income grew from INR6.38 crore to INR23.02 crore reflecting a compounded annual growth rate (CAGR) of 33.85% owing to increase in the number of orders executed. During FY18; based on provisional results the firm has achieved a total operating Income of INR23.02 crores. Further as on May 31, 2018 the company has an order book of around INR 9.00 crore which is to be executed with in next 3-4 months. Leveraged capital structure: The capital structure of the firm stood leveraged owing to higher dependence on external borrowings coupled with low net worth base as marked by overall gearing ratio which stood around 1.50x as on balance sheet dates of past three financial years i.e. FY15- FY17. Working capital intensive nature of business: The operations of the company are working capital intensive in nature as reflected by higher average utilization of its sanctioned working capital limits. The operating capital cycle however appears to be moderate primarily as the company receives a high payable period of around 5-6 months from its suppliers; while on the other hand, realization of receivables owing to lengthy clearance processes with the government departments results in a similar collection period. The average creditor's period and average collection period for FY17 stood high at 169 days and 199 days respectively. The company maintains inventory in the form of raw material as well as finished goods of around two months to ensure smooth execution of order and meet the immediate demand of its customers. The working capital limits remained almost fully utilized in the past 12 months, period ending May 31, 2018. Stiff competition from large number of unorganized players: No significant investment or specialization is required for the system integrator (SI) work carried out by BNK which results in low entry barriers for the business. These low entry barriers have resulted in large number of organized and unorganized players entering the industry which has led to increased competition. Further, with increasing growth opportunities for solar energy sector due to government support/incentives, more players are entering the industry thereby increasing competition. Business risk associated with tender-based orders: The company undertakes solar projects, which are awarded through the tender- based system. The company is exposed to the risk associated with the tender-based business, which is characterized by intense competition. The growth of the business depends on its ability to successfully bid for the tenders and emerge as the lowest bidder. Further, any changes in the government policy or government spending on projects are likely to affect the revenues of the company. Operations exposed to climatic conditions and technological risks: The operations of the company are exposed to climatic conditions as well as technological risks pertaining to adequate availability of sunlight and any redundancy associated with the operational efficiency of PV modules. As per government of Rajasthan (GoR), Rajasthan enjoys around 300 to 330 days of sunshine in a year and solar energy is estimated at 6-7 KWH/ sq. mtr of solar insolation levels. Key Rating Strengths Experienced partners: BNK is being managed by seven partners i.e. Mr. Santosh Kumar Rajgarhia, Mr. Shailesh Ram Rajgarhia, Ms. Neetu Kumari, Ms. Sonu Kumari, Mr. Sanjay Kumar Rajgarhia, Mr. Raminder Singh and Mr. Raj Kumar Roy. All the promoters are from diverse business background and have good experience in solar industry. . Besides that, the firm is managed by qualified professionals having the requisite technical knowledge and skills thereby providing synergistic advantage to the company in terms of successful project execution and commissioning. Moderate Profitability margins and coverage indicators: The profitability margins of BNK stood moderate owing to service nature of industry where profitability margins are moderate as marked by PBILDT and PAT margin which remained above 6% and around 3% for the past two financial years i.e. FY16-FY17. Further, the debt coverage indicators stood moderate as marked by Interest coverage ratio of 1.88x and total debt to GCA of 7.37x in FY17 on account of moderate profitability margins. Ghaziabad (Uttar Pradesh) based, BNK Energy Alternatives (BNK) was established as a partnership firm in the year 2016 and is currently being managed by its partners namely Mr. Santosh Kumar Rajgarhia, Mr. Shailesh Ram Rajgarhia, Ms. Neetu Kumari, Ms. Sonu Kumari, Mr. Sanjay Kumar Rajgarhia, Mr. Raminder Singh and Mr. Raj Kumar Roy sharing profit nad loss in the ratio of 49%, 49%, 0.40%, 0.40%, 0.40%, 0.40% and 0.40%. The firm has succeeded an erstwhile proprietorship firm M/s BNK Energy Alternatives which established in 2006 by Mr. Santosh Rajgharia. The firm is engaged into installation and commissioning of solar power plants. The key raw material required are solar panels, solar modules, batteries, cables, solar inverters, etc. which they procure from manufacturers located locally. CHEEKA RICE: CARE Downgrades Rating on INR8cr LT Loan to B ---------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Cheeka Rice Mill (CRM), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term bank 8.00 CARE B; ISSUER NOT COOPERATING Facilities Revised from CARE B+; Issuer not Cooperating Detailed Rationale & Key Rating Drivers CARE has been seeking information from CRM, to monitor the rating(s) vide e-mail communications/letters dated May 15, 2018, May 29, 2018 and June 4, 2018, with numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on Cheeka Rice Mill's bank facilities CARE B; ISSUER NOT COOPERATING. Users of these ratings (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating takes into account small scale of operations, low profitability margins, leveraged capital structure, weak coverage indicators, working capital intensive nature of operations, volatility in raw material prices, intense competition in the industry due to low entry barriers. However the risk is mitigated by experienced partners in manufacturing industry. Detailed description of the key rating drivers At the time of last rating on March 6, 2017, the following were the rating strengths and weaknesses Credit Risk Assessment Key Rating Weaknesses: Small scale of operations with low profitability margins: The scale of operations continues to remain small reflected by total operating income (TOI) of INR29.65 crore in FY15 (refers to the period April 1 to March 31) as against INR23.71 in FY14. The PBILDT margin of the firm has declined in FY15 and stood at 2.87% as against 3.24% in FY14. However, the PAT margin has improved in FY15 and stood at 0.10% as against 0.04% in owing to comparatively lower interest and deprecation cost during FY15. Weak financial risk profile: The financial risk profile of CRM is characterized by low profitability margins, leveraged capital structure and weak coverage indicators. The firm's profitability margins have been on the lower side owing to the low value addition and intense market competition given the highly fragmented nature of the industry. This apart, interest burden on working capital borrowing also restricts the net profitability of the firm. The PBILDT and PAT margins stood at around 4.70% and 0.03% respectively in the last three financial years (FY11-FY13). As on March 31, 2013, the firm has a leveraged capital structure marked by overall gearing ratio of 2.38x as on March 31, 2013, which deteriorated from 1.54x as on March 31, 2012, mainly on account of higher utilization of working capital bank borrowings as on balance sheet date. The firm's coverage indicators stood weak marked by low interest coverage and high total debt to GCA of 1.18x and above 44x, respectively, for FY13 due to low profitability margin and high debt level. Leveraged capital structure and weak debt service coverage indicators: Capital structure of the firm has improved in FY15; however, stood leveraged marked by overall gearing of 1.67x as on March 31, 2015, as against 2.19x as on March 31, 2014. The improvement was on account of increase in net worth owing to infusion of funds by the partners in form of capital. Debt coverage indicators have remained weak marked by interest coverage and total debt to GCA of 1.14x and 59.23x for FY15 against 1.15x and 62.22x for FY14. Partnership nature of constitution: CRM being a partnership firm and is exposed to the risk of withdrawal of capital by partners due to personal exigencies, dissolution of firm due to retirement or death or insolvency of any partner and restricted financial flexibility due to inability to explore cheaper sources of finance leading to limited growth potential. Highly fragmented industry characterised by high competition: The commodity nature of the product makes the industry highly fragmented with numerous players operating in the unorganized sector with very less product differentiation. There are several small-scale operators which are not into end-to-end processing of rice from paddy, instead they merely complete a small fraction of processing and dispose-off semiprocessed rice to other big rice millers for further processing. Agro-based industry is characterized by its seasonality, as it is dependent on the availability of raw materials, which further varies with different harvesting periods. The price of rice moves in tandem with the prices of paddy. Key Rating Strengths Experienced partners and long track record of operations: CRM is a partnership firm with a track record of over four decades in processing of paddy into rice. Mr. Sat Pal and Ms Darshana Devi have a total experience of around than two decades in the business of processing and trading of paddy. Prior to this, Mr. Sat Pal was involved in Vishnu Trading Co (trading of paddy). Favorable manufacturing location: CRM is mainly engaged in the milling and processing of rice. The main raw material (paddy) and wheat is procured from local grain markets, located in Haryana. The firm's processing facility is situated in Cheeka, Haryana, which is one of the highest producers of paddy in India. Its presence in the region gives additional advantage over the competitors in terms of easy availability of the raw material as well as favorable pricing terms. CRM owing to its location is in a position to cut on the freight component of incoming raw materials. Fragmented nature of the industry: The commodity nature of the product makes the industry highly fragmented with numerous players operating in the unorganized sector with very less product differentiation. There are several small scale operators which are not into end-to-end processing of rice from paddy, instead they merely complete a small fraction of processing and dispose-off semiprocessed rice to other big rice millers for further processing. CRM was established in 1972 as a partnership firm. The current management comprises its present partners, viz, Mr. Sat Pal and Ms Darshana Devi with equal profit and loss sharing. The firm is engaged in the trading and processing of rice. The manufacturing unit is located at Cheeka, Haryana, with an installed capacity of processing of rice of 36,500 metric tonnes per annum (MTPA) as on March 31, 2015. CRM procures paddy from local grain markets located in Haryana and Punjab through commission agents in bulk. The firm sells its products in Haryana and Punjab through a network of commission agents. For FY15 (refers to the period April 1 to March 31), CRM achieved a total operating income (TOI) of INR29.65 crore with PBILDT and PAT of INR0.85 crore and INR0.03 crore, respectively, as against TOI of INR23.71 crore with PBILDT and PAT of INR0.77 crore and INR0.01 crore, respectively, for FY14. The firm has achieved total sales of INR5.13 crore for 5MFY16 (refers to the period April 1 to August 31). COMMERCIAL CARRIERS: CARE Migrates D Rating to Not Cooperating -------------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Commercial Carriers Limited (CCL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 5.99 CARE D; Issuer not cooperating; Facilities Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from CCL to monitor the rating vide e-mail communications/letters dated May 7, 2018, May 14, 2018, June 12, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the rating. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on CCL's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers At the time of last rating done on March 14, 2017, the following were the rating strengths and weaknesses: (updated for the information available from Registrar of Companies) Key Rating Weaknesses: Delay in debt servicing: There are delays in servicing of term loan. CCL was started as a partnership firm in 1978 by Mr. D.N. Mallick and Mrs. Supti Mallick of Guwahati. In March 1993, the company was incorporated as a private limited company and subsequently, in April 2012, it was reconstituted as public limited company with its name changed to the current one. The company is engaged in the business of surface transportation & logistics. It offers services like transportation of various regular consignments; containerize transportation, transportation of various types of odd size consignment etc., for different major industrial houses. DHROOV RESORTS: CARE Migrates D Rating to Not Cooperating --------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Dhroov Resorts to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 11.00 CARE D; Issuer not cooperating; Facilities Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from Dhroov Resorts to monitor the rating(s) vide e-mail communications/letters dated June 1, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on Dhroov Resorts's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating takes into account ongoing delays in debt servicing due to weak liquidity position of the firm. Detailed description of the key rating drivers At the time of last review in March 30, 2016 the following were the rating strengths and weaknesses: Key rating Weaknesses Ongoing delays in debt servicing: There are ongoing delays in the servicing of the interest payment and principal repayments mainly on account of delays in the start of commercial operations. First venture in the hospitality sector: Though Mr. Balbir Singh Verma has prior experience in the real estate and construction industry, this is his first venture in the hospitality sector. Furthermore, M/s Dhroov Resorts has not tied-up with any renowned hotel brand, as on date, that would help establishing its hotel in the market. M/s Dhroov Resorts, a sole proprietary concern of Mr. Balbir Singh Verma, is constructing a 4- star hotel project by the name of "Dhroov Resorts" in Shimla, H.P. Mr. Verma is a MLA (Member of Legislative Assembly) from the Chopalarea (in Shimla district) and is also a certified builder and civil contractor in the region. The total project cost of INR23.57 crore is expected to be funded through a debt of INR15 crore and promoter's capital of INR7.21 crore and other borrowings of INR1.36 crore. As on December 31, 2015, the firm has incurred a total cost of INR20.87 crore. The hotel is expected to start commercial operations from April 2016 onwards. ECO RICH: Insolvency Resolution Process Case Summary ---------------------------------------------------- Debtor: Eco Rich Cosmetic India Private Limited 303-304, 3rd Floor, B Wing, Oxford Chamber, Saki Vihar Road, Powai, Andheri (East), Mumbai - 400 072., Maharastra State Insolvency Commencement Date: July 23, 2018 Court: National Company Law Tribunal, Mumbai Bench Estimated date of closure of insolvency resolution process: January 19, 2019 (180 days from commencement) Insolvency professional: Prabhakar Bhat Interim Resolution Professional: Prabhakar Bhat No 7, First floor Shital, Plot No 81, Jain Mandir Marg, Behind Old SIES College, Sion West, Mumbai - 400022 E-mail: sukkhe@gmail.com Last date for submission of claims: August 6, 2018 GRANNY'S SPICES: CARE Lowers Rating on INR6cr LT Loan to D ---------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Granny's Spices (India) LLP (GSIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 6.00 CARE D Revised from CARE BB-; Facilities Stable Short-term bank 0.25 CARE D Revised from CARE A4 Facilities Long-term/Short- 3.00 CARE D/CARE D Revised from Term Facilities CARE BB-; Stable/CARE A4 Detailed Rationale & Key Rating Drivers The revision in the rating assigned to the bank facilities of GSIL is on account of on-going delay in debt servicing owing to weak liquidity position. Establishing a clear debt servicing track record along with improvement in the liquidity position remains the key rating sensitivities. Detailed description of key rating drivers Key Rating Weaknesses Ongoing delay in debt servicing: GSIL has been irregular in servicing its debt obligation as there are on- going delays in servicing its term loan principal and interest. The same is due to weak liquidity position of the firm. Rajkot-based (Gujarat) GSIL was established in October 2015 to take up the business of manufacturing and export of spices such as turmeric powder, dry chillies, cumin powder etc. GSIL also has group entities viz."Swastik International" which is into trading and export of spices (having accreditation from government as '1 star export house') and "H. C. &Co." which is in the same line of business. GSIL completed its project of INR13.84 crore funded via debt equity mix of 1.77 times and commenced commercial operations from April, 2017. INCOM CABLES: Ind-Ra Maintains 'D' LT Rating in Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Incom Cables Private Limited's (INCOM) Long-Term Issuer Rating in the non- cooperating category. The issuer did not participate in the rating exercise, despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using the rating. The rating will continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR425.0 mil. Fund-based limit (Long and short term) maintained in non-cooperating category with IND D (ISSUER NOT COOPERATING) rating; -- INR425.0 mil. Non-fund-based limit (short-term) maintained in non-cooperating category with IND D (ISSUER NOT COOPERATING) rating; and -- INR60.6 mil. Long-term loans (long-term) due on July 2019 maintained in non-cooperating category with IND D (ISSUERNOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on July 21, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 1979, Incom Cables manufactures telecommunication, signaling and power cables, and sells them under the brand name of INCOM. INDIAN ACRYLICS: Ind-Ra Withdraws 'D' Long Term Issuer Rating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Indian Acrylics Limited's Long-Term Issuer Rating of 'IND D' to the non- cooperating category and simultaneously withdrawn it. The instrument-wise rating actions are: -- The IND D rating on the INR907.9 mil. Term loans due on March 31, 2024 migrated to non-cooperating category and withdrawn; -- The IND D rating on the INR300 mil. Fund-based working capital facilities migrated to non-cooperating category and withdrawn; and -- The IND D rating on the INR1,892.5 bil. Non-fund-based working capital facilities migrated to non-cooperating category and withdrawn. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on December 26, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. KEY RATING DRIVERS The ratings have been migrated to the non-cooperating category because the issuer did not participate in the rating exercise, despite continuous requests and follow-ups by the agency. The agency has simultaneously withdrawn the ratings as it has received no objection certificates from the lenders. This is consistent with the Securities and Exchange Board of India's circular dated March 31, 2017 for credit rating agencies. Ind-Ra will no longer provide analytical and rating coverage for IAL. COMPANY PROFILE Incorporated in 1986, Indian Acrylics manufactures acrylic fiber at its 42,000mtpa facility in Sangrur, Punjab. INNOTECH EDUCATIONAL: CARE Migrates D Rating to Not Cooperating --------------------------------------------------------------- CARE Ratings has migrated the rating on bank facility of Innotech Educational Society (IES) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 19.00 CARE D; Issuer Not Cooperating; Facilities Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from IES to monitor the rating vide e-mail communications/letters dated May 7, 2018, May 21, 2018, May 28, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the rating. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on IES's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers At the time of last rating done on March 8, 2017, the following were the rating strengths and weaknesses: Key Rating Strengths Experienced members from the industry on the advisory board of the society: The founder & promoter of IES, Shri Amit Kumar Das (President of the Society), an NRI (based in Australia), is a graduate and diploma holder in computer engineering, having more than a decade experience in Information Technology sector. He is well supported by an advisory board comprising of experienced professionals from the industry. Modern infrastructure with latest available technology: The campus of the institute is spread over an area of 15 acre and includes facilities such as world class classrooms, health centre, gymnasium, canteen, ATM, Wi-Fi, mini-sports complex, fully equipped auditorium, highly equipped libraries with online access to major journals and publications from across the world, video-conferencing facility, etc. Linkage with reputed International Institute and National University: The institute has signed MoU with TAFE, South Australia for sharing expertise on curriculum, teaching pedagogy and the development of education and training at MBIT. TAFE, is the network of independent institutes, which is the leading and largest vocational education and training provider in South Australia. Further, its engineering college has got affiliation from Aryabhatta Technology University, Bihar and has been approved by All India Council for Technical Education (AICTE). Nascent stage of operations: However, the society has completed two and a half year of operation with the commencement of the operation from September 2014. Project implementation risk: The Phase III will start from Feb. 2016 and is likely to be completed by the end of Mar. 2017. Intense competition from established and upcoming educational institutes: IES faces high competition from other established and upcoming educational institutes located in and around Bihar. In Bihar area itself, there are more than 25 colleges offering bachelor degree in engineering including colleges like IIT, NIT, Birla Institute of Technology, Bhagalpur college of Engineering, etc. to name a few. Further there are numerous engineering colleges in Bihar and its adjoining areas. Regulatory challenges: Despite the increasing trend of privatization of the education sector in India, regulatory challenges continue to pose a significant threat to the educational institutes. In addition to AICTE, the educational institutions are regulated by respective state governments with respect to number of management seats, amount of tuition fee charged for government quota and management quota giving limited flexibility to the institutions. These factors have significant impact on the revenues and profitability of the institutions Innotech Educational Society (IES) was established in March, 2010 under the Societies Registration Act, 1860 for establishing and operating educational institutes for imparting education in engineering discipline in Araria, Bihar. With completion of the Phase I of its three phased project, the society has started an Engineering college under the name "Moti Babu Institute of Technology (MBIT)" with 300 seats in 5 streams of engineering from the academic year 2014-2015. The institute is approved by All India Council for Technical Education (AICTE) and affiliated to Aryabhatta Technology University, Bihar. The society has been founded & promoted by Shri Amit Kumar Das, an NRI (based in Australia), who is a graduate and diploma holder in computer engineering and possesses more than a decade experience in Information Technology sector. He is also the founder & chairman of the ISOFT Software Technologies Pvt. Ltd., a company engaged in software development. KOHINOOR HATCHERIES: Ind-Ra Affirms BB+ LT Rating, Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Kohinoor Hatcheries Private Limited's (KHPL) Long-Term Issuer Rating at 'IND BB+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR183.8 mil. (reduced from INR251.12 mil.) Long-term loans due on July 2023 affirmed with IND BB+/Stable rating; and -- INR400 mil. (reduced from INR411 mil.) Fund-based facilities affirmed with IND BB+/Stable/IND A4+ rating. Ind-Ra continues to take a consolidated view of KHPL and Kohinoor group companies Kohinoor Clean Energy Private Limited, Rithwik Power Projects Limited, Satyamaharshi Power Corporation Limited, Transafrican Farms and Foods Limited (FY18 financials not available) and Rohini Green Energy Private Limited. The group entities have operational and legal inter-linkages in the form of common directors, cross-holdings, corporate guarantees and fungibility of funds. KEY RATING DRIVERS The ratings continue to reflect KHPL's improved-yet-moderate credit metrics on a consolidated basis, because of intense competition in the poultry business from both organized and unorganized sectors. The net leverage (adjusted net debt/operating EBITDA) was 4.1x in FY18 (FY17: 5.1x) and coverage ratio (operating EBITDA/gross interest expense) was 3.1x (2.2x). The credit metrics improved due to the repayment of long-term loans. FY18 financials are provisional in nature. The ratings also reflect the company's modest scale of operations. Revenue plunged in FY18 to INR1,277.3 million (FY17: INR1,528.7 million), as the company discontinued the lower margin trading business which contributed INR240 million to the revenue in FY17. Moreover, EBITDA remained almost stable at INR285.7 million in FY18 (FY17: INR283.8 million). Ind-Ra expects revenue to improve in FY19, due to the stabilization of operations at a new feed plant in FY18 and FY19 will be the first full year of its operations. The ratings factor in KHPL's healthy margins of 22.4% in FY18 (FY17: 18.6%), owing to return on capital employed of 15.04% in FY18. The rise in margins is attributed to higher realization and lower input raw material cost along with discontinuing the lower trading business. The ratings are constrained by KHPL's elongated net working capital cycle of 237 days in FY18 (FY17: 228 days), indicating the working capital-intensive nature of the group's business. The company is experiencing delays in the payment for the electricity sold to the state distribution companies. Moreover, KHPL has a moderate liquidity position with an average peak utilization of the fund-based facilities during the 12 months ended June 2018 being 92.87%. However, the ratings continue to be supported by promoters' two decades of experience in in the poultry and renewable energy generation business. RATING SENSITIVITIES Positive: A significant rise in the revenue and EBITDA margin leading to an improvement in the credit metrics, on a sustained basis, could be positive for the ratings. Negative: Deterioration in the EBITDA margin leading to deterioration in the credit metrics and/or liquidity on a sustained basis, could be negative for the ratings. COMPANY PROFILE Hyderabad-based KHPL was established in 1991 by Mr. D Raghava Rao. The company is engaged in the poultry breeding business. LAVANYA PUREFOOD: CARE Lowers Rating on INR13.32cr Loan to C ------------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of Lavanya Purefood Private Limited (LPFPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 13.32 CARE C; Issuer not cooperating; Facilities Revised from CARE B; Issuer Not Cooperating; Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from LPFPL to monitor the rating vide e-mail communications/letters dated May 7, 2018, May 14, 2018, June 12, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the rating. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on LPFPL's bank facilities will now be denoted as CARE C; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The revision in the rating of the bank facilities of LPFPL takes into account the significant deterioration in overall financial performance during FY17 marked by deterioration in profitability margins, capital structure and debt coverage indicators during FY17. The rating takes into account its small scale of operation, raw material price fluctuation and availability risk with susceptibility to vagaries of nature, highly competitive and fragmented industry and regulated industry. Moreover, the rating continues to derive strengths by its experienced promoters in agro based industry, locational Advantage and insulation from economic cycle with stable demand outlook. Detailed description of the key rating drivers At the time of last rating done on March 14, 2017, the following were the rating strengths and weaknesses: (updated for the information available from Registrar of Companies) Key Rating Weaknesses: Small scale of operation: The scale of operations remained small marked by total operating income of INR34.29 crore (FY16:31.27 crore) with a net loss of INR3.42 crore (net loss of INR3.71 core in FY16) in FY17. Raw material price fluctuation and availability risk with susceptibility to vagaries of nature: The prices of major raw material, wheat, are dependent on its availability which is further dependant on climatic conditions. Wheat production's overdependence on monsoons is an inherent risk which may impact its availability, resulting in volatility in wheat prices. Since, raw material would be the major cost driver for LPFPL, any increase in raw material prices without corresponding increase in finished goods prices will result in adverse performance of the company. Highly competitive and fragmented industry: Flour processing industry is highly fragmented and competitive marked by the presence of numerous unorganized players. Major flour requirement in the country is met through small 'Chakki' units, mainly due to low entry barriers on the back of limited capital and technological requirements and capital subsidy provided by the state government to promote agro based industries, leading to intense competition within the business scenario. Hence, the players in the industry do not enjoy the discretion oven fixing of price and are always expose to pressure on profitability driven by induce completion. Regulated industry: Wheat being a staple food, its prices is under the tight control of the Central and respective State Governments. There are strict regulations in place relating to Minimum Support Price and Exim policy which hugely affects the wheat prices domestically. Key Rating Strengths: Experienced promoters in agro based industry: Mr. Sanjeev Kumar Thakur has rich working experience of around a decade in the field of food processing business through his family business. Locational Advantage: LPFPL's unit has close proximity to local grain markets, from where the major raw material, 'wheat' can be easily procurable. Further, Bihar stands sixth among all other wheat producing states in India. Furthermore, the plant is having good transportation facilities and other requirements like good supply of power, and water etc. Insulation from economic cycle with stable demand outlook: Wheat based products, viz. 'Maida', 'Suji' and 'Atta' have large consumption across the country in the form of bakery products, cakes, biscuits and different types of food dishes in home and restaurants. Being a part of daily food habit, the demand for wheat products is sustainable and accordingly, the flour mill industry is relatively insulated from economic cycle. Furthermore, flour milling industry in India has witnessed a satisfactory upward trend over the past few years. The demand has been driven by the rapidly changing food habits of the average Indian consumer, dictated by the lifestyle changes in urban and semi-urban regions of the country. The boom in the hospitality sector, driven by increasing focus on India by MNC's is expected to act as a steady and sustained growth driver for the company. LPFPL was incorporated in June 2011 by Mr. Dilip Kumar and Mr. Sanjeev Kumar Thakur of Bihar. Although the company has come into existence in the year 2011, its commercial operation started in October 2014. The company has set-up a flour mill in Muzaffarpur, Bihar to process wheat into 'Maida', 'Suzi', and 'Chokar'. MAHALAXMI ROLLER: CARE Cuts Rating on INR5.84cr LT Loan to B ------------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of Mahalaxmi Roller Flour Mills (MAR), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term bank 5.84 CARE B; ISSUER NOT COOPERATING Facilities Revised from CARE B+; Issuer Not cooperating Detailed Rationale & Key Rating Drivers CARE has been seeking information from Mahalaxmi Roller Flour Mills, to monitor the rating(s) vide e-mail communications/letters dated May 16, 2018, May 29, 2018 and June 4, 2018, with numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on Mahalaxmi Roller Flour Mills's bank facilities CARE B; ISSUER NOT COOPERATING. Users of these ratings (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating takes into account small scale of operations, low profitability margins, leveraged capital structure, weak coverage indicators, working capital intensive nature of operations, volatility in raw material prices, intense competition in the industry due to low entry barriers. However the risk is mitigated by experienced partners in manufacturing industry. Detailed description of the key rating drivers At the time of last rating on March 20, 2017, the following were the rating strengths and weaknesses Credit Risk Assessment Key Rating Weaknesses: Small scale of operations coupled with low net worth base Despite being operational for more than three decades, the scale of operations has remained small marked by total operating income and gross cash accruals of INR48.77 crore and INR0.08 crore respectively during FY15 (refers to the period April 1 to March 31) (provisional results). Furthermore, the firm's net worth base was relatively small at INR3.55 crore as on March 31, 2015. The small scale operations limit the firm's financial flexibility in times of stress and deprive it from scale benefits. Weak financial risk profile: The financial risk profile of the firm is weak for the period FY13-FY15, characterized by thin profitability margins, leveraged capital structure and weak debt coverage indicators. The profitability margins marked by PBILDT and PAT margins have remained low during the past three years (FY13-FY15) owing to low value addition and highly competitive nature of the industry. The PBILDT margin has declined in FY14 on account of higher material cost during the year, whereas the PAT margin is declining y-o-y basis during FY13-FY15 owing to higher utilization of working capital borrowings over the years. As on March 31, 2015, the capital structure of the firm comprised of term loan, unsecured loans and working capital bank borrowing. The overall gearing stood leveraged at 2.34x as on March 31, 2015 which deteriorated from 1.40x as on March 31, 2014 mainly attributed to higher utilization of working capital borrowings. The working capital borrowings of the firm remained 85% utilized for 12 months ending March 2015. Debt service coverage indicators marked by interest coverage and total debt to GCA stood weak and declined further in FY15 over the previous financial year on account of higher interest cost owing to high utilization of working capital borrowings. Interest coverage ratio and total debt to GCA stood at of 1.44x and 26.74x for FY15 against 1.72x and 12.01x in FY14. Volatility in raw material prices influenced by government policies on agro commodity and monsoon dependent operations: MAR is primarily engaged in processing of wheat products under its roller mills. The main raw material needed for production of wheat flour is wheat. Prices of wheat are subjected to government intervention since it is an agricultural produce and staple food. Various restrictions including minimum support price (MSP), control on exports, wheat procurement policies for maintenance of buffer stocks etc. are imposed to regulate the price of wheat in the market. The price of wheat is also influenced by the supply scenario which is susceptible to the agro-climatic conditions. Thus, any volatility in wheat prices can have direct impact on the profitability margins of the firm. In addition to government policies on agro commodity, the agro- based industry is characterized by its seasonality, as it is dependent on the availability of raw materials, which further varies with different harvesting periods. Availability and prices of agro commodities are highly dependent on the climatic conditions. Adverse climatic conditions can affect their availability and leads to volatility in raw material prices. The monsoon has a huge bearing on crop availability which determines the prevailing wheat prices. Highly competitive industry & low entry barriers: The flour industry is highly fragmented with more than two-third of the total number of players being unorganized. Due to low entry barriers in the industry and low value-added nature of products, the flour mill units have limited flexibility over pricing their products resulting in low profit margins. Experienced partners & long track record of operations of firm: MAR is currently being managed by Mr. Parvinder Khanduja and Mr. Harvinder Khanduja and both the partners are the second generation entrepreneurs. Both the partners are graduates and have wide experience of around four decades in processing of agriculture product through their association with MAR. Moderate operating cycle: The operating cycle of the firm stood moderate at 41 days for FY15. The average collection period remained at around 10 days during FY15, whereas the firm purchases wheat mainly on cash or advance basis. The firm is required to maintain adequate inventory of raw material for smooth running of its production processes. The firm purchases raw materials from nearby regions and keeps an inventory of around 15-30 days. Mahalaxmi Roller Flour Mills (MAR) is a partnership firm and was established in 1983, by Mr. G K Khanduja. The current partners are Mr. Parvinder Khanduja and Mr. Harvinder Khanduja sharing profit and loss equally. The firm is engaged in processing of wheat into wheat flour, refined flour (maida), suji and choker. The main raw material of the firm is wheat which is procured from broker and commission agents located in Delhi. The firm also procures wheat from Food Corporation of India (FCI). MAR sells its products through commission agents and dealers in states like Uttar Pradesh and Punjab. MANGALDEEP RICE: CRISIL Maintains 'D' Rating in Not Cooperating --------------------------------------------------------------- CRISIL has been consistently following up with Mangaldeep Rice Mill Private Limited (MRM) 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 D (ISSUER NOT COOPERATING) Term Loan 8.24 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 MRM, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on MRM 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 MRM continues to be CRISIL D Issuer not cooperating' MRM, incorporated in 2010-11 (refers to financial year, April 1 to March 31), processes paddy. It has milling capacity of 4 tonnes per hour and sells mainly to the Government of Bihar under the public distribution system. It also sells in the local market. METRO AGRI: CARE Lowers Rating on INR13.84cr LT Loan to D --------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Metro Agri Industries Limited (MAIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 13.84 CARE D; Issuer not cooperating; Facilities Revised from CARE B; Issuer not Cooperating on the basis of best available information Long-term/Short- 2.66 CARE D/CARE D; Issuer not Term Bank cooperating; Revised from Facilities CARE B/CARE A4; Issuer not cooperating on the basis of best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information/NDS from MAIL to monitor the ratings vide e-mail communications/letters dated July 4, 2018, July 2, 2018, June 29, 2018, June 11, 2018, June 6, 2018, May 31, 2018, May 18, 2018, and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The ratings on MAIL's bank facilities will now denoted as CARE D; ISSUER NOT COOPERATING. Detailed description of the key rating drivers The revision in the ratings of the bank facilities of MAIL takes into account ongoing delays in debt servicing by the company. Metro Agri-Industries Limited (MAIL) was incorporated in 2011 by Mr. Vijay Garg, Mr. Himank Garg and Mrs. Ankita Garg as a limited company. The company started its production in November 2013 and is engaged in the business of basmati rice milling and processing of rice which is sold in the export and domestic markets. The processing facility is at Tehsil Israna Karnal district in Panipat (Haryana) with an installed capacity of ~28,800 metric tonnes per annum (MTPA) as on March 31, 2015. MEVADA OIL: CARE Lowers Rating on INR14.60cr LT Loan to D --------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Mevada Oil Mill Private Limited (MOMPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 14.60 CARE D; Issuer not cooperating; Facilities Revised from CARE BB-; Stable; Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from MOMPL to monitor the ratings vide e-mail communications/letters dated July 2, 2018, June 14, 2018, June 5, 2018, May 17, 2018, April 18, 2018 and numerous phone calls. However, despite/our repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The ratings on MOMPL's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. The rating has been revised on account of the delays in debt repayment owing to weak liquidity position. Detailed description of the key rating drivers Key Rating Weaknesses Ongoing delay in debt servicing: MOMPL has been irregular in servicing its debt obligation due to weak liquidity position of the company. Surendranagar-based (Gujarat) MOMPL was established in April, 2000 as a proprietorship firm by Mr. Ramesh Mevada. The firm was engaged in the business of production of refined groundnut oil and trading in all types of Edible Oil and Oil Cakes. During October 2016, the proprietorship firm was reconstituted as "Mevada Oil Mill Private Limited" and is now engaged into manufacturing of cotton wash oil, crude corn oil and oil cakes as well as trading in all kinds of edible oil, non-edible oil and oil cakes. N.S.R. MILLS: CRISIL Maintains 'B' Rating in Not Cooperating ------------------------------------------------------------ CRISIL has been consistently following up with N.S.R. Mills (NSR) 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 4.2 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 N.S.R. Mills. 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 N.S.R. Mills 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 NSR continues to be CRISIL B/Stable Issuer not cooperating. Set up in 2007 by Ms S Amirtham as a proprietorship concern, NSR manufactures cotton yarn of 60s and 40s counts. NATURAL AGRITECH: Ind-Ra Hikes Long Term Issuer Rating to 'B+' -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Natural Agritech Private Limited's (NAPL) Long-Term Issuer Rating to 'IND B+' from 'IND B- (ISSUER NOT COOPERATING)'. The Outlook is Stable. The instrument-wise rating actions are: -- INR40 mil. Fund-based limits upgraded with IND B+/Stable rating; -- INR46.6 mil. (reduced from INR73.7 mil.) Term loan due on May 30, 2021 upgraded with IND B+/Stable rating; and -- INR22.5 mil. Non-fund-based limits affirmed with IND A4 rating. KEY RATING DRIVERS The upgrade reflects NAPL's revenue growth to INR222.85 million in FY18 from INR121.75 million in FY17, driven by a rise in sales volume, though the scale of operations continues to be small. FY18 financials are provisional. The ratings are supported by NAPL's healthy return on capital employed (FY18: 30.15%; FY17: 19.83%) and EBITDA margin (12.31%; 35.81%). The fall in the margin was due to more direct sales (which yield low margins) than job works. The ratings continue to benefit from the promoters' experience of nearly a decade in the rice industry and the company's location advantage owing to its proximity to paddy-growing regions. The ratings, however, continue to be constrained by NAPL's weak credit metrics, which deteriorated in FY18 due to a fall in EBITDA despite a decrease in financial cost and external borrowings. In FY18, its interest coverage (operating EBITDA/gross interest expense) was 1.86x (FY17: 2.25x) and net leverage (total adjusted net debt/operating EBITDAR) was 3.60x (2.25x). The ratings also continue to be constrained by a tight liquidity, indicated by an average maximum fund-based limit utilization of 99.73%% for the 12 months ended June 2018. The ratings continue to reflect company's presence in the highly fragmented and competitive rice milling business, raw material price fluctuations, which are subject to government regulations, and the seasonal nature of the availability of paddy. RATING SENSITIVITIES Negative: Any further decline in the EBITDA margin, leading to any further deterioration in the credit metrics, could lead to a negative rating action. Positive: Revenue growth, along with improved credit metrics, on a sustained basis, could lead to a positive rating action. COMPANY PROFILE Incorporated in 2014 by Krishna Kumar Modi, Sangita Agarwal, Harish Saraogi and Sourav Saraogi, NAPL is engaged in the production and milling of rice. The company has a160 metric ton per day manufacturing facility in Dhenkanal, Odisha. The company mainly sells its products under the brands Babaji, Shivam Gold and Aayog. NAVEEN POULTRY: CRISIL Maintains D Rating in Not Cooperating ------------------------------------------------------------ CRISIL has been consistently following up with Naveen Poultry Farms Private Limited (NPFL) 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 1.7 CRISIL D (ISSUER NOT COOPERATING) Long Term Loan 4.0 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 Naveen Poultry Farms 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 Naveen Poultry Farms 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 ratings on bank facilities of NPFL continues to be CRISIL D Issuer not cooperating. NPFL was set up in 2011 by Mr. K Kiran Kumar, Mrs. K Saritha Rao, and Mr. V Narendra Reddy. The company produces commercial eggs at its facility in Hyderabad. NEW HORIZON: CARE Lowers Rating on INR6.40cr LT Loan to B --------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of New Horizon Knits Private Limited (NHKPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 6.40 CARE B; ISSUER NOT COOPERATING Facilities Revised from CARE B+; Issuer not cooperating on the basis of best available information Short-term Bank 1.60 CARE A4; ISSUER NOT Facilities COOPERATING Reaffirmed Detailed Rationale & Key Rating Drivers CARE has been seeking information from NHKPL to monitor the rating(s) vide e-mail communications/letters dated June 1, 2018, May 29, 2018, May 17, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. CARE's rating on New Horizon Knits Private Limited bank facilities will now be denoted as CARE B; ISSUER NOT COOPERATING/CARE A4; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating has been revised by taking into account no due- diligence conducted due to non-cooperation by New Horizon Knits Private Limited. Further, the ratings take into account small and fluctuating scale of operations, low profitability margins, leveraged capital structure, weak coverage indicators, working capital intensive nature of operations, fragmented nature of industry and susceptibility to the raw material price fluctuations. However the risk is mitigated by long standing experience of the promoters. Detailed description of the key rating drivers At the time of last ratings on April 28, 2017. The following were the rating strengths and weaknesses (Updated for the information available from the registrar of companies). Key Rating Weaknesses Small scale of operations: The scale of operations of the company stood small scale which limits the company's financial flexibility in times of stress and deprise of scale benefits. The profitability margins of the company remained on a lower side owing to the trading nature of the business and highly competitive industry. Low PAT margins and leveraged capital structure and weak coverage indicators: In the past 3 years the company had moderate PBDILT margin. However, higher interest and depreciation restrict the PAT margin below unity in the past three financial years i.e. FY15-FY17. The capital structure of NHKPL stood leveraged owing to high dependance on external borrowings. Furthermore, the debt coverage indicators of NHKPL also stood weak on account of higher interest costs incurred. Working capital intensive nature of business operations: The operating cycle has remained stretched on account of higher inventory maintained by the company. The company manufactures different forms of socks and other hosiery garments and maintains sufficient stock of different forms of raw materials i.e. yarn and fabrics for smooth production process leading to high inventory holding period in FY17 (refers to the period April 1 to March 31). The manufacturing process involves printing, embroidery and dyeing leading to work in progress period of around two weeks. Furthermore, the company has to maintain minimum inventory of its products, mainly socks, to meet the demand of its customers. The company offers credit period of around one and a half month to its customers. However, some comfort can be drawn as the company has been receiving higher credit period from its suppliers as well. Susceptibility to volatility in raw material prices and currency rates: The main raw material of the company is yarn (cotton, nylon and synthetic) which constituted major part of the total cost of production. The cotton prices are volatile on account of various factors like government policies viz. minimum support price, regularity of monsoon leading to unpredictable yield etc. Hence any volatility in the prices of raw material has a direct impact on the profitability margins of the company. NHKPL's revenue is largely dependent on exports, which, thereby the firm is exposed to foreign exchange fluctuation risk. NHKPL does not have any prudent foreign exchange hedging initiative like forward contract etc. The company usually raises its export bill at spot price on the date of receipt of order; however, the payment for the same is received after delivery of goods. Any adverse movement in the currency rate during this period can impact the profitability of the company. Highly fragmented and competitive industry: The company operates in the textile manufacturing and processing industry which is highly fragmented with the presence of numerous independent small-scale enterprises owing to low entry barriers leading to high level of competition in the processing segment. The intense competition in the highly fragmented textile industry restricts ability to completely pass on volatility in input cost to its customers, leading to lower profitability margins. Key Rating Strengths Experienced promoters: Currently, NHKPL is managed by its two directors, Mr. Shyam Sundar Chamria and Mr. Ravi Chamria. Mr. Shyam Sundar Chamria has around four decades of experience in the textile industry and looks after the overall management of the company. Mr. Ravi Chamria has more than one decade of experience and looks after the administrative activities of the company. Due to long standing experience in the textile industry, the company has developed good relations with the local raw material suppliers and procures raw material directly from them. NHKPL was incorporated in the year 2005 by Mr. Shyam Sundar Chamria and his son Mr. Ravi Chamria. The company is engaged in the manufacturing and exports of socks and other hosiery items like leggings and tights for women and kids at its unit in Bahadurgarh (Haryana) under the brand name of Angry Bird and NBA. The exports contributed around 85% during FY15 (refers to the period April 1 to March 31) to the countries like United States and United Kingdom along with other European countries. The main raw materials are cotton yarn, nylon yarn and synthetic yarn which are procured from the domestic suppliers based in the regions of Haryana and Delhi. Its main products are primarily for all seasons and manufacture all variants of socks like boys' & girls' socks, infant socks, knee socks, formal socks and others. NHKPL has an in house facility and infrastructure has fully computerized socks knitting & finishing machines mainly imported from the countries like Korea, Italy and China. The manufacturing takes place keeping in mind correct design, use of correct yarn, colours and sizes as per customers' requirement and demand. NICE POULTRY: CRISIL Maintains B- Rating in Not Cooperating ----------------------------------------------------------- CRISIL has been consistently following up with Nice Poultry Feeds Mill Private Limited (NPFPL) 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) Proposed Long Term 0.75 CRISIL B-/Stable (ISSUER NOT Bank Loan Facility COOPERATING) Term Loan 9.25 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 Nice Poultry Feeds Mill 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 Nice Poultry Feeds Mill 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 NPFPL continues to be CRISIL B/Stable Issuer not cooperating'. NPFPL, incorporated in 2011, manufactures poultry feed at its facility in Ghaziabad (Uttar Pradesh). NPFPL is promoted by Mr. Rais Ahmad, Mr. Naeem Ahmad, and Ms. Shama Praveen. NIKKI STEELS: CARE Lowers Rating on INR12cr LT Loan to B- --------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Nikki Steels Private Limited (NSPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 12.00 CARE B-; ISSUER NOT COOPERATING; Facilities Revised from CARE B; Issuer not cooperating Detailed Rationale & Key Rating Drivers CARE has been seeking information from NSPL to monitor the rating(s) vide e-mail communications/letters dated June 1, 2018, May 29, 2018, May 17, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. CARE's rating on Nikki Steels Private Limited bank facilities will now be denoted as CARE B-; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating has been revised by taking into account no due- diligence conducted due to non-cooperation by Nikki Steels Private Limited. Further, the ratings take into account declining scale of operations, low profitability margins, leveraged capital structure, weak coverage indicators, customer concentration risk, working capital intensive nature of operations, fragmented nature of industry and cyclicality associated with steel industry. However the risk is mitigated by long standing experience of the promoters. Detailed description of the key rating drivers At the time of last ratings on April 28, 2017, the following were the rating strengths and weaknesses (Updated for the information available from the registrar of companies). Key Rating Weaknesses Modest scale of operations: NSPL's scale of operations continues to remain modest which limits the company's financial flexibility in times of stress and deprives it of scale benefits. Weak financial risk profile: The profitability margins of the company continues to remain low owing to the trading nature of the business and intense market competition given the highly fragmented nature of the industry. The capital structure of the company continues to remain leveraged on account of high dependence on working capital borrowings coupled with low net worth base. Furthermore, the debt coverage indicators also continues to remain weak due to low profitability and high debt level. Working capital intensive nature of operations: Operations of the company continues to remain highly working capital intensive marked by elongated operating cycle of around 4 months in FY17 (refers to the period April 1 to March 31). The company procures the goods on cash basis from few suppliers and receives credit of 60-90 days from few suppliers. Furthermore, the company provides credit period of around one and half months to its customers. Cyclicality associated with steel industry: Steel is a cyclical industry which has strong correlation with economic cycles. This emerges from the fact that its key users like automobiles, construction, etc, are highly dependent on the health of the economy. Thus, NSPL, being a smaller player in the industry, gets affected during cyclical downturns of the industry. Highly fragmented nature of industry characterized by intense competition: The segment of the steel industry in which the company operates is highly fragmented and competitive marked by the presence of numerous players in India. Hence, the players in the industry do not have any pricing power and are exposed to competition induced pressures on profitability. Key Rating Strengths Experienced promoters: NSPL is being managed by Mr. Neeraj Gupta and Mr. Sharad Gupta. Mr. Neeraj Gupta has two decades of experience, while Mr. Sharad Gupta has an experience of more than two decades in iron & steel industry through their association with B.B Steels, a proprietorship firm engaged in trading of steel as well as with other regional companies engaged in same activity. NSPL, based in Ghaziabad, Uttar Pradesh, was incorporated in June 2006 by Mr. Neeraj Gupta and Mr. Sharad Gupta. NSPL is primarily engaged in trading of iron and steel products such as coil, bars, wire rods and plates. The company procures the traded product directly from the domestic manufacturers and sells to various construction and private infrastructure companies domestically. ODYSSEY ADVANCED: Ind-Ra Moves BB- Rating to Non-Cooperating ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated Odyssey Advanced Telematics Systems' Long-Term Issuer Rating to the non- cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR80 mil. Fund-based limit migrated to non-cooperating category with IND BB- (ISSUER NOT COOPERATING) rating; and -- INR19 mil. Non-fund-based limit migrated to non-cooperating category with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on June 30, 2017. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Set up in 1993 as a proprietorship concern, Odyssey Advanced Telematics Systems provides operations and maintenance services for the telecommunications sector. It is also engaged in civil construction, and executes orders issued by different entities such as Odisha Power Transmission Corporation Limited. PERTH CERAMIC: CRISIL Maintains B+ Rating in Not Cooperating ------------------------------------------------------------ CRISIL has been consistently following up with Perth Ceramic Private Limited' (PCPL) 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 12.5 CRISIL B+/Stable (ISSUER NOT COOPERATING) Letter Of Guarantee 6.0 CRISIL A4 (ISSUER NOT COOPERATING) Long Term Loan 33.0 CRISIL B+/Stable (ISSUER NOT COOPERATING) Proposed Long Term 1.0 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 PCPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on PCPL 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 PCPL continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating' Set up in 2014, Perth Ceramic Private Limited (PCPL), is a Morbi, Gujarat based partnership firm which engaged in manufacturing of vitrified tiles. The firm is promoted by Mr. Rupesh Kumar Manganlal Kotadiya, Mr. Dilipkumar Jivrajbhai Barasara and Mr. Parshotam Kachrabhai Patel. The company started commercial operation in June 2015. RAJ ARCADE: Ind-Ra Affirms 'BB' LT Issuer Rating, Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Raj Arcade Homes Private Limited's (RAHPL) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. The instrument-wise rating action is: -- INR776.747 mil. (reduced from INR1.020 bil.) Long-term loan due on February 28, 2021 assigned with IND BB/Stable rating. * The final rating has been assigned following the receipt of sanction letter by Ind-Ra. KEY RATING DRIVERS The affirmation reflects risks of time and cost overrun in RAHPL's ongoing residential project, Kalpavruksh Heights. As of June 2018, 70.24% of the total construction was completed. The project is likely to be completed by September 2018. However, the ratings remain supported by the promoters' more than one decade of experience in the real estate sector and the project's strategic location with proximity to schools, colleges and markets. So far 95.16% of the flats have been booked and the company has received 73.55% 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 flows will be negative for the ratings. COMPANY PROFILE RAHPL is constructing a residential project in Kandivali West, Mumbai. The project, which began in January 2012, is a redevelopment project under Slum Rehabilitation Authority. The company was incorporated by Mr. Rajesh Savla. RELISHAH EXPORT: Ind-Ra Affirms B+ Issuer Rating; Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has revised Relishah Export's (Relishah) Outlook to Stable from Negative while affirming its Long-Term Issuer Rating at 'IND B+'. The instrument-wise rating actions are: -- INR240 mil. Fund-based post shipment demand loan/usance foreign bill purchased/foreign bill purchased affirmed with IND A4 rating; -- INR260 mil. Fund-based packing credit/packing credit in foreign currency* affirmed with IND A4 rating; and -- INR2 mil. Non-fund-based inland bank guarantees affirmed with IND A4 rating. * Includes an INR80 million standby limit KEY RATING DRIVERS The Outlook revision reflects Relishah's improved capital structure in FY18, as the partners infused capital of around INR207 million. Moreover, the revenues and margins are likely to improve in FY19 and beyond, as the company is moving its business focus away from the sluggish Chinese market, the largest buyer, to European countries, where the demands and margins are better. Relishah has achieved revenue of INR900 million in 1QFY19, backed by high order inflows from countries such as Peru and Brazil. Revenue remained high in FY18, despite falling 12.6% yoy to INR2,379 million in FY18. This was because China reduced its cotton purchases sharply. Yarn demand from overseas buyers has remained sluggish since domestic cotton prices were hiked in October 2017, as importers held their orders in anticipation of a price fall. The firm's return on capital employed was 15% and EBITDA margin was average at 3.4% in FY18 (FY17: 2.1%). Relishah's credit metrics are modest with interest coverage (EBITDA/gross interest expense) of 1.5x in FY18 (FY17: 1.0x) and net leverage (net debt/EBITDA) of 1.2x (10.0x). The major improvement in credit metrics was on account of reduced dependence on unsecured loans and reduced drawdown of secured loans. FY18 financials are provisional in nature. The ratings remain constrained by the partnership structure of the organization and high competition in and cyclical nature of the cotton trading industry, as well as the risk of any adverse change in regulatory policies. The ratings continue to reflect the firm's high working capital intensity. Its net working capital cycle improved to 50 days in FY18 (FY17: 90 days) due to a reduction in receivable days and inventory days. The ratings, however, are supported by Relishah's adequate liquidity position, indicated by an average maximum utilization of 19.78% of the fund-based working capital limits during the 12 months ended June 2018. The ratings are also supported by the three-decade-long experience of Relishah's founders in the cotton trading industry and the firm's geographically diversified customer base and strong customer relationships. RATING SENSITIVITIES Negative: Future developments that could lead to a negative rating action are a decline in the revenue and EBITDA margin, leading to deterioration in the overall credit metrics, all on a sustained basis. Positive: Future developments that could lead to a positive rating action are a significant rise in the revenue and EBITDA margin, leading to an improvement in the overall credit metrics, all on a sustained basis, and/or conversion in the business structure to corporate from partnership. COMPANY PROFILE Established in 1987, Relishah is a registered partnership firm engaged in the export of textile goods such as cotton yarn. RICHU MAL: CARE Lowers Rating on INR5cr Long-term Loan to B ----------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Richu Mal Bishan Sarup (RMB), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 5 CARE B; Issuer not cooperating; Facilities Revised from CARE B+; ISSUER NOT COOPERATING Detailed Rationale & Key Rating Drivers CARE has been seeking information from RMB to monitor the rating(s) vide e-mail communications/letters dated June 1, 2018, May 28, 2018, May 15, 2018, etc. and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on Richu Mal Bishan Sarup's bank facilities will now be denoted as CARE B; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The rating has been revised by taking into account non- availability of information and no due-diligence conducted due to non-cooperation by Richu Mal Bishan Sarup with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Detailed description of the key rating drivers At the time of last rating on March 16, 2017, the following were the rating strengths and weaknesses: Key Rating Weaknesses Fluctuating and small scale of operations coupled with low net worth base: The scale of operations of the firm has remained small and fluctuating. The total operating income has increased in FY13, however, it declined in FY14 (refers to the period April 1 to March 31), mainly on account of lower quantity sold to local wholesalers. The small scale limits the firm's financial flexibility in times of stress and deprives it from scale benefits. Weak financial risk profile: The overall financial risk profile of the firm was weak marked by thin profitability margins, leveraged overall gearing and weak debt coverage indicators. The profitability margins remained thin for past three financial years i.e. FY12- FY14 marked by PBILDT margin and PAT margin. The capital structure of the firm stood leveraged during past three financial years i.e. FY12-FY14 as marked by overall gearing. Working capital-intensive nature of operations: Operations of the firm are highly working capital intensive marked by high average operating cycle. Being present in a highly competitive business and having low bargaining power with its customers the average credit period allowed by the firm is around 2-3 months. Highly competitive industry & low entry barriers: The trading of food and food product industry is highly fragmented with more than two-third of the total number of players being unorganized. Due to low entry barriers in the industry and low value added nature of products, high competition is the inherent risk associated with the industry. Key Rating Strengths Experienced management & long track record of operations of company: The firm is managed by Mr. Arun Gupta, Mr. Anurag Gupta and Mr. Ashish Gupta who have work experience of around two decades with the firm. Richu Mal Bishan Sarup (RMB) was established in 1961 as a partnership firm by Mr. Richumal and Mr. Bisan Saroop. However, the current active partners are Mr. Arun Gupta, Mr. Ashish Gupta and Mr. Anurag Gupta. The firm is engaged in trading of food and food products such as dry fruits, desi ghee, etc. The firm procures these items mainly from Delhi, Haryana and U.P., whereas it mainly sells its products in Delhi and nearby regions, with selling and distribution activities solely looked after by the partners. ROLTA INDIA: Bondholders Oppose Debt Restructuring Plan ------------------------------------------------------- Bloomberg News reports that Rolta India Ltd.'s attempt to reorganize about $500 million of defaulted bonds faces fresh opposition from a group of noteholders demanding an upfront payment before consenting to the restructuring. Bloomberg relates that Eric Kraus, a money manager at Moscow- based Nikitsky Capital, said the group, which owns almost 20% of 2018 bonds issued by the technology company, has approached an investment bank and law firms to devise an alternative to the proposal by a rival set of creditors. According to Bloomberg, Rolta agreed a revised proposal with that ad hoc committee of creditors earlier this month, some two years after it went into default. That agreement entails a $53 million upfront payment, issuing $500 million of new notes, and giving Rolta an extra option to redeem the new securities at $152 million within 90 days. An earlier debt settlement effort collapsed in April after Rolta failed to provide a $20 million security deposit. "We will seek to block the take-it-or-leave-it proposal as currently tabled by the committee," Bloomberg quotes Mr. Kraus as saying in an email interview on July 24. "The early redemption option is particularly objectionable," given the scale of the haircut, he said. Three phone calls to Rolta went unanswered. Amit Jain, the head of legal, didn't immediately reply to an email seeking comment. Moelis & Co., the financial adviser to Mumbai-based Rolta, declined to comment. Houlihan Lokey Inc., which advises the ad hoc committee, didn't reply to requests for comment, notes Bloomberg News. Bloomberg says Rolta defaulted on $127 million of 2018 notes in June 2016 and $372 million of 2019 bonds in August that year after missing coupon payments. The notes started tumbling in April 2015 after Glaucus Research Group California LLC released a "strong sell" report. While Rolta rejected the concerns over its accounting outlined by Glaucus, rating companies later said they were kept in the dark over the company's finances. Mr. Kraus said his group, which isn't involved in the ad hoc committee, is willing to support the committee's proposal if the early-redemption option is dropped, Bloomberg adds. All agree "that no consent should be granted until a good-faith and inclusive negotiation is held," he said. About Rolta India Rolta India is an IT services and solutions company providing geographical information system services, engineering design services and IT solutions to customers in North America, Europe, Australia and Middle East. As reported in the Troubled Company Reporter-Asia Pacific on July 27, 2017, India Ratings and Research (Ind-Ra) affirmed Rolta India Limited's Long-Term Issuer Rating at 'IND D'. SARASWATI TRADING: CARE Reaffirms B+ Rating on INR4.5cr LT Loan --------------------------------------------------------------- CARE Ratings reaffirmed ratings on certain bank facilities of Saraswati Trading Company (STC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 4.50 CARE B+; Issuer not cooperating; Facilities Rating Reaffirmed; Based on best available information Long-term/Short 1.50 CARE B+/CARE A4; Issuer not Term Bank cooperating; Rating Reaffirmed; Facilities Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from Saraswati Trading Company to monitor the rating(s) vide e-mail communications/letters dated June 1, 2018, May 28, 2018, May 15, 2018, etc. and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on Saraswati Trading Company's bank facilities will now be denoted as CARE B+/CARE A4; ISSUER NOT COOPERATING . Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The ratings take into account the constraints relating to firm's decline in the total operating income with low profitability margins during FY15, deterioration in capital structure, coverage indicators and operating cycle during FY15. The ratings are further constrained by risk associated with highly fragmented industry characterized by high competition. The ratings, however, draws comfort from the favorable manufacturing location of the firm. Detailed description of the key rating drivers At the time of last rating on March 16, 2017, the following were the rating strengths and weaknesses: Key Rating Weaknesses Decline in the total operating income with low profitability margins: The total operating income (TOI) of the firm declined in FY15 (refes to the period April 1 to March 31) on account of lower quantity sold owing to low demand from existing customers. While PBILDT margin and PAT margin increased, respectively, in FY15 owing to goods exported with higher profit margins, the profitability margins continue to be thin due to low value addition, intense market competition and fragmented nature of industry. Deterioration in capital structure, coverage indicators and operating cycle: Overall gearing ratio deteriorated as on March 31, 2015, mainly due to higher utilization of working capital borrowings. Interest coverage ratio of the firm stood moderate during FY15 due to increase in the interest cost mainly attributed to higher utilization of working capital bank borrowings during the year. Furthermore, total debt to GCA deteriorated due to increase in the total debt coupled with lower GCA. The operating cycle of the firm stood elongated mainly due to elongation in inventory holding period during FY15. Highly fragmented industry characterized by high competition: The commodity nature of the product makes the industry highly fragmented with numerous players operating in the unorganized sector with very less product differentiation. Moreover, adverse climatic conditions can affect their availability and leads to volatility in raw material prices. Key Rating Strengths Favorable manufacturing location: The firm's processing facility is situated in Karnal (Haryana) which is one of the highest producers of paddy in India. Its presence in the region gives additional advantage over the competitors in terms of easy availability of the raw material as well as favorable pricing terms. Karnal-based STC was initially established as a proprietorship concern by Mr. Rajesh Khanna in April 1992, and started its commercial production in September, 1992. The constitution was further changed to partnership in September, 2010 and other members of the Khanna family joined as the partners in the firm. Currently, STC has seven partners. The firm is engaged in the trading and processing of rice. The firm procures raw materials (paddy) from the local market through commission agents and the final products are sold in the domestic as well as overseas market. SHREE DATT: Ind-Ra Lowers Long Term Issuer Rating to 'BB+' ---------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Shree Datt Aquaculture Farms Private Limited's (Shree Datt) Long-Term Issuer Rating to 'IND BB+' from 'IND BBB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR415 mil. (increased from INR385 mil.) Fund-based working capital facilities downgraded with IND BB+/Stable/IND A4+ rating; -- INR 41.4 mil. (reduced from INR48.9 mil.) Long-term loan due on March 2023 downgraded with IND BB+/Stable rating; and -- INR43.5 mil. Non-fund-based facilities downgraded with IND A4+ rating. KEY RATING DRIVERS The downgrade reflects a decline in Shree Datt's overall credit profile in FY18. Financials for FY18 are provisional. The company's revenue declined to INR1,772.2 million from INR2,280.2 million in FY17 due to a fall in shrimp prices in 2HFY18 and increased competition from large organized players. The scale of operations remains moderate. Meanwhile, its interest coverage (operating EBITDA/gross interest expense) and net leverage (total adjusted net debt/operating EBITDAR) deteriorated to 1.8x and 6.7x in FY18 from 2.5x and 4.8x in FY17, respectively. The deterioration was due to a fall in absolute EBITDA to INR74.1 million in FY18 from INR96.1 million in FY17 and a rise in interest-bearing debt to INR456 million from INR396.4 million. The credit metrics stay at a modest level. In FY18, Shree Datt's return on capital employed and profitability were modest at 8.0% (FY17: 13.0%) and 4.2% (4.2%), respectively. The ratings continue to reflect Shree Datt's tight liquidity, indicated by a peak utilization of the fund-based working capital limits of about 99.0% during the 12 months ended June 2018, owing to an elongation in the cash conversion cycle to 101 days in FY18 from 78 days in FY17 on account of an inventory pile-up. The ratings also continue to reflect the inherent vulnerability of the seafood industry to disease and viral attacks, competition, currency fluctuations and adverse changes in government policies. However, Shree Datt largely focuses on Vannamei shrimp that has better resistance to diseases and a higher production density. The ratings factor in Shree Datt's reduced geographical concentration, albeit still high. Revenue contribution from the US was 62.0% in FY18 (FY17: 75%). The ratings, however, continue to be supported by the promoters' operating experience of around two decades in the aquaculture business that has led to established relationships with fish farmers. Moreover, it has a captive pond that meets 50.0% of its raw material requirements. RATING SENSITIVITIES Negative: A decline in the revenue and/or the EBITDA margin, leading to deterioration in the credit metrics, on a sustained basis, and/or any deterioration in the net cash conversion cycle, leading to stressed liquidity, will be negative for the ratings. Positive: A substantial improvement in the revenue and a stable profitability, leading to an improvement in the credit metrics, on a sustained basis, could lead to a positive rating action. COMPANY PROFILE Incorporated in 2003, Shree Datt is engaged in the rearing, processing and export of various kinds of seafood. The company has a 90 metric ton per day processing unit in Billimora, Gujarat. In addition, it has a 600 metric ton cold storage facility. SHYAM CORPORATION: CRISIL Maintains B Rating in Not Cooperating --------------------------------------------------------------- CRISIL has been consistently following up with Shyam Corporation 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 6.5 CRISIL B/Stable (ISSUER NOT COOPERATING) Proposed Long Term 2.4 CRISIL B/Stable (ISSUER NOT Bank Loan Facility COOPERATING) Term Loan 16.1 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' SCPL is an Ahmedabad-based textile processing house, engaged in the business of dyeing and printing of different types of fabrics (primary cotton). The company's revenues are equally distributed between job work and own account sales. SCPL was earlier a partnership firm - Shyam Textile Mills and was reconstituted as a private limited company effective July 2010. STONE INDIA: Insolvency Resolution Process Case Summary ------------------------------------------------------- Debtor: Stone India Limited 16, Taratalla Road, Alipore Kolkata - 700088, West Bengal, India Insolvency Commencement Date: July 17, 2018 Court: National Company Law Tribunal, Kolkata Bench Estimated date of closure of insolvency resolution process: January 13, 2019 (180 days from commencement) Insolvency professional: Anil Anchalia Interim Resolution Professional: Anil Anchalia 16B Robert Street, 2nd Floor, Kolkata - 700012, West Bengal E-mail: anilanchalia@yahoo.com - and - Apex Insolvency Professionals LLP Central Plaza, 41 B.B. Ganguly Street, 5th Floor, Room No. 5A, Kolkata - 700012 E-mail: sil.cirp@gmail.com Last date for submission of claims: August 3, 2018 SUMERU DEVELOPERS: CRISIL Migrates B Rating in Not Cooperating -------------------------------------------------------------- CRISIL has been consistently following up with Sumeru Developers (SD) for obtaining information through letters and emails dated April 26, 2018, May 11, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 5 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long 3 CRISIL B/Stable (ISSUER NOT Term Bank Loan COOPERATING; Rating Migrated) Facility The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of Sumeru Developers. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Sumeru Developers 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 Sumeru Developers to 'CRISIL B/Stable Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. SD, based at Pune and established in 2006, is a proprietorship firm of Pune-based Raikar family. The firm develops real estate. It has completed one project, Sushrut, and is undertaking construction of a residential project in Pune. SUNSTAR OVERSEAS: Insolvency Resolution Process Case Summary ------------------------------------------------------------ Debtor: M/s Sunstar Overseas Limited 4119/7, First Floor, Naya Bazar New Delhi DL 110006 IN. - and - Gate#2, 40 Km Stone, G.T. Karnal Road, Bahalgarh, Distt. Sonepat - 131021, Haryana (India) - and - Gate No#1, 40 k.m. Stone, G.T. Karnal Road, Bahalgarh, Distt. Sonepat - 131021, Haryana (India) - and - 26 Km Stone, Amritsar - Jalandhar G.T. Road Tangra, Amritsar - 143009, Punjab (India) Insolvency Commencement Date: July 20, 2018 Court: National Company Law Tribunal, New Delhi Bench Estimated date of closure of insolvency resolution process: January 16, 2019 (180 days from commencement) Insolvency professional: Gian Chand Narang Interim Resolution Professional: Gian Chand Narang Flat No. 214, Block-B 2, Varun Apartment, Sector-9, Rohini, New Delhi - 110085 E-mail: narangcg58@gmail.com - and - ARCK Resolution Professionals LLP 409, 4th Floor, Ansal Bhawan, 16 K G Marg, Connaught Place, New Delhi 110001 E-mail: insolvency@arck.in Last date for submission of claims: August 6, 2018 TATA MOTORS: S&P Cuts Issuer Credit Rating to BB; Outlook Stable ---------------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit rating on India-based automobiles company Tata Motors Ltd. to 'BB' from 'BB+'. The outlook is stable. S&P said, "We also lowered our long-term issue rating on Tata Motors' U.S. dollar-denominated senior unsecured notes to 'BB' from 'BB+'. "We downgraded Tata Motors to reflect our view of the weakening operating conditions for the company's fully owned subsidiary Jaguar Land Rover Automotive PLC. (JLR) over the next two to three years. A recovery in Tata Motors' commercial and passenger vehicle businesses in India will only partially offset the weakness, in our view. "We expect JLR's sales volumes to grow at 6.0%-8.0% annually over the next two to three years after a growth of just 1.7% in fiscal 2018 (year ended March 31, 2018). We had expected volumes to rise 14.0%-17.0% during the year. JLR is a U.K.-based maker of premium cars and accounts for three-fourths of Tata Motors' reported revenue and EBITDA. "We attribute a part of the decline in volumes for JLR to Europe's aversion to diesel cars after the Volkswagen AG "Dieselgate" emissions scandal. Diesel cars accounted for more than 30.0% of JLR's volumes in fiscal 2018, although the share of diesel car sales in the company's U.K. and the European Union (EU) sales was in excess of 80.0%. "Sales of diesel vehicles are gradually recovering in these markets, but we believe such vehicles are well past their peak. Tata Motors expects the share of hybrid and electric vehicles (EV) in its total sales volumes to rise to 20.0% by fiscal 2023, from about 5.0% now, tempering the impact of the decline in diesel car sales. JLR seems to have good EV offerings, although its EV volumes are at best nascent when compared to peers such as Daimler AG and BMW AG. "We believe lingering risks of Brexit-related trade restrictions and of U.S. import tariffs add further uncertainty to JLR's operating performance. JLR's lower operating scale, higher concentration in the U.K., and lack of manufacturing in its key U.S. market, makes its financial performance less resilient than that of significantly larger peers such as Daimler, BMW, and Fiat Chrysler Automobiles N.V. The U.K. accounts for about 70.0% (although the share is declining) of JLR's manufacturing capabilities, while North America (mainly the U.S.) accounts for 21.7% of its volumes sold. Offsetting some of these negatives would be China's latest move to reduce tariffs on imported cars by about 10.0%. "We expect JLR's modest sales growth, stagnant price realization per car, rising commodity prices, and higher product development expenses to continue to weigh on the company's profitability. Its EBITDA margin (mainly adjusted for capitalized product development expenses) was 5.7% in fiscal 2018, 130 basis points lower than our expectation and the margin in fiscal 2017. In comparison, peers have margins of 9.0%-12.0%. "We expect JLR's profitability to gradually recover to about 7.0% in fiscal 2019 and 9.0% by fiscal 2020. Modest volume growth from the company's good product slate, savings from low-cost operations in Slovakia, and better cost controls should support the recovery over the next two to three years. "Meanwhile, we expect Tata Motors' commercial vehicle (CV) volume growth in India to remain strong over the next two to three years. We estimate that sales will rise 9.0%-13.0% annually during the period. CV sales have bounced back sharply after headwinds such as a cyclical slump in demand, changes in India's emission norms, demonetization, and imposition of the goods and services tax over the past few years. The CV volumes were up 16.7% year-over-year in fiscal 2018. The company's market share also recovered to 45.1%, from 44.4% in fiscal 2017. "We believe the following factors should boost Tata Motors' sales and profitability over the next two to three years: (1) India's improving GDP growth; (2) Tata Motors' promising CV and passenger vehicle product portfolio; (3) its better cost management through rationalization of platforms; (4) its increased distribution and customer-centric approaches, and (5) its supplier rationalization. However, heightened price competition (practices of offering discounts) from Indian CV peers such as Ashok Leyland Ltd., Mahindra & Mahindra Ltd., and Bharat Benz Ltd., and the recently announced changes to the CV tonnage policy in India could constrain Tata Motors' profitability. "We estimate Tata Motors reported automotive profitability (EBITDA margins, excluding JLR and Tata Motors Finance Holdings Ltd. [TMF], its captive finance operations) will gradually strengthen to 8.0% over the next two to three years, from about 6.0% now. Significant volume growth in CV and passenger vehicles would support the improvement, although the passenger vehicle is likely to remain loss-making in the next 12-24 months. "Tata Motors' operating performance in fiscal 2018 was largely in line with our expectation. Improving performance of the CV and passenger vehicles businesses largely offset margin pressures from JLR. The company's ratio of funds from operations (FFO) to debt was 24.6%, compared with our expectations of 22.0%-24.0%. "The stable outlook on Tata Motors reflects our expectation that the company's modest volume growth and improving profitability at JLR from a shift in production to low-cost Slovakia facilities and controlled capital spending would lift its ratio of FFO to debt to 30.0%-40.0% over the next 12-18 months. A continued turnaround in Tata Motors' CV business should also support the recovery. "We may lower the rating on Tata Motors if the FFO-to-debt ratio fails to recover to more than 25.0% over the next 12 months. This could happen if the company's operating performance continues to remain weak while its capital spending stays elevated." Reported EBITDA margins of less than 11.0% would indicate weak operating performance. Brexit-related trade restrictions, U.S. import tariffs, reduced volumes or profit margin at JLR due to competition or changing consumer preferences, and a wavering Indian CV business could result in such a scenario. S&P said, "We are unlikely to upgrade Tata Motors over the next 12-24 months unless the ratio of FFO to debt rises above 45.0% on a sustainable basis and the company is close to breakeven on free operating cash flows. JLR's improved performance without a commensurate increase in capital spending, reduced Brexit and U.S.-tariff risks, and a sustained recovery in Tata Motors' India operations could indicate such a scenario." U. K. PAPER: CRISIL Maintains 'B-' Rating in Not Cooperating ------------------------------------------------------------ CRISIL has been consistently following up with U. K. Paper Converters Private Limited (UKPC) 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 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 UKPC, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on UKPC is consistent with 'Scenario 2' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BBB Rating category or lower'. Based on the last available information, the rating on bank facilities of UKPC continues to be 'CRISIL B-/Stable Issuer not cooperating' UKPC was set up as a partnership concern, U K Paper Converters (UKP), in 2012. UKP was converted into a private-limited company on April 01, 2014, and is managed by directors, Mr. Arvinder Singh and Mr. Jaskirath Singh. UKPC manufactures note books and writing and printing paper and trades paper. The company's plant is situated in Kashipur (Uttarakhand). VISHNU CARS: Ind-Ra Maintains B Issuer Rating in Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Vishnu Cars Pvt Ltd.'s Long-Term Issuer Rating in the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will continue to appear as 'IND B (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR200 mil. Fund-based working limits maintained in non- cooperating category with IND B (ISSUER NOT COOPERATING) rating; and -- INR66.03 mil. Long-term loans maintained in non-cooperating category with IND B (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on June 28, 2016. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Vishnu Cars is an authorized dealer of Maruti Suzuki India Limited. It has five showrooms, seven service centers and one stockyard in Chennai. =============== M A L A Y S I A =============== ASIA BRANDS: Auditor Raises Going Concern Doubt ----------------------------------------------- The Sun Daily reports that Asia Brands Bhd's external auditor Messrs UHY has issued a statement of "material uncertainty related to going concern" in respect of the group's financial statements ended March 31, 2018 (FY18). Asia Brands incurred a net loss of RM19.20 million and RM2.14 million for FY18 at the group and company levels, respectively, with net current liabilities of RM32.18 million and RM6.83 million, the report discloses. "These events or conditions, along with other matters, indicate that there is a material uncertainty on the group's ability to continue as a going concern," UHY said in the statement, Sun Daily relays. According to Sun Daily, Asia Brands has started the process of addressing the key audit matters that relates to the material uncertainty related to going concern. "Asia Brands will be undertaking a proposed right issue and private placement exercise. Based on the recent financial performance of the group, Asia Brands has managed to reduce operating losses which resulted in positive cash flow. The group will continue in the same course to further improve its financial standing this year." Barring any unforeseen circumstances, the group expects a timeline of nine months to address the material uncertainty related to going concern, Sun Daily adds. Asia Brands Corporation Berhad manufactures, markets, and sells lingerie, ladies' leisure wear, children's wear, and care and related products in Malaysia. ================= S I N G A P O R E ================= MULHACEN PTE: S&P Assigns B+/B ICRs, Outlook Stable --------------------------------------------------- S&P Global Ratings said that it assigned its 'B+/B' long- and short-term issuer credit ratings (ICRs) to Singapore-based nonoperating holding company Mulhacen Pte. Ltd. (Mulhacen). The outlook is stable. S&P also assigned its 'B+' issue rating to the EUR515 million, senior secured payment-in-kind (PIK) toggle notes due in 2023, to be issued by Mulhacen. On March 26 2018, Varde Partners -- a global investment firm with a portfolio of around $14 billion -- announced the acquisition of the remaining 49% stake in Spain-based operating bank WiZink Bank S.A. (WiZink) that it did not own from Banco Popular Espa§ol S.A. The acquisition will be partly financed with the issuance of EUR515 million, five-year, senior secured PIK toggle notes, by Mulhacen, a newly created holding company located in Singapore. The issue rating of 'B+' on the notes is at the same level as the long-term ICR on the issuer, Mulhacen, given the notes' status as senior obligations. The PIK feature, which entitles the issuer to make coupon payments in kind rather than in cash (in particular, by increasing the principal amount of the outstanding notes), does not lead us to rate the instrument lower than the ICR. That is because if Mulhacen were to pay in kind rather than in cash on an interest payment date, S&P would not see it as a breach of an imputed promise, and therefore it considers the likelihood of repayment of the original principal and PIK interest as similar to the likelihood of the issuer repaying its other obligations. The long-term ICR on Mulhacen stands three notches below S&P's 'bb+' assessment of the group credit profile (GCP). In S&P's analysis, the group encompasses Mulhacen, Aneto, and WiZink. The latter two entities are part of the regulatory perimeter that, on conclusion of the transaction, will be regulated and supervised by the Bank of Spain. The gap between the long-term ICR and the GCP is because S&P sees: -- Mulhacen's creditors as being structurally subordinated to the creditors of the operating bank (WiZink), as Mulhacen's repayment capacity ultimately depends on the upstreaming of dividends from WiZink; -- Risks of possible supervisory barriers to dividend payments, as WiZink is a regulated financial institution, and, together with Aneto, falls under the supervision of Bank of Spain; and -- The group's double leverage, measured as the post-transaction book value of the parent holding company's equity investment in WiZink divided by its unconsolidated shareholders' equity, is a high 140%. This is a risk that we only consider marginally offset by the issuer's commitment to retain as a cash reserve some of the dividends it will receive from WiZink. S&P's assessment of the GCP balances WiZink's limited scale and niche focus on the inherently high-risk Spanish and Portuguese revolving credit cards market, with the solid profitability of its business model, adequate capitalization and risk management, and predominantly retail funding profile. With assets of EUR5.3 billion and operations in Spain and Portugal, WiZink, the group's operating entity, is a mono-line lender focused on simple product offering: revolving credit cards, and time deposits and savings accounts. It serves more than two million clients -- although not all of them hold credit -- through its own online and telephone platforms, stands, and partnerships, and enjoys sizable market shares in the Spanish and Portuguese revolving credit card business (16% in Spain and 29% in Portugal). WiZink is run by a capable management team with several years of experience in the consumer-banking sector, and has built a profitable business, based on strong margins, efficiency, and risk control. Despite enjoying a leading position in the revolving credit card market in the Iberian Peninsula, WiZink's overall scale is small. This, coupled with WiZink's mono-line focus, results in a lack of business diversity and earnings, and makes it vulnerable to changes in the regulatory and competitive environment. S&P said, "Credit card lending is inherently risky. However, we consider that WiZink has good risk management in place, and appropriate tools, underwriting standards, and monitoring and collection processes. The bank has a proven ability to manage risks through the cycle, performing well during the recent economic downturn. Its current lending book is fairly seasoned and well provisioned. We do not foresee an increase in the bank's risk appetite in the years ahead and forecast moderate growth at an average 4% annually this year and next. "We expect the bank to operate with adequate capital, maintaining a risk-adjusted capital (RAC) ratio -- after the closing of the transaction -- toward the upper end of the 7%-10% range over the next 12-18 months. The bank's ultimate owner VÑrde Partners has committed to the regulator to maintain a minimum regulatory common equity tier 1 ratio of 13.8% (at Aneto's consolidated level). While we forecast full distribution of earnings to the parent to allow Mulhacen to service interest payments on its debt, capital should remain fairly stable post the transaction. This is because the gradual amortization of intangibles will offset the capital consumption from risk asset expansion, which we anticipate will track loan growth." The bank displays a more conservative funding profile than its peers, mainly financing its lending with customer deposits, as opposed to wholesale funding sources. Deposits, which accounted for 78% of its funding base as of Dec. 31, 2017, are held entirely by private individuals, have long maturities, and have proved sticky, but show higher-than-average outstanding amounts and are relatively sensitive to price. Wholesale funding is limited, comprising only European Central Bank borrowings and a EUR201 million securitization placed in the market in 2017. The bank holds a comfortable liquidity buffer amounting to about 15% of total assets at year-end 2017, and has limited reliance on short-term funding. S&P said, "The stable outlook on Mulhacen reflects our view that material changes to the group's strategy and financial policies are unlikely over the next 12-18 months. We expect double leverage to decline only modestly over the next 12-18 months, as Mulhacen will retain only a small share of upstreamed dividends from WiZink. "We expect WiZink to be able to continue delivering good returns and preserving adequate capitalization and asset quality while growing. "We could lower the ratings on Mulhacen if its leverage increases or our assessment of the group's creditworthiness deteriorates." This could happen if: -- WiZink were to undertake a more aggressive organic or inorganic growth strategy, potentially leading to a riskier profile; -- WiZink's asset quality metrics deteriorate substantially; -- WiZink's funding profile shifts toward wholesale sources; or -- WiZink's capitalization erodes due to higher dividend upstreaming, lower profits, or higher growth than S&P expects, resulting in an RAC ratio below 7% over the next 12-18 months. S&P said, "Conversely, all else being equal, we could raise the ratings on Mulhacen if its double leverage diminishes materially (reaching a level sustainably below 120%). We could also raise the ratings if WiZink proved able to diversify its business profile, reduce the vulnerability of its earnings to industry and economic shocks, and gain pricing power, while maintaining adequate financials." ==================== S O U T H K O R E A ==================== DOOSAN BOBCAT: S&P Raises Senior Secured Term Loan Rating to 'BB' ----------------------------------------------------------------- S&P Global Ratings said it has raised its issue-level rating on Doosan Bobcat Inc.'s (DBI) US$978 million senior secured term loan due 2024 to 'BB' from 'BB-' and revised the recovery rating to '2' from '3'. The loan belongs to Clark Equipment Co., a DBI subsidiary, and is guaranteed by DBI. The '2' recovery rating reflects S&P's expectation for substantial recovery (70%-90%; 75% rounded estimate) in the event of default. The upgrade mainly reflects the rated senior secured term loan's improved recovery, following a voluntary early prepayment of US$150 million on July 23, 2018. S&P's expectation of DBI's enterprise value at default is unchanged. After the prepayment, the company's outstanding loan amount is now US$978 million, down from the initial issuance amount of US$1.3 billion in May 2017. The company has made two other voluntary prepayments of US$100 million each in the last 12 months, backed by its good free operating cash flow in the past one to two years. S&P expects DBI to continue to show steady operating performance over the next 12-18 months supported by its strong market position in the currently favorable U.S. construction equipment market. S&P's other ratings on DBI, including its 'BB-' long-term issuer credit rating, are unaffected. RECOVERY ANALYSIS Key Analytical Factors: S&P said, "We use an enterprise value (EV) approach to assess recovery prospects and apply a 5x valuation multiple to our emergence EBITDA level of US$179 million. The 5x valuation multiple reflects the industry-specific multiple derived from our empirical analysis of the capital goods industry. As a result, we estimate a gross emergence EV of US$893 million. "Our simulated default scenario contemplates a payment default occurring in 2022 against a backdrop of a prolonged global economic downturn. A decline in business activity in key end markets and increased competition in the construction equipment segment would substantially weaken DBI's cash flow. We believe that the company would reorganize rather than liquidate under our default scenario, given its position in the construction equipment industry and its diverse customer base. We expect the net EV of US$848 million (after deducting estimated priority unpaid administrative expenses of 5%) will be available for distribution to all creditors. We have assumed that approximately 80% of the net EV would be attributable to the guarantor group." After satisfying the asset-based lending (ABL) revolver lenders' priority claims, the collateral value together with residual foreign subsidiaries' unpledged enterprise value is sufficient to provide the senior secured term loan lenders with expectation of a substantial recovery (70%-90%; rounded estimate: 75%) in the event of a default. Simulated Default Assumptions: -- Simulated year of default: 2022 -- Emergence EBITDA: US$179 million Multiple: 5x Simplified Waterfall: -- Net enterprise value (after 5% administrative costs): US$848 million -- Obligor/non-obligor valuation split: 80%/20% -- Estimated priority claims (assuming 60% usage of ABL): US$92 million -- Remaining recovery value: US$697 million -- Estimated first-lien claim: US$952 million -- Value available for first-lien claim: US$697 million -- Recovery range: 70%-90% (rounded estimate: 75%) * Note: All debt amounts include six months of prepetition interest. Ratings List Issue-Level Rating Raised; Recovery Rating Revised To From Clark Equipment Co. Senior Secured BB BB- Recovery Rating 2(75%) 3(65%) SAMSUNG SECURITIES: Faces KRW1 Billion Fine Over Trading Error -------------------------------------------------------------- Yonhap News Agency reports that the Korea Exchange (KRX) decided on July 27 to levy a fine of KRW1 billion on Samsung Securities Co., which is the maximum penalty a bourse operator can slap on a member firm. It is the second time that the market oversight committee under the KRX imposed the maximum penalty, after the first case against Deutsche Securities in 2010 for a stock manipulation incident, Yonhap says. "The massive sell-off of the mistakenly issued stocks caused the share price to drop, causing losses to investors and market chaos," the KRX said in a statement, noting that this case "seriously hurt market confidence and hampered fair trading order," Yonhap relays. Yonhap says to prevent any recurrence of such incidents, Samsung Securities has vowed to beef up the training and education of its employees while strengthening internal controls. Samsung Securities Co., Ltd. provides personalized asset management services. The Company provides brokerage, investment trust, underwriting services, and other services. Samsung Securities also provides cyber trading, mutual funds, asset backed securities issuing, municipal bonds trading services. SAMSUNG SECURITIES: Suspends Partial Operations Until Jan. 26 ------------------------------------------------------------- Yonhap News Agency reports that Samsung Securities Co. said on July 27 it has suspended part of its services for new customers for six months in accordance with the state penalty over its "fat-finger" error. Its CEO Koo Seung-hoon also offered to step down from his post, a day after the Financial Services Commission (FSC) ordered his suspension from duties for three months, the company said in a regulatory filing, Yonhap relays. Making a final decision on punitive measures against the brokerage firm, the FSC on July 26 banned Samsung Securities from providing stock broker operations for new investors until Jan. 26, according to Yonhap. The regulator imposed KRW144 million (US$128,916) in fines for the fiasco, Yonhap notes. Yonhap relates that the state measures came after Samsung Securities in April mistakenly paid KRW112 trillion worth of stocks to its employees as dividends, and 16 employees sold off a combined 5.01 million shares. The suspension of operations is expected to result in KRW8.11 billion in losses, accounting for as much as 0.18 percent of its recent sales, the company said, adding that vice chairman Jang Seok-hoon will serve as acting CEO, Yonhap adds. Samsung Securities Co., Ltd. provides personalized asset management services. The Company provides brokerage, investment trust, underwriting services, and other services. Samsung Securities also provides cyber trading, mutual funds, asset backed securities issuing, municipal bonds trading services. ********* 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 ***