/raid1/www/Hosts/bankrupt/TCRAP_Public/180926.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, September 26, 2018, Vol. 21, No. 191
Headlines
A U S T R A L I A
A & A TESTING: First Creditors' Meeting Set for Oct. 4
AMO (ACT): First Creditors' Meeting Set for Oct. 4
B 'N' R Contracting: Second Creditors' Meeting Set for Oct. 4
ENVIRO ENERGY: Second Creditors' Meeting Set for Oct. 4
FLEXI FINANCE: S&P Withdraws 'BB-/B' Issuer Credit Ratings
FORGE GROUP: HFW Appeal Win "Significant" for Insolvency Cases
LIBERTY FUNDING 2018-3: Moody's Gives (P)Ba2 Rating to E Notes
MADDEN INTERIORS: First Creditors' Meeting Set for Oct. 3
PREMIUM TRAVEL: Second Creditors' Meeting Set for Oct. 3
RETAIL FOOD: Colin Archer Steps Down as Chairman
C H I N A
CHINA ORIENTAL: Fitch Hikes LT Foreign Currency IDR to BB
SUNAC CHINA: Fitch Affirms BB- LT IDR & Alters Outlook to Stable
SUNAC CHINA: S&P Alters Outlook to Positive & Affirms 'B+' ICR
H O N G K O N G
NOBLE GROUP: Agrees to Exchange Sundance's Notes for Cash, Shares
I N D I A
APS POWER: Ind-Ra Maintains B+ Issuer Rating in Non-Cooperating
AYKA MOULD: CARE Reaffirms B+ Rating in Not Cooperating
B.V.L EXPORTS: Ind-Ra Migrates 'BB-' LT Rating to Non-Cooperating
BAL DARBAR: CARE Reaffirms B Rating on INR4.88cr LT Loan
DHARWAD METALLICS: CARE Migrates D Rating to Not Cooperating
DS AGRIFOODS: CARE Reaffirms B+ Rating on INR14.50cr LT Loan
GTL INFRASTRUCTURE: Canara Bank Files Insolvency Bid v. Firm
GURU NANAK: CARE Reaffirms B+ Rating on INR10cr LT Loan
HEAVY METAL: CARE Lowers Rating on INR192.92cr LT Loan to D
HLM INDIA: CRISIL Maintains D Rating in Not Cooperating
INDIAN FOODTECH: CRISIL Maintains D Rating in Not Cooperating
INTEC CAPITAL: CARE Lowers Rating on INR153.35cr Loan to D
K L VENTURES: CARE Lowers Rating on INR5cr LT Loan to D
KD INFRAENGICON: CRISIL Maintains D Rating in Not Cooperating
KELTECH INFRASTRUCTURE: CRISIL Keeps D Rating in Not Cooperating
KISAN MOULDINGS: CARE Lowers Rating on INR208.75cr Loan to D
KND ENGINEERING: CRISIL Lowers Rating on INR35cr Loan to D
KONNECTING INDIA: CRISIL Maintains D Rating in Not Cooperating
LEOFORTUNE INFRA: CRISIL Keeps D Rating in Not Cooperating
MAILAM SUBRAMANIYA: CARE Reaffirms B+ Rating on INR4.87cr Loan
MARUTI METAL: CRISIL Maintains D Rating in Not Cooperating
MEENAKSHI ENERGY: Ind-Ra Lowers Long Term Issuer Rating to 'D'
MOHAN GEMS: CRISIL Maintains 'D' Rating in Not Cooperating
MUSADDILAL MANSARAM: CARE Assigns B Rating to INR0.2cr LT Loan
MY CAR: Ind-Ra Lowers Long Term Issuer Rating to 'D'
OASIS TRADELINK: CARE Lowers Rating on INR15cr LT Loan to D
ORIGIN CORPORATION: CRISIL Maintains D Rating in Not Cooperating
P NARASIMHA: CRISIL Maintains 'D' Rating in Not Cooperating
P Z ESTATES: CRISIL Assigns 'B' Rating to INR20cr Term Loan
PAGODA STEELS: CRISIL Maintains 'D' Rating in Not Cooperating
PELICAN INTERNATIONAL: CRISIL Keeps D Rating in Not Cooperating
PINK ROSE: Ind-Ra Lowers Long Term Issuer Rating to 'D'
PRABIR FOODSTUFF: CRISIL Maintains D Rating in Not Cooperating
PRACHIN FOUNDATION: CRISIL Maintains D Rating in Not Cooperating
RAJAPUR MINERALS: Ind-Ra Migrates B+ LT Rating to Non-Cooperating
RAM'S ASSORTED: Ind-Ra Affirms BB+ Issuer Rating, Outlook Stable
RAVI CAM: CARE Migrates B+ Rating From Not Cooperating Category
REDHU FARMS: CRISIL Maintains 'D' Rating in Not Cooperating
REDHU HATCHERIES: CRISIL Maintains D Rating in Not Cooperating
REGEN INFRASTRUCTURE: CARE Cuts Rating on INR20cr LT Loan to D
RYTHU MITRA: CRISIL Retains D Rating in Not Cooperating Category
SAMARTTHA TRIMURTI: CARE Hikes Rating on INR15cr LT Loan to BB-
SANGHAVI EXPORTS: CARE Migrates D Rating to Not Cooperating
SAOMYA FORTUNE: CRISIL Maintains 'D' Rating in Not Cooperating
SEM INDUSTRIAL: CARE Assigns B+ Rating to INR3.75cr LT Loan
SRINIVASA CIVIL: Ind-Ra Maintains 'D' Rating in Non-Cooperating
SURYA INDUSTRIES: CRISIL Maintains D Rating in Not Cooperating
THEME HOTELS: CARE Lowers Rating on INR3.89cr LT Loan to D
WELCAST PRODUCTS: Ind-Ra Migrates B+ LT Rating to Non-Cooperating
YASH AGRO: CARE Assigns B+ Rating to INR7.50cr LT Loan
M A L A Y S I A
1MDB: Najib Faces Bribery Charges Linked to Bond, M&A Deals
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A U S T R A L I A
=================
A & A TESTING: First Creditors' Meeting Set for Oct. 4
------------------------------------------------------
A first meeting of the creditors in the proceedings of A & A
Testing Consultants Pty Ltd will be held at the offices of
Vincents at Level 2, 14 Moore Street, in Canberra, ACT, on Oct.
4, 2018, at 10:00 a.m.
Anthony Lane of Vincents was appointed as administrator of A & A
Testing on Sept. 21, 2018.
AMO (ACT): First Creditors' Meeting Set for Oct. 4
--------------------------------------------------
A first meeting of the creditors in the proceedings of AMO (ACT)
Pty Ltd will be held at the offices of Vincents at Level 2, 14
Moore Street, in Canberra, ACT, on Oct. 4, 2018, at 9:30 a.m.
Anthony Lane of Vincents was appointed as administrator of AMO
(ACT) on Sept. 21, 2018.
B 'N' R Contracting: Second Creditors' Meeting Set for Oct. 4
-------------------------------------------------------------
A second meeting of creditors in the proceedings of B 'N' R
Contracting Pty Ltd has been set for Oct. 4, 2018, at 10:30 a.m.
at the offices of AMB Insolvency at Level 1, 6 Allison Street, in
Bowen Hills, Queensland.
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 Oct. 3, 2018, at 4:00 p.m.
Anne Marie Barley of AMB Insolvency was appointed as
administrator of B 'N' R Contracting on July 19, 2018.
ENVIRO ENERGY: Second Creditors' Meeting Set for Oct. 4
-------------------------------------------------------
A second meeting of creditors in the proceedings of Enviro Energy
Savers Pty. Ltd. has been set for Oct. 4, 2018, at 10:00 a.m. at
the offices of Clifton Hall at Level 3, 431 King William Street,
in Adelaide, South 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 Oct. 3, 2018, at 4:00 p.m.
Timothy James Clifton of Clifton Hall was appointed as
administrator of Enviro Energy on Aug. 29, 2018.
FLEXI FINANCE: S&P Withdraws 'BB-/B' Issuer Credit Ratings
----------------------------------------------------------
S&P Global Ratings has withdrawn its 'BB-' long-term and 'B'
short-term issuer credit ratings on New Zealand-based finance
company Flexi Finance Ltd. (FFL) at the issuer's request.
At the time of the withdrawal, the outlook on the long-term
rating was stable. FFL is a wholly owned subsidiary of Australia-
based finance company FlexiGroup Ltd. (FXL). FXL is engaged in
consumer leasing, commercial and small and midsize enterprise
leasing, and credit cards in Australia and New Zealand. As of
June 30, 2018, FXL had customer loans and receivables of AUD2.4
billion.
FORGE GROUP: HFW Appeal Win "Significant" for Insolvency Cases
--------------------------------------------------------------
Steve Randall at Australasian Lawyer reports that HFW has won an
appeal against a Supreme Court ruling with "significant
implications" for insolvency proceedings in Australia.
According to the report, the firm helped Rio Tinto subsidiary
Hamersley Iron Pty Ltd overturn a Supreme Court decision that
Hamersley could not set off its claims against Forge Group Power
Pty Ltd.
"Today's decision is not only good news for Hamersley, but for
many other unsecured creditors. The rights between contracting
parties in the event of insolvency is something impacting almost
all businesses," the report quotes partner Matthew Blycha, who
led the HFW team, as saying.
Australasian Lawyer relates that the case focused on a contract
between Hamersley and Forge with Forge charging its rights to a
secured creditor (ANZ).
When Forge went into administration and then liquidation, both
Forge and Hamersley had large claims against each other, the
report says. Hamersley argued that as its claim was larger, it
could set off its claims against those of Forge.
According to Australasian Lawyer, the Supreme Court ruled in 2017
against this argument and said that the mutuality of section 553C
of the Corporations Act was destroyed when Forge's rights were
changed in favor of ANZ. That meant that Hamersley could only
make its AUD200 million claim against (the insolvent) Forge while
ANZ could pursue a claim against Hamersley through the receivers.
However, the Court of Appeal of Western Australia was unanimous
in its decision that section 553C applied and allowed Hamersley's
claims to be set off against Forge's claims, Australasian Lawyer
says.
"Many cases around Australia have been awaiting this decision and
the Court of Appeal has been clear in stating the primacy of set
off under the Corporations Act. While the decision will not
likely be welcomed by financiers, it should provide more
certainty for businesses generally," Mr. Blycha, as cited by
Australasian Lawyer, added.
Clayton Utz was on the other side, acting for KordaMentha,
receivers and managers of Forge, says Australasian Lawyer.
About Forge Group
Forge Group Limited (ASX:FGE) -- http://www.forgegroup.com.au--
is engaged in construction, commercial building, engineering,
maintenance and workshop fabrication. Forge is the holding
company of Cimeco Pty Ltd, Webb Construction West Africa Ltd,
Abesque Engineering Ltd (Abesque) and CTEC Pty Ltd, which provide
a range of engineering and construction services to a diverse
range of clients particularly to the resource and oil and gas
sectors through its operating entities.
Martin Jones, Andrew Saker and Ben Johnson of Ferrier Hodgson
were appointed as Joint and Several Voluntary Administrators of
the Company on Feb. 11, 2014. As a consequence, the financiers
have, pursuant to their securities, appointed Mark Mentha and
Scott Langdon of KordaMentha as Receivers and Managers.
The Australian said that the administrators were called in after
Forge's financier ANZ Group withdrew its support.
As reported in the Troubled Company Reporter-Asia Pacific on
March 20, 2014, ABC News said creditors of Forge Group have voted
to put the company into liquidation. The move means that Forge's
assets can be sold off and returns made to creditors, ABC News
said. The administrator, Ferrier Hodgson, will become the
liquidator, the report added.
LIBERTY FUNDING 2018-3: Moody's Gives (P)Ba2 Rating to E Notes
--------------------------------------------------------------
Moody's Investors Service has assigned the following provisional
ratings to the notes to be issued by Liberty Funding Pty Ltd in
respect of Liberty Series 2018-3.
Issuer: Liberty Funding Pty Ltd in respect of Liberty Series
2018-3
AUD85 million Class A1a Notes, Assigned (P)Aaa (sf)
AUD[ ] million Class A1b Notes, Assigned (P)Aaa (sf)
EUR[ ] million Class A1c Notes, Assigned (P)Aaa (sf)
AUD125.0 million Class A2 Notes, Assigned (P)Aaa (sf)
AUD18.5 million Class B Notes, Assigned (P)Aa2 (sf)
AUD9.5 million Class C Notes, Assigned (P)A2 (sf)
AUD6.0 million Class D Notes, Assigned (P)Baa2 (sf)
AUD5.5 million Class E Notes, Assigned (P)Ba2 (sf)
AUD2.0 million Class F Notes, Assigned (P)B2 (sf)
The AUD8.5 million Class G Notes are not rated by Moody's. The
AUD equivalent of the Class A1b and Class A1c Notes on the
Closing Date will equal AUD240 million. The Class A1b and Class
A1c issue size will be determined on or prior to the pricing
date.
The ratings address the expected loss posed to investors by the
legal final maturity.
The transaction is a securitisation of a portfolio of Australian
prime and non-conforming residential mortgages. All mortgages
were originated and are serviced by Liberty Financial Pty Ltd
(Liberty, unrated).
RATINGS RATIONALE
The definitive rating takes into account, among other factors,
evaluation of the underlying receivables, the evaluation of the
capital structure and credit enhancement provided to the notes,
the availability of excess spread over the life of the
transaction, the liquidity reserve in the amount of 2.00% of the
notes balance, the legal structure, and the credit strength and
experience of Liberty as Servicer.
Moody's MILAN credit enhancement for the collateral pool is
10.0%, while the expected loss is 1.50%. MILAN CE represents the
loss Moody's expects the portfolio to suffer in a severe
recessionary scenario, and does not take into account structural
features of the transaction. or lenders mortgage insurance (LMI)
benefit. The expected loss represents a stressed, through-the-
cycle loss relative to Australian historical data.
After lenders mortgage insurance benefit, MILAN CE is 9.70%.
The key transactional features are as follows:
- Class A1a, Class A1b and Class A1c Notes benefit from 35.0%
credit enhancement (CE) and Class A2 Notes benefit from 10.0%
credit enhauncement
- The Class A1a Notes will receive principal prior to any other
notes at all times, unless there is an event of default. Once
Class A1a Notes are paid off Class A1b and Class A1c Notes will
be paid pro-rata until they are repaid in full following which,
with the Class B to Class F notes receive sequential principal
payments. Upon satisfaction of all stepdown conditions which
include - the payment date falling on or after the payment date
in September 2020, absence of charge offs on any notes and
average arrears greater than or equal to 60 days (as calculated
over the prior three periods plus the current period) do not
exceed 4% - Class A1b, Class A1c, Class A2, Class B, Class C,
Class D, Class E, and Class F Notes will receive a pro-rata share
of principal payments (subject to additional conditions). The
Class G Notes do not step down and will only receive principal
payments once all other notes have been repaid. The principal
pay-down switches back to sequential pay across all notes, once
the aggregate loan amount falls below 20.0% of the aggregate loan
amount at closing, or on or following the payment date in October
2022.
- A liquidity facility provided by the National Australia Bank
Limited (NAB, Aa3/P-1/Aa2(cr)/P-1(cr)), with a required limit
equal to 2.0% of the aggregate invested amount of the notes less
the redemption fund balance. The facility is subject to a floor
of AUD600,000.
- The guarantee fee reserve account, which is unfunded at
closing and will build up to a limit of 0.30% of the issued
notional from proceeds paid to Liberty Credit Enhancement Company
Pty Ltd as Guarantor, from the bottom of the interest waterfall
prior to interest paid to the Class G noteholders. The reserve
account will firstly be available to meet losses on the loans and
charge-offs against the notes. Secondly, it can be used to cover
any liquidity shortfalls that remain uncovered after drawing on
the liquidity facility and principal. Any reserve account balance
used can be reimbursed to its limit from future excess income.
- A currency swap, which mitigates the cross-currency risk
associated with the EUR-denominated Class A1c Notes.
The key pool features are as follows:
- The portfolio has a relatively high scheduled loan to value
ratio of 70.6%, with relatively high proportion of loans with
scheduled LTV above 80.0% (12.7%) and above 90% (8.3%).
- The portfolio has a low weighted average seasoning of 3.3
months, with 88.4% of the portfolio originated in the past six
months.
- 5.2% of the loans in the portfolio were extended on an alt
doc basis
- The portfolio contains 3.2% exposure with respect to
borrowers with prior credit impairment (default, judgment or
bankruptcy). Moody's assesses these borrowers as having a
significantly higher default probability.
- Investment and IO loans represent 30.6% and 10.7% of the
pool, respectively.
Methodology Underlying the Rating Action:
The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
September 2017.
Factors that would lead to an upgrade or downgrade of the
ratings:
Levels of credit protection that are greater than necessary to
protect investors against current expectations of loss could lead
to an upgrade of the ratings. Moody's current expectations of
loss could be better than its original expectations because of
fewer defaults by underlying obligors or higher recoveries on
defaulted loans. The Australian job market and the housing market
are primary drivers of performance.
A factor that could lead to a downgrade of the notes is worse-
than-expected collateral performance. Other reasons for
performance worse than Moody's expects include poor servicing,
error on the part of transaction parties, a deterioration in
credit quality of transaction counterparties, fraud and lack of
transactional governance.
MADDEN INTERIORS: First Creditors' Meeting Set for Oct. 3
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Madden
Interiors Pty Ltd will be held at the offices of Worrells
Solvency & Forensic Accountants at Suite 1, Level 15, 9
Castlereagh Street, in Sydney, NSW, on Oct. 3, 2018, at 11:30
a.m.
Simon Cathro of Worrells Solvency was appointed as administrator
of Madden Interiors on Sept. 21, 2018.
PREMIUM TRAVEL: Second Creditors' Meeting Set for Oct. 3
--------------------------------------------------------
A second meeting of creditors in the proceedings of Premium
Travel Solutions Pty Ltd, trading as WeTravel Tours, has been set
for Oct. 3, 2018, at 11:00 a.m. at the offices of Veritas
Advisory at Level 5, 123 Pitt Street, in Sydney NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Oct. 2, 2018, at 4:00 p.m.
David Iannuzzi and Vincent Pirina of Veritas Advisory were
appointed as administrators of Premium Travel on Aug. 28, 2018.
RETAIL FOOD: Colin Archer Steps Down as Chairman
------------------------------------------------
Patrick Hatch at The Sydney Morning Herald reports that Retail
Food Group's chairman has retired and two new directors have
joined the board of the embattled franchisor, which is fighting
to turn itself around after revelations that many of its
franchisees were struggling to make ends meet.
Colin Archer resigned on Sept. 25, effective immediately,
following 10 years with RFG, including the past five as chairman.
He had flagged his intention to leave at the company's 2017
annual meeting, the report says.
SMH relates that Stephen Lonie, who has been an independent non-
executive director for the past five years, will take over as
chairman. David Grant, a director at Murray Goulburn and former
director at iiNet, and former Optus director Peter George, have
been appointed directors, SMH discloses.
According to the report, Fairfax Media revealed in December that
RFG's business model had sent many of its franchisees to the
wall.
The market capitalisation of the company has since plunged, and
the ASX-listed group last month handed down a AUD306.7 million
full-year loss driven by write-downs to the value of its brands,
SMH discloses.
The report relates that the company's auditors and directors both
warned investors at that time about the "material uncertainty"
RFG faced in continuing as a viable operation.
According to SMH, Mr. Lonie said the RFG board "fully appreciates
the challenges RFG faces", including restoring the value of its
share price, which has fallen 88 per cent, from AUD4.40 to 50õ,
this year.
However, the company had a clear strategy and was confident of
this being implemented by RFG's management, led by new CEO
Richard Hinson, Mr. Lonie said.
SMH relates that Mr. Lonie is a director of listed travel agent
Corporate Travel Management, campervan hire company Apollo
Tourism and Leisure, and Tasmanian financial services group
Mystate.
Retail Food Group Limited (ASX:RFG) -- http://rfg.com.au/--
together with its subsidiaries, owns, develops, and manages
multi-brand retail food franchise in Australia. The company
engages in the ownership of intellectual property; development
and management of coffee roasting facilities; and the wholesale
supply of coffee and allied products. It is also involved in the
development and management of the procurement, warehousing,
manufacturing, and distribution business of various brands. The
company operates a network of approximately 2,500 outlets across
12 brand systems spanning 83 territories.
RFG owns the brands Gloria Jeans, Donut King, Brumbies, Crust and
Pizza Capers.
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C H I N A
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CHINA ORIENTAL: Fitch Hikes LT Foreign Currency IDR to BB
---------------------------------------------------------
Fitch Ratings has upgraded China Oriental Group Company Limited's
(COG) Long-Term Foreign-Currency Issuer Default Rating (IDR) and
senior unsecured rating to 'BB' from 'BB-'. The Outlook is
Stable.
The upgrade reflects a significant improvement in COG's financial
profile, driven by strong free cash flow generation from its core
steelmaking business, which Fitch expects to continue with
support from a favorable domestic operating environment and COG's
prudent financial policies. The ratings are constrained by COG's
concentration in China's Hebei province, which is a focal point
for policymakers in terms of capacity shutdown and production
curtailment. Fitch believes this increases the likelihood of
policy-driven disruption to COG's steelmaking business and higher
spending on environmental-related equipment and upgrades.
KEY RATING DRIVERS
Improved Profitability: COG's steel gross profit per tonne
increased to CNY675 per tonne in 1H18, from CNY233 per tonne in
2016. Steel prices have continued to rise, but prices of raw
material such as iron ore and coking have remained stable,
allowing Chinese steelmakers to enjoy elevated profitability for
the past 18 months. Fitch expects COG's gross profit per tonne
profitability to remain at around CNY660 in 2018 and CNY520-580
per tonne over 2019 and 2020, supported by stable steel prices
and Fitch's lower iron ore and coking coal forecasts.
High Net Cash: COG had net cash of CNY3.3 billion in 2017 and
CNY4.0 billion in 1H18, a turnaround from its net debt position
of CNY971 million in 2016, driven by strong cash flow generation
from its core steelmaking business. The company has a solid
record of generating strong free cash flow, even during the
severe sector downturn in 2015. Fitch expects this to continue
with support from robust steelmaking profitability, despite
increased capex on environmental upgrades and higher dividend
pay-outs. COG should maintain its net cash position provided
there are no major M&A or investments in the near term.
Rising Capex: Fitch expects capex to increase to around CNY2.0
billion in 2018 and CNY1.5 billion-2.0 billion each year in 2019
and 2020, from CNY0.5 billion in 2017, to upgrade facilities to
be compliant with the latest environmental standards and to
upgrade existing blast furnaces. The capex will be funded by
internal cash flow and Fitch expects COG to remain free cash flow
positive even after the increased capex.
Substantial Foreign-Exchange Debt: Around 40% of COG's total debt
is denominated in US dollars, while the majority of its revenue
is in Chinese yuan. This creates a potential foreign-exchange
mismatch and increases foreign-exchange risk should exchange-rate
volatility increase. However, Fitch believes the risk is low as
COG is in a net cash position and employs currency hedging.
Relationship with ArcelorMittal: ArcelorMittal S.A. (BBB-/Stable)
became COG's largest shareholder with a 37% share after
management sold down shares to resume its listing in 2017. Fitch
believes the disputes regarding stake holding and insufficient
public float issue between ArcelorMittal and COG's management
have been temporarily resolved, but that if the relationship
between the two parties further deteriorates, it could negatively
affect COG's operations. ArcelorMittal has one seat on COG's
board, which consists of nine directors.
DERIVATION SUMMARY
COG has a smaller size and slightly lower profitability than
Indian steelmakers, JSW Steel Limited (JSWS, BB/Stable) and Tata
Steel Limited (TSL, BB/Rating Watch Evolving, standalone: BB-),
as the Indian steelmakers have lower input and production costs
as well as iron ore self-sufficiency. COG's financial are
stronger than those of JSWS and TSL, as reflected in its strong
net cash position, whereas JSWS and TSL have net leverage of
around 4.0x-5.0x. COG's financial metrics are overall much better
than those of 'BB' and 'B' rated peers and comparable with some
investment-grade steel producers.
KEY ASSUMPTIONS
Fitch's Key Assumptions within Its Rating Case for the Issuer
- Capex of CNY2 billion per year between 2018 and 2020.
- Dividend pay-out of 40% per year between 2018 and 2020.
- Fitch iron ore price forecast of USD60 per tonne in 2018
and USD55 per tonne in 2019 and 2020.
- Fitch hard coking coal price forecast of AUD185 per tonne in
2018 and AUD140 per tonne in 2019 and 2020.
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- Positive rating action is unlikely in the near term unless
COG improves its operational diversification outside of
Northern China
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- FFO net leverage above 1.5x on a sustained basis
LIQUIDITY
Adequate Liquidity: COG has around CNY5.6 billion in cash and
cash equivalents and around CNY1.7 billion in total debt at end-
1H18. It also has CNY5.0 billion in unutilised banking
facilities.
SUNAC CHINA: Fitch Affirms BB- LT IDR & Alters Outlook to Stable
----------------------------------------------------------------
Fitch Ratings has revised Sunac China Holdings Limited's Outlook
to Stable from Negative, and affirmed the Long-Term Foreign-
Currency Issuer Default Rating (IDR) at 'BB-'. Sunac's senior
unsecured rating and the ratings of its outstanding senior notes
have also been affirmed at 'BB-'.
The Outlook revision reflects Fitch's expectation that the China-
based homebuilder's leverage will likely stay below 50% in 2018.
Sunac's management has publicly made a commitment to deleverage
and Fitch thinks there is no pressure for the company to continue
adding to its land bank aggressively as it has more than 100
million sq m of gross floor area (GFA), an ample supply that will
last for over five years of development. Sunac has not been
making material land acquisitions after it bought the Wanda City
cultural and tourism assets more than a year ago.
KEY RATING DRIVERS
Improving Leverage: Sunac's leverage, measured by net
debt/adjusted inventory with proportionate consolidation of joint
ventures and associates, fell to 47.3% by end-2017 and 46.2% in
1H18 from 63.4% before the 1H17 Wanda City project acquisition.
The significant deleveraging was due to strong contracted sales
and minimal additions to its land bank. Sunac's attributable
contracted sales increased by 151% to CNY266 billion in 2017.
Fitch expects the strong sales momentum to continue in 2018,
enabling the company to meet its full-year sales target of CNY450
billion and achieve further deleveraging. Reported total
contracted sales in 1H18 amounted to CNY192 billion.
Greater Geographical Diversification: Sunac's concentration in
the pan-Bohai Rim, Yangtze River Delta and Chengdu-Chongqing
regions dropped to 70% in 2017, from 90% in 2015, especially
after the Wanda City acquisition, as only five (Hefei, Wuxi,
Jinan, Chengdu and Chongqing) of the 13 projects are located in
these markets. Geographical diversification has become
increasingly important as each local government implements home-
purchase restriction policies differently. Sunac also benefitted
from low land acquisition costs in 2018, with average cost of
CNY3,620 per sq m.
Strong Contracted Sales: The geographical diversification helped
Sunac report robust contracted sales of CNY46 billion in June
2018, which is comparable with China's top-three homebuilders -
China Vanke Co., Ltd. (BBB+/Stable), Country Garden Holdings Co.
Ltd. (BBB-/Stable) and China Evergrande Group (B+/Positive).
The higher sales value, despite a fall in Sunac's average selling
price, suggests it has flexibility to generate sales from a
greater geographical and product spread, making it more likely
that Sunac can improve operational cash flow for deleveraging.
Its EBITDA margin, including the proportional share of EBITDA
from joint ventures and associates, was around 23% as of 1H18, or
32% if valuation gains from acquired projects were removed.
Execution Risk in Non-Property Business: Sunac is increasing its
presence in the cultural and tourism business after the
acquisition of the Wanda City projects, which include hotels,
theme parks and shopping malls. Only five projects have started
operations and seven have yet to begin. Fitch believes there are
inherent execution risks in ramping up these large-scale
projects. However, once fully operational, they may bring in
meaningful income from the non-property development segment.
DERIVATION SUMMARY
Sunac's homebuilding business scale, geographical
diversification, project execution track record, and churn rates
are comparable with 'BBB-' rated homebuilders like Country
Garden, and comparable with or superior to 'BB' rated
homebuilders such as Beijing Capital Development Holding (Group)
Co., Ltd. (BBB-/Negative, standalone BB), and Guangzhou R&F
Properties Co. Ltd. (BB-/Negative). However, Sunac has had a more
volatile financial profile than these peers, and is more
comparable with lower-rated issuers like Greenland Holding Group
Company Limited (BB-/Stable, standalone BB-) and China
Evergrande, even though its 2017 leverage is lower than
Greenland's and similar to that of China Evergrande. No Country-
Ceiling, parent-subsidiary or operating-environment aspects have
an impact on the rating.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Replenishment of land bank to maintain land bank life of
4.5 years
- Consolidated revenue at 60% of attributable sales between
2017 and 2019
- Capex at CNY7.5 billion in 2018 and CNY3.5 billion from 2019,
mainly for Wanda City projects
- Contracted GFA to grow at 30% in 2018 and 5%-10% thereafter
- Contracted average selling price of CNY14,000-14,500 per sq m
between 2018 and 2020
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- Net debt/adjusted inventory sustained below 40% (1H18: 46.2%)
- Attributable contracted sales/gross debt above 1.2x (1H18:
1.0x)
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- Net debt/adjusted inventory sustained above 50%
- Attributable contracted sales/adjusted inventory sustained
below 0.8x (1H18: 0.8x)
- EBITDA margin, excluding the effect of revaluation of
acquisitions, sustained below 18%
LIQUIDITY
Sufficient Liquidity: Fitch expects Sunac to maintain sufficient
liquidity for its operations and debt repayment, as contracted
sales are likely to show strong growth in 2018 to reach more than
CNY300 billion on an attributable basis. Sunac had a cash balance
of CNY87 billion, including restricted cash of CNY25 billion, as
at 1H18, sufficient to cover short-term debt of CNY75 billion.
FULL LIST OF RATING ACTIONS
Sunac China Holdings Limited
- Long-Term IDR affirmed at 'BB-'; Outlook revised to Stable
from Negative
- Senior unsecured rating affirmed at 'BB-'
- USD400 million 6.875% senior notes due 2020 affirmed at 'BB-'
- USD400 million 8.75% senior notes due 2019 affirmed at 'BB-'
- USD600 million 7.95% senior notes due 2022 affirmed at 'BB-'
- USD650 million 7.35% senior notes due 2021 affirmed at 'BB-'
- USD450 million 8.35% senior notes due 2023 affirmed at 'BB-'
- USD400 million 8.625% senior notes due 2020 affirmed at 'BB-'
SUNAC CHINA: S&P Alters Outlook to Positive & Affirms 'B+' ICR
--------------------------------------------------------------
S&P Global Ratings raised its outlook on Sunac China Holdings
Ltd. to positive from stable. At the same time, S&P affirmed its
'B+' long-term issuer credit rating on the Chinese developer. S&P
also affirmed its 'B' long-term issue rating on Sunac's senior
unsecured notes.
S&P said, "The outlook revision reflects our view that Sunac's
deleveraging trend is likely to continue in the next 12 months
based on strong sales execution, solid margins, and controlled
spending. In our view, the company is unlikely to pursue
aggressive debt-funded acquisitions to expand its scale, given it
has become one of the top developers in China and has built up a
sizeable land bank to support its growth over the next few
years."
Sunac could continue to deleverage with the ratio of debt to
EBITDA lowering towards 5x (both consolidated and proportionally
consolidating its joint-venture projects) over the next 12
months. The company's financial leverage improved significantly
in the first half of 2018, with a rolling consolidated ratio of
debt to EBITDA of about 8.2x. On a proportional consolidated
basis, this ratio fell to about 7.2x, from about 15x at the end
of 2017,
S&P said, "We anticipate Sunac's total sales will reach Chinese
renminbi (RMB) 450 billion (of which about 70% attributable) in
2018, with RMB190 billion already achieved in the first six
months of 2018, and saleable resources estimated at RMB490
billion in the second half. The company's diverse land bank and
good geographic positioning--with about 85% of developments in
tier-one and tier-two cities -- provide healthy support for its
growth, despite a softening market environment.
"We expect Sunac to switch to a more prudent land acquisition
pace. In the first six months, the company's outlays for land
purchases was about 30% of cash collected from sales,
significantly lower than about 80% in 2017. We forecast that the
company will maintain a ratio of land purchases to cash from
sales of 30%-40% in the next 12 months, reflecting its
expectation of a softening market, its existing abundant land
reserves, and a more controlled growth.
"At the same time, we believe Sunac has a strong earnings
trajectory, thanks to strong sales growth achieved in the past
few years. At the end of June 2018, the company had unrecognized
revenue of about RMB480 billion, underpinning a strong top line
growth in the next one to two years. This trend is likely to
continue in our view, given the company's competitive products
and geographic positioning."
Profitability is also improving, with Sunac's reported gross
margin rising to 24.7% in the first half of 2018, from 20.7% in
2017. The company's first-half adjusted gross margin was a higher
34% if the impact of amortization of revaluation gains is
excluded in the cost of goods sold. S&P said, "We believe the
adjusted margin is a more reasonable assessment of profitability
because we do not include business combination gains of mergers
and acquisitions at the time of purchase in our EBITDA
calculation. We therefore view Sunac's profitability of about 27%
EBITDA margin as in line with the industry average, compared with
below average assessed previously."
S&P said, "Nevertheless, in our view, Sunac remains opportunistic
and may make unexpected acquisitions, which could strain its
financial positions. The company investment in China-based Leshi
companies in 2017 resulted in material write-downs and rise in
leverage. In our view, the company's has yet to establish a track
record of conservative financial management.
"The positive outlook reflects our view that Sunac's financial
leverage could continue to improve over the next 12 months,
supported by strong sales execution, sustainable profitability,
and lower acquisition spending.
"We could raise the rating if the company can demonstrate a more
consistent track record of financial prudence and improve its
financial leverage. A debt-to-EBITDA ratio, on proportional
consolidated basis, of below 5.0x on a sustained basis could
indicate such improvement.
"We may revise the outlook to stable if Sunac's financial
leverage improvement is weaker than our expectation or if we
believe the lower leverage position is not sustainable. This
could be due to a lack of financial discipline or weaker-than-
expected cash generation. A debt-to-EBITDA ratio of more than
6.0x on a proportional consolidated basis, could indicate that
the company's leverage will not be materially improving."
================
H O N G K O N G
================
NOBLE GROUP: Agrees to Exchange Sundance's Notes for Cash, Shares
-----------------------------------------------------------------
Annabeth Leow at The Business Times reports that Noble Group has
agreed to stand down as a noteholder of debt-ridden Australia-
listed miner Sundance Resources, the Singapore-listed commodities
trader said in a bourse filing on Sept. 25.
According to the report, the convertible notes, which are held by
a wholly owned Noble subsidiary, had a face value of AUD32
million (SGD31.7 million). They have been fully impaired and will
be cancelled by Sundance under an agreement reached on Sept. 24
with the Australian miner's other noteholders.
Noble Resources International Pte Ltd will instead get a package
valued at AUD27.6 million for the cancellation of the notes, the
report says.
This is made up of AUD11.9 million in cash, as well as 475.8
million new Sundance shares and 2.38 billion options that could
represent a further stake of up to 9.7 per cent if exercised.
Sundance plans to fund the debt swop with proceeds from a share
placement to Australia-listed Aust-Sino Resources Group, BT
discloses.
According to BT, Noble said that the transaction does not affect
its own planned debt restructuring, as the consideration would be
among the assets to be sold and transferred to the new corporate
entity in that restructuring.
It added that the cash proceeds from the transaction "will be
used for general corporate purposes".
In its filing, Noble said that the rationale for the transaction
was because it "satisfies the relevant notes owed to (Noble
Resources International) by Sundance, as well as to allow the
company to further consolidate its shareholding interests in
Sundance," BT relates.
"The noteholders are also supportive of the need to restructure
the balance sheet of Sundance in order to attract new investments
to fund Sundance's iron ore project," it added.
Noble Resources International first subscribed for Sundance notes
in 2013, the report recalls. It also has arrangements for the
right to at least half of all iron products from Sundance's
Central African Mbalam-Naeba iron ore project in the first 10
years of production - a deal that Noble said will "continue
unaffected"
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
Sept. 5, 2018, Moody's Investors Service has upgraded Noble Group
Limited's corporate family rating to Caa1 from Caa3. At the same
time, Moody's has affirmed Noble's senior unsecured ratings at
Ca, and the rating on its senior unsecured medium-term note (MTN)
program at (P)Ca. The company is in default on its existing debt
obligations. The ratings outlook is stable.
"The upgrade of Noble's CFR reflects its expectation that the
company's capital structure and liquidity will improve, following
its restructuring, which was approved by shareholders earlier
this week," Gloria Tsuen, a Moody's Vice President and
Senior Analyst, said. "Moody's expects that the restructuring
will be completed by the end of this year," added Tsuen.
=========
I N D I A
=========
APS POWER: Ind-Ra Maintains B+ Issuer Rating in Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained APS Power Tech
(India) Private Limited's Long-Term Issuer rating in the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
continue to appear as 'IND B+ (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR49 mil. Fund-based working capital limit Maintained in
non-cooperating category with IND B+ (ISSUER NOT
COOPERATING)/IND A4 (ISSUER NOT COOPERATING) rating; and
-- INR60 mil. Non-fund-based working capital limit maintained in
non-cooperating category with IND A4 (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
May 26, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated on July 25, 2005, APS Power Tech (India)
manufactures and repairs power and distribution transformers at
its facility in Lucknow.
AYKA MOULD: CARE Reaffirms B+ Rating in Not Cooperating
-------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Ayka Mould Tech Industries Limited (AMTIL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 7.43 CARE B+; Stable Reaffirmed
Short-term Bank
Facilities 0.50 CARE A4 Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of AMTIL are
constrained on account of small scale of operations couple with
thin profitability margins. The ratings are further constrained
on account of its leveraged capital structure, weak debt coverage
indicators, moderate liquidity position, susceptibility of
operating margins to volatility in prices of raw material,
foreign exchange fluctuation risk and its presence in a highly
fragmented and competitive nature of industry. The rating,
however, derives strength from the experience of the promoters in
the plastic industry.
The ability of AMTIL to increase its scale of operations and
improve its overall financial risk profile by improving its
profit margins, capital structure and debt coverage indicators
coupled with efficient working capital management are the key
rating sensitivities.
Detailed Description of the Key Rating Drivers
Key Rating Weaknesses
Small scale of operations and thin profitability: AMTIL commenced
its operations in June, 2017 and registered TOI of INR25.25 crore
with PBILDT of 1.18 crore (PBILDT margin 4.68%) during its ten
months of operations ending March 31, 2018 (Prov.). During
10MFY18 (Prov.), the AMTIL booked a net profit of INR0.18 crore
and cash accrual of INR0.60 crore.
Leveraged capital structure, weak debt coverage indicators and
moderate liquidity position: As on March 31, 2018 (Prov.),
capital structure remained leveraged as marked by an overall
gearing ratio of 4.12x. Further, debt coverage indicators
remained weak as marked by interest coverage ratio of 1.80x
during FY18 (Prov.) as well as TDGCA of 12.47x as on March 31,
2018 (Prov.). Liquidity position remained moderate as marked by
current ratio of 1.11 times along with operating cycle of 37 days
during FY18. Further, average working capital utilization
remained 95% for trailing 12-month period ended July, 2018.
Susceptibility of operating margins to volatility in prices of
raw material and foreign exchange fluctuation risk: The prices of
primary raw materials, i.e., PP/LDPE/LLDPOE/HDPE granules and
chips are derivatives of crude oil, the fluctuation of which may
affect the profit margins of the company. Also, as AMTIL imports
few of its raw materials, it's profit margins are also exposed to
foreign exchange fluctuation risk.
Presence in a highly fragmented and competitive nature of
industry: AMTIL operates in plastic industry which is highly
fragmented marked by presence of large number of organized and
unorganized players. Also, intense competition in the industry
also limits the pricing flexibility.
Key Rating Strengths
Experienced promoters with established track record of
operations: The key promoter of AMTIL, Mr. Sahil Basir Shaikh
holds an experience of around 12 years in the plastic industry
while he is assisted by other directors for the overall
management of the company.
Daman-based AMTIL was incorporated by Mr. Sahil Basir Shaikh, Mr.
Asfaq Basir Shaikh, Ms. Samimbanu Basirbhai Shaikh and Ms. Sahnaj
Sahil Shaikh. The entity is established to carry on the business
of manufacturing plastic crates, plastic chairs, plastic drums,
polypropylene (PP) file sheets; PP pallates, PP compound for
automobiles, PP box strapping from its sole manufacturing
facility located in Daman, with an installed capacity of 15 tons
of plastic goods per day.
B.V.L EXPORTS: Ind-Ra Migrates 'BB-' LT Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated B.V.L Exports
Private Limited's Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating action is:
-- INR1.250 bil. Fund-based working capital limits migrated to
non-cooperating category with IND BB- (ISSUER NOT
COOPERATING)/IND A4+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
September 7, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated on October 29, 1997, B.V.L Exports is engaged in
procurement and trading of tobacco. In addition, it is engaged in
the trading of granites.
BAL DARBAR: CARE Reaffirms B Rating on INR4.88cr LT Loan
--------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Bal Darbar Spinning Mills Private Limited (BDSPML), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 4.88 CARE B; Stable Reaffirmed and
Facilities Removed from issuer not
cooperating
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of BDSPML continue to
remain constrained on account of its modest scale of operations
in the highly competitive and fragmented textile industry with
vulnerability of margins to fluctuation in the raw material
prices. The ratings are, further, continues to remain constrained
on account of its low profitability, weak solvency position and
stressed liquidity position.
The ratings, however, continue to favorably take into account the
experience promoters in the textile industry and location
advantage with easy availability of raw material and labour.
The ability of the company to increase its scale of operations
with improving profitability and improvement in the solvency
position with efficient management of working capital shall be
the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Modest scale of operations in the highly competitive and
fragmented textile industry: The scale of operations of the
company remained modest with Total Operating Income (TOI) of
INR10.60 crore in FY18 as against INR11.94 crore in FY17. The
company is present in the highly fragmented industry having high
level of competition and intense pricing pressures.
Smaller companies are more vulnerable to intense competition and
have limited pricing flexibility, which constrains their
profitability as compared to larger companies who have better
efficiencies and pricing power considering their scale of
operations. Any significant changes in macro-economic factors
will have direct impact on the business operations of the
company.
Moderate profitability margins, weak solvency and stressed
liquidity position: The profitability margins of the company
remained moderate with PBILDT and PAT margin of 15.46% and 0.61%
respectively in FY18. The capital structure of the company stood
moderate marked by an overall gearing of 11.15 times as on March
31, 2018, improved from negative/non-meaningful overall gearing
mainly on account of infusion of share capital by promoters
Further, debt service coverage indicators of the company stood
moderate with total debt to GCA of 8.86 times in FY18 and
interest coverage ratio stood at 1.98 times in FY18.
The business of the company stood stressed with almost full
utilization of its working capital bank borrowings during last 12
months ended July, 2018. The liquidity ratio of the company stood
weak with current ratio and quick ratio of 0.87 times and 0.51
times respectively as on March 31, 2018 owing to high inventory
along with higher short term debt including working capital bank
borrowing.
Key Rating Strengths
Experienced promoter in the textile industry: Mr Sohan Lal Tater,
the key promoter, has an extensive experience of around three
decades in this domain and looks after the overall management of
the company. Mr Ankit Tater, Director, Mr Namit Sacheti and Mr
Sanjay Sachetil along with team of qualified top managerial
personnel and technical team having long standing experience in
their respective fields for executing orders on time. The company
will benefit from the established presence of its group concern
and promoters of around three decades in the textile industry.
Location advantage by virtue of being situated near the textile
cluster of Bhilwara: The manufacturing facility of the company is
located at Bijainagar (Rajasthan) which is in the close proximity
to one of the largest textile clusters in India. BDSM's presence
in the textile manufacturing region results in easy access to
customers due to various units engaged in the manufacturing of
fabrics, benefit derived from low transportation cost both on
transportation and storage and easy availability of raw materials
at effective prices.
Bijainagar (Rajasthan) based Bal Darbar Spinning Mills Private
Limited (BDSM), was incorporated in 2013, by 'Tater' and
'Sacheti' family. BDSM was incorporated with an objective to set
up a spinning unit for manufacturing of Polyester Cotton (PC)
yarn. However, from July, 2018, the company has started
manufacturing of multi-yarn and started trading of polyester
cotton yarn. The manufacturing facility located at Bijainagar
having an installed capacity of 4 tonne per day as on March 31,
2018. BDSM manufactures 8 to 15s count multi yarn and caters to
domestic market through the network of agents located primarily
in Northern part of India under the brand name of "Bal Darbar".
It majorly supplies its product in tyre industry.
DHARWAD METALLICS: CARE Migrates D Rating to Not Cooperating
------------------------------------------------------------
CARE Ratings has migrated the rating on bank facility of Dharwad
Metallics Private Limited (DMPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.30 CARE D; Issuer not cooperating,
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from DMPL to monitor the rating
vide e-mail communications/letters dated May 8, 2018, July 11,
2018, July 3, 2018, August 3, 2018 and August 6, 2018 and
numerous phone calls. However, despite CARE's repeated requests,
the company has not provided the requisite information for
monitoring the rating. In the absence of minimum information
required for the purpose of rating, CARE is unable to express
opinion on the rating. In line with the extant SEBI guidelines,
CARE rating on Dharwad Metallics Private 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.
Detailed Description of Key Rating Drivers
At the time of last rating on June 19, 2017, the following were
the rating strengths and weaknesses:
Key Rating Weakness
Losses incurred in the review period (FY15-FY16), leveraged
Capital structure, weak debt coverage indicators and liquidity
position resulting in ongoing delays in making debt repayments.
The company achieved total operating income of INR0.34 crore for
FY16 as against INR0.01 crore in FY15. DMPL has incurred
operational as well as net losses owing to its high operational
costs, finance costs and depreciation costs. Furthermore, DMPL
has leveraged capital structure and weak debt coverage indicators
due to high debt levels and low networth base due to year-on-year
cash losses incurred during the review period. DMPL has a weak
Current Ratio of 0.76x and Quick ratio of 0.35x indicating a weak
liquidity position as on March 31, 2016. Weak financial position
and liquidity issues resulted in ongoing delay in making debt
repayments. As per the banker's mail dated June 2, 2017, the
account is NPA from the month of April 2017.
Highly fragmented and competitive nature of industry: Metal
casting industry in India is highly competitive with presence of
numerous organized and unorganized players resulting in
fragmented nature of business operations.
Key Rating Strengths
Reasonable Experience of Promoters: The promoters of DMPL has a
reasonable experience of over 6 years in the metal industry.
Comfortable Operating Cycle (days): DMPL has a comfortable
operating cycle days of 6 days in FY16 owing to its high
creditors and inventory period of 351 and 400 days respectively
and satisfactory collection period of 55 days. The high
creditor's period is owing to delay in making payments to its
suppliers on time and high inventory holding is due to lack of
proper inventory management.
Dharwad Metallics Private Limited (DMPL) was incorporated in the
year 19thDecember 2011 by Ms. Ruchita Rajendra Patole,Mr. Belaval
Subhash and Mrs. Roopadevi Basavaraddi Devaraddi. The company is
engaged in manufacturing of SG Iron/Cast Iron and does Casting of
Metals including finished or semi-finished products.
DS AGRIFOODS: CARE Reaffirms B+ Rating on INR14.50cr LT Loan
------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
DS Agrifoods Private Limited (DSA), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 14.50 CARE B+; Stable Reaffirmed
Detailed Rationale and key rating drivers
The rating assigned to the bank facilities of DSA continues to
remain constrained by small scale of operations, low
profitability margins, leveraged capital structure and weak
coverage indicators. The rating further continues to remain
constrained by susceptibility to fluctuation in raw material
prices and monsoon dependent operations, fragmented nature of
industry coupled with high level of government regulation. The
rating, however, draws comfort from experienced management,
growing scale of operations and moderate operating cycle.
Going forward, the ability of the company to increase its scale
of operations while improving its profitability margins, capital
structure with effectively managing the working capital
requirements would be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small though growing scale of operations: The scale of operations
of DSA continues to remain small marked by total operating income
(TOI) and gross cash accruals of INR75.41 crore and INR0.84 crore
in FY18 (refers to the period April 1 to March 31; based on
provisional results). Furthermore, the tangible net worth of the
company stood relatively small at INR6.53 crore as on March 31,
2018. The small scale limits the company's financial flexibility
in times of stress and deprives it of scale benefits. Though the
risk is partially mitigated by the fact that the scale of
operations is growing continuously. For the period FY16-FY18,
DSA's total operating income grew from INR55.76 crore to INR75.41
crore reflecting a compounded annual growth rate (CAGR) of 16.29%
attributable to higher quantity sold to existing customers.
Further, during 4MFY19 (refers to the period April 1 to July 31;
based on provisional results) the company has achieved total
operating income of INR56.10 crore.
Low profitability margins: The profitability margin of the
company continues to remain low for the past 3 financial years
(FY16-18) due to low value addition and highly fragmented nature
of industry characterized by intense competition. This apart,
interest burden on working capital borrowing also restricts the
net profitability of the company. The PBILDT margin of the
company stood around 3% and PAT margin stood below 0.35% for the
last 3 financials years (FY16-18).
Leveraged capital structure and weak debt coverage indicators:
The capital structure of the company continues to remain
leveraged marked by overall gearing ratio of around ~2x as on
past three balance sheet dates ending March 31 '16-18'. The
company has leveraged capital structure mainly attributed to high
working capital requirement which are largely met through bank
borrowings. The coverage indicators continue to remain weak as
marked by interest coverage ratio of less than 1.56x and total
debt to gross cash accruals of more than 18x for the past three
financial years i.e. FY16-FY18.
Susceptibility to fluctuation in raw material prices and monsoon
dependent operations: 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. 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. Paddy is the major raw material and the peak
paddy procurement season is during November to January during
which the company builds up raw material inventory to cater to
the milling and processing of rice throughout the year. The
monsoon has a huge bearing on crop availability which determines
the prevailing paddy prices. Since there is a long time lag
between raw material procurement and liquidation of inventory,
the company is exposed to the risk of adverse price movement
resulting in lower realization than expected.
Fragmented nature of industry coupled with high level of
government regulation: 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. The raw material (paddy) prices are regulated by
government to safeguard the interest of farmers, which in turn
limits the bargaining power of the rice millers.
Key Rating Strengths
Experienced management: Mr Rakesh Kumar Agarwal and Mr Amit
Agarwal collectively look after the overall operations of the
company. Both the directors have around one and a half decades of
experience in trading and processing of agro products through
their association with DSA.
Moderate operating cycle: The operating cycle of the company
continues to remain moderate at 79 days for FY18. The company
maintains a minimum inventory of raw material for around two-
three months for smooth functioning of the processing business.
Moreover, the firm maintains inventory in the form of finished
goods to meet the immediate needs of the customers. All these
resulted into an average inventory of 74 days for FY18. The firm
receives payment in up to 30 days from its customers.
Furthermore, the company meets its working capital requirements
through a credit period of up to one month from supplier and
utilization of it working capital limits which remained around
80% utilized for the past 12 months ended July, 2018.
Pilibhit (Uttar Pradesh) based DS Agrifoods Private Limited (DSA)
was incorporated in 2013 and was promoted by Mr Amit Agarwal, Mr
Rakesh Kumar Agarwal and Mr Anuj Agarwal. The company has
succeeded an erstwhile partnership firm 'D.S. Exports (DSE)'
(established in 2000) and the said firm was converted into
private limited company. The company is engaged in trading and
processing (milling) of paddy and rice. The manufacturing unit is
located at Pilibhit, Uttar Pradesh with a total installed
capacity of 20 tonne per day (TPD) as on March 31, 2018. DSA
procures paddy and rice from local grain markets located in Uttar
Pradesh through commission agents. The company sells its products
i.e. basmati and nonbasmati rice mainly in Uttar Pradesh,
Uttarakhand, Delhi and Rajasthan through dealer and distribution
network. The company also exports to Singapore, Nepal and gulf
countries. The company sells basmati rice in the brand name 'Doon
Malai' and 'Hill Queen' and non-basmati rice is mainly sold in
the brand name 'Goodric'. The firm has two group concerns namely
Durgar Rice Industries engaged in trading of paddy and Lord
Pashupati Seeds Private Limited engaged in seeds farming.
GTL INFRASTRUCTURE: Canara Bank Files Insolvency Bid v. Firm
------------------------------------------------------------
BloombergQuint reports that state-run Canara Bank has filed an
application for initiation of insolvency proceedings against GTL
Infrastructure Ltd. over the alleged default to the tune of
INR541.49 crore, according to an exchange filing by the telecom
infrastructure company.
The company, however, denied any such default, and said that the
bank's claims were "on illegal and unjustifiable grounds," the
report relays. According to the filing, the company claimed that
its dues to the bank stood at INR275.48 crore as on March 31.
BloombergQuint relates that the company, according to the filing,
said it has initiated legal action before "relevant judicial
authorities".
GTL Infrastructure obtained a status quo against the Corporate
Insolvency Resolution Process proceedings from the appropriate
judicial forum, BloombergQuint says. Subsequently, the insolvency
process has been stayed pending the outcome of the aforementioned
proceedings, the filing said.
GURU NANAK: CARE Reaffirms B+ Rating on INR10cr LT Loan
-------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Guru Nanak Rice and General Mills (GNR), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 10.00 CARE B+; Stable Reaffirmed
Detailed Rationale and key rating drivers
The rating assigned to the bank facilities of GNR continues to be
constrained by its modest scale of operations, low profitability
margins and leveraged capital structure. The rating is further
constrained by business susceptibility to vagaries of nature,
fragmented and competitive nature of industry and partnership
nature of constitution. The rating, however, derives strength
from the experienced partners, moderate operating cycle and
favourable location of operations.
Going forward, the ability of the firm to profitably scale-up its
operations while improving the overall solvency position would
remain the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Strengths
Experienced partners: GNR was established in 1981 by Mr Biahari
Lal Garg. The firm is currently being managed by his sons, Mr
Pardeep Garg and Mr Purushotam Garg. Mr Pardeep Garg and Mr
Purushotam Garg have an industry experience of around 15 years
and 20 years, respectively, through their association with GNR
itself.
Moderate operating cycle: The average operating cycle of the
company stood moderate at 41 days for FY18 [PY: 47 days]. GNR is
required to maintain adequate inventory mainly in the form of raw
material to ensure smooth production process as well as maintain
stock of finished products in order to meet the demand of
customers which resulted in average inventory period of 39 days
for FY18 [PY: 44 days]. The firm generally extends credit period
of around one month to its customers, however, timely realization
from debtors to avail cash discount resulted into average
collection period of 9 days for FY18 (PY:8 days). Consequently,
average creditors period stood at 7 days for FY18 (PY: 6days).
Favorable manufacturing location: GNR's manufacturing unit is
located in Kaithal, Haryana. The area is one of the hubs for
paddy/rice, leading to its easy availability. The presence of GNR
in the vicinity of paddy-producing regions gives it an advantage
over competitors operating elsewhere in terms of easy
availability of the raw material as well as favorable pricing
terms.
Key Rating Weaknesses
Modest scale of operations with low profitability margins: The
total operating income of the firm increased from INR46.69 crore
in FY17 to INR91.64 crore in FY18 owing to higher quantities sold
due to increase in orders received from existing customers as
well as from new customers added during the period. However, the
same continues to remain modest. The modest scale of operations
limits the firm's financial flexibility in times of stress and
deprives it from scale benefits. The profitability margins stood
weak marked by PBILDT margin of 1.96% and PAT margin of 0.20% in
FY18.
Leveraged capital structure: The capital structure of the firm is
leveraged as reflected by overall gearing ratio of 8.89x as on
March 31, 2018. It improved from 12.38x as on March 31, 2017
mainly on account of lower utilization of working capital limits
as on last balance sheet date as compared to previous year
coupled with accretion of profits into the net worth base of the
firm. However, the same continues to remain weak.
Susceptibility of margins to fluctuation in raw material prices
and monsoon dependent operations: Agro-based industry is
characterized by its seasonality, due to its dependence on raw
materials whose availability is affected directly by the vagaries
of nature. The price of rice moves in tandem with the prices of
paddy. 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.
Fragmented nature of industry coupled with high level of
government regulation: The commodity nature of the product makes
the industry highly fragmented with numerous players operating in
the unorganized sector with very less product differentiation.
Furthermore, the concentration of rice millers around the
paddy-growing regions makes the business intensely competitive.
Additionally, the raw material (paddy) prices are regulated by
government to safeguard the interest of farmers, which in turn
limits the bargaining power of the rice millers.
Partnership nature of constitution: GNR's constitution as a
partnership firm has the inherent risk of possibility of
withdrawal of the partner's capital at the time of personal
contingency and firm being dissolved upon the
death/retirement/insolvency of partner. Moreover, partnership
firms have restricted access to external borrowing as credit
worthiness of partners would be the key factors affecting credit
decision of the lenders.
GNR was established in 1981 as a partnership firm by Mr Biahari
Lal Garg and relatives. The firm is currently being managed by Mr
Pardeep Garg and Mr Purushotam Garg as its partners (sons of Mr
Biahari Lal Garg) sharing profit and loss equally. The firm is
engaged in processing of paddy to manufacture basmati and non-
basmati rice at its manufacturing facility located in Kaithal,
Haryana with an installed capacity of 50,000 tonnes of paddy per
annum as on July 31, 2018. Furthermore, the firm is also engaged
in the grading & sorting and processing of unfinished rice which
is procured locally from various rice millers.
HEAVY METAL: CARE Lowers Rating on INR192.92cr LT Loan to D
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Heavy Metal and Tubes Ltd. (HMTL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 192.92 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE B; Stable
on the basis of best available
information
Short-term Bank 11.50 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE A4 on the
basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has sought the monthly Default, if any, (NDS) statement for
the month of March 2018, April 2018, May 2018, June 2018, July
2018 and August 2018 vide email dated March 31, 2018, April 3,
2018, April 5, 2018, April 7, 2018, April 12, 2018, April 18,
2018, April 30, 2018, May 3, 2018, May 8, 2018, May 10, 2018, May
16, 2018, May 31, 2018, June 4, 2018, June 6, 2018, June 11,
2018, June 22, 2018, June 29, 2018, July 2, 2018, July 4, 2018,
July 6, 2018, July 11, 2018, July 19, 2018, July 31, 2018, August
1, 2018, August 3, 2018, August 16, 2018 and September 3, 2018
from HMTL. However, the company has not submitted NDS for the
said months. Moreover, CARE has been seeking information from the
company to monitor the ratings vide e-mail communications/letters
dated July 25, 2018, July 30, 2018, August 7, 2018, August 13,
2018 and September 5, 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
rating on HMTL's bank facilities will now be denoted as CARE
D/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 revision in the ratings assigned to the bank facilities of
HMTL takes into account delay in servicing of its debt
obligations.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delay in servicing of debt obligation: HMTL has delayed in
servicing of its debt obligations on account of continued cash
losses resulting in stretched liquidity.
Incorporated in 1991, HMTL is currently engaged in the
manufacturing of Hot Finished Seamless (HFS) tubes and Oil
Country Tubular Goods (OCTG) tubes. HMTL's products find
application across industries like oil & gas refineries, steel
plants, power plants and fertilizers. Post reporting subdued
operating performance in FY14, HMTL's lenders had approved
the restructuring of its debt repayment obligations in March
2015. During FY17, HMTL demerged Unit-I (manufacturing of
stainless steel pipes & tubes), corporate house & one windmill
and sold these assets for a consideration of INR32.50 crore. The
sales proceeds from the demerger were utilized for pre-payment of
principal obligations till June 2018. Further, in March 2018,
HMTL demerged Unit-II and sold it for a consideration of INR17.00
crore. The sales proceeds from the same were utilized for pre-
payment of principal obligations till September 2018.
HLM INDIA: CRISIL Maintains D Rating in Not Cooperating
-------------------------------------------------------
CRISIL said the rating on bank facilities of HLM India Private
Limited (HIPL) continues to 'CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.5 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Long Term
Bank Loan Facility 10.85 CRISIL D (ISSUER NOT
COOPERATING)
Term Loan 2.65 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with HIPL for obtaining
information through letters and emails dated Feb. 28, 2018 and
Aug. 31, 2018 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 HIPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on HIPL 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 HIPL continues to 'CRISIL D Issuer not
cooperating'.
The TSI group was established in 2006 and manufactures carriers
used in logistic services. It manufactures tippers and trailers
under TSIPL, car and truck carriers under LIAPL, and refrigerated
carriers under HIPL. Its promoters have industry experience of
over four decades.
INDIAN FOODTECH: CRISIL Maintains D Rating in Not Cooperating
-------------------------------------------------------------
CRISIL said the rating on bank facilities of Indian Foodtech
Limited (IFL) continues to 'CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7.5 CRISIL D (ISSUER NOT COOPERATING)
Term Loan 2.5 CRISIL D (ISSUER NOT COOPERATING)
CRISIL has been consistently following up with IFL for obtaining
information through letters and emails dated Feb. 28, 2018 and
Aug. 31, 2018 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 IFL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on IFL 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 IFL continues to 'CRISIL D Issuer not cooperating'.
IFL is a closely held public-limited company incorporated in
2010. It processes and packages ready-to-eat, ready-to-cook,
ready-to-serve food and frozen peas under its own brand, Ruhils,
and for other brands also. The company is managed by Mr. Ashok
Ruhil. It has its processing plant in Bajpur (Uttarakhand) and
started full scale of operations in 2012-13 (refers to financial
year, April 1 to March 31).
INTEC CAPITAL: CARE Lowers Rating on INR153.35cr Loan to D
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Intec Capital Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 153.35 CARE D Revised from
Facilities CARE BB; Stable
(Fund Based)
CARE has withdrawn the outstanding ratings of CARE BB; Stable
assigned to the Non-Convertible debentures of Intec Capital
Limited with immediate effect, as the company repaid the
aforementioned NCD issue in full and there is no amount
outstanding under the issue as on date. The revision in the
rating assigned to the long term bank facilities of Intec Capital
Limited takes into consideration the overdrawal in its cash
credit (CC) facilities for a period exceeding 30 consecutive
days.
Going forward, the ability of the company to regularize its CC
borrowings within the drawing power limit along with an overall
improvement in its liquidity profile would remain the key rating
sensitivity.
Detailed description of the key rating drivers
Key Rating Weaknesses
Intec's ongoing Overdrawal of the cash credit borrowings against
the drawing power: The company's utilization of cash credit
facilities was more than the drawing power for a period of
exceeding 30 consecutive days.
Weak Asset Quality: Gross NPA ratio and Net NPA ratio of the
company have deteriorated to 39.52% and 32.60% respectively as on
March 31, 2018 vis-a-vis 21.16% and 17.66% respectively as on
March 31, 2017. Also, Net NPA/Tangible Net Worth has deteriorated
to 87.7% as on March 31, 2018 vis-a-vis 65.6% as on March 31,
2017.
Decline in business and profitability parameters: The net loan
portfolio of the company has declined by 33.5% to INR346 crore as
on March 31, 2018 vis-a-vis INR520 cr as on March 31, 2017. Total
income of ICL was lower by 38.19% to INR60.25 crore in FY18
(Rs.97.48 crore in FY17). The company reported net losses of
INR30.28 cr during FY18 and net losses of INR3.8 cr during
Q1FY19.
Key Rating strengths
Experienced promoters and management: ICL was founded by Mr
Sanjeev Goel, who is a Chartered Accountant and holds Master's
Degree in International Finance from the University of Iowa. He
has an experience of more than 25 years. Furthermore, ICL has
been operating in the SME equipment financing for the last two
decades.
Incorporated in February 1994, ICL (formerly known as Intec
Securities Limited) is promoted by Mr Sanjeev Goel. In October
1994, the company was converted into a public limited company and
subsequently in September 2009, it was renamed to its present
name. ICL is registered with RBI as Non deposit accepting (ND)
NBFC (Asset Finance Company) and is listed at Bombay Stock
Exchange. ICL is primarily engaged in the business of providing
funding for office equipment, medical equipment, plant &
machinery, computer peripherals, etc, to small and medium
enterprises as well as government, semi-government and private
sector customers. These loans are given against hypothecation of
the equipment/ machinery. Following weakness in asset quality
Intec stopped fresh disbursements wef November 2016. Company's
tangible net worth was INR137.62 crore as on March 31, 2018 and
its total borrowings were INR202.17 crore leading to leverage of
1.47 times as on march 31, 2018. Company CAR and Tier 1 capital
was 37.64% and 37.24% respectively as on March 31, 2018.
Company's Gross and Net NPAs were INR39.52% and 32.60% as on
March 31, 2018.
K L VENTURES: CARE Lowers Rating on INR5cr LT Loan to D
-------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
K L Ventures & Enterprises (KLVE), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.00 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE BB-; Stable
on the basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from KLVE to monitor the
ratings vide e-mail communications/letters dated May 14, 2018,
August 6, 2018, August 7, 2018, August 8, 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 KLVE's bank facilities
will now be denoted as CARE D; ISSUER NOT COOPERATING.
The ratings have been revised on account of ongoing delays in
debt servicing of term loans, during past 12 months ended August
2018.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while
using the above rating(s).
Detailed description of the key rating drivers
Key Rating Weakness
Ongoing Delays in debt servicing: As per the interaction with the
banker, there have been ongoing delays of over 2-10 days in debt
servicing of term loans, during past 12 months ended August 2018.
Incorporated in 2011 by Mr. Satish Aggarwal, K L Ventures &
Enterprises (KLVE) belongs to the Lotus Group (LG), and is
engaged in construction & development of residential spaces. The
firm has recently completed a residential redevelopment project
named Bhagwati Kripa at Malad (West), spanning across a total
saleable area of 19,000 Sq. Ft. with G+9 floors of residential
spaces. Moreover, LG has developed many residential as well as
commercial spaces in Thane, Kandivali (West) and Malad (West).
Currently, KLVE is undertaking a residential redevelopment cum
fresh sale project named Satya Niwas Tower II at Malad (West),
spanning across a total area of 41,176.05 Sq. Ft. (including area
of tenant building, area of saleable building and common area)
with 2 wings (A wing would be existing tenant building comprising
G+9 floors with 3 1-BHK flats per floor, whereas B wing (saleable
area of 17,144.15 Sq. Ft.) would be new saleable building
comprising G+9 floors with 2 2-BHK flats per floor).
KD INFRAENGICON: CRISIL Maintains D Rating in Not Cooperating
-------------------------------------------------------------
CRISIL said the rating on bank facilities of KD Infraengicon
Private Limited (MDQKEPL) continues to 'CRISIL D/CRISIL D Issuer
not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 6.53 CRISIL D (ISSUER NOT
COOPERATING)
Cash Credit 8.40 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Fund- 1.57 CRISIL D (ISSUER NOT
Based Bank Limits COOPERATING)
CRISIL has been consistently following up with MDQKEPL earlier
known as Md. Quiyamuddin Khan Engineers Private Limited (QKEPL)
for obtaining information through letters and emails dated
Feb. 28, 2018 and Aug. 31, 2018 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 MDQKEPL, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on MDQKEPL
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 MDQKEPL continues to 'CRISIL D/CRISIL D Issuer not
cooperating'.
QKEPL, promoted in August 2010 by Ranchi-based Mr. Manzar Imam
Khan and his family members, undertakes civil construction,
primarily construction of roads, in Jharkhand and Bihar.
KELTECH INFRASTRUCTURE: CRISIL Keeps D Rating in Not Cooperating
----------------------------------------------------------------
CRISIL said the ratings on bank facilities of Keltech
Infrastructure Limited (KIL) continues to be 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 10 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with KIL for obtaining
information through letters and emails dated Feb. 28, 2018 and
Aug. 31, 2018 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 KIL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on KIL 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 KIL continues to be 'CRISIL D Issuer not
cooperating'.
Set up by Mr. Narendra Kumar in 2010, KIL is part of the Kumar
group. The company undertakes real estate construction and
development, mainly in and around Ghaziabad (Uttar Pradesh). It
has two on-going projects in Ghaziabad: Golf Vista in Crossing
Republic Township on National Highway 24, and Kumar Imperial
Greens in Greater Noida West Township. A third project, Keltech
Rize, is also on the drawing board.
KISAN MOULDINGS: CARE Lowers Rating on INR208.75cr Loan to D
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Kisan Mouldings Limited (KML), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 208.75 CARE D Revised from CARE B+;
Facilities Stable
Short-term Bank 91.25 CARE D Revised from CARE A4;
Facilities Stable
Detailed Rationale & Key Rating Drivers
The revision in the ratings assigned to the bank facilities of
KML is on account of delays in servicing of debt obligations.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delays in servicing of debt obligations: There have been
instances of delays reported by the Auditor.
Established in 1982, Kisan Mouldings Limited (KML) is primarily
involved in manufacturing of PolyVinyl Chloride (PVC) pipes and
fittings. They also manufacture custom moulded articles and
moulded furniture. It processes around 50,000 metric tonnes of
polymer each year. The products are marketed under its own brand
viz. KISAN & KML CLASSIC through 11 branch offices spread across
major cities catering to existing base of 100 distributors and
3,000 dealers' network. KML has its manufacturing units at 5
locations while its registered office is in Mumbai. They have
recently entered into manufacturing of water tanks, which is
operational in Maharashtra currently.
KND ENGINEERING: CRISIL Lowers Rating on INR35cr Loan to D
----------------------------------------------------------
CRISIL has downgraded its rating on the bank loan facilities of
KND Engineering Technologies Limited (KND) to 'CRISIL D/CRISIL D
Issuer not cooperating' from 'CRISIL B+/Stable/CRISIL A4 Issuer
not cooperating' as the company is in insolvency resolution
process under the provisions of Insolvency and bankruptcy code,
2016 (IBC) by order of (NCLT) National Company Law Tribunal.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 35 CRISIL D (ISSUER NOT
COOPERATING; Downgraded
from 'CRISIL A4 ISSUER NOT
COOPERATING')
Cash Credit 15 CRISIL D (ISSUER NOT
COOPERATING; Downgraded
from 'CRISIL B+/Stable
ISSUER NOT COOPERATING')
Proposed Bank 20 CRISIL D (ISSUER NOT
COOPERATING; Downgraded
from 'CRISIL B+/Stable
ISSUER NOT COOPERATING')
CRISIL has been consistently following up with KND 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.
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 KND, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on KND is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
KND, based in Kolkata, was incorporated in 1982, by Late Mr. K N
Dadina; it became a public limited company in 1991. The company
provides services such as soil investigation, geotechnical
studies and also undertakes foundation/piling works. It recently
forayed into civil construction segment. The Dadina family
manages the daily operations.
KONNECTING INDIA: CRISIL Maintains D Rating in Not Cooperating
--------------------------------------------------------------
CRISIL said the rating on bank facilities of with Konnecting
India (KI) continues to 'CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 12 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with KI for obtaining
information through letters and emails dated Feb. 28, 2018 and
Aug. 31, 2018 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 KI, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on KI 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 KI continues to 'CRISIL D Issuer not cooperating'.
KI, based in Mumbai and established in 2008 by Mr. Anmol Samat
and his mother Ms. Sapna Samat, trades in technical textile
fabrics.
LEOFORTUNE INFRA: CRISIL Keeps D Rating in Not Cooperating
----------------------------------------------------------
CRISIL said the rating on bank facilities of Leofortune
Infrabuildcon Private Limited (LIPL) continues to 'CRISIL D
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 15 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with LIPL for obtaining
information through letters and emails dated Feb. 28, 2018 and
Aug. 31, 2018 among others, apart from telephonic communication.
However, the issuer has remained non-cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 LIPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on LIPL 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 LIPL continues to 'CRISIL D Issuer not
cooperating'.
LIPL was incorporated in 2009 by Mr. Pradeep K Swami, Mr.
Sitapathy Chavali, Mr. Dhiren Savla, Mr. Prasad K Swami and Mr.
Vasant D Bhambhaniya. The company is engaged in real estate
development in Navi Mumbai. The company currently has three
ongoing projects - Fortune Symphony, Fortune Calypso and Fortune
Oriana.
MAILAM SUBRAMANIYA: CARE Reaffirms B+ Rating on INR4.87cr Loan
--------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Mailam Subramaniya Swamy Educational Trust (MSSET), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 4.87 CARE B+; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of MSSET is
constrained by the declining income and surplus margin,
elongation in collection period and inherent cash flow mismatches
in the sector, exposure to group entity and presence in highly
regulated industry. The rating, however, draws strength from the
long-standing experience of the trustees and long operational
track record of the trust and moderate capital structure.
Going forward, ability of the trust to increase student intake
thereby improving its income and manage operational cost and
exposure to group entities would be key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Declining revenue and surplus margin: The trust reported drop of
7% in total income in FY18 (refers to the period April 1 to
March 31) due to lower student intake. Further, surplus margin
witnessed continuous fall over the past few years mainly due to
increase in salary cost and cost incurred on account of
scholarships offered by the trust to meritorious students from
minority communities from FY16 on the back of lower income
levels.
Elongation in collection period and inherent cash flow mismatch:
Fee payment by majority of students is done during July-August
every year. However, the trust provides additional time for fee
payments to students belonging to lower economic strata resulting
in stretching of collection period. Further, the trust encounters
mismatch in cash flows on account of annual cash inflow in the
form of fee receipts while it incurs regular operational
expenditure by way of salary payments, lab expenses, admin
expenses, etc.
Exposure to group entity: The Trustees of MSSET manage another
educational trust which operates six colleges in Puducherry.
MSSET had advanced INR11.71 crore to SMVET as of March 31, 2018
(PY: INR16.71 crore). Gearing adjusted for the exposure stood at
0.25x as on March 31, 2018 (PY: 0.52x).
Presence in highly regulated industry: The education sector is
highly regulated in India. In addition to AICTE, the engineering
colleges are regulated by respective state governments in various
aspects which have significant impact on the revenues and
profitability of educational institutions and limit their
financial flexibility.
Key Rating Strengths
Established track record of the trust with experienced trustees:
The trust has been operational for more than two decades with
experienced trustees at the helm. The Chairman of the Trust, Mr
Dhanasekaran, has around 19 years of experience in the academic
sector and is ably supported by Mr Sugumaran, Vice Chairman who
also has 19 years of experience in the sector. The day-to-day
operations of the institute are managed by the Administrative
Officer, Mr Sivanandam who is supported by administrative staff.
Moderate capital structure: The capital structure of the trust is
moderate with a net worth base of INR36.43 crore and overall
gearing of 0.17x as on March 31, 2018 (PY: 0.27x). The trust has
not availed any working capital facilities. The total debt to GCA
improved and stood at 3.19 years as on March 31, 2018. MSSET
reported cash and bank balance of INR0.64 crore as on even date.
MSSET was founded by Mr N Kesavan in 1996. The trust established
Mailam Engineering College (MEC) in Villupuram district, Tamil
Nadu in 1998. MEC is approved by the AICTE, New Delhi and is
affiliated to Anna University, Chennai. The college offers six
undergraduate and six post graduate engineering and management
courses and has total student strength of around 3,000.
MARUTI METAL: CRISIL Maintains D Rating in Not Cooperating
----------------------------------------------------------
CRISIL said the rating on bank facilities of Maruti Metal
Industries (MMI) continues to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL D (ISSUER NOT
COOPERATING)
Letter of Credit 9.5 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Long Term 13.05 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING)
Standby Line of .45 CRISIL D (ISSUER NOT
Credit COOPERATING)
CRISIL has been consistently following up with MMI for obtaining
information through letters and emails dated Feb. 28, 2018 and
Aug. 31, 2018 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 MMI, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on MMI 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 MMI continues to be 'CRISIL D/CRISIL D Issuer not
cooperating'
MMI, based in Bhavnagar (Gujarat), is a partnership firm set up
in 2003. Managed by Mr. Mahendrakumar Rana, the firm trades in
non-ferrous metals such as bronze, copper, nickel, zinc, and
lead.
MEENAKSHI ENERGY: Ind-Ra Lowers Long Term Issuer Rating to 'D'
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Meenakshi
Energy Pvt Ltd.'s bank loan ratings to 'IND D (ISSUER NOT
COOPERATING)' from 'IND BBB (ISSUER NOT COOPERATING)'. The issuer
did not participate in the rating exercise, despite continuous
requests and follow-ups by the agency. Thus, the rating is based
on the best available information. Therefore, investors and other
users are advised to take appropriate caution while using these
ratings.
The detailed instrument-wise rating actions are:
-- INR10.570 bil. Senior bank loan phase I (long-term)
downgraded with IND D (ISSUER NOT COOPERATING) rating;
-- INR23,311.7 bil. Senior bank loan phase II (long-term)
downgraded with IND D (ISSUER NOT COOPERATING) rating; and
-- INR11.310 bil. Additional term loan (long-term) downgraded
with IND D (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; Based on
the best available information.
KEY RATING DRIVERS
The rating action reflects delays by Meenakshi Energy in the
servicing of payments towards the bank loans which fell due
during July 2017 to March 2018, as reported in the company's FY18
financial statement.
RATING SENSITIVITIES
Positive: Timely debt servicing for three consecutive months will
lead to a positive rating action.
COMPANY PROFILE
Meenakshi Energy, founded by the Meenakshi Group of companies, is
implementing coal-based thermal power plants of 300MW (2 X 150MW)
and 700MW (2 X 350MW) in two phases in the coastal area of
Thaminappatnam in Andhra Pradesh at a cost of INR14,280 million
and INR50,050 million, respectively. The phase I of the project
has been operational since April 2013, while the phase II is
under construction.
According to announcement by NSE, the acquisition of Meenakshi
Energy by India Power Corporation Limited (IPCL) was completed on
September 30, 2016 and shareholding in Meenakshi Energy was
95.07%. According to FY18 annual report of IPCL, its entire
shareholding in Meenakshi Energy had been fully pledged with SBI
CAP Trustee Company Limited on behalf of the lenders. Pledge on
these shares was invoked on 2 May 2018. IPCL has filed a suit in
this regard and related developments and the matter is sub-
judice.
MOHAN GEMS: CRISIL Maintains 'D' Rating in Not Cooperating
----------------------------------------------------------
CRISIL said the ratings on bank facilities of Mohan Gems and
Jewels Private Limited (MGJPL) continues to be 'CRISIL D Issuer
not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 100 CRISIL D (ISSUER NOT
COOPERATING)
Funded Interest 25 CRISIL D (ISSUER NOT
Term Loan COOPERATING)
Working Capital 225 CRISIL D (ISSUER NOT
Term Loan COOPERATING)
CRISIL has been consistently following up with MGJPL for
obtaining information through letters and emails dated Feb. 28,
2018 and August 31, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 MGJPL, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on MGJPL 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 MGJPL continues to be 'CRISIL D Issuer not
cooperating'.
MGJPL, promoted by Mr. Murari Lal Soni, is a private limited
company incorporated in 2006. It manufactures gold jewellery
ranging from 18 to 24 carats. The company also has a retail
showroom in the Karol Bagh area of Delhi.
MUSADDILAL MANSARAM: CARE Assigns B Rating to INR0.2cr LT Loan
--------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Musaddilal Mansaram Rice Mill, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facility 0.20 CARE B; Stable Assigned
Short-term Bank
Facility 6.00 CARE A4
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of Musaddilal
Mansaram Rice Mill are constrained by its constitution as a
partnership entity, small scale of operation with low
profitability margins, fragmented and competitive nature of
industry, regulated nature of industry, high working capital
intensity and exposure to vagaries of nature and leveraged
capital structure with weak debt coverage indicators. However,
the aforesaid constraints are partially offset by its experienced
partners with satisfactory track record of operation, close
proximity to raw material sources and stable demand outlook of
rice.
The ability of the entity to grow its scale of operations and
improve its profit margins and ability to manage working capital
effectively would be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Strengths
Experienced partners with satisfactory track record of operation:
Musaddilal Mansaram Rice Mill has been engaged in rice milling
and processing business since 1995. Hence, they have a
satisfactory track record of more than two decades. Mr.
Bajranglal Agarwal (Partner) along with other partners Mr. Sanjay
Kumar Agarwal and Mr. Manoj Kumar Agarwal who have around 23
years, 20 years and 30 years of experiences, respectively, in
similar line of business, are looking after the day to day
operation of the entity.
Close proximity to raw material sources and stable demand outlook
of rice: Musaddilal Mansaram Rice Mill's plant is located in
Raigarh District, Chhattisgarh which is in close proximity to the
paddy growing areas of the state. The entire raw material
requirement is met locally from the farmers helping the entity to
save simultaneously on transportation cost and paddy procurement
cost. Further, rice being a staple food grain with India's
position as one of the largest producer and consumer, demand
prospects for the industry is expected to remain good in near to
medium term. Rice, being one of the primary food articles in
India, demand is high throughout the country and with the change
in life style and health consciousness; by-products of the same
like rice bran oil etc. are in huge demand.
Key Rating Weaknesses
Constitution as a partnership entity: Musaddilal Mansaram Rice
Mill, being a partnership entity, is exposed to inherent risk of
the partner's capital being withdrawn at time of personal
contingency and entity being dissolved upon the death/insolvency
of the partner. Furthermore, partnership entities have restricted
access to external borrowing as credit worthiness of partner
would be the key factors affecting credit decision for the
lenders.
Small scale of operation with moderate profitability margins:
Musaddilal Mansaram Rice Mill is a relatively small player in the
rice milling and processing business having total operating
income and PAT of INR4.36 crore and INR0.15 crore, respectively,
in FY18 (provisional). The PBILDT and PAT margins of the entity
was moderate at 27.06% and 5.14% in FY18 (provisional). The net
worth of the entity was also low at INR0.67 crore as on March 31,
2018. Small scale of operations with low net worth base limits
the credit risk profile of the entity in an adverse scenario.
This apart, the entity has achieved sale of INR0.51 crore during
4MFY19.
Fragmented and competitive nature of 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.
Regulated nature of industry: The Government of India (GoI)
decides a minimum support price (MSP-to be paid to paddy growers)
for paddy every year limiting the bargaining power of rice
millers over the farmers. The MSP of paddy was increased during
the crop year 2018-19 to INR1750/quintal from INR1550/quintal in
crop year 2017-18. Given the market determined prices for
finished product vis-a-vis fixed acquisition cost for paddy, the
profitability margins are highly volatile. Such a situation does
not augur well for the entity, especially in times of high paddy
cultivation.
High working capital intensity and exposure to vagaries of
nature: Rice milling is a working capital intensive business as
the rice millers have to stock rice by the end of each season
till the next season as the price and quality of paddy is better
during the harvesting season. Further, the millers are required
to extend a credit period of around 30 days to its customers.
Also, paddy cultivation is highly dependent on monsoons, thus
exposing the fate of the entities' operation to vagaries of
nature. Accordingly, the working capital intensity remains high
leading to higher stress on the financial risk profile of the
rice milling units.
Leveraged capital structure with weak debt coverage indicators:
Capital structure of the entity remained leveraged as marked by
long term debt-equity ratio and overall gearing ratio of 10.25x
respectively, as on March 31, 2018 (Provisional). Furthermore,
the debt coverage indicators remained weak as marked by total
debt to GCA ratio of 20.21x in FY18 (Provisional). Moreover,
interest coverage ratio remained satisfactory at 1.53x in FY18
(Provisional).
Musaddilal Mansaram Rice Mill was established in February 1995
with an objective to enter into the rice milling and processing
business. It is a partnership entity, currently carrying out the
business by three partners. The entity earns around 75% of
revenue from custom milling and balance 25% revenue from own
milling. The manufacturing unit of the entity is located at Vill:
Thusekela, Sakti Road, Kharsia, Raigarh, Chhattisgarh- 496661
with an installed capacity of 57600 metric tons per annum. The
entity is procuring raw paddy from the local farmers and small
paddy agents for own milling and from FCI for custom milling. Mr.
Bajranglal Agarwal (Partner) along with other partners Mr. Sanjay
Kumar Agarwal and Mr. Manoj Kumar Agarwal who have around 23
years, 20 years and 30 years of experiences, respectively, in
similar line of business, are looking after the day to day
operation of the entity.
MY CAR: Ind-Ra Lowers Long Term Issuer Rating to 'D'
----------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded My Car Private
Limited's Long-Term Issuer Rating to 'IND D (ISSUER NOT
COOPERATING)' from 'IND B (ISSUER NOT COOPERATING)'. The issuer
did not participate in the rating exercise despite continuous
requests and follow-ups by the agency. Thus, the rating is based
on the best available information. Therefore, investors and other
users are advised to take appropriate caution while using the
rating. The rating will now appear as 'IND D (ISSUER NOT
COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR6.21 mil. Term loan (long term) downgraded with IND D
(ISSUER NOT COOPERATING) rating; and
-- INR245 mil. Fund-based limit (Long term) downgraded with
IND D (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; Based on
the best available information
KEY RATING DRIVERS
The downgrade reflects delays in debt servicing by My Car and the
company's classification as a non-performing asset since June
2018.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months will positive for the ratings.
COMPANY PROFILE
Incorporated in 2009, My Car is a dealer for Maruti Suzuki's
passenger vehicles in Kanpur, Uttar Pradesh. All its showrooms
and workshops are owned. Vijay Garg is the promoter.
OASIS TRADELINK: CARE Lowers Rating on INR15cr LT Loan to D
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Oasis Tradelink Limited (OTL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 15.00 CARE D Revised from CARE BB;
Stable
Short-term Bank
Facilities 15.00 CARE D Revised from CARE A4
Detailed Rationale & Key Rating Drivers
The ratings for the bank facilities of OTL take into account on-
going delays in its debt servicing obligations owing to stretched
liquidity owing to elongation in its collection period along with
withdrawal of unsecured loans infused by promoters that had
earlier supported its funding requirements.
Detailed description of the key rating drivers
Key Rating Weaknesses
Overdrawing in working capital limits for more than 30
consecutive days: OTL's collection period had elongated over the
last few months due to delay in receipt of payments from its
customers. This along with withdrawal of unsecured loans by the
promoters that had supported its funding requirements resulted in
stress on its liquidity, which led to overdrawal in its working
capital limits for more than 30 consecutive days
Ahmedabad-based OTL, incorporated in 1996 as Oasis Tradelink
Private Limited, is engaged in the business of edible oil
packaging, branding and marketing. OTL sells its product under
the brand name of 'Maruti' which is a well-recognized name in
edible oil segment in Gujarat. It primarily procures wash oil
from the seed crushers and gets it refined from other oil
refining entities on job-work basis, post which, it carries out
the packaging, marketing and distribution of the end products.
OTL is promoted by Mr. Snehal B. Patel and his family members and
has a packaging unit in Kadi, Gujarat.
ORIGIN CORPORATION: CRISIL Maintains D Rating in Not Cooperating
----------------------------------------------------------------
CRISIL said the rating on bank facilities of Origin Corporation
(OC) continues to be 'CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6.15 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Long Term
Bank Loan Facility .67 CRISIL D (ISSUER NOT
COOPERATING)
Term Loan .68 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with OC for obtaining
information through letters and emails dated February 28, 2018
and August 31, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 OC, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on OC 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 OC continues to be 'CRISIL D Issuer not
cooperating'.
OC was set up in 2006 in Indore (Madhya Pradesh) by Mr. Tapash
Roy, Mrs. Ajanta Roy, and Mr. Animesh Roy. It was initially
involved in trading in polyester yarn. However, in 2008, the firm
started processing polyester yarn in the count range of 20s to
80s. Gradually, it also started manufacturing sewing threads.
P NARASIMHA: CRISIL Maintains 'D' Rating in Not Cooperating
-----------------------------------------------------------
CRISIL said the ratings on bank facilities of P Narasimha Rao and
Company (PNRC) continues to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 5.5 CRISIL D (ISSUER NOT
COOPERATING)
Cash Credit 2.5 CRISIL D (ISSUER NOT
COOPERATING)
Long Term Loan 1.33 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Long Term 3.67 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING)
CRISIL has been consistently following up with PNRC for obtaining
information through letters and emails dated Feb. 28, 2018 and
Aug. 31, 2018 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 PNRC, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on PNRC 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 PNRC continues to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
PNRC was set up in 2004 by Mr. P Narasimha Rao and his family
members. The firm constructs roads and bridges in Andhra Pradesh
and Telangana, and undertakes contract work for the Railways,
such as laying and maintenance of railway tracks. It is based in
Hyderabad.
P Z ESTATES: CRISIL Assigns 'B' Rating to INR20cr Term Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term
bank facility of P Z Estates Private Limited (PZEPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Term Loan 20 CRISIL B/Stable
The rating reflects the company's exposure to implementation and
funding risks related to ongoing project. These weaknesses are
partially offset by promoter's experience in the construction and
real estate segments.
Key Rating Drivers & Detailed Description
Weaknesses:
* Exposure to project implementation risk: PZEPL is currently
setting up a naturopathy centre that is in initial stage. Timely
completion of this project will determine liquidity over the
medium term.
* Funding risk: Term loan of INR17 crore for the project has not
yet been sanctioned. Hence, timely funding will be a key
sensitivity factor.
Strengths:
* Experience of promoter: Presence of around two decades in the
construction segment has enabled the promoter to understand local
market dynamics and establish healthy relationship with customers
and suppliers.
Outlook: Stable
CRISIL believes PZEPL will continue to benefit from the
experience of its promoter. The outlook may be revised to
'Positive' if there are more-than-expected realisations from
ongoing project, along with prudent working capital management.
The outlook may be revised to 'Negative' if lower-than-expected
revenue or profitability or stretched working capital cycle
weakens financial risk profile, especially liquidity.
PZEPL was established in 1996 as a special-purpose vehicle by
Silverline Holdings Pvt Ltd to set up a naturopathy centre in
Village Sarai, District Mewat, Haryana.
PAGODA STEELS: CRISIL Maintains 'D' Rating in Not Cooperating
-------------------------------------------------------------
CRISIL said the ratings on bank facilities of Pagoda Steels
Private Limited (PSPL) continues to be 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 12.00 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Long Term 0.59 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING)
Term Loan 2.41 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with PSPL for obtaining
information through letters and emails dated February 28, 2018
and August 31, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 PSPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on PSPL 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 PSPL continues to be 'CRISIL D Issuer not
cooperating'.
PSPL was established in 2005; in 2012, the Bhavnagar (Gujarat)-
based Patel family took over the company's operations. PSPL is
currently being managed by Mr. Jignesh R Patel. The company
manufactures TMT bars under its brand, Pagoda, at its facility in
Bhavnagar.
PELICAN INTERNATIONAL: CRISIL Keeps D Rating in Not Cooperating
---------------------------------------------------------------
CRISIL said the ratings on bank facilities of Pelican
International Private Limited (PIPL) continues to be 'CRISIL
D/CRISIL D Issuer not cooperating'
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit .25 CRISIL D (ISSUER NOT
COOPERATING)
Letter of Credit 18.75 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with PIPL for obtaining
information through letters and emails dated February 28, 2018
and August 31,2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 PIPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on PIPL 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 PIPL continues to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
PIPL was incorporated in 2005 by Mr. Girish Aggarwal. The company
trades in tyres and mild steel products. The company is based in
Hyderabad, Andhra Pradesh.
PINK ROSE: Ind-Ra Lowers Long Term Issuer Rating to 'D'
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Pink Rose
Lingerie Pvt Ltd.'s (PRPL) Long-Term Issuer Rating to 'IND D
(ISSUER NOT COOPERATING)' from 'IND B+ (ISSUER NOT COOPERATING)'.
The issuer did not participate in the rating exercise, despite
continuous requests and follow-ups by the agency. The rating
action is based on the best available information. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will now appear as 'IND D
(ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR8.68 mil. Term loan downgraded with IND D (ISSUER NOT
COOPERATING) rating;
-- INR85 mil. Fund-based limit downgraded with IND D (ISSUER NOT
COOPERATING) rating; and
-- INR120 mil. Non-fund-based limit downgraded with IND D
(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; Based on
the best available information.
KEY RATING DRIVERS
The downgrade reflects delays in debt servicing by PRPL. The
account has been classified as a non-performing asset for the
five months ended February 2018.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months will positive for the ratings.
COMPANY PROFILE
PRLPL was incorporated in 2008 as a private limited company in
Bangalore. It manufactures innerwear for women under the brand
name Laavian. The company is managed by Santosh Kumar and
Madumati Kumar.
PRABIR FOODSTUFF: CRISIL Maintains D Rating in Not Cooperating
--------------------------------------------------------------
CRISIL said the ratings on bank facilities of Prabir Foodstuff
Factory (PFF) continues to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 13 CRISIL D (ISSUER NOT
COOPERATING)
Warehouse Financing 15 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with PFF for obtaining
information through letters and emails dated February 28, 2018
and August 31, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 PFF, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on PFF 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 PFF continues to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
PFF, set up in 2005 by Mr. Kuljit Singh, mills and sorts basmati
and non-basmati rice. It sells its rice under the brands
Victoria, 777, KR, and Flying Horse. The firm has a rice milling
and sorting facility in Amritsar (Punjab), with a capacity of 12
tonnes per hour.
PRACHIN FOUNDATION: CRISIL Maintains D Rating in Not Cooperating
----------------------------------------------------------------
CRISIL said the ratings on bank facilities of Prachin Foundation
(Prachin) continues to be 'CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 7.09 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Long Term 2.91 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING)
CRISIL has been consistently following up with Prachin for
obtaining information through letters and emails dated
February 28, 2018 and August 31, 2018 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 Prachin, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on Prachin
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 Prachin continues to be 'CRISIL D Issuer not
cooperating'.
Prachin, based in Hyderabad (Telangana), was established by Mr. G
Satyanarayana in June 2009. The society has a franchisee
agreement with GIFL, Singapore, to manage the Global Indian
International School. The school offers education from pre-school
to high school level. Its operations are managed by Mr. A
Venkateswara Rao.
RAJAPUR MINERALS: Ind-Ra Migrates B+ LT Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Rajapur
Minerals' Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND B+ (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR21 mil. Term loans due on January 2020 migrated to non-
cooperating category with IND B+ (ISSUER NOT COOPERATING)
rating; and
-- INR29 mil. Fund-based working capital limits migrated to non-
cooperating category with IND B+ (ISSUER NOT COOPERATING) /
IND A4 (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
September 7, 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 2002, Rajapur Minerals is engaged in the
extracting, crushing, screening and transportation of iron ore.
RAM'S ASSORTED: Ind-Ra Affirms BB+ Issuer Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Ram's Assorted
Cold Storage Limited (RACSL) a Long-Term Issuer Rating of 'IND
BB+'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR350 mil. Fund-based limits assigned with IND BB+/Stable
rating; and
-- INR150 mil. Proposed fund-based limits* assigned with
Provisional IND BB+/Stable rating.
* The rating is provisional and shall be confirmed upon the
sanction and execution of loan documents for the above facilities
by RACSL to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The ratings reflect RACSL's modest profitability and modest
credit metrics. Its EBITDA margin fell to 5.3% in FY18 from 6.1%
in FY17 owing to a decline in the average realization of prawns
because of stiff competition. Its return on capital employed was
9% in FY18 (FY17: 7%). Moreover, its interest coverage (absolute
EBITDAR/interest cost) improved to 1.9x in FY18 from 1.5x in
FY17, with net financial leverage (net debt/absolute EBITDAR)
enhancing to 5.0x from 6.2x. The improvement in the credit
metrics was primarily driven by a substantial rise in absolute
EBITDAR to INR82 million in FY18 from INR67 million in FY17.
The ratings also reflect a modest liquidity, indicated by an
average fund-based limit utilization of 99% for the 12 months
ended July 2018. RACSL has kept a healthy fixed deposit of
INR46.58 million in FY18 (FY17: INR47.67 million) against the
fund-based limits of INR350 million as an earmark.
The ratings further reflect a high geographical concentration
risk faced by RACSL, given it generates the majority of revenue
from overseas, including the US, which contributed almost 40% to
revenue in FY18.
The ratings, however, are supported by a rise in RACSL's revenue
to INR1,549 million in FY18 from INR1,098 million in FY17, driven
by a rise in prawn sales volume. The scale of operations is
medium.
The ratings also benefit from the decade-long experience of the
promoter in the seafood industry.
RATING SENSITIVITIES
Negative: Any fall in EBITDAR, leading to any deterioration in
the credit metrics, will be negative for the ratings.
Positive: Any rise in the scale of operations and the EBITDAR
margin, leading to any significant improvement in the credit
metrics, will be positive for the ratings.
COMPANY PROFILE
Incorporated in 1986, RACSL is primarily engaged in seafood
processing and exports. Its shrimp processing units are in
Cuttack and Pradeep.
RAVI CAM: CARE Migrates B+ Rating From Not Cooperating Category
---------------------------------------------------------------
CARE Ratings has migrated the rating on bank facility of Ravi Cam
Manufacturing Private Limited (RCPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 5.23 CARE B+; Stable Revised
Facilities from CARE B+; Issuer Not
Cooperating
In the absence of minimum information required for the purpose of
rating, CARE was unable to express an opinion on the rating of
RCPL and in line with the extant SEBI guidelines, CARE had
revised the ratings of bank facilities of the company to 'CARE
B+; Stable; ISSUER NOT COOPERATING'. However, the company has now
submitted the requisite information to CARE. CARE has carried out
a full review of the ratings and the rating stand at 'CARE B+;
Stable'.
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of RCPL factors in the
small scale of operations with low capitalization, fluctuating
income, moderate solvency position, working capital intensive
nature of operations, susceptibility of margins to volatility in
key raw material prices, and foreign exchange rates and presence
of the company in a highly fragmented auto component
manufacturing industry.
The ratings, however, derive strength on from the extensive
experience of the promoters, long track record of over three
decades, reputed customer base and moderate profitability
margins. The ability of the company to increase its scale of
operations and efficiently manage its working capital
requirements while improving its solvency position are the key
rating sensitivities.
Key Rating Weaknesses
Small scale of operation with low capitalization: The scale of
operations of the company remained small with total operating
income (TOI) of INR11.41 crore in FY18 (Provisional) and total
net worth of INR5.06 crore as on March 31, 2018 thus limiting
financial flexibility of the company in times of stress and
depriving the company form the benefits of scale.
Moderate solvency position: The capital structure of the company
was moderate as reflected by an overall gearing ratio of 2.07x as
on March 31, 2018. Moreover, with moderate margins and gearing
levels, the debt coverage indicators were comfortable as
indicated by a PBILDT interest coverage ratio of 2.02 times in
FY18.
Working capital intensive nature of operations: Operations of
RBPL are working-capital-intensive in nature due to the low
bargaining power against its customers resulting in stretched
collection period as reflected by high gross current asset of 330
days in FY18. The working capital requirements are met through
cash credit facility which remained utilized at a higher level
for last 12 months ended August, 2018.
Presence of the company in highly fragmented and competitive
industry: RCPL operates in an auto component industry
characterized by high competition due to low entry barriers, high
fragmentation and presence of a large number of players in the
organized and unorganized sector. Thus the companies operating in
the segment have a low bargaining power vis-a-vis their
customers.
Susceptibility of operating margin to volatility in raw material
prices: The raw materials (grey cast iron castings) required by
RCPL are highly volatile in price. Hence, the profit margins of
the company are exposed to any sudden spurt in the raw material
prices. However, long term ties with its suppliers for purchase
of aforesaid raw materials reduce the risk of price volatility to
some extent.
Foreign exchange fluctuation risk: The company has availed
foreign currency term loans (USD) which exposes it to the foreign
exchange fluctuation risk. However, RCPL exports its products to
USA and UK providing a natural hedge, to a certain extent.
Key Rating Strengths
Experienced promoters along with operational linkages with merged
group concern: RCPL is managed by the Mulik family of Kolhapur.
Promoters have an average experience of more than three decades
in the business of manufacturing of cam shaft. Being in the
business for so long has helped the promoters in gaining adequate
acumen about the business which aids in smooth operations of the
business.
Moderate profitability and cash accruals: The profitability
margins of the company remained moderate during the past three
years ending FY18 with operating margin remaining in the range of
21.95-21.03% and PAT margin in the range of 8.05-2.80%. The gross
cash accruals has seen a y-o-y growth of 30% in FY18.
Kolhapur-based (Maharashtra) RCPL was incorporated in November
11, 1984 and is engaged in manufacturing of auto components,
namely cam shafts, used in the automobile industry, power
generation industry and shipping industry. RCPL had two group
companies namely Bharat Cam Industries (BCI) and V.R. Industries
(VRI) managed by same promoters and were operating in same line
of business as RCPL. On April 1, 2016, the two entities were
merged into RCPL.
REDHU FARMS: CRISIL Maintains 'D' Rating in Not Cooperating
-----------------------------------------------------------
CRISIL said the ratings on bank facilities of Redhu Farms Private
Limited (RFPL; part of the Redhu group) continues to be 'CRISIL D
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 21 CRISIL D (ISSUER NOT
COOPERATING)
Term Loan 2.69 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with RFPL for obtaining
information through letters and emails dated February 28, 2018
and August 31, 2018 among others, apart from telephonic
communication. However, the issuer has remained non-cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 RFPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on RFPL 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 RFPL continues to be 'CRISIL D Issuer not
cooperating'.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of RFPL and Redhu Hatcheries Pvt Ltd
(RHPL). This is because the two companies, together known as the
Redhu group, operate in the same line of business, and have a
common management team, along with financial and business
linkages, and intra-group transactions. Moreover, RHPL and RFPL
have extended corporate guarantees to each other's bank
facilities.
RFPL (incorporated in 1997) and RHPL (1992) are engaged in
poultry farming. The Redhu group sells day-old chicks, eggs, and
culls, and trades in poultry feed. The group entered the broiler
business in 2008-09. The hatchery units and broiler farms are at
Jind (Haryana) and near Pilani (Rajasthan).
REDHU HATCHERIES: CRISIL Maintains D Rating in Not Cooperating
--------------------------------------------------------------
CRISIL said the ratings on bank facilities of Redhu Hatcheries
Private Limited (RHPL; part of the Redhu group) continues to be
'CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 24.8 CRISIL D (ISSUER NOT
COOPERATING)
Term Loan 10.76 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with RHPL for obtaining
information through letters and emails dated February 28,2018 and
August 31,2018 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 RHPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on RHPL 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 RHPL continue to be 'CRISIL D Issuer not
cooperating'.
For arriving at the rating, CRISIL has combined the business and
financial risk profiles of RHPL and Redhu Farms Pvt Ltd (RFPL).
This is because the two companies, together known as the Redhu
group, operate in the same line of business, and have a common
management team, along with financial and business linkages, and
intra-group transactions. Moreover, RHPL and RFPL have extended
corporate guarantees to each other's bank facilities.
RHPL (incorporated in 1992) and RFPL (1997) are engaged in
poultry farming. The Redhu group sells day-old chicks, eggs, and
culls, and trades in poultry feed. The group entered the broiler
business in 2008-09. The hatchery units and broiler farms are at
Jind (Haryana) and near Pilani (Rajasthan).
REGEN INFRASTRUCTURE: CARE Cuts Rating on INR20cr LT Loan to D
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Regen Infrastructure and Services Private Limited (RISPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term bank 20.00 CARE D Revised from CARE BB;
Facilities Stable
(Fund Based)
Long/Short term 15.00 CARE D Revised from CARE BB;
Bank facilities Stable/CARE A4
(Non-Fund Based)
Detailed Rationale
The revision in ratings reflects on going delays in servicing
debt obligations.
Detailed Rationale and Key Rating Drivers
Key Rating Weaknesses
On account of delays in realising receivables, the company's
liquidity position has deteriorated which led to delays in
servicing its debt obligations.
Regen Infrastructure and Services Private Limited (RISPL) was
incorporated in January 2008 to provide wind power solutions on
turnkey basis. The company is a wholly owned subsidiary of Regen
Power Tech Private Ltd. (RPPL) (CARE D). Till FY17, RISPL was
engaged in the business of erection, installation and
commissioning of Wind Energy Generators (WEGs), providing O&M
services for WEGs installed by RPPL only, creating infrastructure
such as site development and providing power evacuation facility
for wind power projects. Post FY17, EPC activities of the company
will be taken over by RPPL and RISPL will focus only on providing
O&M services to clients of RPPL.
RYTHU MITRA: CRISIL Retains D Rating in Not Cooperating Category
----------------------------------------------------------------
CRISIL said the ratings on bank facilities of Rythu Mitra
Fertilizers Private Limited (RMF) continues to be 'CRISIL D
Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.75 CRISIL D (ISSUER NOT
COOPERATING)
Long Term Loan 10.25 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with RMF for obtaining
information through letters and emails dated February 28,2018 and
August 31,2018 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 RMF, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on RMF 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 RMF continues to be 'CRISIL D Issuer not
cooperating'.
RMF, based in Andhra Pradesh, is engaged in manufacturing of
nitrogen, phosphorus and potassium (NPK) fertilizer. RMF is
promoted by Mr. M Sambasiva Rao and Mr. G Gopichand.
SAMARTTHA TRIMURTI: CARE Hikes Rating on INR15cr LT Loan to BB-
---------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Samarttha Trimurti Properties (STP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 15.00 CARE BB-; Stable Revised from
CARE B+; Stable
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of STP has been
revised on account of achievement of financial closure for the
debt with increase in sales velocity of the area launched coupled
with inflow of receivables. The rating continues to derive
strength from the experience of the promoter in real estate
development in Pimpri-Chinchwad, receipt of approvals and
clearances for the project and strategic location of the project.
The rating, however, continues to remain constrained on account
of project execution risk due to high dependence on customer
advances, competition from other real estate players in the
region coupled with inherent cyclicality associated with the real
estate industry along with partnership nature of constitution
leading to limited financial flexibility.
The ability of the firm to complete the project as per the
schedule within envisaged cost, thereby enabling timely inflow
of the receivables and sell the inventory as estimated rates are
the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Strengths
Experienced promoter group in real estate development in Pune:
STP is a part of Samarth Group which is one of the established
real estate groups of Pune. The group has been engaged in real
estate business since, past fifteen years and has completed
around fifteen residential and commercial projects with an area
of 18.73 lakh square feet (lsf). Also, the group currently has
nine on-going projects in Pune with total saleable area of 12.40
lsf.
Receipt of approvals and clearances for the project: STP has
received all the necessary clearances and approvals for the
project related to land acquisition and construction.
Commencement certificate from the Pimpri Chinchwad Municipal
Corporation has been received. Further, the said land has also
been converted to non-agriculture use and environmental clearance
for the project has also been obtained. Furthermore, the project
has been registered with Maharashtra RERA.
Strategic location of the project: STP is currently developing a
project namely 41 Estara at Punawale, Pune which is very well
connected to Mumbai Pune Highway. The project is residential
project with modern amenities targeting customers from the middle
class and business class. In addition, the project is situated in
area with easy access to basic civic amenities such as schools,
hospitals, colleges, malls, situated close by and is also in
close proximity to Hinjewadi IT park and Pune Mumbai Expressway.
Key Rating Weaknesses
Project execution risk to high dependence on customer advances:
The project is heavily dependent on customer advances as it is
assumed to fund 40% of the total project cost. However, the debt
has been tied up for the project and the entity has already
incurred 30% of the total project cost as on June 30, 2018 which
was funded through promoter funds, customer advances and debt in
the ratio of 0.18:0.10:0.72. Further, the firm has sold 34% of
the saleable area. The ability of the entity to complete the
project as per schedule within the envisaged cost and achieve the
project sales at the assumed price will be critical from credit
perspective.
Cyclical nature of the real estate industry: The firm is exposed
to the cyclicality associated with the real estate sector which
has direct linkage with the general macroeconomic scenario,
interest rates and level of disposable income available with
individuals. In case of real estate companies, the profitability
is highly dependent on property markets. A high interest rate
scenario could discourage the consumers from borrowing to finance
the real estate purchases and may depress the real estate market.
Presence in a competitive environment: Real Estate industry in
India is highly fragmented with most of the real estate
developers having region-specific presence. STP also faces
competition from other real-estate developers who are coming up
with residential projects in Punawale, Pune such as Pethkar
Siyona, Twin Arc and My Home and such other upcoming projects.
However, the partners have a good understanding of the region and
its dynamics which partly mitigates this risk Partnership nature
of constitution: STP's constitution as a partnership firm
restricts its access to external borrowing owing to its
partnership nature of constitution. Furthermore, the firm is
exposed to inherent risk of partners' capital being withdrawn at
time of personal contingency. This limits the financial
flexibility of the firm.
Established in the year 2012, STP is the special purpose vehicle
of Samartha Group (SG). SG is one of the reputed real estate
group in Pune. The group has completed 15 projects in the last 15
years, with a total saleable area of 17.37 lakh sq. feet. STP was
established with a view to execute the real estate project namely
"41 Estara" in Punawale, Pune.
SANGHAVI EXPORTS: CARE Migrates D Rating to Not Cooperating
-----------------------------------------------------------
CARE Ratings has migrated the rating on bank facility of Sanghavi
Exports International Pvt. Ltd. (SEIPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 544.50 CARE D; ISSUER NOT COOPERATING;
Facilities Based on best available
(Fund Based) Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 23, 2017, placed the
rating(s) of SEIPL under the 'issuer non-cooperating' category as
ABC had failed to provide information for monitoring of the
rating. SEIPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, letter
dated July 13, 2018, July 12, 2018, June 25, 2018, June 18, 2018,
June 14, 2018, June 11, 2018 and August 2, 2018. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
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 reaffirmed on account of the ongoing delays
in debt servicing of the company as informed by the
lenders.
Detailed description of the key rating drivers
Key Rating Weaknesses
Ongoing delays in servicing debt: The rating has been reaffirmed
on account of the ongoing delays in debt servicing of the company
as informed by the lenders.
Sanghavi Exports International Pvt. Ltd (SEIPL) was established
as, a partnership firm in 1984 by the late Mr Vasantlal R.
Sanghavi, Mr Kirtilal R. Sanghavi, Mr Rameshchandra R Sanghavi
and Mr Chandrakant R Sanghavi (Chairman). In April 2007, the firm
was converted to a private limited company. SEIPL is engaged in
the business of processing and exports of cut and polished
diamonds. The company also undertakes trading of diamonds on a
limited scale. SEIPL's manufacturing facility is located at
Surat, Gujarat with a staff strength of 1500 workers and
employees. The company currently does not enjoy any direct
sourcing arrangement for rough diamonds from mining companies.
Hence, rough diamonds are procured from intermediaries majorly
from Belgium, Dubai and Hong Kong. Polished diamonds are exported
mainly to Hong Kong, USA and Dubai.
SAOMYA FORTUNE: CRISIL Maintains 'D' Rating in Not Cooperating
--------------------------------------------------------------
CRISIL said the ratings on bank facilities of Saomya Fortune
Infra Ventures (SFIV) continues to be 'CRISIL D Issuer not
cooperating'
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 15 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with SFIV for obtaining
information through letters and emails dated February 28, 2018
and August 31, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 SFIV, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SFIV 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 SFIV continues to be 'CRISIL D Issuer not
cooperating'
SFIV is a partnership firm between Leofortune Infrabuildcon Pvt.
Ltd and Saomya Infra Pvt. Ltd. The firm is undertaking
development of a residential complex, 'Fortune Belleza' in
Panvel, Navi Mumbai.
SEM INDUSTRIAL: CARE Assigns B+ Rating to INR3.75cr LT Loan
-----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Sem
Industrial Syndicate (SIS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 3.75 CARE B+; Stable Assigned
Short term Bank
Facilities 8.75 CARE A4 Assigned
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of SIS are
constrained by relatively small and fluctuating scale of
operation albeit moderate order book position, moderate capital
structure and debt coverage indicators, working capital intensive
nature of operations and weak liquidity position. The rating is
further constrained by presence in competitive and fragmented
industry and constitution of entity being proprietorship. The
rating however, derives strength from established track record of
operations along with experienced promoters and moderate but
fluctuating profitability margins.
Ability of the entity to increase its scale of operations with
timely execution of the orders in hand, maintain its
profitability and capital structure and manage its working
capital requirement efficiently are the key rating sensitivities.
Detailed description of Key rating drivers
Key Rating Weaknesses
Relatively small and fluctuating scale of operation: The scale of
operation stood small and fluctuating in past, however the same
grew with total operating income (TOI) of INR9.20 crore in FY18
vis-Ö-vis INR7.98 crore in FY17.on account of increase in number
of contracts executed during that period. Further, the tangible
net worth of the firm also remained small due to lower
capitalization. However, the firm has moderate order book
position thus providing medium term revenue visibility.
Moderate capital structure and debt coverage indicators: SIS's
capital structure marked by overall gearing, deteriorated in FY18
and stood moderate due to increase in the debt level on the back
of increased dependence of working capital bank borrowings along
with availment of various other long terms and interest free
unsecured loan availed from family. The debt coverage indicators
improved marginally and stood moderate in FY18 owing to growth in
the gross cash accruals. Interest coverage ratio improved owing
to decrease in the interest and finance cost and improvement in
operating margins.
Working capital intensive nature of operations and weak liquidity
position: The operations of SIS are working capital intensive in
nature on account of funds being blocked in receivables owing to
liberal credit period provided to its customers. Also, EMD and
retention money have to be maintained upto 1% and 10% each of the
contract value. On the other hand, firm receives moderate credit
from its suppliers. Hence, the working capital utilization
remained high at 100% during past 12 months ended July 2018.
Presence in competitive and fragmented industry: SIS operates in
a highly competitive and fragmented coal handling and thermal
industry. The company witnesses intense competition from both the
other organized and unorganized players domestically and
globally. This fragmented and highly competitive industry results
into price competition thereby posing a threat to the profit
margins of the companies operating in the industry.
Proprietorship nature of constitution: Being a proprietorship
firm, SIS has inherent risk of withdrawal of capital at the
time of personal contingency. Furthermore, it has restricted
access to external borrowings where net worth as well as
creditworthiness of the proprietor are the key factors affecting
credit decision of the lenders. Hence, limited funding avenues
along with limited financial flexibility have resulted in small
scale of operations for the firm.
Key rating Strengths
Established track record of operations along with experienced
promoters: SIS possesses an established track record of over 20
years in the business of trading and distribution of gear boxes,
motors, pumps and various electro mechanical automation systems.
Furthermore, firm also benefits from the experience of the
promoter Mr. Chandrashekar Ashok Joshi through his association
with the firm SIS since its establishment in 1996 and experience
in thermal and hydro power plants.
Moderately comfortable but fluctuating profitability margin:
SIS's profit margin has remained moderately comfortable but
fluctuating during past three years ending FY18. During FY18,
operating margin of the entity increased marginally and remained
moderately comfortable at 9.80% in FY18 owing to the increase in
total operating income. Further PAT margin improved and stood at
5.79% in FY18 vis-a-vis 3.66% in FY17 owing to reduction in
interest and finance cost and reduction in depreciation expense.
Sem Industrial Syndicate (SII) was established in the year 1996
as a proprietorship concern by Mr. Chandrashekhar Ashok Joshi.
The firm is engaged in the business of trading and distribution
of gear box, motors, pumps and various electro mechanical
automation systems. Its products find its application in the
thermal power industry with customer base comprising of various
thermal power stations based in Maharashtra and Madhya Pradesh.
It caters to 8 thermal power stations [which are operated by
MAHAGENCO (Maharashtra State Power Generation Company)] such as
Nashik Thermal Power station, Khaparkheda Thermal Power Station,
Koradi Thermal Power Station, Bhusawal Thermal Power station,
Uran Thermal Power station and others in Maharashtra and Madhya
Pradesh Thermal Power station in Madhya Pradesh.
SSI is an authorized channel partner of ABB India Limited (ASEA
Brown Boveri India Limited) for automation division for supply of
products like DCS System (Distributed Control System), pump
operating control machines, pan Maharashtra except Chandrapur
(i.e. Chandrapur Thermal Power Station). For Kirloskar Brother
Limited, SSI is the sole distributor for the distribution of
industrial, agricultural and domestic pumps and its spare parts
to Bhusawal Thermal Power station, Khaperkheda Thermal Power
station and Koradi Thermal Power station. Further, it distributes
gear boxes, gear motors and fluid clouping required for conveyor
belts of coal handling plants and thermal power stations by
procuring the same from Premium Energy Transmission Limited. SSI
operates through its registered office in Mumbai, Maharashtra and
Nashik, Maharashtra.
SRINIVASA CIVIL: Ind-Ra Maintains 'D' Rating in Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Srinivasa
Civil Works Private Limited's Long-Term Issuer Rating in the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using 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:
-- INR35 mil. Fund-based limits (long-term) maintained in Non-
Cooperating Category with IND D (ISSUER NOT COOPERATING)
rating; and
-- INR210 mil. Non-fund-based limits (short-term) maintained in
Non-Cooperating Category with IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
October 17, 2014. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Srinivasa Civil Works was incorporated by P Ramachandra Raju in
1998. It undertakes work orders issued by the public works and
irrigation departments. The company operates in Andhra Pradesh,
Telangana, Madhya Pradesh and Maharashtra.
SURYA INDUSTRIES: CRISIL Maintains D Rating in Not Cooperating
--------------------------------------------------------------
CRISIL said the rating on bank facilities of Surya Industries
(SI) continues to 'CRISIL D/CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee .02 CRISIL D (ISSUER NOT
COOPERATING)
Cash Credit 14.00 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Long Term
Bank Loan Facility 6.58 CRISIL D (ISSUER NOT
COOPERATING)
Term Loan .40 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with SI for obtaining
information through letters and emails dated Feb. 28, 2018 and
Aug. 31, 2018 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the 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 SI, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SI 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 SI continues to 'CRISIL D/CRISIL D Issuer not
cooperating'.
SI hulls and mills paddy and processes basmati rice. It was
founded by a group of locals in Ghubaya village in Jalalabad
(Punjab) in 2000. In 2009, it was taken over by Mr. Subhash
Chander and his family members. Currently, it is being managed by
Mr. Anil Josan and Mr. Raman Josan.
THEME HOTELS: CARE Lowers Rating on INR3.89cr LT Loan to D
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Theme Hotels Private Limited (THPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 3.89 CARE D Revised from
Facilities CARE B-; Stable
Detailed Rationale & Key rating Drivers
The revision in the rating of THPL takes into account ongoing
delays in debt servicing.
Detailed description of the key rating drivers
Key Rating Weakness
Irregularity in debt servicing: There are on-going delays in debt
servicing by the company due to off-season of hotel industry in
Rajasthan.
Rajasthan based Theme Hotel Private Limited (THPL) was
incorporated as a private limited company in 2004 by Mr Prashant
Kumar and Mr Giraj Kumar. THPL is engaged in the hotel business
and presently owns and operates a Hotel namely The Theme Hotel,
located in Jaipur (Rajasthan) with total 53 rooms comprising of
12 executive and 41 deluxe rooms, 3 banquets along with 4
restaurants and bars. The hotel became operational from November,
2012. THPL also has various other facilities such as Gym, gaming
zone etc. THPL is a 3-star government approved hotel situated
near the Airport in Jaipur. Further the company also has
agreement with online portals such as Make my trip and GOIBIBO.
WELCAST PRODUCTS: Ind-Ra Migrates B+ LT Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Welcast Products
Pvt. Ltd.'s Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise,
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND B+ (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating action is:
-- INR170.00 mil. Fund-based working capital limits migrated to
non-cooperating category with IND A4 (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
August 28, 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 1997, Welcast Products manufactures iron casts,
manhole covers, lampposts, brackets, lamp bases, fountains and
basins.
YASH AGRO: CARE Assigns B+ Rating to INR7.50cr LT Loan
------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Yash
Agro Industries (YAI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 7.50 CARE B+; Stable Assigned
Detailed Rationale & Key rating Drivers
The rating assigned to the bank facilities of YAI is primarily
constrained on account of fluctuating Total Operating Income
(TOI) during last three financial years ended FY18 (FY refers to
the period April 1 to March 31) with moderate profitability
margins, weak solvency position and working capital intensive
nature of operations. The rating is, further, constrained on
account of its presence in the lowest segment of the textile
value chain coupled with highly competitive and fragmented cotton
ginning industry, vulnerability of its operating margins to
fluctuation in the cotton prices as well as seasonality
associated with the industry and constitution as a partnership
concern. The rating, however, favorably takes into account the
experienced partners in the cotton ginning industry and strategic
location being located in the cotton growing region.
Improvement in the scale of operations with improving in its
solvency position and efficient management of working capital
would be key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weakness
Fluctuating Total Operating Income (TOI) and moderate
profitability margins: The scale of operations of the firm has
witnessed fluctuating trend over the past three financial years
ended FY18 mainly due to volatility in the prices of raw cotton.
As per provisional result of FY18, TOI of the firm has declined
by 6.01% over FY17 mainly on account of decrease in sale volume.
The profitability margins of the firm stood moderate with PBILDT
and PAT margin at 4.13% and 1.17% respectively in FY18.
Weak solvency position: The capital structure of the firm stood
leveraged with an overall gearing of 3.80 times as on March 31,
2018, improved from 4.51 times as on March 31, 2017 owing to
scheduled repayment of term loan as well as accretion of profit
to
reserves. Further, the debt coverage indicators of the firm stood
weak marked by total debt to GCA of 23.88 times as on March 31,
2018 and the interest coverage stood weak at 1.48 times in FY18.
Working Capital intensive nature of operations: The business of
the firm is working capital intensive marked by elongated
operating cycle of 132 days in FY18. Further, YAI has fully
utilized its working capital bank borrowings during last twelve
months ended July, 2018.
Operating margins susceptible to cotton price fluctuation and
seasonality associated with the cotton industry: Operations of
cotton business are seasonal in nature, as sowing season is done
during March to July and harvesting cycle (peak season) is spread
from November to February every year. Prices of raw material i.e.
raw cotton are highly volatile in nature and depend upon factors
like monsoon condition, area under production, yield for the
year, international demand supply scenario, export policy decided
by government and inventory carried forward of the last year.
Ginners usually have to procure raw materials at significantly
higher volume to bargain bulk discount from suppliers.
Furthermore, cotton being a seasonal crop, the inventory levels
of the entity generally remains high at the end of the financial
year. Thus, aggregate effect of both the above factors results in
exposure of ginners to price volatility risk.
Presence in the lowest segment of the textile value chain and in
a highly fragmented cotton ginning industry and constitution as a
partnership concern: High proportion of small scale units
operating in cotton ginning and pressing industry has resulted in
fragmented nature of industry leading to intense competition
amongst the players. As YAI operates in this highly fragmented
industry wherein large numbers of un-organized players are also
present, it has very low bargaining power against both its
customers as well as its suppliers. This coupled with limited
value addition in cotton ginning process results in the firm
operating at very thin profitability (PAT) margins.
Its constitution as a partnership concern restricts its overall
financial flexibility in terms of limited access to external fund
for any future expansion plans. Furthermore, there is an inherent
risk of possibility of withdrawal of capital and dissolution of
the concern in case of death/insolvency of partner.
Key Rating Strengths
Experienced management in cotton industry with establish relation
with its customer & suppliers: Mr. Anil Mangal, father of Mr.
Yash Mangal, has more than three decade of experience in cotton
industry and looks after overall affairs of the firm. Further, he
is supported by, Mrs. Rekha Mangal, partner, who looks after the
administrative function of the firm and Mr. Yash Mangal, MBA in
Finance by qualification and looks after the accounts and finance
function of the firm. Being present in the industry since 2013,
YAI has established relations with its customer and suppliers. It
majorly sells its products in Maharashtra, Gujarat, Rajasthan,
Haryana and Madhya Pradesh.
Strategically located in the cotton growing region: Gujarat,
Maharashtra, Andhra Pradesh, Haryana, Madhya Pradesh and Tamil
Nadu are the major cotton producers in India. The plant of YAI is
located in one of the cotton producing belt of Madhya Pradesh in
India. The presence of YAI in cotton producing region results in
benefit derived from lower logistics expenditure (both on
transportation and storage), easy availability and procurement of
raw materials at effective price.
Sendhwa (Madhya Pradesh) based Yash Agro Industries (YAI) was
formed as partnership firm in July, 2013 by Mrs. Rekha Mangal and
Mr. Yash Mangal who share profit and loss in the ratio of 55:45.
YAI is engaged in the cotton ginning and pressing activities
along with trading of cotton seeds and bales. The processing
plant of the firm is located at Sendhwa and has total installed
capacity of 300 bales per day as on March 31, 2018. It procures
raw cotton from local farmers. After getting raw cotton, the firm
does ginning and pressing activities and further process it and
sell cotton seeds to oil mill in Maharashtra, Gujarat, Rajasthan,
Haryana and Madhya Pradesh. Further, it sells cotton bales to the
textile mills, suit mill and thread mill in Maharashtra, Madhya
Pradesh, Gujarat, Punjab and South India.
===============
M A L A Y S I A
===============
1MDB: Najib Faces Bribery Charges Linked to Bond, M&A Deals
-----------------------------------------------------------
Bloomberg News reports that former Malaysian premier Najib Razak
plans to defend himself against charges linked to 1MDB's
multibillion-dollar bond sales and acquisitions, as authorities
speed up efforts to prosecute those who had allegedly embezzled
from the state fund.
According to Bloomberg, the charges accused Najib of receiving
MYR2.08 billion (US$503 million) of bribes related to the
issuance of a letter of support by the government for $3 billion
of 1MDB bonds in 2013. He's also accused of getting MYR49.9
million in relation to a $975 million loan facility from Deutsche
Bank AG.
In total, Najib was presented with 25 new charges on Sept. 20
comprising 21 counts of receiving, using and transferring illicit
funds, as well as four counts of corruption, Bloomberg discloses.
He has pleaded not guilty in earlier arraignments linked to the
receipt of a separate MYR42 million from a former 1MDB unit, as
well as to accusations of money laundering and abuse of power.
1MDB is at the center of a global scandal involving claims of
embezzlement and money laundering, which have also triggered
investigations in the U.S., Singapore, Switzerland and other
countries, according to Bloomberg. Malaysian investigators are
increasingly moving their sights overseas to advance probes, and
the government has sought cooperation from other countries to
repatriate monies and assets that it said were purchased with
1MDB money.
Bloomberg says Prime Minister Mahathir Mohamad seeks to recoup
$4.5 billion potentially lost through the state fund as Malaysia
grapples with debt and liabilities worsened by state guarantees
on 1MDB debt.
"This case may be harder to make as it involves international
fund transfers that could lengthen the time line," Bloomberg
quotes Khor Yu Leng, an independent economist with Segi Enam
Advisors Pte., as saying. "Perhaps this announcement will assuage
public demand for action on the full amount, but it is tougher
and more uncertain. There's a long list of alleged recipients
including many politicians and others. This could trigger a lot
of other charges."
"I am not a thief," Najib said to reporters after he was released
on MYR3.5 million bail, Bloomberg relays. "Whatever becomes the
verdict, my hope is that it ensures the rule of law is truly
upheld in this country."
The Malaysian Anti-Corruption Commission won't deny that there
will be other charges laid against more people in the 1MDB case,
Deputy Chief Commissioner Azam Baki said to reporters after the
court proceeding, Bloomberg relates. He won't deny that Najib's
wife Rosmah Mansor could be charged as part of the probe.
Bloomberg relates that Najib's lawyer Mohd Shafee Abdullah is
also facing several allegations of money laundering and false
income declaration linked to the receipt of MYR9.5 million from
him. Shafee has been a long-time lawyer for the opposition
Barisan Nasional coalition, which ruled the country for more than
60 years before being toppled by the current government in May.
Malaysia has also laid money laundering charges on Low Taek Jho,
painted by authorities at home and overseas as a central figure
in the 1MDB scandal, Bloomberg relays. According to the report,
Low proclaimed his innocence on his website launched last week,
which describes him as a "global philanthropist, investor and
entrepreneur." The police are requesting Interpol's help to
arrest Low and his father Low Hock Peng. His whereabouts aren't
known, Bloomberg notes.
According to Bloomberg, the Monetary Authority of Singapore
seized SGD240 million ($175.5 million) of assets in 2016 as part
of its probe into 1MDB, whose full name is 1Malaysia Development
Bhd. The fund flows that were probed included those linked to
Good Star Limited (Seychelles), Aabar Investments PJS Limited
(BVI), Aabar Investments PJS Limited (Seychelles), and Tanore
Finance Corp. (BVI).
Bloomberg adds that Malaysian police said earlier this month that
they found a total $972 million of transfers to Najib's accounts
involving 132 transactions through three channels that they
identified as Good Star, Aabar and Tanore. Low has been linked in
various probes to the companies.
About 1MDB
Kuala Lumpur-based 1Malaysia Development Bhd (1MDB) operates as a
government agency. The Company offers financial assistance,
analysis, and advice through investors, corporations, and
consultants to startups and growth companies. 1MDB focuses on
investments with strategic value and high multiplier effects on
the economy, particularly in energy, real estate, tourism, and
agribusiness.
As reported in the Troubled Company Reporter-Asia Pacific in June
2015, Reuters relayed that Singapore Police Force has frozen two
bank accounts to help with an investigation in to Malaysia's
troubled state-owned investment fund 1Malaysia Development Bhd
(1MDB), which is being probed by authorities in Malaysia for
financial mismanagement and graft. Reuters said the freezing of
the Singapore bank accounts follows a similar move in Malaysia
where a task force investigating 1MDB said earlier in July that
it had frozen half a dozen bank accounts following a media report
that nearly $700 million had been transferred to an account of
Malaysia's Prime Minister Najib Razak.
The Wall Street Journal reported in July 2015 that investigators
looking into 1MDB had traced close to US$700 million of deposits
moving through Falcon Bank in Singapore into personal bank
accounts in Malaysia belonging to Najib.
The TCR-AP, citing Bloomberg News, reported in November 2015,
that 1MDB agreed to sell its power assets to China General
Nuclear Power Corp. for MYR9.83 billion (US$2.3 billion) as the
state investment company moved one step closer to winding down
operations after its mounting debt raised investor concern.
Bloomberg, citing President Arul Kanda in October 2015, related
that the company faced cash-flow problems after a planned initial
public offering of Edra faced delays amid unfavorable market
conditions. The listing plan was later canceled as the company
opted for a sale of the assets, Bloomberg noted.
The TCR-AP, citing The Wall Street Journal, reported in April
2016, that the company defaulted on a $1.75 billion bond issue,
triggering cross defaults on two other Islamic notes totaling
MYR7.4 billion ($1.9 billion).
Asian Nikkei Review reported in June 2016 that Malaysia has
replaced the board of 1Malaysia Development Berhad with treasury
officials, paving the way for the dissolution of the troubled
state investment fund.
*********
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 ***