/raid1/www/Hosts/bankrupt/TCRAP_Public/181008.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, October 8, 2018, Vol. 21, No. 199
Headlines
A U S T R A L I A
AUZCORP PTY: Second Creditors' Meeting Set for Oct. 12
I.C.M. PROPERTY: Second Creditors' Meeting Set for Oct. 12
ICAPSULATE PTY: Second Creditors' Meeting Set for Oct. 16
LYGON FOOD: First Creditors' Meeting Set for Oct. 15
MARRANGAROO ESTATE: Second Creditors' Meeting Set for Oct. 18
MAX BRENNER: To Close 20 Australian Stores Today
PRAGMATIC CUSTODIAN: First Creditors' Meeting Set for Oct. 15
SAI GLOBAL: S&P Cuts Issuer Credit Rating to CCC+, Outlook Stable
WATERGARDENS PHARMACIES: 2nd Creditors' Meeting Set for Oct. 15
C H I N A
361 DEGREES: Fitch Affirms 'BB' LT FC IDR, Outlook Stable
OCEANWIDE HOLDINGS: S&P Raises ICR to 'CCC+', Outlook Negative
WUZHOU INTERNATIONAL: Misses US$204 Million in Bond Payments
I N D I A
ANTONY WASTE: Ind-Ra Withdraws B+ Long Term Issuer Rating
AUTO PROFILES: Ind-Ra Ups LT Issuer Rating to BB+, Outlook Stable
D.S.P. KNITTING: Ind-Ra Maintains BB- Rating in Non-Cooperating
ELEGANT ENTERPRISES: Ind-Ra Keeps BB- Rating in Non-Cooperating
GANPATI STRUCTURES: CRISIL Migrates B+ Rating to Not Cooperating
G M COT: CRISIL Migrates B+ Rating to Not Cooperating Category
GMR HYDERABAD: Moody's Revises Outlook on Ba1 CFR to Negative
GS ATWAL: Ind-Ra Maintains D LT Issuer Rating in Non-Cooperating
IDT CLOTHING: Ind-Ra Maintains 'B+' LT Rating in Non-Cooperating
INFRASTRUCTURE LEASING: Misses INR33.9cr Loans Payment
JAYDEEP TUBES: Ind-Ra Maintains 'B+' LT Rating in Non-Cooperating
K.P. PACKAGING: Ind-Ra Maintains 'D' LT Rating in Non-Cooperating
KEVA IMPEX: CRISIL Migrates B+ Rating to Not Cooperating Category
LAKSHMI NARASIMHA: CRISIL Migrates B+ Rating to Not Cooperating
NEEL MOTORS: CRISIL Migrates B Rating to Not Cooperating Category
OSCAR INVESTMENTS: Ind-Ra Maintains 'C' Rating in Non-Cooperating
P KRISHNA: CRISIL Assigns B+ Rating to INR8cr LT Loan
PARIJAT OIL: CRISIL Migrates B Rating to Not Cooperating Category
PLK MANUFACTURING: CRISIL Cuts Rating on INR7cr Loan to B+
R. PRIYA: CRISIL Migrates B Rating to Not Cooperating Category
RECORE CERAMIC: CRISIL Migrates B+ Rating to Not Cooperating
RHC HOLDING: Ind-Ra Cuts Rating on INR750MM Loan to D, Not Coop.
SAMAY COTTON: CRISIL Migrates B+ Rating to Not Cooperating
SARVODAY ASHRAM: CRISIL Raises Rating on INR7cr Cash Loan to B+
SCODA TUBES: Ind-Ra Raises LT Issuer Rating to B+, Outlook Stable
SHIVA PARBOILED: CRISIL Reaffirms B+ Rating on INR8cr Cash Loan
SHREEOM WIRES: Insolvency Resolution Process Case Summary
SONDHI RAM: CRISIL Migrates B+ Rating to Not Cooperating Category
SORKHI INDUSTRIES: CRISIL Reaffirms B+ Rating on INR6.5cr Loan
SRI KARUNAMBIKAI: Insolvency Resolution Process Case Summary
SRI MEENAXI: CRISIL Migrates B Rating to Not Cooperating Category
SRV KNIT: CRISIL Reaffirms B+ Rating on INR7.5cr Cash Loan
TIRUPATI PADDY: CRISIL Migrates 'B' Rating to Not Cooperating
VASWANI INDUSTRIES: Ind-Ra Moves 'BB' Rating to Non-Cooperating
VIDEOCON INDUSTRIES: Promoter Seeks Stay on Inviting Bids
YASHASVI YARNS: Ind-Ra Maintains 'D' LT Rating in Non-Cooperating
YCD INDUSTRIES: Ind-Ra Affirms 'BB+' LT Rating, Outlook Stable
I N D O N E S I A
BAYAN RESOURCES: Moody's Assigns Ba3 CFR, Outlook Stable
J A P A N
SURUGA BANK: Moody's Lowers LT Bank Deposit Rating to Ba2
M O N G O L I A
DEVELOPMENT BANK OF MONGOLIA: Fitch Assigns 'B' LT IDR
DEVELOPMENT BANK OF MONGOLIA: S&P Rates New Sr. Unsec. Notes 'B-'
S O U T H K O R E A
* SOUTH KOREA: Major Public Firms' Debt Likely to Rise
V I E T N A M
VINGROUP JSC: Fitch Puts B+ LT IDR on Rating Watch Negative
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A U S T R A L I A
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AUZCORP PTY: Second Creditors' Meeting Set for Oct. 12
------------------------------------------------------
A second meeting of creditors in the proceedings of:
* Auzcorp Pty Ltd
* Auzcorp Accommodation Pty Ltd
* Morgan Street Pty Ltd
* Mia Mia Port Hedland International Airport Pty Ltd
* Auzcorp Australia Pty Ltd
* Mia Mia House in the Desert Pty Ltd
* Auzcorp Developments Pty Ltd
* Mia Mia Executive Apartments Pty Ltd
* Modular Accommodation Pty Ltd
has been set for Oct. 12, 2018, at 3:00 p.m. at Level 28, 108 St
Georges Terrace, in Perth, WA.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Oct. 11, 2018, at 4:00 p.m.
Martin Bruce Jones and Andrew Michael Smith of Ferrier Hodgson
were appointed as administrators of Auzcorp Pty on July 5, 2018.
I.C.M. PROPERTY: Second Creditors' Meeting Set for Oct. 12
----------------------------------------------------------
A second meeting of creditors in the proceedings of I.C.M.
Property Services Pty. Ltd. has been set for Oct. 12, 2018, at
11:00 a.m. at the offices of Cor Cordis, One Wharf Lane,
Level 20, 171 Sussex 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. 11, 2018, at 4:00 p.m.
Ozem Kassem and Sam Kaso of Cor Cordis were appointed as
administrators of I.C.M. Property on Sept. 6, 2018.
ICAPSULATE PTY: Second Creditors' Meeting Set for Oct. 16
---------------------------------------------------------
A second meeting of creditors in the proceedings of iCapsulate
Pty Limited and iCapsulate Holdings Pty Ltd has been set for
Oct. 16, 2018, at 10:30 a.m. at "Fraser Room", Chartered
Accountants Australia and New Zealand, 33 Erskine 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. 15, 2018, at 5:00 p.m.
Andrew James Barnden of Rodgers Reidy was appointed as
administrators of iCapsulate Pty on Sept. 10, 2018.
LYGON FOOD: First Creditors' Meeting Set for Oct. 15
----------------------------------------------------
A first meeting of the creditors in the proceedings of Lygon Food
Store Pty Ltd will be held at the offices of Cor Cordis, Level
29, 360 Collins Street, in Melbourne, Victoria, on Oct. 15, 2018,
at 11:00 a.m.
Sam Kaso and Bruno A Secatore of Cor Cordis were appointed as
administrators of Lygon Food on Oct. 3, 2018.
MARRANGAROO ESTATE: Second Creditors' Meeting Set for Oct. 18
-------------------------------------------------------------
A second meeting of creditors in the proceedings of Marrangaroo
Estate Pty Ltd has been set for Oct. 18, 2018, at 10:00 a.m. at
the offices of Rodgers Reidy, Level 12, The University Centre,
210 Clarence Street, 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. 17, 2018, at 4:00 p.m.
Andrew James Barnden of Rodgers Reidy was appointed as
administrator of Marrangaroo Estate on Sept. 14, 2018.
MAX BRENNER: To Close 20 Australian Stores Today
------------------------------------------------
The Sydney Morning Herald reports that the majority of Max
Brenner's Australian stores will close their doors for good
today, Oct. 8, after administrators of the collapsed chocolate
and cafe chain took less than a week to decide they were
unsalvageable.
Administrators McGrathNicol, who were appointed on Sept. 30, said
on Oct. 5 that 20 of Max Brenner's 37 stores would be closed at
5:00 p.m. today, October 8, SMH discloses.
"The decision to close stores is always regrettable but in this
case we were left with no choice following a store-by-store
review of Max Brenner operations," the report quotes Barry Kogan
as saying. "The remaining 17 stores in the Max Brenner network
will stay open and it will be business as usual in these stores.
These stores are profitable and will be offered for sale or
recapitalisation."
Max Brenner has 600 staff in Australia, and those working at the
soon-to-be closed stores will be made redundant, McGrathNicol
said, SMH relates.
According to SMH, McGrathNicol said it hopes to secure the future
of the remaining Australian stores through a deed of company
arrangement, or by selling it to new owners.
"Based on the strong interest we have received to date we expect
a high volume of inquiries," Mr. Kogan, as cited by SMH, said.
A first meeting of Max Brenner creditors will be held on Oct. 11,
the report notes.
About Max Brenner
Max Brenner Australia operates 37 company owned stores across
Australia and a head office/distribution centre at
Alexandria (NSW), and employs approximately 600 staff.
McGrathNicol partners; Barry Kogan, Kathy Sozou and Jason Preston
were appointed Voluntary Administrators of Max Brenner Australia
by a resolution of its Directors on 30 September 2018.
The Directors of Max Brenner Australia resolved to appoint
Voluntary Administrators due to escalating costs and tighter
retail trade.
PRAGMATIC CUSTODIAN: First Creditors' Meeting Set for Oct. 15
-------------------------------------------------------------
A first meeting of the creditors in the proceedings of:
-- Pragmatic Custodian Pty Ltd;
-- Pragmatic Training Pty Ltd, trading as National Academy
of Beauty;
-- National Academy Of Early Childhood;
-- Pragmatic Education Group;
-- Parapharm Pty Ltd, trading as Paramount Higher Education;
-- Beachside Training & Event Centre Pty Ltd; and
-- Empower HR Pty Ltd;
will be held at the offices of Chartered Accountants Australia
and New Zealand, Level 18, Bourke Place, 600 Bourke Street, in
Melbourne, Victoria, on Oct. 15, 2018, at 3:00 p.m.
Robyn Erskine and Adrian Hunter of Brooke Bird were appointed as
administrators of Pragmatic Custodian on Oct. 3, 2018.
SAI GLOBAL: S&P Cuts Issuer Credit Rating to CCC+, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings said that it has lowered its long-term issuer
credit rating on SAI Global Holdings I (Australia) Pty Ltd. to
'CCC+' from 'B'. The outlook is stable.
S&P said, "At the same time, we lowered our issue ratings on the
company's senior secured first-lien debt to 'CCC+' from 'B' and
on the second-lien debt to 'CCC-' from 'CCC+'. We affirmed the
recovery ratings at '3' and '6' on the first- and second-lien
debt, respectively."
SAI Global is a provider of risk management services in large
global markets and property settlement services in Australia.
S&P said, "We lowered the ratings on SAI Global to reflect our
view that difficult trading conditions will continue through the
year ending June 30, 2019. We view the company's capital
structure as unsustainable over the long term in the absence of a
turnaround. However, a credit or payment crisis is unlikely to
occur over the near term."
Trading conditions will continue to be difficult for the
company's Australian property segment and uncertainty remains
over the royalty negotiations in its standards business.
Furthermore, the extent to which the company will realize an
enduring benefit from restructuring initiatives remains
uncertain.
In addition, the company's liquidity remains tight, despite a
recent AUD58 million equity injection from its financial sponsor
Baring Asia Private Equity Fund VI (Baring Asia). S&P said, "In
our opinion, the equity injection was sufficient for the company
to remain compliant with its revolving credit facility covenants
and indicates a degree of parental support during periods of
financial stress. We also note that Baring Asia has stated that
it will continue to be supportive of the company."
S&P said, "Our base-case scenario suggests that the revolving
credit facility will be restricted to a maximum of 35% or US$26
million (US$11 million drawn as of June 30, 2018). In addition,
SAI Global's cash position reduced to AUD30.7 million as of June
30, 2018, from AUD46.7 million a year earlier. We also view the
company's interest expense as sensitive to interest rate risk
given that both tranches of debt are on floating rates.
"We expect SAI Global's key credit metrics to further deteriorate
in fiscal 2019. Operating expenses are high as the company
bolsters its commercial team to accelerate growth in its risk
segment. Lower transaction volumes as well as a structural loss
of market share in the mortgage settlement market have worsened
the company's property segment. In addition, new royalty rates
under negotiation with Standards Australia may place additional
pressure on the company's earnings.
"In our opinion, the company's deteriorating operating
performance and tight liquidity make it dependent on favorable
business, financial, and economic conditions to meet its
financial commitments.
"We believe SAI Global has some scope to reduce capital
expenditure as a means of preserving cash in the near term.
However, we do not view this as sustainable given the level of
investment required to maintain the company's market position.
The company has no debt maturities until 2023 and does not
disclose its future operating lease commitments.
"The stable outlook reflects our expectation that SAI Global will
focus on improving its operating performance while protecting its
liquidity position over the next 12 months.
"In our opinion, the company's capital structure is unsustainable
without a sustained improvement in its operating performance.
That said, we believe a turnaround is possible given the
company's reasonably established market position across its suite
of services, brand recognition in Australia, and modest global
footprint.
"The stable outlook does not incorporate the divestment of any
business lines, major acquisitions, or additional financial
support from its financial sponsor.
"We could lower the rating if we perceive a higher likelihood of
default over the next 12 months. This could occur if liquidity
further tightens as a result of ongoing operational
underperformance or higher financial costs. We could raise the
rating if the company can sustainably generate positive cash
flows and demonstrate a clear deleveraging path. Upward rating
action would also likely require disclosure of its future
operating lease commitments."
WATERGARDENS PHARMACIES: 2nd Creditors' Meeting Set for Oct. 15
---------------------------------------------------------------
A second meeting of creditors in the proceedings of Watergardens
Pharmacies Pty Ltd has been set for Oct. 15, 2018, at 11:00 a.m.
at Level 43, 600 Bourke Street, Melbourne VIC.
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. 12, 2018, at 4:00 p.m.
George Georges and John Ross Lindholm of Ferrier Hodgson were
appointed as administrators of Watergardens Pharmacies on July 9,
2018.
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C H I N A
=========
361 DEGREES: Fitch Affirms 'BB' LT FC IDR, Outlook Stable
---------------------------------------------------------
Fitch Ratings has affirmed China-based sportswear maker 361
Degrees International Limited's Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB' with a Stable Outlook. 361 Degrees'
senior unsecured rating and the rating on its outstanding USD400
million 7.25% senior notes due 2021 have also been affirmed at
'BB'.
The ratings are supported by 361 Degrees' positive free cash flow
(FCF) generation and its sustained net cash position, although
the recent lower EBITDA margin has reduced its rating headroom.
The company's small scale and lower market share than both global
foreign and leading domestic brands constrain its rating.
KEY RATING DRIVERS
Moderating Growth: Fitch expects revenue growth for 361 Degrees
to be maintained at single digits over the next few years.
China's sportswear industry is likely to continue growing due to
rising disposable incomes, increasing health consciousness and
supportive policies. However, Fitch expects growth to moderate
given a higher base of comparison. The company's sales growth in
2017 slowed to 3% yoy from 13%-14% in 2015-2016, partly due to a
delay in delivering orders in 2H17, although it recovered to 8%
in 1H18. The company also reported that retail sales for the core
361 Degrees brand rose at a high single-digit rate yoy from 2Q17
to 2Q18.
Changing Operational Control: 361 Degrees has adopted a
supplementary order system to have better control over its
channel inventory. The company previously hosted trade fairs
about six months ahead of its product launches in retail stores
and orders were placed in advance, but it is moving towards a
more flexible arrangement starting 4Q17 that allows a portion of
orders to be placed closer to the season's launch. Fitch thinks
the measure can manage inventory at a healthy level although it
may affect the timing of some order deliveries in the short term.
Investments in Other Segments: 361 Degrees may benefit from
growth in businesses other than its core brand, including 361
Degrees Kids, its e-commerce business, international operations
and high-end outdoor brand, One Way. The company remains highly
dependent on its core brand but Fitch expects it to continue
diversifying its earnings as contributions from other segments
rise. Its core brand contributed 83% of total sales in 2017, down
from 85% in 2016.
The rating headroom for profitability is becoming more limited
but Fitch expects faster growth in other segments to drive
economies of scale, keeping profitability above the negative
trigger of 15% EBITDA margin. Growth in the other segments may
affect profitability in the short term as more resources are
needed to build brand awareness, promote its technical products
and invest in its other channels. For instance, the online
business was taken in-house in September 2016 and is part of the
reason its EBITDA margin declined by 2 percentage points to 17.1%
in 2017 but the segment's contribution also increased
significantly to 10.9% of sales in 1H18 from 4.1% in 1H17.
Positive Free Cash Flow: Fitch expects the FCF that turned
positive in 2016 to continue in the near term. Working capital
has improved over the past few years, with trade and bills
receivable turnover days declining to 155 from a peak of 205 in
2013, and Fitch does not see further significant deterioration
with operating performance likely to stay stable. Fitch expects
capex to remain low with no major projects in the short term.
DERIVATION SUMMARY
361 Degrees has a smaller scale of operations than global peers,
and is less diversified in terms of geography and product
portfolio. However, the company has a strong financial profile,
with a sustained net cash position and consistently positive FCF.
361 Degrees has a smaller scale (approximately 21% of EBITDA)
than branded apparel company Levi Strauss & Co. (BB/Positive),
but benefits from higher profitability, a higher coverage ratio,
and a net cash position while Levi Strauss has an FFO net
leverage ratio of over 3x.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
- Mid-single-digit revenue growth in 2018-2020
- EBITDA margin in the range of 16%-17% in 2018-2020
- Capital expenditure of CNY100 million annually
- Receivable days and inventory days similar to 2017 levels
- Dividend payout of 40%
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- No positive rating action will be considered until 361
Degrees significantly boosts its operating scale and market
share.
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- EBITDA margin below 15% for a sustained period (2017: 17%)
- Negative FCF for a sustained period
- Failure to sustain a net cash position
- Deteriorating working capital, such as worsening trade
receivables (including bill receivables) days or a significant
increase in channel inventory
LIQUIDITY
Ample Liquidity: 361 Degrees had sufficient capital and liquidity
resources at end-June 2018, reflected in its total debt balance
of CNY2.7 billion - of which CNY112 million was current
borrowings - and a readily available cash balance of CNY6.0
billion. The company also had unutilised banking facilities of
over CNY3 billion. Fitch expects 361 Degrees to continue its
strong cash flow generation after FCF turned positive starting
2016, thanks to working-capital management and limited capex
requirements.
OCEANWIDE HOLDINGS: S&P Raises ICR to 'CCC+', Outlook Negative
--------------------------------------------------------------
S&P Global Ratings said that it had raised its long-term issuer
credit rating on Oceanwide Holdings Co. Ltd. to 'CCC+' from
'CCC'. The outlook is negative. S&P also raised its long-term
issue rating on the company's outstanding guaranteed senior
unsecured notes to 'CCC' from 'CCC-'. Oceanwide is a China-based
property developer and financial holdings group.
S&P said, "We raised the rating because we expect Oceanwide to
have stronger refinancing prospects in the next 12 months
following its repayment of offshore senior notes totaling US$800
million in July and August 2018. We anticipate that the company's
obtainment of presales permits in Beijing and Shanghai will
assist a moderate recovery in sales in the next 12 months and
improve cash generation. However, we expect Oceanwide to continue
to face substantial refinancing pressure, and believe the
prospect of meaningful deleveraging is still remote. This is due
to the company's very high short-term debt and its overall huge
debt burden. We continue to view Oceanwide's capital structure as
unsustainable and vulnerable to adverse market conditions or
operational slippages, despite no specific default scenario
envisaged."
Oceanwide's recent repayment of its offshore senior notes and
Chinese renminbi (RMB) 4 billion in domestic corporate bonds
reflects its sound ability to source financing under difficult
conditions. To fund those obligations, the company obtained a
RMB11.6 billion one-year loan facility from China Minsheng Bank
and issued domestic medium-term notes and private placement bonds
totaling RMB6.9 billion in August and September 2018. Oceanwide
also received offshore intercompany liquidity support from its
parent China Oceanwide Group. S&P believes Oceanwide's access to
the domestic bond market and bank channels remains resilient,
thanks to the company's track record in the onshore capital
market, good asset quality of its land and property inventory,
and the strong reputation of its Chairman Mr. Lu Zhiqiang.
Oceanwide's operating cash flows should improve in the next 12
months with the recovery of property sales and potential
government reimbursements of resettlement funds, which S&P
estimates at RMB3 billion-RMB4 billion. After a delay in the
first half of 2018, the company obtained presales permits for its
Shanghai project in July and Beijing project in September. S&P
expects these two projects to bring around RMB16 billion of
sellable resources and generate around RMB10 billion of cash
inflows by mid-2019. Including the inflows from both the projects
and resettlement reimbursement, Oceanwide's operating cash flows
will be neutral or mildly positive over the next 12 months, after
paying construction costs, and general and interest expenses.
S&P said, "In our view, Oceanwide will continue to face high
refinancing pressure. As of June 30, 2018, the company has short-
term debt of RMB56 billion, against only around RMB7 billion in
cash. Even with a smooth execution of debt repayment in the third
quarter, we estimate Oceanwide will still have more than RMB35
billion of debt due before June 2019, of which over 40% is in
trust loans. We believe trust loans are more difficult to roll
over and could need to be replaced by standard bank financing.
The company continues to actively seek equity financing from
strategic investors for its commercial property projects in
Beijing and Wuhan. S&P said, "But we view the timing and size of
these transactions to be uncertain. In addition, Oceanwide still
has offshore maturities of RMB14 billion (US$2 billion)
outstanding by June 2019, consisting of Hong Kong dollar 2.7
billion (equivalent to about US$350 million) private placement
bonds in November 2018, US$400 million senior unsecured notes in
May 2019, and the remaining in offshore bank loans. We believe
the refinancing risk is partially alleviated by the company's
about RMB5 billion in an undrawn bank facility from China
Minsheng Bank and somewhat improved funding conditions onshore."
S&P said, "We expect meaningful deleveraging to be unlikely in
the near-term in the absence of substantial equity financing,
even though Oceanwide's total debt could reduce slightly by June
2019. The debt-to-EBITDA ratio of the company's nonfinancial
segment is likely to stay very high at over 20x in the next 12-24
months while EBITDA interest coverage will remain below 0.8x.
"The negative outlook reflects our expectation that Oceanwide's
liquidity will continue to be very tight in the next 12 months,
given its high short-term debt, limited cash balance, and some
execution risks in its sales and refinancing plan. We continue to
see significant refinancing risk on an ongoing basis because the
capital structure is unsustainable and the company is likely to
be vulnerable to adverse market conditions.
"We could lower the rating if Oceanwide's refinancing plan fails
to materialize or its operating cash flows fail to improve as we
expect, such that we believe the company will face difficulty in
repaying its debt. This could happen if Oceanwide's proceeds from
property sales are lower than we expect, the company finds it
difficult to obtain new bank credit lines, or its access to
onshore capital markets weakens.
"We may raise the rating if Oceanwide can meaningfully deleverage
or improve its capital structure. This could happen if: (1)
Oceanwide's property sales or financial services segment
materially outperforms our expectations; or (2) the company can
raise more equity or longer-term funding, including higher
support from its parent. An indication of such improvement could
be liquidity sources over uses being close to 1x."
WUZHOU INTERNATIONAL: Misses US$204 Million in Bond Payments
------------------------------------------------------------
South China Morning Post reports that Wuzhou International
Holdings said it had missed CNY1.4 billion (US$204 million) in
bonds payments and was also facing claims for at least CNY756
million, adding to a string of earlier defaults and financial
woes.
The Post relates that the company's revelation comes amid the
rising the number of bond defaults by Chinese companies this year
as the government reduced implicit guarantees, in turn moral
hazard, to steer the debt market towards a healthier development.
State-owned mainland media reported that 21 Chinese companies
defaulted in CNY48.6 billion of bond payments in the third
quarter, with listed companies accounting for half of the volume.
According to the report, property developers like Wuzhou
International have been especially hard hit under Beijing's
deleveraging drive to reduce risks and its imposed curbs on
lending to cool the overheated property market.
"The number of bond defaults of weaker, private companies will
continue to increase in a steady, controlled manner," the Post
quotes Judy Kwok-Cheung, a fixed income analyst at Bank of
Singapore, as saying. But Kwok-Cheung said despite the increased
number, the default rate of 0.2 per cent remained low.
In a filing to the Hong Kong stock exchange on Oct. 4, Wuzhou
International said it failed to repay CNY395.5 million in
principal and the CNY111 million in interest for a portion of the
second tranche of the CNY1.5 billion 2016 corporate bonds on
September 19, the Post relays.
In addition, it was unable to pay all of the CNY1 billion in
principal and CNY50.6 million of interest on September 20 for the
first tranche of 2017 bonds sold by its indirectly wholly-owned
subsidiary Wuxi Wuzhou Ornament City, says the Post.
The Post notes that Wuzhou International is due to appear in the
Higher People's Court of Ningxia Hui autonomous region, where a
creditor has demanded the company to repay about CNY167.8 million
in loan and CNY8.9 million in interest accrued up to August 27.
It is also required to appear in the Intermediate People's Court
of Ningxia for the repayment of another CNY13.3 million in loan
and CNY170,800 in interest owed to another creditor, the report
states.
According to the report, the statement said a joint venture
partner had applied for arbitration to repurchase the equity
interest for CNY126.3 million and seek CNY35.8 million payment
for damages.
The Post relates that an unnamed bank has also demanded a loan
and interest repayment of CNY291.1 million and CNY2.5 million
respectively, according to the statement.
The Post says Wuzhou International attributed its failure to
repay its debt to unspecified "financial difficulties".
"The company is now actively exploring various ways to remedy the
defaults . . . and handle the various legal proceedings and
claims as mentioned above," it said in the statement.
Last month, the developer said it had suspended seven projects
under construction or in operation, the Post recalls.
Wuzhou International Holdings Limited is an investment holding
company principally engaged in the property related businesses.
The Company operates through three business segments. The
Property Development segment is engaged in the development and
sales of properties. The Property Management and Investment
segment is engaged in the commercial management, property
management and property consulting business, as well as the
investment in properties for rental income potential and capital
appreciation. The Others segment is engaged in the lending to
customers, the operation of department stores and the provision
of consulting services. The Company is also involved in the
trading business through its subsidiaries.
=========
I N D I A
=========
ANTONY WASTE: Ind-Ra Withdraws B+ Long Term Issuer Rating
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Antony Waste
Handling Cell Private Limited's Long-Term Issuer Rating of 'IND
B+ (ISSUER NOT COOPERATING)'.
The instrument-wise rating actions are:
-- The IND B+ rating on the INR330 mil. Fund-based working
capital limits are withdrawn; and
-- The IND B+ rating on the INR330 mil. Non-fund-based working
capital limits are withdrawn.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the ratings, as the
agency has received no-objection certificates from the lenders.
This is consistent with the Securities and Exchange Board of
India's circular dated March 31, 2017 for credit rating agencies.
COMPANY PROFILE
Antony Waste Handling Cell was incorporated on January 17, 2001.
The company executes solid waste management contracts of various
municipal corporations of major cities.
AUTO PROFILES: Ind-Ra Ups LT Issuer Rating to BB+, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Auto Profiles
Limited's (APL) Long-Term Issuer Rating to 'IND BB+' from 'IND BB
(ISSUER NOT COOPERATING)'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR304 mil. Fund-based limits Long-term rating upgraded;
short-term rating affirmed with IND BB+/Stable/IND A4+
rating;
-- INR182.15 mil. (reduced from INR287.2 mil.) Term loan due on
March 2023 upgraded with IND BB+/Stable rating;
-- INR54.49 mil. Term loan due on March 2023 assigned with IND
BB+/Stable rating; and
-- INR58.8 mil. Proposed fund-based limits* Long-term rating
upgraded; short-term rating affirmed with Provisional IND
BB+/Stable/Provisional IND A4+ rating.
* The ratings are provisional and shall be confirmed upon the
sanction and execution of the loan documents for the above
facility by APL to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The upgrade reflects APL's demonstrated ability to report strong
revenue growth in FY18 while maintaining comfortable credit
metrics. Revenue increased to INR4,240 million during FY18 (FY17:
INR2,913 million), backed by a rise in order flow from Tata Motor
Ltd (TML), leading to a rise in capacity utilization. Interest
coverage (operating EBITDA/gross interest expense) was 2.8x
during FY18 (FY17: 2.6x) and net financial leverage (adjusted net
debt/operating EBITDAR) was 3.1x (3.2x). Moreover, the agency
expects the credit metrics to improve in the coming years, backed
by the absence of a large debt-funded capex along with schedule
debt repayments.
Moreover, the company's customer concentration declined during
FY18, as revenue contribution from TML came down to 73% (FY17:
79%). However, APL's dependency on TML remains high.
The ratings, however, are constrained by APL's declining and
modest EBITDA margin (FY18: 4.4%; FY17: 7.0%), on account of a
rise in expenses which the company was unable to pass on to its
end-customers. APL's ROCE was 10% in FY18 (FY17: 12%).
The ratings continue to factor in APL's comfortable liquidity
profile with average utilization of the fund-based limits being
below 50% during the 12 months ended August 2018. Also, cash flow
from operation was positive during FY16-FY18 on account of
healthy EBITDA.
The ratings remain supported by APL's promoters' over three
decades of experience in manufacturing sheet metal pressed auto
components along with its associations with TML and Daimler India
Commercial Private Ltd among others.
RATING SENSITIVITIES
Positive: A substantial improvement in the EBITDA margin while
maintaining the credit metrics will be positive for the ratings.
Negative: Sustained deterioration in the credit metrics will be
negative for the ratings.
COMPANY PROFILE
APL was incorporated under the Companies Act, 1956, in 1989. APL
is promoted by Mr. Bikash Mukherjee. It is engaged in the
manufacturing of sheet metal pressed auto components and has a
total production capacity of 78,000 metric tons per annum.
D.S.P. KNITTING: Ind-Ra Maintains BB- Rating in Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained D.S.P.
Knitting Company's Long-Term Issuer Rating in the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
continue to appear as 'IND BB- (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR15 mil. Long-term loan maintained in non-cooperating
category with IND BB- (ISSUER NOT COOPERATING) rating; and
-- INR52.5 mil. Fund-based working capital limit maintained in
non-cooperating category with IND BB- (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
May 14, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1967 as a partnership entity, D.S.P. Knitting
Company manufactures garments for export markets at its
manufacturing site located in Tirupur, Tamil Nadu.
ELEGANT ENTERPRISES: Ind-Ra Keeps BB- Rating in Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained M/s Elegant
Enterprises' 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 BB- (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating action is:
-- INR51 mil. Fund-based working capital limit maintained in
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
January 29, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2009 as a proprietorship concern, M/s Elegant
Enterprises manufactures hosiery garments for men, women and
children. It exports to countries such as Spain and France.
GANPATI STRUCTURES: CRISIL Migrates B+ Rating to Not Cooperating
----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Ganpati
Structures Private Limited (GSPL) to CRISIL B+/Stable Issuer not
cooperating.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Term Loan 4.76 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with GSPL for obtaining
information through letters and emails dated August 30, 2018 and
September 11, 2018 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Ganpati Structures Private
Limited, which restricts CRISIL's ability to take a forward
looking view on the entity's credit quality. CRISIL believes
information available on Ganpati Structures Private Limited is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Ganpati Structures Private Limited to CRISIL
B+/Stable Issuer not cooperating'.
Furthermore, the company has not paid the fee for conducting
rating surveillance as agreed to in the rating agreement.
GSPL, which was set up in 2006 by Mr Ashok Joshi, Mr Amit Joshi
and Mr Omprakash Joshi, manufactures TMT bars, MS angles, bars,
rounds and plates. The manufacturing facilities are located at
Indore (Madhya Pradesh).
G M COT: CRISIL Migrates B+ Rating to Not Cooperating Category
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of G M Cot
Fibers (GMCF) to 'CRISIL B+/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 0.2 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
Term Loan 2.8 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with GMCF for obtaining
information through letters and emails dated June 29, 2018,
September 3, 2018 and September 10, 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 GMCF. Which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on GMCF is
consistent with 'Scenario 2' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BBB' rating
category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of GMCF to 'CRISIL B+/Stable Issuer not cooperating'.
Furthermore, the company has not paid the fee for conducting
rating surveillance as agreed to in the rating agreement.
GMCF was set up in 2014 as a partnership firm by Mr. Govind
Agarwal and his nephews, Mr. Pratish Agarwal and Mr. Ashish
Agarwal. The firm is setting up a cotton ginning unit in Sendhwa
(Madhya Pradesh).
GMR HYDERABAD: Moody's Revises Outlook on Ba1 CFR to Negative
-------------------------------------------------------------
Moody's Investors Service has revised the outlook on GMR
Hyderabad International Airport Limited's corporate family rating
to negative from stable.
At the same time, Moody's has affirmed the company's Ba1 CFR.
RATINGS RATIONALE
"The change in HIAL's rating outlook to negative reflects the
likely deterioration in its financial metrics over the next 18
months under our base case scenario, as the company incurs
additional debt during fiscal year ending March 2020 (fiscal
2020) to part-fund its Rajiv Gandhi International Airport (RGIA)
expansion," says Spencer Ng, a Moody's Vice President and Senior
Analyst.
Moreover, because HIAL plans to fund the balance of the capital
spending with operating cash flow, the airport's financial
profile over the expansion period will also be affected by any
unexpected volatility in its operations during the construction
phase.
Based on HIAL's plan to part-fund the expansion with debt,
Moody's expects the airport's funds from operations (FFO)/debt to
trend towards the minimum rating tolerance level of 8% in fiscal
2020. Moody's also expects the weakening trend to continue beyond
this period, as incremental debt is incurred for the expansion.
"Our financial projections assume that the lower tariff outlined
in the regulator's December 2017 consultation paper will be
implemented in April 2019, and exclude any potential tariff
increase from the ongoing tariff appeal relating to the previous
control period, due to the level of uncertainty associated with
this outcome and its timing," adds Ng.
Under Moody's base case scenario, HIAL will see a modest decrease
in revenue in fiscal 2020 due to the tariff reduction, which will
outweigh the benefits of a likely low-double digit percentage
increase in passenger traffic at the airport and put negative
pressure on the company's financial profile.
Additionally, HIAL does not currently have committed debt funding
in place for the expansion and plans to commence its fund raising
process in the second half of 2019, potentially exposing the
airport to higher funding costs if there are any unexpected
challenges in its operations or expansion, or should capital
market conditions deteriorate further. The airport has available
cash and cash equivalent of INR 16 billion (as at June 2018),
which it will use as the primary source of funding for the next
12 months.
On balance, Moody's believes HIAL's business risk profile will be
tempered until the expansion is completed, although exposure to
execution risk should remain manageable given: (1) its plan to
deliver the expansion under fixed-price turnkey contracts with
experienced contractors, and (2) GMR Infrastructure Ltd's
experience as airport developers.
HIAL has a long-term concession to operate the Rajiv Gandhi
International Airport (RGIA) in Hyderabad, which is one of the
leading airports in India by passenger traffic.
HIAL is embarking on a major expansion to increase RGIA's
passenger handling capacity to 34 million passengers per annum
(mppa), which the company expects will cost up to INR55 billion
over a four-year development period. The 34 mppa expansion
supersedes a previous plan to expand to 20 mppa at a cost of
INR20-INR25 billion, given that passenger traffic at RGIA is
likely to reach 20 million in fiscal 2019.
Key elements of the expansion include the extension of the
existing passenger terminal, a new parallel taxiway, as well as
the widening of the ramp connection from the main access roads.
HIAL's Ba1 CFR continues to consider its: (1) strong market
position and its strategic location in the city of Hyderabad, (2)
low concession revenue share payment to the government, and (3)
strong operating performance relative to its key performance
targets, as stipulated by the concession.
These credit strengths, however, are offset by: (1) the evolving
nature of the regulatory framework in India, which has resulted
in lengthy delays in tariff determination and implementation, as
well as (2) HIAL's exposure to execution risks and securing
appropriate term debt funding for the planned expansion.
Positive rating momentum is unlikely over the next 3-4 years,
because of the execution risk associated with the expansion, and
elevated financial leverage approaching the downdriver for the
Ba1 rating.
The outlook on the rating could revert to stable, however, if
there is an improvement in HIAL's financial profile, which would
help sustain its FFO/debt at above 8% throughout the construction
phase. Such improvement could be the result of a favorable
outcome in the pending tariff appeal or if the non-aeronautical
business outperforms Moody's base case expectation.
Moody's could downgrade the rating if there is further evidence
that HIAL's financial metrics will fall below the level
considered appropriate for its Ba1 rating during the expansion.
The financial metrics that could indicate downward pressure on
the rating include FFO to gross adjusted debt declining below 8%
on a consistent basis.
Moody's could also downgrade the rating if there are any material
missteps in implementing the expansion project, or a reduction in
aeronautical and/or non-aeronautical revenues relative to Moody's
base case expectation.
The principal methodology used in this rating was Privately
Managed Airports and Related Issuers published in September 2017.
GMR Hyderabad Airport International Limited operates one of the
larger airports under a public-private partnership model in
India.
The company started commercial operations on March 23, 2008. The
airport has a current design capacity of 12 million passengers
per annum. In February 2018, GMR Airport signed a share purchase
agreement to acquire Malaysia Airports Holdings Berhad's (A3
stable) equity interest in HIAL. Post completion, HIAL's equity
will be held by GMR Airports, the Government of India through the
Airports Authority of India, and the Government of Telangana. GMR
Airports is a subsidiary of GMR Infrastructure Ltd.
GS ATWAL: Ind-Ra Maintains D LT Issuer Rating in Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained GS Atwal & Co
(Engineers) Pvt. Ltd.'s Long-Term Issuer Rating in the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR55 mil. Fund-based limits (Long-term/Short-term)
maintained in non-cooperating category with IND D (ISSUER
NOT COOPERATING) rating;
-- INR122.4 mil. Long-term loan maintained in non-cooperating
category with IND D (ISSUER NOT COOPERATING) rating; and
-- INR80 mil. Non-fund-based limits (Long-term/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 8, 2014. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
GS Atwal & Co (Engineers), a closely-held private limited
company, undertakes contracts for overburden removal, evacuation
works and other works in the mining of coal, limestone and
chromite.
IDT CLOTHING: Ind-Ra Maintains 'B+' LT Rating in Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained IDT Clothing
Pvt Ltd.'s Long-Term Issuer Rating in the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
continue to appear as 'IND B+ (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR125 mil. Fund-based working capital limit maintained in
non-cooperating category with IND B+ (ISSUER NOT
COOPERATING)/IND A4 (ISSUER NOT COOPERATING) rating; and
-- INR7.5 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
April 10, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2001, IDT Clothing manufactures readymade
garments and exports them mainly to Europe, the US and Canada.
INFRASTRUCTURE LEASING: Misses INR33.9cr Loans Payment
------------------------------------------------------
Livemint.com reports that Infrastructure Leasing & Financial
Services Ltd. (IL&FS) is missing more debt obligations, even as
the Indian government pledged to prevent further defaults,
underscoring the challenges its new board faces in fixing the
firm's mounting debt problems.
IL&FS failed to service principal and interest on loans from
banks, inter-corporate deposit and commercial papers totaling
INR33.9 crore due for the period from September 30 to October 4,
Livemint.com relates citing IL&FS's exchange filing.
According to the report, the government has seized control of the
conglomerate, which has total debt of $12.6 billion, ousting the
erstwhile board of directors.
"This amount is peanuts in the big picture, that's how bad the
situation is at the group," the report quotes Rajiv Kochhar,
chief executive officer of Avista Advisory Partners in Singapore,
as saying. "There is a huge mismatch in cash flows and people now
have to manage their expectations in terms of the recovery
prospect."
Livemint.com says the newly-constituted board of directors for
the troubled Indian lender met on Oct. 4 and undertook an initial
assessment of the firm. They face an uphill task in restoring
confidence in the group, whose downfall has led to a selloff in
equities and bonds, the report says. IL&FS's default has also
prompted risks of an investor stampede out of mutual funds that
hold its securities. Getting fresh cash infusions would be
crucial for the group that's defaulted on its obligations since
June, prompting rating cuts to junk, according to Livemint.com.
Livemint.com adds that the new board at IL&FS has been tasked
with preparing a plan for the group and filing a response with
the National Company Law Tribunal, the nation's insolvency court,
by October 15.
About IL&FS
Infrastructure Leasing & Financial Services Limited (IL&FS)
operates as an infrastructure development and finance company in
India. It focuses on the development and commercialization of
infrastructure projects, and creation of value added financial
services. The company operates in Financial Services,
Infrastructure Services, and Others segments. Its Financial
Services segment engages in the commercialization of
infrastructure; investment banking, including corporate finance,
advisory, capital market, and other financial services; and
securities trading, venture capital, and trusteeship operations.
As reported in the Troubled Company Reporter-Asia Pacific on
Oct. 3, 2018, the Indian Express said that the government on
Oct. 1 stepped in to take control of crisis-ridden Infrastructure
Leasing & Financial Services Ltd (IL&FS) by moving the National
Company Law Tribunal (NCLT) to supersede and reconstitute the
board of the firm which has defaulted on a series of its debt
payments over the last one month. This was said to be an attempt
to restore the confidence of financial markets in the credibility
and solvency of the infrastructure financing and development
group.
JAYDEEP TUBES: Ind-Ra Maintains 'B+' LT Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Jaydeep Tubes
Pvt Ltd.'s Long-Term Issuer Rating in the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using the rating. The rating will
continue to appear as 'IND B+ (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating action is:
-- INR20 mil. Fund-based working capital limit maintained in
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
February 12, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 1999, Jaydeep Tubes manufactures copper tubes,
brass tubes, polyvinyl chloride copper tubes, copper alloys and
others at its site in Umbergaon, Gujarat.
K.P. PACKAGING: Ind-Ra Maintains 'D' LT Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained K.P. Packaging
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
now continue to be 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR40 mil. Fund-based working capital limit (long-term)
maintained at non-cooperating category with IND D (ISSUER NOT
COOPERATING) rating; and
-- INR50 mil. Non-fund-based working capital limit (short-term)
maintained at non-cooperating category with IND D (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
September 13, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
KPPL was incorporated in 1998 and is primarily engaged in
manufacturing all kinds of packaging products at its two
manufacturing units in Silvassa.
KEVA IMPEX: CRISIL Migrates B+ Rating to Not Cooperating Category
-----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Keva Impex
(Keva) to 'CRISIL B+/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit/ 7 CRISIL B+/Stable (ISSUER NOT
Overdraft COOPERATING; Rating Migrated)
facility
CRISIL has been consistently following up with Keva for obtaining
information through letters and emails dated July 27, 2018,
September 3, 2018 and September 10, 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 Keva Impex, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on Keva
Impex is consistent with 'Scenario 1' outlined in the 'Framework
for Assessing Consistency of Information with CRISIL BB' category
or lower.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Keva Impex to 'CRISIL B+/Stable Issuer not
cooperating'.
Based in Raipur and set up in 2012, Keva is a proprietorship firm
of Mr Ravi Patel. The firm trades in iron and steel products. It
also trades in timber; however, over 90% of the revenue is
contributed from the iron and steel trading activity.
LAKSHMI NARASIMHA: CRISIL Migrates B+ Rating to Not Cooperating
---------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Lakshmi
Narasimha Traders - Nellore to CRISIL B+/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with LNTN for obtaining
information through letters and emails dated July 26, 2018,
September 9, 2018 and September 10, 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 Lakshmi Narasimha Traders -
Nellore, which restricts CRISIL's ability to take a forward
looking view on the entity's credit quality. CRISIL believes
information available on Lakshmi Narasimha Traders - Nellore is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Lakshmi Narasimha Traders - Nellore to CRISIL
B+/Stable Issuer not cooperating'.
Set up in 2002 as a partnership firm Lakshmi Narasimha Traders-
Nellore (LNTN) is engaged in milling and processing of paddy into
rice, rice bran, broken rice and husk. It has an installed paddy
milling capacity of 3 tons per hour. Its rice mill is located in
Nellore (Andhra Pradesh). The firm is promoted by Mr. Y Ranga
Rao.
NEEL MOTORS: CRISIL Migrates B Rating to Not Cooperating Category
-----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Neel Motors
LLP (NML) to CRISIL B/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Inventory Funding 5.5 CRISIL B/Stable (ISSUER NOT
Facility COOPERATING; Rating Migrated)
Overdraft 7.0 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with NML for obtaining
information through letters and emails dated July 26, 2018,
September 11, 2018 and September 17, 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 Neel Motors LLP, which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Neel Motors LLP is consistent with 'Scenario 1' outlined in the
'Framework for Assessing Consistency of Information with CRISIL
BB' category or lower.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Neel Motors LLP to CRISIL B/Stable Issuer not
cooperating'.
A limited liability partnership, Neel Motors LLP (NML) has
automobile dealership of Hyundai Motor India Limited (Hyundai).
The firm has recently opened a 3S showroom on Pune-Solapur higher
(Pune) and a workshop will commence in the same area by July,
2017. Its daily operations are overlooked by Mr. Akshay Shah and
his wife Mrs. Isha Shah.
OSCAR INVESTMENTS: Ind-Ra Maintains 'C' Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Oscar
Investments Limited's (Oscar) debt instrument ratings in the non-
cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The ratings
will continue to appear as 'IND C (ISSUER NOT COOPERATING)' on
the agency's website.
The instrument-wise rating actions are:
-- INR1.5 bil. Non-convertible debenture (NCDs)* maintained in
non-cooperating category with IND C (ISSUER NOT COOPERATING)
rating; and
-- INR5.0 mil. Long-term bank loan maintained in non-cooperating
category with IND C (ISSUER NOT COOPERATING) rating.
* Unutilized
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
July 14, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Oscar is a listed group company of RHC Holding Private Limited
(RHC). RHC, along with Malav Holding and Shivi Holding, holds 69%
of Oscar's equity shares. On March 31, 2017, Oscar held stakes in
several unlisted subsidiaries and group companies.
P KRISHNA: CRISIL Assigns B+ Rating to INR8cr LT Loan
-----------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to long term
bank facilities of P Krishna Pillai Memorial Printing and
Publishing Company Private Limited (PKP).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 8 CRISIL B+/Stable (Assigned)
The rating reflects modest scale of operations with customer
concentration, along with weak liquidity. These rating weaknesses
are partially mitigated by long track record of operations of the
company.
Analytical Approach
Unsecured loan of INR6.3 crores (as on March 2018) treated as
neither debt neither equity (NDNE).
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale of operations with customer concentration in
revenues: The Company has modest scale of operations, with
revenues of about INR5.3 crore for fiscal 2018. Additionally, the
company derives 100% of its revenues from printing work of the
newspaper - Deshabhimani, a popular newspaper in Kerala.
* Weak Liquidity Profile: Liquidity profile is constrained by
modest cash accruals, against which the company has term loan
repayment obligations. Accruals was modest at INR0.76 crores in
fiscal 2018. Though accruals are expected to improve with growth
in revenue, the cushion between accruals and repayment
obligations would remain a rating sensitivity factor.
Strengths
* Long track record of operations of the company: The Company has
been in this line of business from about 1984 and has seen
several business cycles.
Outlook: Stable
CRISIL expects PKP business risk profile to remain stable backed
by long track record of operations in this line. The outlook may
be revised to 'Positive' if PKP significantly improves its scale
and profitability, leading to a better financial risk profile.
Conversely, the outlook may be revised to 'Negative' if PKP's
profitability weakens due to larger than expected debt funded
capex, or in case of deterioration in the company's working
capital management.
Established in 1984, PKP is engaged in printing and publishing
activities. It is based out of Trivandrum and prints the
Trivandrum edition of the popular Malayalam newspaper,
Deshabhimani. Day to day operations are managed by managing
director, Mr. Thomas Joseph Kollamparambil.
PARIJAT OIL: CRISIL Migrates B Rating to Not Cooperating Category
-----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Parijat Oil
and Feeds Private Limited to 'CRISIL B/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.5 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Term Loan 8.0 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with POFPL for
obtaining information through letters and emails dated August 28,
2018, August 29, 2018 and September 3, 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 Parijat Oil and Feeds Private
Limited, which restricts CRISIL's ability to take a forward
looking view on the entity's credit quality. CRISIL believes
information available on Parijat Oil and Feeds Private Limited is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Parijat Oil and Feeds Private Limited to 'CRISIL
B/Stable Issuer not cooperating'.
Parijat Oil and Feeds Private Limited was set up in September
2016. The company is currently setting up a plant to manufacture
rice bran oil and de-oiled rice bran. The total project cost is
around INR13.7 crore. The company has been promoted by
Mr.Mohinderjit Singh and Mr.Sachin Goel who are family friends
and their family members.
PLK MANUFACTURING: CRISIL Cuts Rating on INR7cr Loan to B+
----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of PLK Manufacturing Unit (PLK) to 'CRISIL B+/Stable' from
'CRISIL BB-/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
Proposed Long Term 0.5 CRISIL B+/Stable (Downgraded
Bank Loan Facility from 'CRISIL BB-/Stable')
The downgrade reflects weaker standalone financial risk profile,
modest scale of operations and low profitability margins along
with stretched liquidity profile.
The ratings continue to reflect below average financial risk
profile, working capital intensive nature of operations and
modest scale of operations in intensely competitive industry.
These rating weaknesses are partially offset by extensive
experience of the promoters in the gold jewellery industry.
Analytical Approach
Based on management stance, CRISIL has adopted standalone
approach for rating for PLK, than earlier approach of
consolidation with Pulikkottil Lazar and Sons Jewellery (PLS).
The entities are independently managed.
Key Rating Drivers & Detailed Description
Weaknesses
* Working capital intensive nature of operations: PLK's
operations remain working capital intensive with gross current
asset of 197 days as of March 31, 2018, on account of high
inventory. Limited credit from suppliers lead to working capital
bank lines being utilized fully. CRISIL believes that the
operations of PLK would continue to remain working capital
intensive on account of high inventory holding requirement over
the medium term.
* Below Average financial risk profile: Total outside liabilities
to adjusted networth is high at 2.64 times as on March 31, 2018.
Debt protection metrics is weak with interest coverage and net
cash accruals to adjusted total debt of 1.10 times and 0.01 time
respectively in fiscal 2018.
* Modest scale of operations: Scale of operations are modest as
reflected in revenue of INR19.08 crores in fiscal 2018, which
limits benefits from economies of scale and bargaining power with
customer and suppliers.
Strength:
* Extensive experience of the promoters: Promoters' extensive
experience in the jewellery retail segment for over four decades
has helped establish strong relationship with various customers
and developed a regional market position in Kerala. This is
expected to continue to support the business risk profile of the
firm over the medium term.
Outlook: Stable
CRISIL believes the PLK will continue to benefit over the medium
term from its promoters' extensive industry experience. The
outlook may be revised to 'Positive' if considerable increase in
cash accruals backed by higher revenue and operating
profitability, leads to better financial risk profile.
Conversely, the outlook may be revised to 'Negative' if decline
in revenue and operating profitability, results in lower cash
accrual, or an increase in working capital requirement, weakens
financial risk profile.
Set up in 2015 and based in Kerala, PLK manufacture gold
ornaments. The firm was promoted by Mr Jomy Varghese and Mr Jimmy
Varghese. The promoters also have three gold jewellery retail
showrooms under the name of Pulikkotil Lazar and Sons Jewellery
at Kunnamkulam, Pattambi and Kechery, in Kerala.
R. PRIYA: CRISIL Migrates B Rating to Not Cooperating Category
--------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of R. Priya to
CRISIL B/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 0.37 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
Term Loan 1.63 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with RP for obtaining
information through letters and emails dated June 26, 2018,
September 11, 2018 and September 17, 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 R. Priya, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on R. Priya
is consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of R. Priya to CRISIL B/Stable Issuer not
cooperating'.
RP, based in Chennai, was established in 2017 by Ms R Priya. The
firm rents out cameras and allied equipment used in the media
industry.
RECORE CERAMIC: CRISIL Migrates B+ Rating to Not Cooperating
------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Recore
Ceramic to CRISIL B+/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Proposed Long Term 2.75 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Rating Migrated)
Term Loan 6.75 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with Recore for
obtaining information through letters and emails dated July 31,
2018, September 3, 2018 and September 10, 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 Recore Ceramic, which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Recore Ceramic is consistent with 'Scenario 2' outlined in the
'Framework for Assessing Consistency of Information with CRISIL
BBB' category or lower.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Recore Ceramic to CRISIL B+/Stable Issuer not
cooperating'.
Established in 2014, Recore was set up by the Morbi (Gujarat)-
based Savsani and Nagpara families.
The firm manufactures digital wall tiles. Recore commenced
commercial operations in June 2015.
RHC HOLDING: Ind-Ra Cuts Rating on INR750MM Loan to D, Not Coop.
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded RHC Holding
Private Limited's (RHC) bank loans, while affirming its non-
convertible debenture (NCD) ratings. 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 instrument-wise rating actions are:
-- INR2.0 bil. Secured long-term NCD (long-term) issued on
December 27, 2013 ISIN INE657K07213 has a coupon rate of
13.60% due on December 27, 2018 affirmed IND D (ISSUER NOT
COOPERATING) rating; and
-- INR750 mil. Secured long-term bank loans (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 affirmation reflects continued default by RHC in servicing
its NCD obligations. The downgrade reflects RHC's default in
servicing its bank loan obligations as confirmed by the lender.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months could result in a positive rating action.
COMPANY PROFILE
Incorporated in 2007 as Solaries Finance Pvt. Ltd, the company
was renamed as RHC in November 2008. RHC is a closely held
investment company owned by Mr. Malvinder Mohan Singh and Mr.
Shivinder Mohan Singh. As on March 31, 2017, RHC held stakes in
several unlisted subsidiaries and group companies.
SAMAY COTTON: CRISIL Migrates B+ Rating to Not Cooperating
----------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Samay Cotton
(SC) to 'CRISIL B+/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Long Term Loan .87 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with SC for obtaining
information through letters and emails dated July 31, 2018,
September 3, 2018 and September 10, 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 SC. Which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SC is
consistent with 'Scenario 4' outlined in the 'Framework for
Assessing Consistency of Information.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of SC to 'CRISIL B+/Stable Issuer not cooperating'.
Furthermore, the company has not paid the fee for conducting
rating surveillance as agreed to in the rating agreement.
Established in March 2014, SC manufactures cotton oil from cotton
seeds at its unit in Wankaner, Gujarat, which has installed
capacity to manufacture 15 tonne per day. It caters to the
domestic market and its operations are managed by Mr Ravi.
SARVODAY ASHRAM: CRISIL Raises Rating on INR7cr Cash Loan to B+
---------------------------------------------------------------
CRISIL has upgraded its rating on the long-term bank facility of
Sarvoday Ashram (SA) to 'CRISIL B+/Stable' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
The upgrade reflects expected improvement in SA's business risk
profile due to new orders of INR30 crore received from Assam
Khadi and Village Industries Board (AKVIB) and Patanjali Paridhan
(PP). Revenue may increase to INR35 crore in fiscal 2019 from
INR11.4 crore in fiscal 2018, thereby also strengthening debt
protection metrics. However, gearing will remain high because of
large working capital requirement.
The rating also factors SA's exposure to intense competition from
machine-made fabric, modest scale of operations, weak financial
risk profile, and large working capital requirement. These
weaknesses are partially offset by the experience of the promoter
and an established market position in the khadi industry, and the
Government of India's (GoI's) favourable policies for the
industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Intense competition from machine-made fabrics: Khadi faces
intense competition from machine-made fabrics due to better
consistency and durability of the latter.
* Modest scale of operations: Scale of operations has been
modest, with revenue of INR11.4 crore in fiscal 2018, due to low
demand and off-take of khadi products. But due to new orders
received from AKVIB and PP, revenue may rise to INR35 crore in
fiscal 2019.
* Weak financial risk profile: Financial risk profile has been
modest due to weak interest coverage ratio of 1.75 times in
fiscal 2018 and low networth of INR8.7 crore as on March 31,
2018. However, total outside liabilities to adjusted networth
ratio was comfortable at 1.7 times as on March 31, 2018. Debt
protection metrics are expected to improve in fiscal 2019 due to
healthy revenue growth; three-year moving average interest
coverage and net cash accrual to adjusted debt ratios are
projected at 2.7 times and 0.09 time, respectively.
* Large working capital requirement: Gross current assets (GCAs)
were 642 days as on March 31, 2018, driven by debtors of 209 days
and inventory of 380 days. Debtors are high because of slow
realisation due to procedural delays at customer end whereas
inventory is high because the process is not mechanised and hence
production cycle is long. Delay in receiving payments caused
overdraw of working capital limit during June and July 2018.
Though operations are expected to remain working capital
intensive, due to expectation of lower credit period availed by
new customers, viz. AKVIB and PP, during fiscal 2019, GCAs may
decrease to around 400 days as on March 31, 2019. The society's
management is also planning to increase its working capital debt
which is expected to support the increased working capital
requirement. Efficient working capital requirements shall be the
key rating sensitivity factor over the medium term.
Strengths
* Established position and experience of promoter; favourable
government policies: SA is categorised as an A+ khadi unit with
the Khadi and Village Industries Commission (KVIC), GoI's entity
for khadi promotion due to its longstanding presence and the
promoter's experience. It employs 3,000 spinners and weavers and
has undertaken initiatives to promote khadi with the opening of
retail outlets in five locations, Delhi (two outlets),
Chandigarh, Goa, and Puducherry. Favourable government policies
for the industry are also expected to support the growth.
Outlook: Stable
CRISIL believes SA will continue to benefit from an established
presence and favourable government policies for the khadi
industry. The outlook may be revised to 'Positive' if there is
substantial increase in revenue and profitability along with
prudent working capital management. Conversely, the outlook may
be revised to 'Negative' if any large, debt-funded capital
expenditure or stretch in working capital cycle weakens financial
risk profile.
SA, established in 1952 at Etah (Uttar Pradesh) by the late Mr
Rohan Lal Chaturvedi, is affiliated to KVIC. It spins, weaves,
and markets khadi clothes under its brand, Ekmatra. The founder's
son, Mr Manoj Chaturvedi, is the current elected chairman.
SCODA TUBES: Ind-Ra Raises LT Issuer Rating to B+, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Scoda Tubes
Limited's (SCTL) Long-Term Issuer Rating to 'IND B+'. The Outlook
is Stable.
The instrument-wise rating actions are:
-- INR92.5 mil. Fund-based limits upgraded with IND B+/Stable
rating; and
-- INR32.5 mil. Non-fund-based limits affirmed with IND A4
rating.
KEY RATING DRIVERS
The upgrade reflects significant revenue growth to INR476 million
in FY18 from INR206 million in FY17, though its scale of
operation remained small. The upgrade also reflects an
improvement in the net working capital cycle to 165 days in FY18
from 374 days in FY17, driven by an improvement in inventory and
creditor days.
The ratings, however, are constrained by modest credit metrics.
Its interest coverage ratio (operating EBITDA/gross interest
coverage) was 1.4x in FY18 (FY17: 1.5x) and net leverage (net
debt/operating EBITDA) was 6.0x (10.3x). The improvement in the
leverage was due to a rise in absolute EBITDA.
The ratings are also constrained by an average operating margin,
which fell to 8.2% in FY18 from 9.5% in FY17 due to an increase
in cost of raw materials consumed. Its return on capital employed
was 12% in FY18 (FY17: 7%).
The ratings are further constrained by SCTL's tight liquidity,
indicated by a maximum average utilization of 97.3% of the fund-
based limits for the 12 months ended August 2018.
RATING SENSITIVITIES
Negative: Any decline in the EBITDA margin, leading to any
deterioration in the credit metrics, could lead to a negative
rating action.
Positive: Any improvement in the credit metrics, along with any
revenue growth, could lead to a positive rating action.
COMPANY PROFILE
Incorporated in November 2008, SCTL commenced commercial
operations in September 2010. It manufactures stainless steel
seamless and welded tubes, pipes and U tubes, and has an
installed capacity of 700 metric tons.
SHIVA PARBOILED: CRISIL Reaffirms B+ Rating on INR8cr Cash Loan
---------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating to the bank
facility of Shiva Parboiled Industries (SPI).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B+/Stable (Reaffirmed)
The rating reflects the firm's modest scale and working capital
intensive operations in a highly fragmented rice processing
industry. The rating also factors in risks related to ongoing
project. These weaknesses are partially offset by the extensive
industry experience of its partners and moderate financial risk
profile.
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale and working capital intensive operations in a
fragmented industry: With revenue of INR29 crore in fiscal 2018,
the firm's scale remains small in the intensely competitive rice
industry. The gross current asset (GCA) days stood at 104 days as
on March 2018, reflecting working capital intensity in
operations.
* Risks related to ongoing project: The firm plans to expand its
manufacturing facility at a cost of INR10 crores to be funded in
a debt equity ratio of 3:1, thus exposing it to project specific
risks such as demand, funding and implementation risks.
Strengths:
* Extensive industry experience of the promoters: The promoters
have an experience of more than 25 years in the rice industry.
Over the period, the promoters have developed a healthy
relationship with customers and suppliers which ensures steady
supply of raw material and repeat orders and have a strong
understanding of the industry.
* Moderate financial risk profile: The Company has modest net
worth of around INR5.04 Cr as on March 31, 2018 and gearing stood
at around 1.12 times as on March 31, 2018 NCATD and interest
coverage ratio stood at 0.16 and 2.36 times for fiscal 2018
Outlook: Stable
CRISIL believes SPI will continue to benefit over the medium term
from the industry experience of promoter. The outlook may be
revised to 'Positive' in case of an increase in revenue and
significant improvement in profitability driven by stabilization
of ongoing project. Conversely, the outlook may be revised to
'Negative' in case of time and cost overrun in the ongoing
capital expenditure programme, or in case of sharp decline in
sales volumes and profitability, or a considerable stretch in
working capital cycle, leading to deterioration in the financial
risk profile, especially liquidity.
SPI was established in 1991 as a partnership firm and is promoted
by Mr M Ravindra and Mr G Nagendra with 50% shareholding each.
SPI processes non-basmati rice at its plant capacity of 8 metric
tonne per hour at Nalgonda, Telangana.
SHREEOM WIRES: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Shreeom Wires Private Limited
B-59, 3rd Floor, Mansarover Park
Shahdara, Delhi East Delhi
DL 110032 IN
Insolvency Commencement Date: August 10, 2018
Court: National Company Law Tribunal, Delhi Bench
Estimated date of closure of
insolvency resolution process: February 5, 2019
Insolvency professional: Mr. Brijender Singh Deswal
Interim Resolution
Professional: Mr. Brijender Singh Deswal
C-122, New Rajendra Nagar
New Delhi, Delhi 110060
E-mail: brijender@deswal.com
ip.shreeomwires@gmail.com
Phone: 9811414181
Last date for
submission of claims: October 11, 2018
SONDHI RAM: CRISIL Migrates B+ Rating to Not Cooperating Category
-----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Sondhi Ram
Gian Chand (SRGC) to 'CRISIL B+/Stable/CRISIL A4 Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 4.86 CRISIL A4 (ISSUER NOT
COOPERATING; Rating Migrated)
Cash Credit 0.90 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with SRGC for obtaining
information through letters and emails dated May 31, 2018 and
June 30, 2018 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of Sondhi Ram Gian Chand, which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Sondhi Ram Gian Chand is consistent with 'Scenario 2' outlined in
the 'Framework for Assessing Consistency of Information with
CRISIL BBB' category or lower.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Sondhi Ram Gian Chand to 'CRISIL B+/Stable/CRISIL
A4 Issuer not cooperating'.
SRGC, based in Patiala, Punjab, and established in 1972, operates
a petrol pump. The firm is an authorised retailer for IOCL and is
promoted by Mr Gian Chand.
SORKHI INDUSTRIES: CRISIL Reaffirms B+ Rating on INR6.5cr Loan
--------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long-
term bank facilities of Sorkhi Industries Private Limited (SIPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Cash
Credit Limit 2.5 CRISIL B+ (Reaffirmed)
Term Loan 6.5 CRISIL B+/Stable (Reaffirmed)
The rating reflects SIPL's small scale of operations in the
highly fragmented pipe industry, stretched working capital cycle,
and susceptibility to fluctuations in raw material prices. These
weaknesses are partially offset by moderate financial risk
profile, promoters' extensive experience, and established
relations with customers.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations in a highly fragmented industry:
Intense competition in the pipe industry' because of low entry
barriers' continues to constrain scalability: revenue was INR5.3
crore in fiscal 2018.
* Stretched working capital cycle: Operations are working capital
intensive, with gross current assets at 415 days as on March 31,
2018, driven by debtors and inventory of 56 and 50 days,
respectively.
* Vulnerability to increase in raw material prices: Profitability
although healthy at 11.1-13.2% over the four years ended fiscal
2018'remains susceptible to fluctuations in raw material prices,
which are linked to the prices of crude oil.
Strengths:
* Moderate financial risk profile: Gearing is estimated to remain
high at 6.33 times as on March 31, 2018. Debt protection metrics
were comfortable: interest coverage and net cash accrual to total
debt ratios were 7.5 times and 0.05 time, respectively, in fiscal
2018.
* Promoters' experience: Benefits from the promoters' experience
of around a decade, and healthy relations with reputed players in
the pipe industry should continue to support business risk
profile.
Outlook: Stable
CRISIL believes SIPL will continue to benefit from its promoters'
experience and healthy relations with customers. The outlook may
be revised to 'Positive' if significant improvement in revenue,
stabilisation of operations in the planned unit, and stable
profitability strengthen key credit metrics. The outlook may be
revised to 'Negative' if low cash accrual, stretch in working
capital cycle, or time or cost overruns in the planned projects
weakens financial risk profile, especially liquidity.
Incorporated in 2010, SIPL is promoted by Mr Rajender Singh and
family. It manufactures glazed stoneware pipes (ceramic) of 150-
500 millimetre, mainly used in sewage treatment and irrigation
systems. It has also set up a manufacturing facility for high-
density polyethylene pipes that is expected to commence
operations in November 2018. The manufacturing unit is in Hisar
(Haryana).
SRI KARUNAMBIKAI: Insolvency Resolution Process Case Summary
------------------------------------------------------------
Debtor: Sri Karunambikai Mills Private Limited
Registered Office:
P.B. No. 2, Mill Road, Somanur P.O.
Coimbatore 641668
Insolvency Commencement Date: September 26, 2018
Court: National Company Law Tribunal, Coimbatore Bench
Estimated date of closure of
insolvency resolution process: March 25, 2019
(180 days from commencement)
Insolvency professional: Shri K. Ranganathan Seshadri
Interim Resolution
Professional: Shri K. Ranganathan Seshadri
No. 403, Nagammai Building
2nd floor, Dr. Nanjappa Road
Gandhipuram, Coimbatore 641018
E-mail: kr.seshadri@gmail.com
Last date for
submission of claims: October 12, 2018
SRI MEENAXI: CRISIL Migrates B Rating to Not Cooperating Category
-----------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Sri Meenaxi
Granites to 'CRISIL B/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Export Packing 3 CRISIL B/Stable (ISSUER NOT
Credit COOPERATING; Rating Migrated)
Proposed Working 1 CRISIL B/Stable (ISSUER NOT
Capital Facility COOPERATING; Rating Migrated)
CRISIL has been consistently following up with SMG for obtaining
information through letters and emails dated June 26, 2018,
September 11, 2018 and September 17, 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 Sri Meenaxi Granites, which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Sri Meenaxi Granites is consistent with 'Scenario 1' outlined in
the 'Framework for Assessing Consistency of Information with
CRISIL BB' category or lower.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Sri Meenaxi Granites to 'CRISIL B/Stable Issuer not
cooperating'.
SMG was set up in 1999 and is engaged in export of rough granite
blocks. The firm is based out of Chennai and its operations are
managed by its promoter Mr. N Senthil.
SRV KNIT: CRISIL Reaffirms B+ Rating on INR7.5cr Cash Loan
----------------------------------------------------------
CRISIL has reaffirmed its rating on bank loan facility of SRV
Knit Tech Private Limited (SRV) at 'CRISIL B+/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7.5 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect the modest scale of and working
capital-intensive operations. The rating weaknesses are partially
offset by the promoter's extensive experience in the ready-made
garments industry, and its established relationships with
customers.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations: The modest scale of operations is
reflected in the operating income of INR19 crores as on March 31,
2018. The readymade garment industry is highly fragmented, across
few organized players and several unorganized players. Despite
having a diverse product portfolio including cotton garments, a
significant portion of revenue comes from woolen clothing,
leading to seasonality in the revenue profile.
* Working-capital-intensive operations: The highly working
capital-intensive operations are driven by the large inventory
holding period. The company had large GCA of 238 days as on 31st
March 2018. The high GCA is mainly due to high inventory period
of more than 200 days. This large working capital requirement is
primarily funded by the bank limit.
Strengths
* Improved financial risk profile: Moderate cash accrual helped
net worth improve to INR6.33 crores as on 31st March, 2018 and
strengthened the financial risk profile. The Total Outside
liabilities to total net worth stood at 2.35 times as on March
31, 2018, due to moderate increase in net worth. Average
profitability and healthy debt protection metrics further support
the financial risk profile. The interest coverage and net cash
accruals to total debt ratios stood at 2.4 times and 0.19 time,
respectively, as on March 31, 2018. Stable accretion to reserve
should help the financial risk profile improve over the medium
term.
* Extensive experience of promoter in readymade garments
industry: The Khanna family has extensive experience of over a
decade in the garment manufacturing business. The family also
manages other entities such as Suresh Woollen Mills and Khanna
Spinning Mills. It caters to leading companies such as Aditya
Birla Nuvo Ltd, Arvind Lifestyle Brands Ltd, Benetton India Pvt
Ltd, Color Plus Fashion Ltd, among others. CRISIL expects
moderate growth in scale of operations, supported by the
company's established market position.
Outlook: Stable
CRISIL believes SRV will continue to benefit over the medium term
from its established market position, and its promoter's
extensive industry experience. The outlook may be revised to
'Positive' in case of a significant increase in revenue, along
with sustained improvement in profitability margin and debt
protection metrics. Conversely, the outlook may be revised to
'Negative' in case of deterioration in operating margin or debt
protection metrics, or a significant stretch in working capital
cycle.
Incorporated in 2000, SRV manufactures ready-made cotton and
woollen garments for several leading brands. The company is
promoted by Mr. Akhil Khanna, a Delhi-based entrepreneur. It has
its manufacturing facility in Bengaluru.
TIRUPATI PADDY: CRISIL Migrates 'B' Rating to Not Cooperating
-------------------------------------------------------------
CRISIL has migrated the rating on bank facilities of Tirupati
Paddy Products (TPP) to 'CRISIL B/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
Warehouse Receipts 10 CRISIL B/Stable (ISSUER NOT
COOPERATING; Rating Migrated)
CRISIL has been consistently following up with TPP for obtaining
information through letters and emails dated August 29, 2018 and
September 3, 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 Tirupati Paddy Products, which
restricts CRISIL's ability to take a forward looking view on the
entity's credit quality. CRISIL believes information available on
Tirupati Paddy Products is consistent with 'Scenario 1' outlined
in the 'Framework for Assessing Consistency of Information with
CRISIL BB' category or lower.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has migrated the rating on bank
facilities of Tirupati Paddy Products to 'CRISIL B/Stable Issuer
not cooperating'.
Incorporated in 2011, as a proprietorship firm, Tirupati Paddy
Products is engaged in trading of agriculture products such as
wheat, maize, paddy and rice. The company is managed by Mr.
Chandrakesh Yadav. The company has its registered office in
Mohali, Punjab.
VASWANI INDUSTRIES: Ind-Ra Moves 'BB' Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Vaswani
Industries Limited's Long-Term Issuer Rating at 'IND BB' while
migrating the rating to the non-cooperating category. The Outlook
is Stable. 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 BB
(ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR400 mil. Fund-based working capital limit affirmed and
migrated to Non-Cooperating Category with IND BB (ISSUER NOT
COOPERATING)/Stable rating; and
-- INR320 mil. Non-fund-based limits affirmed and migrated to
Non-Cooperating Category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; Based on
the best available information.
KEY RATING DRIVERS
The affirmation reflects Vaswani Industries' continued modest
credit profile. In FY18, its revenue was INR2,373.24 million
(FY17: INR2,555.11million), interest coverage (absolute
EBITDA/interest cost) was 1.85x (1.76x) and net financial
leverage (net debt/absolute EBITDA) was 2.98x (2.60x). Its EBITDA
margin was 6.8% in FY18 (FY17: 6.4%). In addition, its return on
capital employed was 8.2% in FY18 (FY17: 8.1%)
However, the ratings continue to draw comfort from the founders'
experience of over two decades in the iron and steel industry.
The ratings have been migrated to the non-cooperating category as
the company did not provide Ind-Ra revised projection data,
latest banker details, updated management certificate and working
capital utilization in a timely manner.
RATING SENSITIVITIES
Positive: An improvement in the overall liquidity profile, while
maintaining the credit profile, will be positive for the ratings.
Negative: Any further deterioration in the overall liquidity
profile and weakening of the credit metrics could lead to a
negative rating action.
COMPANY PROFILE
Incorporated in 2003, Vaswani Industries is engaged in generating
power and manufacturing sponge iron, steel billets and ingots in
Raipur. Its sponge iron is mainly used as a raw material for
manufacturing mild steel billets/ingots. Its captive power plant
provides uninterrupted power supply to its manufacturing plant.
VIDEOCON INDUSTRIES: Promoter Seeks Stay on Inviting Bids
---------------------------------------------------------
Livemint.com reports that the promoter of Videocon Industries Ltd
(VIL), Venugopal Dhoot, has approached the National Company Law
Tribunal (NCLT) to seek its intervention to stop inviting
expression of interest by the resolution professional (RP) of the
company.
According to Livemint.com, the promoter of the Aurangabad-based
group has cross-shareholdings in every company and an expression
of interest at this stage in any company that is under the
insolvency proceedings can harm the prospects of other companies
as well.
Livemint.com relates that Dhoot has sought to defer the
resolution processes of all group companies, including Videocon
Industries and 13 other subsidiaries of the group, before the
Mumbai bench of NCLT as the decision of the principal bench is
awaited.
"Venugopal Dhoot is the personal guarantor in respect of all the
loans. He is also a former director in all the companies besides
being the shareholder and hence he is wearing three hats for the
companies," argued Zal Andhyarujina, counsel for Dhoot,
Livemint.com relays.
"We have already made an application to consolidate all the
companies into one matter at the principal bench. All we need is
to stop accepting any expression of interest for any company till
the bench decides on the consolidation," he said.
Livemint.com relates that the counsel appearing for the
resolution professional said that he did not have an issue with
clubbing the resolution processes of all 14 companies once the
clarification comes from the principal bench as it will lead to
maximization of the value of the assets.
At present, there is no clarity on dealing with the insolvency,
which involves the entire group, including several subsidiaries
and businesses, the report states.
Also, the biggest lender of the group, State Bank of India, which
has filed the insolvency pleas against Videocon, also agreed to
the proposal only if there is a common 270-day deadline for all
the group companies, Livemint.com says.
Livemint.com notes that the single bench of NCLT presided over by
M.K. Shrawat had reserved the order after hearing all the
parties.
About Videocon Industries
Videocon Industries sells consumer products like color
televisions, washing machines, air conditioners, refrigerators,
microwave ovens and many other home appliances in India.
On June 6, 2018, National Company Law Tribunal (NCLT), Mumbai
bench, admitted a petition for initiating insolvency resolution
process against the company under the Insolvency and Bankruptcy
Code, 2016.
According to Videocon's FY17 annual report, the company is liable
to repay the liability of other group companies to the extent of
INR5,082 crore as on March 31, 2017. The company's total debt
stood at INR19,506 crore as of March last year, Livemint.com
discloses.
YASHASVI YARNS: Ind-Ra Maintains 'D' LT Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Yashasvi Yarns
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 D (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR510 mil. Fund-based limits (Long-term) maintained in non-
cooperating category with IND D (ISSUER NOT COOPERATING)
rating;
-- INR260 mil. Non-fund-based limits (Short-term) maintained in
non-cooperating category with IND D (ISSUER NOT COOPERATING)
rating; and
-- INR285.4 mil. Term loan (Long-term) maintained in non-
cooperating category with IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
June 17, 2015. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1993, Yashasvi Yarns manufactures texturized and
twisted variants of polyester yarn.
YCD INDUSTRIES: Ind-Ra Affirms 'BB+' LT Rating, Outlook Stable
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed YCD Industries
Limited's (YCD; formerly Bhandari Exports Industries Limited)
Long-Term Issuer Rating at 'IND BB+'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR280 mil. Fund-based working capital limit affirmed with
IND BB+/Stable/IND A4+ rating;
-- INR80 mil. Non-fund based limit affirmed with IND A4+ rating;
and
-- INR18 mil. (reduced from INR30 mil.) Term loan due on October
2022 affirmed with IND BB+/Stable rating.
KEY RATING DRIVERS
The affirmation reflects YCD's continued modest credit profile.
Its revenue rose to INR1,278.20 million in FY18 from INR1,126.84
million in FY17, driven by an improvement in raw material prices,
a higher quantity sold to existing clients and the addition of
new clients. Its EBITDA margin was largely unchanged at 4.71% in
FY18 compared with 4.94% in FY17, with return on capital employed
standing at 8% (8%). FY18 financials are provisional in nature
Moreover, its gross interest coverage (operating EBITDA/gross
interest expense) improved to 1.66x in FY18 from 1.45x in FY17 on
account of the repayment of a term loan that led to lower
interest expenses. Its net financial leverage (adjusted net
debt/operating EBITDA) deteriorated to 6.29x in FY18 from 5.39x
in FY17, primarily due to a higher fund-based limit utilization
to support an increase in working capital requirements.
The ratings also reflect YCD's modest liquidity, indicated by an
average working capital limit utilization of 88.57% for the 12
months ended August 2018.
The ratings, however, continue to be supported by the
management's experience of around one decade in the paper and
textile industry.
RATING SENSITIVITIES
Negative: A substantial fall in EBITDA margin, leading to weaker
credit metrics, will be negative for the ratings.
Positive: An improvement in the credit profile, with gross
interest coverage exceeding 2.5x, on a sustained basis, will be
positive for the ratings.
COMPANY PROFILE
YCD is promoted by Mr. Dhruv Satia and is a part of Satia group.
The company started its operations in 1994 under the management
of Mr. Naresh Bhandari. However, in 2002, the unit was declared a
sick unit and in 2004 the unit was purchased by the current
promoters. The company manufactures cotton and polyester yarn
with counts ranging from 10s to 40s at its unit in Lalru
(Punjab), with an installed capacity of 17,328 spindles, as on
March 31, 2018. The yarn manufactured by the company is used for
the production of fabrics for t-shirts, tops, shawls, suits and
others.
=================
I N D O N E S I A
=================
BAYAN RESOURCES: Moody's Assigns Ba3 CFR, Outlook Stable
--------------------------------------------------------
Moody's Investors Service has assigned a Ba3 corporate family
rating to Bayan Resources Tbk.
The rating outlook is stable.
RATINGS RATIONALE
"Bayan's Ba3 rating reflects its growing thermal coal production
levels following the ramp-up at its Tabang mine, long reserve
life of around 30 years, as well as strong profitability, and
very low leverage," says Maisam Hasnain, a Moody's Analyst and
Lead Analyst for Bayan.
The Ba3 rating also takes into account Bayan's strong operating
profile. The company has a globally competitive cost structure,
supported by low labor costs, efficient open-cut mining
operations with a low strip ratio and mine site integrated
infrastructure. In 1H 2018, the company reported an average strip
ratio of 4.1x, cash cost of around $30 per ton and a reported
EBITDA margin of 48%.
The Indonesian coal miner produced 14.8 million tons of coal in
the first six months of 2018 (1H 2018) across its five operating
mines, up 78% from the 8.3 million tons produced during the same
period last year. Bayan is on track to meet its target of up to
28 million tons for the full year. Tabang is the company's
largest producing asset and will contribute around 80% of total
volumes in 2018.
The company plans to spend approximately $255 million over the
next three years to considerably increase the capacity at its
Tabang mine to 50-60 million tons by 2021 from 25-35 million tons
currently. The expansion will be funded primarily with internal
cash generated from operations.
"As Bayan continues with the planned volume growth at Tabang, we
expect it to maintain prudent financial policies, including
maintaining low leverage and these expectations are built into
the Ba3 rating," adds Hasnain. "Under our base case projections,
Bayan's adjusted debt/EBITDA will stay below 1.0x through 2020."
At the same time, the Ba3 rating remains constrained by a lack of
diversification, given Bayan's single commodity exposure to
thermal coal and geographic concentration, because all its mines
are located in Kalimantan.
Tabang has a relatively short track record having only started to
materially increase production in 2015. Nonetheless, Moody's
believes operational risk is mitigated by the stable production
ramp-up since 2015 and the use of experienced and reputable
contract miners at the mine site.
The stable outlook on the rating reflects Moody's expectations
that Bayan will achieve its production volume growth, while
maintaining a financial profile appropriate for its Ba3 rating.
An upgrade of the rating is unlikely over the next 12-18 months,
given Bayan's limited scale and lack of diversification.
Nonetheless, upward rating pressure could develop over the longer
term, if Bayan increases production meaningfully, improves
diversification in relation to geography and/or product, while
maintaining a strong credit profile.
Downward pressure on the rating could emerge if: 1) Bayan
experiences material disruption to its operations; 2) industry
fundamentals deteriorate, leading to a decline in earnings; or 3)
there is a material change in its underlying financial or
operational strategy, including but not limited to, higher-than-
expected capital spending, material debt funded acquisitions or a
more aggressive dividend payment policy.
Specific financial indicators that could lead to a rating
downgrade include adjusted debt/EBITDA approaching 3.5x or
adjusted EBIT/interest expense trending down to 2x.
The principal methodology used in this rating was Mining
published in September 2018.
Listed on the Indonesian Stock Exchange in 2008, Bayan Resources
Tbk (P.T.) is engaged in surface open cut mining of coal mines
primarily located in East and South Kalimantan. It has a 90%
interest in its largest producing asset at Tabang, which will
contribute around 80% of its total production volume of up to 28
million tons in 2018.
At December 31, 2017, the company had JORC-compliant resources of
around 1.9 billion tons, of which, proven and probable reserves
accounted for 792 million tons.
Bayan's founder Dato' Low Tuck Kwong is the largest shareholder
with a 51.6% stake, Korea Electric Power Corporation (KEPCO, Aa2
stable) owns 20% through its subsidiaries and PT Sumber Suradaya
Prima owns 10%. Bayan's management holds a 14.5% stake and the
balance is publicly owned.
=========
J A P A N
=========
SURUGA BANK: Moody's Lowers LT Bank Deposit Rating to Ba2
---------------------------------------------------------
Moody's Japan K.K. has downgraded the short- and long-term bank
deposit ratings, the baseline credit assessment, Adjusted BCA,
and the Counterparty Risk Assessments of Suruga Bank, Ltd.
At the same time, the BCA, Adjusted BCA, long-term bank deposit
ratings, and long-term CRA for Suruga Bank remain on review for
further downgrade.
The affected ratings are as follows:
- Baseline credit assessment (BCA): downgraded to ba3 from
baa3, review for further downgrade
- Adjusted BCA: downgraded to ba3 from baa3, review for further
downgrade
- Long-term bank deposit rating (domestic and foreign
currency): downgraded to Ba2 from Baa1, review for further
downgrade
- Short-term bank deposit rating (domestic and foreign
currency): downgraded to Not Prime from P-2
- Long-term Counterparty Risk (CR) assessment: downgraded to
Ba1(cr) from A3(cr), review for further downgrade
- Short-term Counterparty Risk (CR) assessment: downgraded to
Not Prime(cr) from P-2(cr)
RATINGS RATIONALE
The rating action reflects the risk of further material credit
costs related to its real estate investment lending in the light
of a recent independent investigative report.
This investigation revealed that the size of this portfolio was
much larger than previously reported, as well as documenting
widespread breaches of the bank's lending policies and document
falsification. The downgrades also reflect a deterioration in the
bank's liquidity.
The continuing review will continue to focus on the quality of
the bank's loan portfolio and the impact on profitability, and
its liquidity and funding positions.
According to an independent third-party report, the bank's real
estate investment loan portfolio, including loans extended to
finance the purchase of share houses from real estate developers,
totaled around JPY1.9 trillion at March 2018 (about 60% of the
bank's total loans), which is significantly larger than its
tangible common equity of JPY297.1 billion. The report
highlighted the bank's failure on governance and internal control
practices, resulting in five senior managers resigning.
The bank's JPY71.8 billion of reported loan-loss reserves for
investment-related real estate loans through the end of June 2018
were just a fraction of the total for its real estate investment
loans.
Given the evidence in the report of widespread breaches of the
bank's lending policies and the falsification of documentation,
there is a material probability that the bank will need to
increase its provisioning.
Liquidity at the bank is also deteriorating, with deposits
continuing to fall, declining more quickly than loans, resulting
in an increasing loan/deposit ratio and falling pool of liquid
assets.
Furthermore, Moody's lowered the government support assumption to
moderate from high, given Suruga Bank's challenges are
idiosyncratic in nature and may not have material implications
for the broader Japanese banking system.
As a result, its long-term deposit ratings as well as the CRA now
incorporate one notch of government support compared to two
notches previously.
What Could Change the Ratings - Up
Given that the ratings are on review for downgrade, an upgrade is
unlikely.
However, Moody's could confirm the ratings, if the full extent of
the bank's problems are identified and are mostly reflected in
its financials. A stabilization of the bank's liquidity profile
would also contribute to a confirmation of the ratings.
What Could Change the Ratings - Down
Factors that could result in a downgrade include, but are not
limited to:
1. Findings that further undermine the bank's reputation or
further weaken its ability to conduct business
2. Expectations of further material credit costs that erode the
bank's capital position
3. Continued weakening of the bank's liquidity profile caused by
a continued reduction in deposits and liquid assets
4. A reduction in Moody's assessment of the government's
willingness to provide support
The principal methodology used in these ratings was Banks
(Japanese) published in August 2018.
Suruga Bank, Ltd. is a regional bank headquartered in Shizuoka
Prefecture. The bank reported a consolidated asset base of JPY4.2
trillion as of June 30, 2018.
===============
M O N G O L I A
===============
DEVELOPMENT BANK OF MONGOLIA: Fitch Assigns 'B' LT IDR
------------------------------------------------------
Fitch Ratings has assigned Mongolia-based policy bank Development
Bank of Mongolia LLC (DBM) Long-Term Issuer Default Ratings
(IDRs) of 'B' with a Stable Outlook.
Fitch has also assigned DBM's proposed US dollar senior unsecured
notes an expected rating of 'B(EXP)' with a Recovery Rating of
'RR4'. The notes are to be issued under New York law and will be
listed on the Singapore Stock Exchange. The notes will be used to
refinance existing debt, lengthen the bank's debt maturity
profile and lower its average funding cost.
The final rating on the notes is contingent on the receipt of
final documentation conforming to information already received.
KEY RATING DRIVERS
IDRS, SUPPORT RATING AND SUPPORT RATING FLOOR
The IDRs and Support Rating Floor of DBM are equalised with the
IDRs of the sovereign, reflecting its expectation of strong
incentives for the state to support the bank, if required. This
stems from DBM's policy role, full state ownership and close
linkages to the government, such as board representation, lending
to state-owned companies and guaranteed legacy debt. The Support
Rating of '4' takes into account its view of the lower ability
(as opposed to propensity) of the sovereign, which is rated 'B',
to support the bank.
DBM is the only financial institution in Mongolia with a specific
mandate to finance projects in important sectors that support the
economy, as specified in the Development Bank of Mongolia Act
(the Act). For instance, DBM was established with the purpose of
financing projects that develop products and services that
increase export revenue or replace imports through domestic
alternatives. The Act stipulates that at least 60% of DBM's
exposures should be channelled towards export-related projects.
Fitch views the state ownership as strategic in light of the
policy role, notwithstanding the revisions made to the Act in
April 2017 as part of the structural reforms under the IMF
programme. The government's involvement in DBM's day-to-day
operations has been minimised and it is not to dictate or refer
specific projects to DBM given the intent to make the bank more
independent and self-sustaining through the generation and
retention of profit to fund future activities. Nevertheless, a
majority of the bank's board will be appointed by the state,
including three state secretaries specifically representing its
interests.
The government has previously supported DBM through the transfer
of a sizeable portfolio of fiscal-related loans to the Ministry
of Finance and capital injections, and Fitch believes the state
remains incentivised to continue supporting DBM in light of the
bank having retained the debt it issued in 2014, which is
explicitly co-guaranteed by the government until 2024.
Under the revised act, DBM does not benefit from an automatic
loss-absorption mechanism but Fitch expects the government to
provide support when necessary. Its shareholders will decide
whether to inject capital into DBM in the event that its reserve
fund is insufficient to cover losses. DBM is required to build
the fund and its target is to set aside a minimum 40% of its
comprehensive income starting 2018, while the remainder will be
used to offset current retained losses.
Certain prudential ratios, including a total capital-adequacy
ratio (minimum: 10.5%; end-1H18: 32.5%) and an all-currency
liquidity-coverage ratio (100%; 159%), are monitored by the Bank
of Mongolia. The central bank can recommend remedial actions to
the government through the Ministry of Finance if DBM breaches
any of the prudential ratios but the power of putting DBM into
liquidation resides with the government.
The Stable Outlook reflects that of Mongolia's sovereign rating.
Fitch does not assign a Viability Rating (VR) for DBM due to its
evolving commercialised business model, in which it is not yet
sufficiently tested in its view. DBM relies on wholesale funding
and the bank does not have a deposit franchise as it is
prohibited from taking retail deposits under the Act.
SENIOR DEBT AND RECOVERY RATING
Fitch equalises the rating on the notes with that of DBM as they
constitute direct, unsecured and unsubordinated obligations of
the bank. They will rank pari passu with DBM's other unsecured
and unsubordinated obligations, and they will be subordinated to
the secured debt of the bank and the obligations of its
subsidiaries.
The notes contain various default events that link them closely
to the sovereign, reinforcing its expectation of strong
incentives for the state to support the bank, if required.
Specifically, the events of default make reference to the
government of Mongolia declaring a general moratorium or becoming
liable to repay prior to maturity any amount of its external
debt, which captures DBM's existing JPY30 billion bond maturing
in 2024 that is guaranteed by Mongolia's Ministry of Finance and
the Japan Bank of International Cooperation, and certain
bilateral loans of DBM, which benefit from a government
guarantee. The bonds would also be considered in default if the
Mongolian government ceases to wholly own and control DBM, if the
legal basis for its operations were to be taken away or the
international reserves of the government become subject to
preferential arrangement for the benefits of any creditors.
The Recovery Rating of 'RR4' indicates typical recovery prospects
of 31%-50%.
RATING SENSITIVITIES
IDRS, SUPPORT RATING AND SUPPORT RATING FLOOR
The bank's IDRs, Support Rating and Support Rating Floor are
sensitive to Fitch's perception of the state's ability or
willingness to support the bank, and movement in the sovereign
rating.
Its ratings may be notched down from the sovereign's if the
bank's policy role were to diminish, the state's stake in the
bank were to fall significantly or the linkages between the two
were to weaken. Fitch does not expect the scenarios to occur in
the near to medium term.
Fitch might assign a VR to DBM in the future if the bank's
commercial aspirations materialise, which would make it more
meaningful to assess its standalone credit profile.
SENIOR DEBT AND RECOVERY RATING
The rating of the notes is sensitive to the same factors that
drive DBM's IDRs: changes to the sovereign's ratings and in
Fitch's view on DBM's linkages to the government, including state
ownership.
The Recovery Rating of the notes is sensitive to Fitch's
assessment of potential recoveries for creditors in case of
default or non-performance. It could be downgraded if there is a
change in Fitch's assumptions on the quality or the recovery
rates of the assets.
The rating actions are:
Long-Term Foreign-Currency IDR assigned at 'B'; Outlook Stable
Short-Term Foreign-Currency IDR assigned at 'B'
Long-Term Local-Currency IDR assigned at 'B'; Outlook Stable
Support Rating assigned at '4'
Support Rating Floor assigned at 'B'
Rating on proposed US dollar senior unsecured notes assigned at
'B(EXP)' with Recovery Rating of 'RR4'
DEVELOPMENT BANK OF MONGOLIA: S&P Rates New Sr. Unsec. Notes 'B-'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' long-term issue rating to a
proposed issue of U.S. dollar-denominated senior unsecured notes
by Development Bank of Mongolia (DBM: B-/Stable/B). The rating on
the notes is subject to S&P's review of the final issuance
documentation.
The proposed notes will constitute direct, unsecured, and
unsubordinated obligations of DBM. They shall at all times rank
at least pari passu with all other unsecured and unsubordinated
obligations of the bank. However, the proposed notes will be
effectively subordinated to secured obligations of the bank and
its subsidiaries. DBM intends to use the proceeds to refinance
its existing debt to lower its funding costs.
The proposed notes will be considered in default if the Mongolian
government ceases to wholly own and control DBM. The proposed
notes will also be considered in default if the Mongolian
government declares a general moratorium on its external debt,
including obligations under guarantees.
S&P said, "The ratings on DBM reflect our view of an almost
certain likelihood that the Mongolian government would provide
timely and sufficient extraordinary support to the bank if
needed. That's because DBM is a fully government-owned policy
bank that provides long-term funding for projects that secure the
country's long-term growth prospects. We equalize the ratings on
DBM with the sovereign ratings on Mongolia (B-/Stable/B)."
====================
S O U T H K O R E A
====================
* SOUTH KOREA: Major Public Firms' Debt Likely to Rise
------------------------------------------------------
Yonhap News reports that South Korea's public sector debt growth
is likely to rise this year, government data showed on Oct. 7,
raising concerns about Seoul's financial burdens.
The combined debt of 39 major South Korean public sector firms is
forecast to reach KRW480.8 trillion ($425 billion) this year,
Yonhap discloses citing the data from the Ministry of Economy and
Finance submitted to the National Assembly.
The debt had declined for four straight years to KRW472.3
trillion in 2017 after hitting a record high of KRW498.5 trillion
in 2013, Yonhap says,
According to Yonhap, the ministry said the combined debt of the
39 major public firms could increase to KRW539 trillion in 2022
as they increase their investments and expand their businesses.
Yonhap relates that the listed firms include the Korea Land and
Housing Corp. and the Korea Electric Power Corp. (KEPCO). The
ministry said the debt of the Korea Land and Housing Corp. could
reach KRW150.4 trillion in 2022 from an estimated KRW128.1
trillion this year.
In August, the ministry said the 39 public firms are required to
maintain their debt-to-total asset ratio at an average of 152
percent in the next five years, down from 167 percent in 2017, to
improve their balance sheets, Yonhap adds.
=============
V I E T N A M
=============
VINGROUP JSC: Fitch Puts B+ LT IDR on Rating Watch Negative
-----------------------------------------------------------
Fitch Ratings has placed Vietnamese property developer Vingroup
JSC's 'B+' Long-Term Foreign- and Local-Currency Issuer Default
Ratings and senior unsecured rating on Rating Watch Negative
(RWN).
The ratings were placed on RWN pending Vingroup's appeal against
Fitch's rating decision following a rating review on October 2,
2018. Vingroup will provide Fitch with information in relation to
the appeal by close of business October 8, 2018. The RWN will be
resolved by close of business on October 10, 2018.
*********
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
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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 ***