/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/190121.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, January 21, 2019, Vol. 22, No. 014 Headlines A U S T R A L I A DBW PROPERTIES: First Creditors' Meeting Set for Jan. 29 HARVEST EDUCATION: Second Creditors' Meeting Set for Jan. 30 ONSLOW MINERALS: Second Creditors' Meeting Set for Jan. 29 ORIGINAL BEEF: First Creditors' Meeting Set for Jan. 30 RISK ADVISOR: First Creditors' Meeting Set for Jan. 30 TRITON TRUST 2019-1: S&P Assigns BB Rating to Class E Bonds C H I N A CENTRAL CHINA: Fitch Affirms BB- LongTerm IDR, Outlook Stable JIANGSU NEW HEADLINE: S&P Withdraws 'BB' Issuer Credit Rating JIAYUAN INTERNATIONAL: Crash Underscores China Property Risks WINTIME ENERGY: Stocks Trade Amidst Possible Default on Bonds I N D I A A-1 HEIGHTS: CRISIL Maintains 'B' Rating in Not Cooperating ADI WIRES: CRISIL Keeps 'D' Rating in Not Cooperating Category ASOKE TIMBER: Ind-Ra Raises Rating on INR60MM Debt to 'BB' BABA BHUBANESWAR: CRISIL Maintains B- Ratings in Not Cooperating BAJORIA AGRO: CRISIL Maintains B+ Ratings in Not Cooperating CHANDITALA BLUE: ICRA Maintains C Ratings in Not Cooperating CHAUDHARY JAI: CRISIL Maintains 'B' Ratings in Not Cooperating COSMIC PETROCHEM: CRISIL Maintains B+ Ratings in Not Cooperating D.P. GARG: Ind-Ra Migrates B+ LT Issuer Rating to Non-Cooperating DAKSHINESWAR RICE: CRISIL Maintains B+ Ratings in Not Cooperating DEEPAK COTTON: CRISIL Maintains 'B' Rating in Not Cooperating DURGASHAKTI FOODS: CRISIL Withdraws B Rating on INR10.51cr Loan EMSON GEARS: CRISIL Maintains 'B+' Rating in Not Cooperating ESHWARR STEEL: CRISIL Maintains 'B' Ratings in Not Cooperating EYE-Q VISION: ICRA Lowers Rating on INR4cr NCD to D FASTBUILD BLOCKS: CRISIL Maintains B- Rating in Not Cooperating HARESH OVETA: CRISIL Maintains B+ Rating in Not Cooperating JAY BHARAT FOOD: ICRA Keeps B+ Ratings in Not Cooperating JAY BHARAT SPICES: ICRA Maintains B+ Rating in Not Cooperating KAKINADA SEZ: ICRA Lowers Rating on INR150cr LT Loan to D LAXMINARAYAN SPINNERS: CRISIL Withdraws B Rating on INR40cr Loans LC DEVOLVEMENT: ICRA Lowers Rating on INR2cr Loan to D LEO TIMBER: CRISIL Maintains 'B' Ratings in Not Cooperating MANMATHA NATH: ICRA Maintains B+ Rating in Not Cooperating MASTER INDIA: CRISIL Maintains 'D' Ratings in Not Cooperating MOZART VITRIFIED: CRISIL Maintains 'B' Rating in Not Cooperating NIKITA JEWELLERS: Ind-Ra Moves BB+ LT Rating to Non-Cooperating NOVEL SUGAR: Ind-Ra Migrates BB+ Issuer Rating to Non-Cooperating QUAD LIFESCIENCES: Ind-Ra Migrates BB+ Rating to Non-Cooperating R.P. STEEL: CRISIL Lowers Rating on INR17cr Cash Loan to D RAJASTHAN COMMU: Ind-Ra Migrates B+ LT Rating to Non-Cooperating RAJASTHAN METALS: Ind-Ra Moves BB- LT Rating to Non-Cooperating SAJEESH K: CRISIL Withdraws 'D' Rating on INR9cr Loans SHRI KESHAV: Ind-Ra Lowers Long Term Issuer Rating to 'BB' TCL-MMPL CONSORTIUM: ICRA Withdraws B+ Rating on INR1cr Loan YASHMU PROJECTS: ICRA Withdraws B Rating on INR25cr LT Loan I N D O N E S I A ALAM SUTERA: Fitch Rates USD175MM Sr. Unsec. Notes 'B' GOLDEN ENERGY: Fitch Affirms B+ Long-Term IDR, Outlook Positive M A L A Y S I A SCOMI GROUP: Units Default on MYR36.15 Million Bank Loan N E W Z E A L A N D AUCKLAND ACADEMY: In Liquidation, Fails to Pay NZ$351K Fine FALCON BUILDING: Former Employee Owed NZ$36K May Not Get Money P H I L I P P I N E S HANJIN HEAVY: Philippine Unit Collapse Hits Small Businesses UNITED COCONUT: Moody's Ups Foreign Curr. Deposit Ratings to Ba3 S I N G A P O R E HYFLUX LTD: Zero Recovery for Sub. Noteholders in Liquidation - - - - - ================= A U S T R A L I A ================= DBW PROPERTIES: First Creditors' Meeting Set for Jan. 29 -------------------------------------------------------- A first meeting of the creditors in the proceedings of DBW Properties Pty Ltd (as trustee for the DBW Properties Trust) will be held on Jan. 29, 2019, at 10:00 a.m. at the offices of SV Partners, at Level 17, 200 Queen Street, in Melbourne, Victoria. Richard John Cauchi of SV Partners was appointed as administrator of DBW Properties on Jan. 16, 2019. HARVEST EDUCATION: Second Creditors' Meeting Set for Jan. 30 ------------------------------------------------------------ A second meeting of creditors in the proceedings of Harvest Education Technical College Pty. Ltd. has been set for Jan. 30, 2019, at 10:00 a.m. at Jacaranda Room, Marriot Hotel, 515 Queen Street, in Brisbane, Queensland. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by Jan. 29, 2019, at 4:00 p.m. Christopher John Baskerville of Jirsch Sutherland was appointed as administrator of Harvest Education on Dec. 24, 2018. ONSLOW MINERALS: Second Creditors' Meeting Set for Jan. 29 ---------------------------------------------------------- A second meeting of creditors in the proceedings of Onslow Minerals Pty Ltd has been set for Jan. 29, 2019, at 10:00 a.m. at the offices of The Charlotte Boardroom, The Institute of Company Directors, Level 1, Allendale Square, 77 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 Jan. 25, 2019, at 4:00 p.m. Carl Huxtable, Cameron Shaw & Richard Albarran of Hall Chadwick were appointed as administrators of Onslow Minerals on Aug. 10, 2018. ORIGINAL BEEF: First Creditors' Meeting Set for Jan. 30 ------------------------------------------------------- A first meeting of the creditors in the proceedings of Original Beef Jerky Pty Ltd, trading as Roadkill Beef Jerky, will be held on Jan. 30, 2019, at 11:00 a.m. at the offices of HLB Mann Judd (Insolvency WA), at Level 3, 35 Outram Street, in West Perth, WA. Kimberley Stuart Wallman of HLB Mann Judd (Insolvency WA) was appointed as administrator of Original Beef on Jan. 17, 2019. RISK ADVISOR: First Creditors' Meeting Set for Jan. 30 ------------------------------------------------------ A first meeting of the creditors in the proceedings of Risk Advisor Pty Ltd, trading as Risk Point, will be held on Jan. 30, 2019, at 10:00 a.m. at Eagle Room, Allendale Square Level 24, 77 St George's Terrace, in Perth, WA. Mathieu Tribut of GTS Advisory was appointed as administrator of on Risk Advisor Jan. 17, 2019. TRITON TRUST 2019-1: S&P Assigns BB Rating to Class E Bonds ----------------------------------------------------------- S&P Global Ratings assigned its ratings to seven classes of prime residential mortgage-backed securities (RMBS) issued by Perpetual Corporate Trust Ltd. as trustee for Triton Trust No. 8 Bond Series 2019-1. The ratings reflect: -- S&P's view of the credit risk of the underlying collateral portfolio, including the fact that this is a closed portfolio, which means no further loans will be assigned to the trust after the closing date. -- S&P's view that the credit support is sufficient to withstand the stresses it applies. This credit support comprises mortgage insurance covering 43.5% of the loans in the portfolio, accrued interest, and reasonable costs of enforcement, as well as note subordination for all rated notes. -- S&P's expectation that the various mechanisms to support liquidity within the transaction, including an amortizing liquidity facility equal to 1.2% of the invested amount of all notes, principal draws, and a loss reserve that builds from excess spread, are sufficient under its stress assumptions to ensure timely payment of interest. -- The extraordinary expense reserve of A$150,000, funded from day one by Columbus Capital Pty Ltd., available to meet extraordinary expenses. The reserve will be topped up via excess spread if drawn. -- The benefit of a fixed-to-floating interest-rate swap provided by National Australia Bank Ltd. (NAB) to hedge the mismatch between receipts from any fixed-rate mortgage loans and the variable-rate RMBS. RATINGS ASSIGNED Triton Trust No. 8 Bond Series 2019-1 Class Rating Amount (mil. AUD) A1-AU AAA (sf) 260.00 A1-3Y AAA (sf) 100.00 AB AAA (sf) 25.20 B AA (sf) 6.80 C A (sf) 4.80 D BBB (sf) 1.40 E BB (sf) 1.00 F NR 0.80 NR--Not rated. ========= C H I N A ========= CENTRAL CHINA: Fitch Affirms BB- LongTerm IDR, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed Central China Real Estate Limited's Long-Term Issuer Default Rating at 'BB-'. The Outlook is Stable. Fitch has also affirmed the senior unsecured rating at 'BB-' and the ratings on CCRE's outstanding foreign-currency senior unsecured bonds at 'BB-'. CCRE's ratings are supported by the company's position as a leading real-estate developer in China's Henan province, with broad housing-product diversification and a growing non-property development business in rental properties and project management. The ratings are also supported by the company's healthy financial profile, with leverage, as measured by net debt/adjusted inventory that proportionately consolidates its joint ventures, estimated by Fitch at 31% at end-2018. KEY RATING DRIVERS Strong Presence in Henan: Fitch believes CCRE's track record supports its plan to increase its market share in Henan to 10%- 13% in the next one to three years from 8.7% in 1H18. CCRE has been developing residential properties almost entirely in the province for more than 25 years and it has projects in 18 prefecture-level cities and an established reputation. CCRE's lower average selling price (ASP) of CNY7,221 per square metre (sq m) in 2018 compared with peers' ASP of above CNY11,000 per sq m reflects its wide product exposure, which includes projects in smaller cities. The diversification helps it mitigate the risks of home-purchase restrictions in the provincial capital, Zhengzhou. Sales, Market Share to Increase: CCRE's contracted sales in 2018 were strong at CNY53.7 billion, up 76.5% from 2017. This was driven by a larger share of sales from lower-tier cities in Henan. Fitch expects CCRE's annual contracted sales to increase to CNY61 billion-68 billion in 2019-2020, while the company's market share in Henan province is likely to expand to more than 10% in the medium term. The company remained as the largest developer in the province in 1H18. Growing Non-Development Businesses: Fitch estimates CCRE's EBITDA/interest rose to 3.1x by end-2018 (end-2017: 1.5x), as the company expanded its non-development businesses, including investment properties and cultural tourism, which will help to improve its debt service ability. Local governments are encouraging cultural tourism projects, giving CCRE access to lower-cost funding and alternative land banking channels that improve its financial flexibility. CCRE's expansion into project management of residential property developments (asset-light business model) in the province's smaller towns drove the increase in EBITDA from non-development businesses. As of 1H18, CCRE has 93 projects under the asset- light model, which it expects to provide CNY3 billion of revenue over the next three to four years. Revenue from the asset-light model increased by more than 150% to CNY249 million in 1H18, with gross margin of 99%. Aggressive Land Acquisitions Drive Leverage: In 1H18, CCRE acquired 5.9 million sq m in attributable gross floor area of land for CNY6.5 billion. Fitch expects the company to achieve a land-acquisition-to-contracted sales value ratio of 0.26x in 2018, in line with 0.2x-0.3x in previous years. Fitch expects the acquisitions to drive up the company's leverage, measured by net debt to adjusted inventory on a proportionate consolidation basis, to above 33% in 2019-2020, from about 31% in 2018. Leverage fell in 2018 from 34% in 2016-2017 thanks to strong contracted sales growth. The company's land bank is sufficient for its development for the next five years and Fitch believes CCRE's land banking to keep pace with its rising contracted sales in 2019-2020. Improving Margin: Fitch estimates CCRE's EBITDA margin (after deducting capitalised interest from cost of sales) to be 19%-25% in 2018-2020 compared with 13%-17% in 2016-2017, due to an estimated 9% increase in contracted sales ASP in 2018. This will support CCRE's EBITDA margin when revenue from these projects are recognised in the next one to two years and CCRE's EBITDA margin should stabilise over time. DERIVATION SUMMARY CCRE's contracted sales of CNY53.7 billion in 2018 are comparable with those of 'BB-' rated peers, while it has maintained a healthier financial profile. Yuzhou Properties Company Limited (BB-/Stable) had contracted sales of CNY56 billion in 2018 and KWG Group Holdings Limited (BB-/Stable) had CNY65.5 billion. CCRE"s leverage ratio, measured by net debt to adjusted inventory on a proportionately consolidated basis, is likely to be 31% in 2018, well below the 'B+' and 'B' rated peers' of 40%-60% and in line with 'BB-' rated peers' of 20%-45%. However, CCRE's leverage may increase to 34%-35% in 2019-2020. CCRE's EBITDA margin of 17% in 2017 was near the bottom of the range for 'BB-' peers of 18%-25% due to its destocking strategy. However, Fitch expects CCRE's EBITDA margin to rise to 19%-25% in 2018-2020 as revenue from projects with higher contracted sales ASP will start be recognised and revenue increases from the company's higher-margin rental property and project management businesses. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Total contracted sales by gross floor area to increase by 13% in 2019 and 11% in 2020 - Average selling price for contracted sales to increase 0%-1% per annum in 2019-2020 - EBITDA margin (excluding capitalised interest) to reach 19% in 2018, 24%-25% in 2019-20 - Land acquisition budget to be 22%-26% of total contracted sales for 2018-2020 for the company to maintain its land bank at approximately five years of contracted sales RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Leverage, measured by net debt to adjusted inventory on a proportionately consolidated basis, persistently at 30% or below, while the company maintains its leading position in Henan province. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Sustained decline in contracted sales - Leverage sustained at 40% or above - EBITDA margin sustained at below 18% LIQUIDITY Ample Liquidity: As of June 30, 2018, company had total cash of CNY15.0 billion (including restricted cash of CNY2.4 billion), sufficient to cover short-term debt of CNY1.6 billion maturing in one year. Diversified Funding Channels: CCRE had a total debt CNY19.7 billion as of June 30, 2018, consisting of bank loans, other loans, senior notes and corporate bonds. There were unutilised banking facilities of CNY66.6 billion. CCRE is listed on the Hong Kong stock exchange and conducted an equity placement in 1H18 that raised about CNY800 million. Stable Funding Cost: The average cost of borrowing was 6.9% in 1H18, stable from 6.8%-6.9% in 2016-2017. JIANGSU NEW HEADLINE: S&P Withdraws 'BB' Issuer Credit Rating ------------------------------------------------------------- S&P Global Ratings said that it has withdrawn its ratings on Jiangsu New Headline Development Group Co. Ltd. (New Headline, BB/Stable/) and its subsidiary HK Zhiyuan Group Ltd. (HK Zhiyuan, BB-/Stable) at the companies' request. The issuer credit rating on New Headline was 'BB' and outlook stable at the time of withdrawal. The issuers have no rated debt outstanding. S&P said, "Our rating had reflected our view of New Headline's extremely high likelihood of receiving extraordinary support from the Lianyungang government (Lianyungang) in case of financial distress. New Headline is the only municipal controlled financing vehicle that undertakes various infrastructure investments in the Economic and Technological Development Zone, an important economic region for the city. We also view the company's link to the government as integral. Lianyungang fully controls New Headline, owning 100% of its shares with no future dilution plan, closely managing its senior management team, and driving its business strategy. "The stable outlook at the time of withdrawal reflected our view of the stable creditworthiness of Lianyungang. The government's satisfactory financial management should enable it to prevent a material slippage of its budget deficit and maintain its exceptional liquidity. We also continue to see an extremely high likelihood that New Headline will receive extraordinary support from Lianyungang in a distress situation. In addition, HK Zhiyuan's status as a highly strategic subsidiary to the group should remain intact over the same period." JIAYUAN INTERNATIONAL: Crash Underscores China Property Risks ------------------------------------------------------------- Emma Dunkley at The Financial Times reports that shares in Jiayuan International, a Chinese property developer, collapsed in late trading in Hong Kong on Jan. 17, underlining investors' unease over a sector that is staggering under vast debts just as the world's second-biggest economy slows. According to the FT, analysts said that the stock, which closed down 81 per cent after a chaotic day's trading that wiped more than $3 billion from its market capitalisation, was engulfed by concern that Jiayuan would struggle to repay a $350 million bond that was due last week. The FT relates that the panic over Jiayuan appeared to ensnare rival property company Sunshine 100 China Holdings, whose shares plunged 65 per cent. The companies share a director, according to Jiayuan's website. The combination of the large amounts of dollar debt the companies have amassed and a flagging Chinese economy has left property developers in investors' crosshairs for the last year, the FT notes. Chinese developers have about $55 billion of maturing onshore debt in 2019, the FT discloses citing data provider Dealogic, which accentuates concern over potential defaults. The sector is under pressure because of "potential concern over bond defaults, as [the companies] have offshore funding coming due," the FT quotes Phillip Zhong, an analyst at Morningstar, as saiyng. "The cost of refinancing is quite expensive." The FT relates that Jiayuan said it had repaid the $350 million bond, adding that "its current financial situation is healthy and business operations is normal". After a boom in recent years, China's property market is cooling. Homeowners protested in the streets last year in several large cities to demand refunds after developers cut prices to stimulate sales, the FT notes. Refinancing maturing debt "has always been a concern for lower- rated companies" in the property business, and will be particularly urgent this year given the scale of the debt maturing, said Mr. Zhong, the FT relays. According to the FT, Nicole Wong, an analyst at CLSA, noted that recent stimulus measures by the central bank are "aimed at only the very big [developers]". The plunge in the shares of the property developers was not enough to unsettle the wider Hong Kong market, with the benchmark Hang Seng index closing down 0.5 per cent. The FT relates that Wee Liat Lee, head of financial group and property research in Asia at BNP Paribas, said the issue of systemic risk "is a problem . . . the Chinese economy is pretty dependent on property as a sector, in terms of investment and reliance of local government on land sales and revenue". "But I think this is an issue the Chinese government realised a long time ago," the report quotes Mr. Wee as saying. "It's a structural problem that takes quite a bit of time to unwind." He noted that larger property developers have begun to deleverage, the FT adds. WINTIME ENERGY: Stocks Trade Amidst Possible Default on Bonds ------------------------------------------------------------- Jeanny Yu at Bloomberg News reports that Wintime Energy Co., a company that recorded one of China's biggest corporate bond defaults, is emerging as the most popular name among the nation's stock traders in 2019. According to Bloomberg, Shanxi-based coal mining company Wintime Energy Co. has surged 60 percent this year to lead the benchmark China Securities Index (CSI) 300 Index. Its shares have rallied as investors wait for it to announce details on restructuring efforts, even as it said it sees uncertainty over repaying a CNY1 billion (US$148 million) bond due this week, Bloomberg says. Wintime was the second-biggest bond defaulter in China last year after CEFC Shanghai International Group, according to data compiled by Bloomberg. It was sitting on CNY63.2 billion of outstanding debt as of the end of September. Concerns over its ability to repay the debt put it among the worst-performers on the CSI 300 Index last year, falling more than 60 percent as the stock endured periods of suspension. It hasn't finalized a debt restructuring plan, according to a filing to the Shanghai stock exchange dated Jan. 15. Bloomberg says the coal miner has proposed asset sales to repay debt, including a plan to sell its stake in a power plant by the end of this month, and has said it is in talks to sell some financial investments. According to Bloomberg, China's banking regulator on Jan. 16 said it would step up support for private and small companies by boosting credit supply and keeping financing costs at a reasonable level. "Stock investors, especially some speculative short-term traders, have bet that the government will rescue private companies with financial difficulties. Wintime is one of them," Bloomberg quotes Dai Ming, Shanghai-based fund manager at Hengsheng Asset Management Co., who sold the stock in 2013, as saying. "Beijing and the local government will not allow the company to fall when the economy is so weak." Wintime surged by its daily limit of 10 percent on Jan. 17, with trading volume at more than six times its three-month average, while the CSI 300 Index lost 0.6 percent, Bloomberg discloses. The stock is overbought based on its 14-day relative strength, after trading near oversold levels for most of December. "Wintime could be bailed out by the government," said Guo Feng, an investment adviser at Northeast Securities Co, Bloomberg relays. "It's a good target for speculative money." Such hopes could be tested again this week, Bloomberg says. "Wintime has proposed asset sales to repay the debt, which might explain the market's optimism on the stock," said Michelle Leung, an analyst with Bloomberg Intelligence in Hong Kong. "Having said that, there's another CNY1 billion bond due on January 22, which might trigger another default." About Wintime Energy China-based Wintime Energy Co., Ltd., engages in the power, mining, petrochemical, logistics and investment, and other businesses in China. The company generates power; mines and produces coking coal; and processes shale gas. It has an electric power installed capacity of 10.94 million kilowatts; a total of 14 producing mines; and shale gas exploration rights. The company is also involved in the new energy business; and distribution of petrochemicals. In addition, it invests in strategic emerging industry projects, financial sector, coking coal and thermal coal projects, and power and new energy projects. As reported in the Troubled Company Reporter-Asia Pacific on Oct. 24, 2018, Reuters said Wintime Energy Co. had defaulted on principal and interest payments on a puttable medium-term note after investors exercised their options to sell bonds back to the company. The payments, worth a total of CNY1.49 billion ($214.74 million), were due Oct. 22, the company said in a statement on the website of the Shanghai Clearing House, Reuters relates. In a separate statement, the company said the default had triggered cross-protection clauses in six of its other outstanding debt instruments. ========= I N D I A ========= A-1 HEIGHTS: CRISIL Maintains 'B' Rating in Not Cooperating ----------------------------------------------------------- CRISIL has been consistently following up with A-1 Heights and Hospitality Private Limited (AHH) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non-cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Term Loan 10 CRISIL B/Stable (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of AHH, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on AHH is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of AHH continues to be 'CRISIL B/Stable Issuer not cooperating'. AHH, a part of the Milan group, operates a three-star hotel, Aureole Hotel, at Andheri in Mumbai. It commenced operations in July 2015. ADI WIRES: CRISIL Keeps 'D' Rating in Not Cooperating Category -------------------------------------------------------------- CRISIL has been consistently following up with Adi Wires Private Limited (AWPL) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non-cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 2.35 CRISIL D (ISSUER NOT COOPERATING) Term Loan 3.18 CRISIL D (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of AWPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on AWPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of AWPL continues to be 'CRISIL D Issuer not cooperating'. Incorporated in 2006, Jharkhand-based AWPL manufactures binding wires and wire nails, which are largely used in the construction industry. The company is promoted and managed by Mr. Amit Sarawgi and Mr. Rohit Jain. ASOKE TIMBER: Ind-Ra Raises Rating on INR60MM Debt to 'BB' ---------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Asoke Timber Co's (ATC) Long-Term Issuer Rating to 'IND BB' from 'IND B+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR160 mil. Fund-based working capital limits upgraded with IND BB/Stable rating; and -- INR50 mil. Non-fund-based limits upgraded with IND A4+ rating. KEY RATING DRIVERS The upgrade reflects an improvement in ATC's credit metrics in FY18, due to an increase in the absolute EBITDA, backed by improved revenue. Revenue grew to INR755.6 million in FY18 (FY17: INR682.82 million), on account of an increase in the number of orders executed, leading to EBITDA growing to INR14.99 million (INR13.78 million). Ind-Ra expects a significant improvement in the top line in FY19, given the 9MFY19 revenue of INR462.8 million. Interest coverage (operating EBITDA/gross interest expense) improved marginally to 1.18x in FY18 (FY17: 1.16x) and net financial leverage (adjusted net debt/operating EBITDAR) to 7.39x (8.2x). Also, the firm's working capital cycle shortened to 57 days in FY18 (FY17: 77 days), owing to a decline in inventory holding period to 31 days (60 days). However, the scale of operations remains medium and metrics moderate. Also, EBITDA margin continue to modest at 2.0% in FY18 (FY17: 2.0%) with return on capital employed of 9%, due to the trading nature of business. Moreover, ATC is exposed to foreign exchange fluctuation risk, as it imports timber from Malaysia, Indonesia and China. The ratings are supported by ATC's comfortable liquidity position as indicated by 68% average utilization of its working capital limits during the 12 months ended December 2018. Cash flow from operations turned positive to INR9.53 million in FY18 from negative INR1.15 million in FY17 on the back of the improved working capital cycle along with an increase in absolute EBITDA. The ratings are also supported by ATC's proprietor's experience of more than 40 years in the timber trading business. RATING SENSITIVITIES Positive: A substantial increase in revenue leading to an improvement in the overall credit metrics, on a sustained basis, could lead to a positive rating action. Negative: A sustained decline in the revenue and deterioration in the credit metrics could lead to a negative rating action. COMPANY PROFILE Set up in 1975, ATC is engaged in the trading of timber, veneer, plywood, marble, granites and tiles. Asoke Choudhary is the proprietor. BABA BHUBANESWAR: CRISIL Maintains B- Ratings in Not Cooperating ---------------------------------------------------------------- CRISIL has been consistently following up with Baba Bhubaneswar Cold Storage Private Limited (BBSCPL) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 5.75 CRISIL B-/Stable (ISSUER NOT COOPERATING) Proposed Long Term 0.47 CRISIL B-/Stable (ISSUER NOT Bank Loan Facility COOPERATING) Term Loan 4.28 CRISIL B-/Stable (ISSUER NOT COOPERATING) Working Capital 0.50 CRISIL B-/Stable (ISSUER NOT Term Loan COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of BBSCPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on BBSCPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of BBSCPL continues to be 'CRISIL B-/Stable Issuer not cooperating'. The company was incorporated in 2015, by the promoters, Mr. Radha Raman Mondal, Mr. Rajib Kumar Nandy, Mr. Manas Kumar Dhara, Mr. Swapan Kumar Ghosh, and Mr. Basudeb Majhi. The unit at Burdwan has a storage capacity of 19,500 million tonnes, which is divided into two chambers. BAJORIA AGRO: CRISIL Maintains B+ Ratings in Not Cooperating ------------------------------------------------------------ CRISIL has been consistently following up with Bajoria Agro Processing Private Limited (BAPPL) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non-cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 3.75 CRISIL B+/Stable (ISSUER NOT COOPERATING) Proposed Cash 0.35 CRISIL B+/Stable (ISSUER NOT Credit Limit COOPERATING) Term Loan 4.90 CRISIL B+/Stable (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of BAPPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. Based on the last available information, the ratings on bank facilities of BAPPL continues to be 'CRISIL B+/Stable Issuer not cooperating'. Incorporated in 2013, BAPPL manufactures wheat based products including maida, sooji, rava and atta. Its manufacturing facility at Abohar, Punjab had a production capacity of about 10 tonne/hour. It commenced commercial operations in August 2015. CHANDITALA BLUE: ICRA Maintains C Ratings in Not Cooperating ------------------------------------------------------------ ICRA said the rating for the bank facility of Chanditala Blue Print (CBP) continues to remain under 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]C; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based 0.20 [ICRA]C ISSUER NOT COOPERATING; Limit-Cash Rating continues to remain under Credit 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Incorporated in 2014, CBP is engaged in wholesale trading of medicines. The partners have an experience of around two decades in this line of business with its medical shop in Sonarpur, West Bengal. CHAUDHARY JAI: CRISIL Maintains 'B' Ratings in Not Cooperating -------------------------------------------------------------- CRISIL has been consistently following up with Chaudhary Jai Ram Cold Storage Private Limited (CJR) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non-cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Long Term Loan 3.1 CRISIL B/Stable (ISSUER NOT COOPERATING) Overdraft 1.9 CRISIL B/Stable (ISSUER NOT COOPERATING) Proposed Long Term 4.7 CRISIL B/Stable (ISSUER NOT Bank Loan Facility COOPERATING) Working Capital 0.3 CRISIL B/Stable (ISSUER NOT Facility COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of CJR, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on CJR is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of CJR continues to be 'CRISIL B/Stable Issuer not cooperating'. Incorporated in December 2014, CJR is promoted by Mr. Veerendra Singh and Mr. Gaurav Singh. It is engaged in providing cold storage services to farmers for potatoes and perishable products. COSMIC PETROCHEM: CRISIL Maintains B+ Ratings in Not Cooperating ---------------------------------------------------------------- CRISIL has been consistently following up with Cosmic Petrochem Private Limited (CPPL) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non-cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 3.5 CRISIL B+/Stable (ISSUER NOT COOPERATING) Long Term Loan 3.5 CRISIL B+/Stable (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of CPPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. Based on the last available information, the ratings on bank facilities of CPPL continues to be 'CRISIL B+/Stable Issuer not cooperating'. CPPL, promoted by Mr. Kapil Maggu and Ms. Surabhi Bansal, manufactures high-density polyethylene/polyethylene (HDPE/PE) wax. Its manufacturing unit is in Haryana. Production started in December 2013. D.P. GARG: Ind-Ra Migrates B+ LT Issuer Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated D.P. Garg Exports (Pvt.) Ltd.'s Long-Term Issuer Rating to the non- cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using the rating. The rating will now appear as 'IND B+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR115 mil. Fund-based working capital limits migrated to Non-Cooperating Category with IND B+ (ISSUER NOT COOPERATING)/IND A4 (ISSUER NOT COOPERATING) rating; and -- INR5 mil. Non-fund-based limits migrated to Non-Cooperating Category with IND A4 (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on January 24, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Established in 1998 and promoted by B.M. Garg, D.P. Garg Exports manufactures and exports hinges and ironmongery at its facility in Noida. DAKSHINESWAR RICE: CRISIL Maintains B+ Ratings in Not Cooperating ---------------------------------------------------------------- CRISIL has been consistently following up with Dakshineswar Rice Mill (DRM) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 2.92 CRISIL B+/Stable (ISSUER NOT COOPERATING) Term Loan 4.78 CRISIL B+/Stable (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of DRM, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on DRM is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of DRM continues to be 'CRISIL B+/Stable Issuer not cooperating'. Established in 2012 as a partnership firm, DRM is engaged in milling of non-basmati parboiled rice. Its manufacturing facility is at Burdwan (West Bengal). The firm's day-to-day operations are looked after by one of its partners, Mr. Bishnu Kumar Ghosh. DEEPAK COTTON: CRISIL Maintains 'B' Rating in Not Cooperating ------------------------------------------------------------- CRISIL has been consistently following up with Deepak Cotton Mills (DCM) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 12 CRISIL B/Stable (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of DCM, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on DCM is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of DCM continues to be 'CRISIL B/Stable Issuer not cooperating'. DCM was set up in 1990 as a partnership firm with Mr. Krishan Kumar, Mr. Anjani Kumar, Mr. Ghisa Ram, and Ms. Saroj Bala as partners. The firm gins and presses raw cotton (kapas), and crushes cotton seeds to extract cotton seed oil. In 2012-13, it diversified its product range to guar gum, with commercial production commencing in November 2012. DURGASHAKTI FOODS: CRISIL Withdraws B Rating on INR10.51cr Loan --------------------------------------------------------------- CRISIL has withdrawn its ratings on the bank facilities of Durgashakti Foods Private Limited (DFPL) on the request of the company and receipt of a no objection certificate from its bank. The rating action is in line with CRISIL's policy on withdrawal of its ratings on bank loans. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 10.51 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Withdrawn) Term Loan 4.49 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Withdrawn) CRISIL has been consistently following up with DFPL for obtaining information through letters and emails dated February 28, 2018 and August 31,2018, among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as they are arrived at without any management interaction and are 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 DFPL. This restricts CRISIL's ability to take a forward DFPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB rating category or lower. Based on the last available information, the rating on bank facilities of DFPL continues to be 'CRISIL B/Stable Issuer Not Cooperating'. CRISIL has withdrawn its ratings on the bank facilities of DFPL on the request of the company and receipt of a no objection certificate from its bank. The rating action is in line with CRISIL's policy on withdrawal of its ratings on bank loans. DFPL was set up in 2008 by Mr. Shashikant Sureka and his two brothers to expand their family-run edible oil business. The Sureka family has been manufacturing crude edible oil (soya and sunflower) and de-oiled cakes for more than two decades. The company's production facility is in Khamgaon (Maharashtra). EMSON GEARS: CRISIL Maintains 'B+' Rating in Not Cooperating ------------------------------------------------------------ CRISIL has been consistently following up with Emson Gears Limited (EGL; part of the Emson group) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non-cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 24 CRISIL B+/Stable (ISSUER NOT COOPERATING) Proposed Cash 6 CRISIL B+/Stable (ISSUER NOT Credit Limit COOPERATING) Proposed Long Term 5.29 CRISIL B+/Stable (ISSUER NOT Bank Loan Facility COOPERATING) Term Loan 64.71 CRISIL B+/Stable (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of EGL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on EGL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of EGL continue to be '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. For arriving at the rating, CRISIL has combined the business and financial risk profiles of EGL and Osho Forge Ltd (OFL). This is because these companies, collectively referred to as the Emson group, operate in the same line of business and are under a common management. OFL manufactures gears, crown wheels, and pinions, all of which are used as raw material by EGL. CRISIL used to consolidate Osho Gears and Pinion Ltd (OGPL) also, however, the same is now merged with EGL. The Emson group comprises EGL and OFL. EGL was established as a partnership firm, Emson Sales, in 1981. The firm, founded by Mr Ashok Kumar Dhall and Mr. Vimal Dhall, manufactures gears and was reconstituted as a limited company in 1981. In 1993, the group established OFL to implement vertical integration into the forgings segment. In the same year, another facility to manufacture gears and pinions was set up under OGPL, the same is now merged with EGL. ESHWARR STEEL: CRISIL Maintains 'B' Ratings in Not Cooperating -------------------------------------------------------------- CRISIL has been consistently following up with Eshwarr Steel Tech Private Limited (ESTPL) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4 CRISIL B/Stable (ISSUER NOT COOPERATING) Long Term Loan 1.22 CRISIL B/Stable (ISSUER NOT COOPERATING) Proposed Long Term 0.28 CRISIL B/Stable (ISSUER NOT Bank Loan Facility COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of ESTPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on ESTPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of ESTPL continues to be 'CRISIL B/Stable Issuer not cooperating'. ESTPL was incorporated in 2007 in Shimoga (Karnataka). The company manufactures steel and alloy steel castings. EYE-Q VISION: ICRA Lowers Rating on INR4cr NCD to D --------------------------------------------------- ICRA has downgraded the long-term rating to [ICRA]D from [ICRA]B+ (Negative) for the USD 4.0-million1 NCD programme of Eye-Q Vision Private Limited (Eye-Q). Amount Facilities (INR crore) Ratings ---------- ----------- ------- Non Convertible 4.00 [ICRA]D; revised from [ICRA]B+ Debenture (NCD) (Negative) Programme Rationale The revision of Eye-Q's rating takes into account the recent delays in interest servicing by the company towards Essential Capital Consortium B.V. Credit strengths Qualified promoters with rich experience in the healthcare sector: The Eye-Q's promoters have been involved in the ophthalmic services domain of the healthcare industry for over two decades in the capacity of surgeon and at managerial positions. The qualification and experience of promoters has helped Eye-Q in attracting renowned investors (IFC, Helion Ventures, Nexus India, Hoya) in multiple funding rounds over the years. Credit challenges Delays in debt servicing: There have been delays in interest servicing towards Essential Capital Consortium B.V. to the tune of INR1.83 crore by Eye-Q. Consistent cash losses: Eye-Q's profitability has remained weak which is reflected in continued operating and cash losses reported over the years. Liquidity Position Eye-Q's liquidity position remains stretched and cash flows continues to remain negative. Incorporated in 2006 by Mr. Ajay Sharma and Mr. Rajat Goel, Eye-Q owns and operates a chain of 40 super-specialty eye-care hospitals and four vision centres in India and one overseas centre in Lagos Nigeria in a joint venture with Skippersiel Limited. The hospitals operated by Eye-Q provide services in the specialties of cataract, cornea and refractive, retina, orbit and oculoplasty, glaucoma, optical and medicines among others. The company has presence in 28 cities in North and West India (Delhi National Capital region (NCR), Haryana, Uttar Pradesh, Uttarakhand, Gujarat and Maharashtra). While 29 eye-care hospitals are located in North India, remaining eleven are located in West India (Gujarat and Maharashtra). Its business model is focused on providing high-quality eye-care services at affordable prices. As a business strategy, it is primarily present in tier-III and tier-IV cities having no or limited access to quality eye-care services. Eye-Q is empanelled with Ex- servicemen Contributory Health Scheme (ECHS) as well as Central Government Health Scheme (CGHS) and has arrangements with major insurance companies and thirdparty administrators (TPAs). Eye-Q has received multiple rounds of funding over the years from renowned private equity funds. The entity has also issued a USD 4-million NCD programme for business expansion. The funding was received in two tranches of USD 3 million and USD 1 million in December 2015 and October 2016 respectively. FASTBUILD BLOCKS: CRISIL Maintains B- Rating in Not Cooperating --------------------------------------------------------------- CRISIL has been consistently following up with Fastbuild Blocks Private Limited (FBPL) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4 CRISIL B-/Stable (ISSUER NOT COOPERATING) Term Loan 14.55 CRISIL B-/Stable (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of FBPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on FBPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of FBPL continues to be 'CRISIL B-/Stable Issuer not cooperating'. FBPL, incorporated in December 2012, manufactures autoclaved aerated concrete (AAC) blocks and has its manufacturing unit in Cuttack, Odisha. Mr. Ashish Rungta, Mr. Sandeep Kumar Bhartia, and Mr. Vineet Chand are directors of the company. Its operations are primarily managed by Mr. Rungta who is its managing director. HARESH OVETA: CRISIL Maintains B+ Rating in Not Cooperating ----------------------------------------------------------- CRISIL has been consistently following up with Haresh Oveta (HO) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non-cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 2 CRISIL B+/Stable (ISSUER NOT COOPERATING) Letter of Credit 10 CRISIL A4 (ISSUER NOT COOPERATING) Proposed Long Term 2 CRISIL B+/Stable (ISSUER NOT Bank Loan Facility COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of HO, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on HO is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of HO continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. HO was set up by Mr. Bharat Kasat and his brother Mr. Haresh Kasat in 1984. It trades in several bulk drugs and has a clientele of over 100 generic drug manufacturers. It is managed by Mr. Haresh Kasat. JAY BHARAT FOOD: ICRA Keeps B+ Ratings in Not Cooperating --------------------------------------------------------- ICRA said the rating for the bank facilities of Jay Bharat Food Process Private Limited (JBFPPL) continues to remain under 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable); ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based Limit- 3.00 [ICRA]B+ (Stable) ISSUER NOT Cash Credit COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Fund based Limit- 12.29 [ICRA]B+ (Stable) ISSUER NOT Term Loan COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. JBFPPL was incorporated in 2007 by the Panda family, based in Cuttack, Odisha. The company processes various agricultural products to manufacture atta, besan, papad, sattu, tadaka, vermicelli, chuda powder, soyabadhi, etc. The company is also engaged in pasta manufacturing since FY2013. JAY BHARAT SPICES: ICRA Maintains B+ Rating in Not Cooperating -------------------------------------------------------------- ICRA said the rating for the bank facilities of Jay Bharat Spices Private Limited (JBSPL) continues to remain under 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable); ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based Limit- 13.00 [ICRA]B+ (Stable) ISSUER NOT Cash Credit COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Fund based Limit- 1.95 [ICRA]B+ (Stable) ISSUER NOT Term Loan COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. JBSPL was incorporated in 2003 by the Panda family based in Cuttack, Odisha. The company procures whole spices and grinds them into powder. The produce is marketed by JBSPL under the brand name - Bharat. JBSPL's product portfolio includes spices like haldi, mirchi, jeera, dhania, garam masala, etc. JBSPL is also engaged in selling products manufactured by its group company 'Jay Bharat Food Process Private Limited' outside Odisha. KAKINADA SEZ: ICRA Lowers Rating on INR150cr LT Loan to D --------------------------------------------------------- ICRA has downgraded the rating on the bank facilities of Kakinada SEZ Limited to [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term fund- 150.00 [ICRA]D; revised from based bank [ICRA]B- (Stable) facilities Long-term 62.50 [ICRA]D; revised from Unallocated [ICRA]B- (Stable) bank facilities Rationale The rating downgrade takes into account the delays in debt servicing by KSL, due to cash flow mismatches arising from the low incremental leasing and the continued spending towards project capex coupled with sizeable repayment obligations. While revising the rating, ICRA has also taken a note of the operational developments including conversion of captive port project into a commercial port which has improved the Special Economic Zone's (SEZ's) marketability as well as ongoing negotiations (including execution of Memorandums of Understanding [MOUs]) with potential tenants for ~3,100 acres (~37% of the total land area including SEZ and Domestic Tariff Area) area. These agreements, if executed, can support the company's cash flows in the form of one-time security deposits as well as regular rental income. However, the actual lease-outs and occupancy in the SEZ area continue to be low as on date, resulting in negligible rental inflows and limited revenue visibility. KSL's ability to refinance its debt obligations with a longer-tenure debt to align scheduled repayments with the expected cash flows and continued funding support from the promoter group towards meeting debt obligations in a timely manner, in the absence of operational cash flows, will be the key drivers of the credit profile. Key rating drivers Credit Challenges Low occupancy and limited revenue visibility: Although KSL has entered into several MOUs for a large portion of the SEZ land and enjoys location-specific benefits in terms of proximity to ports and being a part of Vizag-Chennai Investment Corridor, the current leased out portion in the project is low. Till date, KSL has leased out negligible proportion of the total leasable area in the SEZ. As a result, the company's revenue base continues to be marginal, with low visibility of future cash flows. Marketing risk: Given the large residual leasable area and continuing weak investment - scenario, the company remains exposed to marketing risk. Although the risk is partially mitigated by the MOUs executed by the company for ~3,100 acres (~37% of the total land area) of the area under SEZ and Domestic Tariff Area (DTA), KSL's ability to close the deals in pipeline at favourable terms and at an early date remains crucial for the cash flows. Sizeable debt-servicing obligations and funding shortfalls: The debt outstanding in the books of the company is a short-tenure loan with repayments spread over eight quarters, resulting in sizeable repayment obligations in the near term. This is more so considering the existing marginal revenue base as well as ongoing expenditure on the project. Accordingly, the company continues to be reliant on funding support from the promoter group for meeting its funding shortfalls. Liquidity Position: KSL's liquidity profile is weak given the low cash inflows from the existing leased area as well as the delays witnessed in leasing incremental area. Given the high outgo towards physical capex and debt repayments, the company has been facing a sizeable cash flow shortfall resulting in debt servicing delays. Analytical approach: Analytical Approach Comments Applicable Rating Methodologies Corporate Credit Rating Methodology Parent/Group Support Not considered. KSL is part of the GMR group; nevertheless given that there are debt servicing delays, currently no group support has been considered. Consolidation/Standalone Standalone Kakinada SEZ Limited, 51% held by GMR Infrastructure Limited through its wholly-owned subsidiary, GMR SEZ and Port Holdings Private Limited, is in the process of developing a multi-product SEZ in about 10,400-acre land parcel at Kakinada (Andhra Pradesh) along with a deep-water port. Land acquisition is in progress at present and various approvals/clearances are being applied for. Title for approximately 8,300 acres of land has already been passed on to KSL, while the title transfer for the balance land, which is required for the development of port, is in progress. SEZ notification is in place for approximately 5,000 acres. The company plans to undertake phase-wise development of the area available for SEZ development. Till date, the company has developed ~500 acres of land, while development process for the remaining land is under process. As a part of the project, a deep water commercial port is also being developed. While originally the port was allocated for captive purpose, subsequently it was converted to a commercial port. KSL has recently won the right to develop the port which is expected to handle 16 mn tonnes of cargo per annum upon completion. LAXMINARAYAN SPINNERS: CRISIL Withdraws B Rating on INR40cr Loans ----------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Laxminarayan Spinners (I) Private Limited (LSIPL) on the request of the company and receipt of a no objection certificate from its bank. The rating action is in line with CRISIL's policy on withdrawal of its ratings on bank loans. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 7 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Withdrawn) Term Loan 33 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Withdrawn) CRISIL has been consistently following up with LSIPL for obtaining information through letters and emails dated August 28, 2018 and September 28, 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 they are arrived at without any management interaction and are 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 LSIPL. This restricts CRISIL's ability to take a forward LSIPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB rating category or lower. Based on the last available information, the rating on bank facilities of LSIPL continues to be 'CRISIL B/Stable Issuer Not Cooperating'. CRISIL has withdrawn its rating on the bank facilities of LSIPL on the request of the company and receipt of a no objection certificate from its bank. The rating action is in line with CRISIL's policy on withdrawal of its ratings on bank loans. Incorporated in 2015, Solapur (Maharashtra)-based LSIPL manufactures cotton yarn and is promoted by Mr Omprakash Somani. The company's commercial operations started in Fiscal 2017. LC DEVOLVEMENT: ICRA Lowers Rating on INR2cr Loan to D ------------------------------------------------------ ICRA has downgraded the ratings on the bank facilities of LC Devolvement to [ICRA]D and removed from the non-cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based 2.00 [ICRA]D; Downgraded from Cash Credit [ICRA]B+(Stable) and removed from Issuer Not Cooperating category Non-fund-based 20.00 [ICRA]D; Downgraded from Import Letter [ICRA]A4 and removed from of Credit cum Issuer Not Cooperating category Buyers Credit Rationale The rating downgrade takes into account instances of LC Devolvement, which has remained overdue, for more than 30 days, in the last three months due to delay in receipt of payments from key customers. Further, the working capital limit was fully utilised, with instances of overutilisation. The ratings reflect the company's weak financial risk profile, marked by leveraged capital structure, weak coverage indicators and high working capital intensity. Further, the ratings are constrained by the stiff competition in the timber industry and the vulnerability of VLPL's profitability to the volatility in timber prices and to foreign exchange fluctuation due to substantial imports. The ratings, however, continue to favourably factor in the extensive experience of VLPL's promoters in the timber industry and the ease of procurement because of the proximity of the entity's facilities to the Kandla port in Gujarat. Credit strengths Extensive experience of promoters in timber industry: Incorporated in 2002, Variety Lumbers Private Limited (VLPL) operations are managed by the members of the Dubey family, who have more than two decades of experience in timber business. Location-specific advantage - VLPL facility is located at Gandhidham in Gujarat, which has been declared a timber zone by the Government. Further, a major part of its procurement is through imports. Thus, proximity to the Kandla port in Gujarat provides logistics advantage to the company. Credit challenges Delays in debt servicing: Instances of LC devolvement has been observed for more than 30 days in the past three months following delay in receipt of payment from key customers. Further, the cash credit limit has also been fully utilised with instances of over utilisation. Weak financial risk profile characterised by leveraged capital structure and weak coverage indicators: Low value addition in timber sawing and trading business results in low operating margin (4.7% in FY2018) and net margin (0.9% in FY2018). The capital structure of the company continues to remain leveraged, with gearing of 2.3 times as on FY2018-end and 2.7 times as on FY2017-end. The debt coverage indicators have also remained weak, with interest coverage of 1.4 times, TD/OPBIDTA of 4.3 times, DSCR of 1.3 times and NCA/TD of 6% as on FY2018-end as against interest coverage of 1.3 times, TD/OPBIDTA of 8.6 times, DSCR of 1.2 times and NCA/TD of 3% as on FY2017-end. The company's working capital intensity remained high, with NWC/OI at 20% in FY2018, due to stretched receivables and inventory. Further, the creditors also remained stretched to support the working capital. Intense competition due to presence of numerous players: Timber sawing and trading is a low value-added business with stiff competition from numerous players operating in the fragmented industry, which keeps the margins under check. Exposure to government regulations of importing country; volatility in timber prices: Majority of the company's key raw material requirement, i.e. timber, is met through imports from New Zealand. This exposes the company to the risks associated with timber availability and adverse changes/restrictions in timber export policies by the Government of the timber supplying countries. Vulnerability of profitability to adverse fluctuation in foreign currency exchange rate: Import constitutes a major part of VLPL's total purchase and the entity does not have any formal hedging policy for its forex risk. Hence, it remains exposed to the risk of adverse movement in forex rates with respect to its import payables. Liquidity position VLPL's fund flow from operations (FFO) turned positive to INR0.31 crore in FY2018 compared to FY2017 and free cash flows (before debt repayment) turned positive due to lower incremental working capital requirement. The liquidity profile of the company remained tight because of stretched receivables. This has led to almost full utilisation of working capital requirement during July 2018-November 2018 and few instance of LC devolvement. Incorporated in 2002, Variety Lumbers Private Limited processes and trades timber logs and manufactures wooden pallets. VLPL deals in radiate pine logs, which are majorly imported from New Zealand and Singapore. The plant is located at Gandhidham in Gujarat, which is close to the Kandla port. The company is promoted by the Dubey family, the key promoters being Mr. Swami Nath Dubey and his son Mr. Jay Kumar Dubey. The promoters have more than 25 years of experience in the timber business. In FY2018, the company reported a net profit of INR0.40 crore on an operating income (OI) of INR43.90 crore compared to a net profit of INR0.26 crore on an OI of INR36.72 crore in the previous year. LEO TIMBER: CRISIL Maintains 'B' Ratings in Not Cooperating ----------------------------------------------------------- CRISIL has been consistently following up with Leo Timber Private Limited (LTPL) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 3.35 CRISIL B/Stable (ISSUER NOT COOPERATING) Letter of Credit 8.00 CRISIL A4 (ISSUER NOT COOPERATING) Proposed Long Term 0.65 CRISIL B/Stable (ISSUER NOT Bank Loan Facility COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of LTPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on LTPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of LTPL continues to be 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. Incorporated in 1996, LTPL trades in timber. The company is based in Delhi and is managed by Mr. Devender Singh. MANMATHA NATH: ICRA Maintains B+ Rating in Not Cooperating ---------------------------------------------------------- ICRA said the ratings for the bank facilities of Manmatha Nath Kundu & Sons Construction Co. Pvt. Ltd. (MNKS) continue to remain under 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based Limit- 7.00 [ICRA]B+ (Stable) ISSUER NOT Cash Credit COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Non fund based 7.00 [ICRA]A4 ISSUER NOT Limit-Bank COOPERATING; Rating continues Guarantee to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Manmatha Nath Kundu & Sons, a partnership firm, was established in 1996. The firm was promoted by Mr. Subrata Kundu and his family members. In April 2011, the firm was converted into a private limited company and subsequently, the name was changed to Manmatha Nath Kundu & Sons Construction Co. Pvt. Ltd. The company is engaged in the construction and maintenance of roads. MASTER INDIA: CRISIL Maintains 'D' Ratings in Not Cooperating ------------------------------------------------------------- CRISIL has been consistently following up with Master India Brewing Co. (MIBC) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non-cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4.5 CRISIL D (ISSUER NOT COOPERATING) Long Term Loan 27.0 CRISIL D (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of MIBC, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on MIBC is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of MIBC continues to be 'CRISIL D Issuer not cooperating'. MIBC, set up as a partnership firm in fiscal 2010, manufactures beer. The firm is promoted by Mr. Deepak Burman, Mr. Jitendra Newatia, Mr. Rajesh Kumar Jalan, and Master (India) Brewing Co Ltd. MOZART VITRIFIED: CRISIL Maintains 'B' Rating in Not Cooperating ---------------------------------------------------------------- CRISIL has been consistently following up with Mozart Vitrified Private Limited (MVPL) for obtaining information through letters and emails dated June 28, 2018 and December 10, 2018 among others, apart from telephonic communication. However, the issuer has remained non-cooperative. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 3 CRISIL A4 (ISSUER NOT COOPERATING) Cash Credit 8 CRISIL B/Stable (ISSUER NOT COOPERATING) Long Term Loan 22.5 CRISIL B/Stable (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of MVPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on MVPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of MVPL continues to be 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. Incorporated in 2015, MVPL is a Morbi (Gujarat)-based company setting up a manufacturing facility for ceramic vitrified tiles. The company is promoted by Mr. Dhruv Bhila, Mr. Keyur Bhuva and Mr. Chetankumar Amratiya and is expected start commercial operations from December 2016. NIKITA JEWELLERS: Ind-Ra Moves BB+ LT Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Nikita Jewellers Pvt. Ltd.'s Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using the rating. The rating will now appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR156 mil. Fund-based limits migrated to Non-Cooperating Category with IND BB+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on January 19, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 1998, Nikita Jewellers is engaged in retailing of jewelry. The company has two showrooms in Mumbai, which are managed by Suresh D Bagrecha. NOVEL SUGAR: Ind-Ra Migrates BB+ Issuer Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Novel Sugar Limited's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR170 mil. Fund-based working capital limits migrated to non-cooperating category with IND BB+ (ISSUER NOT COOPERATING)/IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on February 6, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Established in 2003, Novel Sugar manufactures khandsari sugar. The company's manufacturing facility, located in Pilibhit, Uttar Pradesh, has a daily sugar crushing capacity of 1,500 tons. QUAD LIFESCIENCES: Ind-Ra Migrates BB+ Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Quad Lifesciences Private Limited's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR220 mil. Fund-based working capital limit migrated to non- cooperating category with IND BB+ (ISSUER NOT COOPERATING) / IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May 25, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Quad Lifesciences manufactures active pharmaceutical ingredients from herbs, seeds, and plants at its site in Derabassi, Punjab. R.P. STEEL: CRISIL Lowers Rating on INR17cr Cash Loan to D ---------------------------------------------------------- CRISIL has downgraded the ratings on bank facilities of R. P. Steel Industries (RP Steel) to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL B/Stable/CRISIL A4 Issuer Not Cooperating'. The rating downgrade takes into account the instance of irregularity in servicing of working capital debt, of over 30 days during last 3 months. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 7 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL B/Stable ISSUER NOT COOPERATING') Letter of Credit 10 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL A4 ISSUER NOT COOPERATING') CRISIL has been consistently following up with RP Steel for obtaining information, through letters and emails dated February 21, 2018 and February 26, 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 ratings assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward-looking component as they have been arrived at without any management interaction, and are based on best available, limited or dated information on the company'. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL did not receive any information, indicating either the financial performance or strategic intent of RP Steel. This restricts CRISIL's ability to take a forward-looking view on the entity's credit quality. CRISIL believes information available on RP Steel s consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information and feedback from the bankers, CRISIL has downgraded its ratings to 'CRISIL D/CRISIL D Issuer Not Cooperating' from 'CRISIL B/Stable/CRISIL A4 Issuer Not Cooperating'. The rating downgrade takes into account the instance of irregularity in servicing of working capital debt, of over 30 days during last 3 months. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. RP Steel was set up in 1984, by Mr Purushotam Agarwal. It trades in iron and steel long products such as rounds, billets, blooms, pig iron, wire rods, thermo-mechanically treated bars/rebars, and imported scrap. RAJASTHAN COMMU: Ind-Ra Migrates B+ LT Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Rajasthan Communications' Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND B+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR25 mil. Fund-based working capital limit migrated to non- cooperating category with IND B+ (ISSUER NOT COOPERATING) / IND A4 (ISSUER NOT COOPERATING) rating; and -- INR25 mil. Proposed non-fund based working capital limit migrated to non-cooperating category with Provisional IND A4 (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on January 17, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Formed in 2009, Rajasthan Communications is a partnership firm engaged in the construction of roads and flyovers, largely in Dholpur and Bharatpur in Rajasthan and surrounding districts. RAJASTHAN METALS: Ind-Ra Moves BB- LT Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Rajasthan Metals' Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using the rating. The rating will now appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR60 mil. Fund-based limits migrated to Non-Cooperating Category with IND BB- (ISSUER NOT COOPERATING) / IND A4+ (ISSUER NOT COOPERATING) rating; -- INR140 mil. Non-fund based limits migrated to Non-Cooperating Category with IND A4+ (ISSUER NOT COOPERATING) rating; and -- INR75 mil. Proposed non-fund-based limits migrated to Non- Cooperating Category with Provisional IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on January 23, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Founded in 1974, Rajasthan Metals is a proprietorship concern based at Chawri Bazar, Delhi. The firm is engaged in the trading of copper tubes and other tradable. Moreover, the firm procures copper and brass alloy goods in bulk and wholesales it to various customers. SAJEESH K: CRISIL Withdraws 'D' Rating on INR9cr Loans ------------------------------------------------------ CRISIL has withdrawn its rating on the bank facilities of Sajeesh k Lukose (SKL) on the request of the company and after receiving no objection certificate from the bank. The rating action is in- line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 0.6 CRISIL D (ISSUER NOT COOPERATING; Migrated from 'CRISIL D'; Rating Withdrawn) Cash Credit 7 CRISIL D (ISSUER NOT COOPERATING; Migrated from 'CRISIL D'; Rating Withdrawn) Proposed Long Term 0.8 CRISIL D (ISSUER NOT Bank Loan Facility COOPERATING; Migrated from 'CRISIL D'; Rating Withdrawn) Term Loan 0.6 CRISIL D (ISSUER NOT COOPERATING; Migrated from 'CRISIL D'; Rating Withdrawn) CRISIL has been consistently following up with SKL for obtaining information through letters and emails dated December 18, 2018 and December 24, 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 SKL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for SKL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of SKL to 'CRISIL D Issuer not cooperating' from 'CRISIL D'. CRISIL has withdrawn its rating on the bank facilities of SKL on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Set up as a proprietary concern in 2006, SKL is a Kerala-based civil contractor, and undertakes building construction projects for the Kerala PWD. SHRI KESHAV: Ind-Ra Lowers Long Term Issuer Rating to 'BB' ---------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Shri Keshav Cements and Infra Limited's (SKCIL) Long-Term Issuer Rating to 'IND BB' from 'IND BBB-' while resolving the Rating Watch Negative (RWN). The Outlook is Stable. The instrument-wise rating actions are: -- INR413 mil. Long-term loans due on January 2030 downgraded; Off RWN with IND BB/Stable rating; and -- INR267 mil. Fund-based limits downgraded; Off RWN with IND BB/Stable/IND A4+ rating. KEY RATING DRIVERS The downgrade reflects continued deterioration in SKCIL's credit metrics, lower revenue than Ind-Ra's expectations in FY18 and 1HFY19, and highly volatile EBITDA margin during the three quarters ended September 2018, thereby raising concerns over the liquidity. SKCIL's interest coverage (operating EBITDA/gross interest expense) was 0.92x in 1HFY19 (FY18: 0.8x) and net leverage (total adjusted net debt/operating EBITDAR) was 19.8x in 1HFY19 (EBITDAR annualized) (20.7x). The additional debt taken for a capex on plant expansion and solar power plant establishment led to the weak credit metrics. The capex was incurred on the expansion of the grinding unit at SKCIL's Lokapur plant to 900 tons per day from 200 tons per day that was completed by end-January 2018 and the setup of a 20MW solar power plant that was completed by end- March 2018. SKCIL's revenue levels in 1HFY19 and FY18 were lower than Ind- Ra's expectations. The agency expected a pickup in SKCIL's core business activity of cement manufacturing after the completion of the capex. The company's revenue marginally rose 3.4% to INR521 million in FY18. The marginal revenue growth was owing to the capex, as the company had to shut down its plant for over 100 days. The shutdown was for a higher number of days than the company had anticipated earlier. The company booked INR292.34 million in revenue for 1HFY19. The scale of operations is small. The EBITDA margin was volatile during the three quarters ended September 2018 (4QFY18: 13%; 1QFY19: 45%; 2QFY19: 18%) owing to the captive consumption of power and an increase in cost of raw materials and coal during 1HFY19. The margin was 14.15% in FY18 (FY17: 21.24%). In addition, the return on capital employed of SKCIL was 1% in FY18 (FY17: 5%). The ratings reflect a tight liquidity, indicated by an average fund-based limit utilization of 92% for the 12 months ended November 2018. SKCIL has a debt repayment of INR75.5 million in FY19 and of INR125.3 million in FY20. Its debt-service coverage ratio (annualized) was about 1.0x in 1HFY19x. In view of no improvement in the operating performance, there arises liquidity concern over the repayment of debt obligations in a timely manner. The ratings, however, are supported by the promoters' experience of over 11 years in the cement sector. RATING SENSITIVITIES Negative: Any decline in the revenue or the EBITDA margin, deteriorating the liquidity position and the credit metrics, all on a sustained basis, would result in a negative rating action. Positive: A significant rise in the revenue and the EBITDA margin, improving the liquidity position and the credit metrics, all on a sustained basis, would lead to a positive rating action. COMPANY PROFILE Incorporated in 1993, SKCIL is listed on the Bombay Stock Exchange. The company manufactures ordinary Portland cement. TCL-MMPL CONSORTIUM: ICRA Withdraws B+ Rating on INR1cr Loan ------------------------------------------------------------ ICRA has withdrawn ratings to the bank facilities of TCL-MMPL Consortium (TMC). Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based Limit- 1.00 [ICRA]B+ (Stable) ISSUER NOT Cash Credit COOPERATING; Withdrawn Non-fund based 15.00 [ICRA]A4 ISSUER NOT Limit-Bank COOPERATING; Withdrawn Guarantee Rationale The ratings are withdrawn in accordance with ICRA's policy on withdrawal and suspension and as desired by the company. Key rating drivers Key Rating drivers has not been captured as the rated instrument(s) are being withdrawn. TCL-MMPL Consortium (TMC) was established in 2008 as an 'Association of Persons', with Teknomin Construction Limited (TCL) and Maheshwari Mining Private Limited (MMPL) as members with equal profit/loss sharing ratio. The entity was formed with an object to participate in two large tenders floated by Hindustan Copper Limited (HCL) in 2009. TMC is engaged in underground mine development and drilling works. YASHMU PROJECTS: ICRA Withdraws B Rating on INR25cr LT Loan ----------------------------------------------------------- ICRA has withdrawn the ratings on the bank facilities of Yashmu Projects (YP): Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- Unallocated 25.00 [ICRA]B (Stable); Withdrawn Rationale The ratings are withdrawn in accordance with ICRA's policy on withdrawal and suspension, as desired by the company as Yashmu Projects did not avail any bank facilities against the unallocated limits rated by ICRA. Yashmu Projects (YP) (Erstwhile Eternity Structures Private Limited) was incorporated in 2012 as a partnership firm with Mr. K Vijaya Prasad Reddy and Ms. CV Kasturi as partners. The entity is into the business of real estate development and is executing its first mixed use (residential cum commercial) project namely, Eternity Asprire, at Mysore Road, Bengaluru, at present. The project consists of two towers, comprising G+7 floors each with 72 residential units and 41,500 sq. ft. of commercial space. ================= I N D O N E S I A ================= ALAM SUTERA: Fitch Rates USD175MM Sr. Unsec. Notes 'B' ------------------------------------------------------ Fitch Ratings has assigned Indonesia-based homebuilder PT Alam Sutera Realty Tbk's (ASRI, B/Stable) USD175 million 11.5% senior unsecured notes due 2021 a final rating of 'B' and a Recovery Rating of 'RR4'. The notes will be issued by ASRI's wholly owned subsidiary, Alam Synergy Pte Ltd, and guaranteed by ASRI and certain subsidiaries. The final rating follows the receipt of documents conforming to information already received and is in line with the expected rating assigned on January 14, 2019. The notes are rated at the same level as ASRI's senior unsecured rating as they represent its unconditional, unsecured and unsubordinated obligations. The notes include a 'permitted priority indebtedness' clause that allows the company to issue secured debt of up to 15% of total assets. Fitch does not believe this level of debt will impair ASRI's senior unsecured creditors. This is because Fitch expects the overall secured debt to be less than 2.5x of prospective EBITDA in 2019 and the Recovery Rating, based on a scenario of maximum allowable secured debt, to remain at 'RR4'. Fitch believes ASRI's financial profile will remain unchanged and consistent with its ratings, as the new notes will mainly be used to refinance its outstanding USD235 million senior unsecured notes, which are due in 2020, and to extend the maturity profile of the company's debt, allowing it more flexibility to manage cash flow. KEY RATING DRIVERS Elections to Affect Demand: Fitch forecasts ASRI will book presales of around IDR3.0 trillion in 2019 (9M18: IDR3.6 trillion), slightly less than half of which are likely to be from contracted land sales to its Chinese development partner, China Fortune Land Development Co., Ltd. (CFLD; BB+/Stable), and the remainder from the sale of existing inventory and new project launches in the Alam Sutera and Suvarna Sutera townships. Fitch's forecast of lower presales yoy in 2019 reflects short-term demand risk due to the upcoming Indonesian presidential elections in April 2019. Fitch believes the political uncertainty may deter consumers from big-ticket purchases, such as property, and lead to weak presales. Land Sales Increase Concentration: ASRI's liquidity has benefited from its partnership with CFLD in its Suvarna Sutera township project in Pasar Kemis, under which CFLD buys raw, zoned land from ASRI's extensive local land bank. This strategy does, however, make ASRI's cash flow more dependent on a single buyer. The land sales have helped plug slow presales in a market facing challenges from continued supply growth, but it has been at the cost of lowering operating cash flow quality and overall realisation from the company's land bank. CFLD's involvement will accelerate the achievement of critical mass for a development located on the outer edge of greater Jakarta, but ties ASRI's own land bank in the area more closely to the development success or failure of a third party. Shift in Development Strategy: Fitch believes ASRI's new developments may have a more balanced mix of landed and high-rise properties, where ASRI has a shorter track record. ASRI's original Alam Sutera township, close to Jakarta's central business district (CBD) and served by retail, commercial and increasingly light-business properties, is approaching maturity and new developments may be more geared towards high-rise units. Nevertheless, this is balanced by the landed residential projects that the company plans to launch in North Serpong. The company's commercial projects are also likely to feature condominiums as part of mixed-use developments, notably in the potential redevelopment of ASRI's other Jakarta CBD property, the older Wisma Argo Manunggal, whose redevelopment will be timed to match sales from the completed The Tower. Established Township, Solid Land Bank: The company has a sizeable low-cost land bank and an established domestic franchise, with close to 20 million square metres of land available for development with a carrying value of over IDR10 trillion at end- September 2018. ASRI still benefits from around 120 hectares of prime development land bank within the original Alam Sutera township, plus adjacent land purchased or under negotiation for purchase from fellow developer, PT Modernland Realty Tbk (B/Stable), and other land owners. DERIVATION SUMMARY ASRI's Long-Term Issuer Default Rating may be compared with those of peers, such as Modernland and PT Kawasan Industri Jababeka Tbk (B/Stable). ASRI's established record in residential development is a key differentiating factor to Modernland. Fitch believes ASRI has a better record of selling residential properties and a larger land bank to support sales compared with Modernland. Still, Modernland has demonstrated stronger sales execution during recent downturns. These reasons, combined with both companies' similar presales scale, support their ratings at the same level. Modernland's lower leverage profile also offsets ASRI's wider profit margin. Fitch believes Jababeka's development profile is weaker than that of ASRI. Jababeka's main estate in Cikarang is better located and more mature compared with ASRI's township in Pasar Kemis, but there is also a greater degree of competition in the area and therefore higher demand risk. Fitch also believes ASRI's residential/commercial township in Serpong is more strategically located and commands a premium compared with Jababeka's nascent second estate in Kendal, central Java. Nevertheless, Fitch thinks Jababeka's stronger and more stable non-development interest coverage, which stems from its 20-year power-purchase agreement with the state electricity company, compensates for its weaker development profile. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Annual property presales of around IDR3 trillion in 2019 - EBITDA margin to remain around 50% in the next two years (9M18: 54%) Key Recovery Rating assumptions: - The recovery analysis assumes ASRI will be liquidated in a bankruptcy rather than continue as a going concern because it is an asset-trading company - To estimate liquidation value Fitch has assumed a 75% advance rate against the value of accounts receivable and a 50% advance rate against inventory and fixed assets. Fitch believes the company's reported land bank value, which is based on historical land cost, is at a significant discount to current market value and, thus, is already conservative - Fitch has assumed that ASRI's approximately IDR1 trillion of secured bank loans outstanding as of September 2018 will rank prior to its USD480 million senior unsecured notes in a liquidation - Fitch has deducted 10% of the resulting liquidation value for administrative claims - The estimates result in a recovery of 91%-100% of ASRI's unsecured debt, corresponding to a 'RR1' Recovery Rating for the senior unsecured notes. Nevertheless, Fitch has rated the senior notes at 'B' with a Recovery Rating of 'RR4' because under Fitch's Country-Specific Treatment of Recovery Ratings criteria, Indonesia falls into 'Group D' of creditor friendliness. Instrument ratings of issuers with assets in this group are subject to a soft cap at the issuer's IDR RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action - Annual presales, including sales to CFLD, sustained at more than IDR3.5 trillion - Net debt/adjusted inventory sustained below 50% Developments that May, Individually or Collectively, Lead to Negative Rating Action - Net debt/adjusted inventory above 60% for a sustained period (9M18: 46%) - Significant weakening in liquidity LIQUIDITY Ongoing Refinancing: As of September 2018, ASRI had a cash balance of around IDR560 billion compared with around IDR440 billion of maturing short-term bank loans. ASRI also has USD235 million of bonds maturing in March 2020, which it plans to partly refinance by using the proceeds of the new bond issuance. Post refinancing, the company's debt maturity profile will be partially extended, providing greater flexibility to manage cash flow and shore up liquidity. Nevertheless, liquidity is a key factor and failure to successfully address the upcoming maturities may lead to negative rating action. ASRI's capex in the short-term is largely limited to construction costs and is partly contingent upon meeting sales thresholds for the period required. This, coupled with the discretionary nature of land acquisitions, may allow ASRI to accumulate cash and further shore up its liquidity profile. Liquidity is also supported by ASRI's access to local banks and capital markets. ASRI also employs corridor hedging for its US dollar bonds, which represent 85%-90% of its debt, helping defray foreign-currency exposure arising from a dollar-funded/rupiah-income profile. GOLDEN ENERGY: Fitch Affirms B+ Long-Term IDR, Outlook Positive --------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDR) of Golden Energy and Resources Limited and PT Golden Energy Mines Tbk at 'B+'. The Outlook is Positive. The agency has also affirmed the 'B+' rating and 'RR4' Recovery Rating of GEAR's US dollar bond. At the same time, Fitch Ratings Indonesia has affirmed GEMS's National Long-Term Rating of 'A(idn)'. The Outlook is Positive. The ratings of both entities are based on the consolidated profile of Singapore-based GEAR. They reflect the group's strong financial profile, healthy reserve life, track record of production growth, and the moderate sensitivity of its credit metrics to benchmark coal prices. The Positive Outlook reflects its expectation that GEMS will likely be able to continue to increase coal production to a level commensurate with the profile of a 'BB-' rated entity over the coming year. 'A' National Long-Term Ratings denote expectations of low default risk relative to other issuers or obligations in the same country. However, changes in circumstances or economic conditions may affect the capacity for timely repayment to a greater degree than is the case for financial commitments denoted by a higher rated category. KEY RATING DRIVERS Moderate Linkages: The linkages between GEAR and Indonesia-based GEMS are moderate, as assessed under Fitch's Parent and Subsidiary Rating Linkage criteria. GEAR owns 67% of GEMS, its sole operating subsidiary accounting for all of the group's consolidated EBITDA, retains majority representation over the board, and is actively involved in managing GEMS's operation. An agreement between GEMS's shareholders ensures that the company will maximise profit distribution by paying at least 80% of its free cash flow as dividends. The two companies' ratings are based on the consolidated profile of the GEAR group. Fitch will reassess this rating approach should weaknesses arise in the linkages. Fitch adjusts the consolidated credit metrics to include only 67% of the financial data of GEMS due to the presence of a minority shareholder, GMR Coal Resources Pte. Ltd, which owns 30%. GEAR's standalone operations are not significant and most of its earnings are derived from GEMS's dividends. Stanmore Acquisition; Credit Positive: Fitch expects GEAR's financial profile to continue to remain strong even after the proposed acquisition of Australia-based Stanmore Coal with consolidated net debt to EBITDA remaining at or below 1.0x (9M18: -0.6x). In its view, Stanmore's net cash position and steady earnings in the medium term will support GEAR's financial profile after the acquisition. GEAR acquired a 19.9% stake in Stanmore in December 2018 and if its bid is accepted, its effective ownership could rise to 51%. Depending on GEAR's final shareholding, the acquisition could hasten the group's scale and diversity improvement, which would increase the likelihood of rating upgrades. Fitch is likely to upgrade the ratings of GEAR and GEMS if the group is able to maintain a production volume of more than 30 million tonnes (mt) per annum, which Fitch expect the company to achieve by 2020. This will allow GEAR to continue maintaining an adjusted EBITDA (based on a proportionate consolidation of GEMS) of over USD150 million (2017: USD116 million), based on its long- term coal-price assumptions. Rising Production: Fitch expects GEMS to be able to continue to boost production by about 5 mt-8 mt per year to reach 30 mt of annual production by 2020, subject to regulatory approvals. GEMS expected to produce more than 22 mt of coal in 2018, above its target, resulting in production CAGR of about 35% over the last four years. Fitch expects annual capex of USD30 million-40 million over the next three years, mainly to upgrade the capacity of GEMS's hauling roads, crushers and barge-loading conveyors, which will support its increasing production. GEMS's production capex requirement is lower than that of some peers due to the proximity of its main coal mine to a leading port. Low-Cost Key Mine: GEMS benefits from the low-cost structure of its key coal mine held under its 99%-owned subsidiary, PT Borneo Indobara (BIB), which accounts for about 90% of the coal produced by GEMS. Its cost is in the world's top quartile due to a low strip ratio of 4x coupled with short haulage. However, the calorific value (CV) of GEMS's coal is lower than the Indonesian average, which results in a lower selling price. The total cash cost in 2018, however, has been higher than in 2017, mainly due to higher fuel costs and use of third- party ports for some of the additional volume as its main port is still expanding. The higher cost was also due to the company's decision to work with higher strip ratios given the better price realisation during the year. Fitch thinks the increased coal cost is not structural, and expect the cash cost to return to the historical average once the port expansion is completed, fuel- price volatility subsides and strip ratios run closer to the average for the life of the mine. Healthy Reserves; Long Contract Life: GEMS has the fourth-largest coal reserves in Indonesia, with proven reserves of about 826 mt at end-September 2018, translating into a reserve life of over 30 years based on its 2018 production. The reserve life improved from 2017 after GEMS acquired PT Barasentosa Lestari (BSL), which has about 130 mt of proven reserves in Indonesia. GEMS's BIB mine holds over 600 mt of its proved reserves, with a mining licence that is valid until 2036, alleviating issues over licence renewal. Many established Indonesian coal miners face licence-renewal risks, which Fitch considers an event-risk, over the next five years. Fitch believes GEMS is unlikely to rush into any acquisitions due to its large reserves, but GEAR is likely to continue to seek acquisitions or investments to diversify its portfolio after the Stanmore acquisition. Conservative Financial Profile: Fitch expects GEAR to continue to maintain its conservative and prudent financial profile, even if it is able to acquire all of the shares of Stanmore Coal. This would be aided by rising production volumes, healthy pre-dividend cash flow generation, moderate capex in relation to its operating cash flows and relatively low interest expense. Fitch expects GEAR to maintain net debt to EBITDA below 1.0x (proportionately consolidating 67% of GEMS) with interest cover (EBITDA/interest) of above 6.0x during 2019-2021. Cyclical Coal-Industry Exposure: Fitch expects GEAR's earnings to marginally weaken due to the recent weakness in the Indonesian coal index (ICI) as it decouples from the Newcastle coal benchmark price, demonstrating the vulnerability the company faces due to the cyclical nature of the coal industry. Global thermal-coal prices are at their highest in five years (Newcastle 6,000kcal still close to USD100/mt), but the ICI's discount to the benchmark has been significantly wider than the historical average. DERIVATION SUMMARY The ratings of GEAR and GEMS are based on the consolidated credit profile of the GEAR group due to the moderate linkages between the two entities and their relative credit profiles. The ratings factor in the group's strong credit ratios, large reserve base and moderate sensitivity to coal prices. GEAR's leverage, coverage and refinancing profile are stronger than those of PT Indika Energy Tbk (BB-/Stable), and GEMS has a longer reserve life. However, Indika's operations are larger and more integrated, and its earnings are also higher and more diversified, which Fitch believes justify the one-notch difference in their IDRs. The production capacity of Indika's key coal asset, Kideco, is well-established, and is at its peak compared with GEMS, which is currently boosting production. Fitch also thinks that both companies demonstrate similar sensitivity to declines in coal prices. Its Positive Outlook on GEMS reflects its expectations it will be able to boost production. GEMS's financial profile is comparable with that of Singapore's Geo Energy Resources Limited (B/Stable). However, GEMS has a stronger business risk profile with a substantially larger reserve base and higher potential production levels, which are reflected in its Positive Outlook, while Geo is constrained at the current rating level due to its smaller scale of operations. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer Include: - Index coal prices in line with Fitch's mid-cycle commodity price assumptions, adjusted for the difference in CV (average Newcastle 6,000kcal free-on-board: USD79/tonne in 2019, USD77/tonne in 2020 and USD74/tonne in 2021. - Selling prices at GEMS in line with the average discount of its various grades of coal to Newcastle coal prices, adjusted for the recent weakness in the ICI. The company has also agreed with customers to sell 3 mt of production per annum at a fixed price. - Total volume of coal produced in 2019, 2020 and 2021 of 27 mt, 32.7 mt and 36.4 mt, respectively. - Capex incurred in 2019, 2020 and 2021 of USD30 million, USD30 million and USD40 million, respectively, mainly to ramp up capacity at its BIB mine. - Inclusion of about 1 mt to 1.5 mt of production from its new acquisition, BSL. - No further acquisitions factored in for GEMS. - GEAR to be able to acquire the targeted 51% stake in Stanmore in 2019, which will add coking coal output of 2 mt in 2019, with volumes rising 20% a year subsequently. The average selling price for Stanmore Coal is assumed to be in line with Fitch's Hard Coking Coal Index mid-cycle commodity price assumptions, adjusted for CV. - GEAR to make another acquisition of USD80 million in 2019, after the Stanmore acquisition. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Fitch may consider upgrading the ratings of GEAR and GEMS if GEMS is able to increase its sustainable production volume to over 30 mt per annum, while GEAR is able to maintain adjusted EBITDA of USD150 million a year, based on a proportionate consolidation of GEMS, adjusted net debt/EBITDA of less than 2.0x, and holding company standalone EBITDA/interest cover of 3.0x. Developments That May, Individually or Collectively, Lead to Negative Rating Action - A failure to ramp up production volume to its expectations LIQUIDITY Robust Liquidity at GEMS: GEMS has healthy cash generation, low debt levels and long-drawn-out maturities. As of end-September 2018, the company had USD107 million of debt (end-2017: USD65 million), which includes USD74 million of long-term debt. The increase in the debt in 2018 was mainly due to the acquisition of BSL, which was in line with its expectations. GEMS's debt has a gradual repayment structure and it does not have any significant refinancing requirements over the next three years. Fitch expect internal cash generation at GEMS to be more than sufficient to fund its cash outflows for capex to increase production and meet its debt repayment obligations. Fitch expects the majority of cash flows after capex to be paid out as dividends as stipulated in its shareholder agreement. Dividends Support GEAR's Liquidity: GEAR's liquidity depends on the dividends from GEMS, which remains its main source of cash inflow. If GEAR is able to secure more than 51% in Stanmore Coal (GEAR's general offer closes January 22, 2019), Fitch expects its debt to rise to a maximum of USD50 million for the additional 31.1% stake. Fitch expects any future acquisitions to be debt funded. GEAR's liquidity is supported by strong dividend inflows from GEMS, which would be used to service its debt obligations. =============== M A L A Y S I A =============== SCOMI GROUP: Units Default on MYR36.15 Million Bank Loan -------------------------------------------------------- The Sun Daily reports that Scomi Group Bhd's sub-subsidiary Urban Transit Private Limited (UTPL) and subsidiary Scomi Engineering Bhd (SEB) have each received a notice of demand from India's Axis Bank Limited for MYR36.15 million due to failure by UTPL (as borrower) and SEB (as guarantor) to pay under the bank facilities granted to UTPL. "UTPL and SEB are still in the process of negotiating with Axis Bank. Currently, there are no business, financial and operational impact of the default on Scomi," the group said in a stock exchange filing, the Sun Daily relays. This will give rise to an event of default by virtue of the cross-default provision under the financing documents in respect of a leasing facility amounting to MYR1.29 million and an overdraft and foreign exchange contract facility (zero outstanding) granted to certain subsidiaries of Scomi, according to the report. The Sun Daily relates that Axis Bank has the right to proceed with legal proceedings against UTPL as the borrower and SEB as the guarantor. Scomi has no liability in respect of obligations incurred under the bank facilities as they are neither a borrower nor a security party. "By virtue of the cross default provision of the financing documents, the respective financiers will have the right to declare the financing facilities therein be cancelled and will become due and payable immediately. The financiers may enforce on the securities created under the respective financing documents, if any." Scomi said UTPL and SEB are not major subsidiaries of the company, the report adds. Headquartered in Kuala Lumpur, Malaysia, Scomi Group Bhd -- http://www.scomigroup.com.my/publish/home.shtml-- provides drilling fluids and mud engineering services and the supply of industrial and production chemicals to the upstream and downstream oil and gas industry. ==================== N E W Z E A L A N D ==================== AUCKLAND ACADEMY: In Liquidation, Fails to Pay NZ$351K Fine ----------------------------------------------------------- Aimee Shaw at The New Zealand Herald reports that Auckland Academy of Learning (AAL), a maths education company slapped with a $351,000 fine by the Commerce Commission for multiple breaches of the Fair Trading Act, has gone under. AAL was put into liquidation at the beginning of the month and has not paid the court fine it received in November, the Herald says. John Whittfield of Whittfield Associates has been appointed liquidator and is yet to determine how much the company owes creditors, the Herald discloses. The Herald, citing the liquidator's first report, says the director of the company said the reason for liquidation was the "result of a court fine imposed on the company." The report lists ASB Bank, Ecostyle Limited and Jewellery of New Zealand Limited as creditors with security interests. Mr. Whittfield told the Herald that AAL had not paid the fine. He could not confirm whether or not the company went into liquidation because it did not have the money to pay the fine. The liquidator's first report will be published in six months, the Herald notes. According to the Herald, the Commerce Commission charged AAL with 11 charges under the Fair Trading Act in relation to the way it sold software education packages. The Herald relates that the court heard the company preyed on parents' "hopes and fears" about their children's future to sell the expensive tuition products and that staff misrepresented the product and breached consumer credit and direct selling laws. AAL pleaded guilty to the charges in the Auckland District Court and received a NZ$351,000 fine. Prior to the prosecution, the commission received more than 180 complaints, largely after a series of stories aired on the now- defunct TV3 programme Campbell Live, between 2014 and 2015 over the way AAL sold computer-aided mathematic instruction software, the Herald discloses. The price of the software, which ranged from NZ$6,000 to NZ$11,000, was found to have been misrepresented in some instances, the Herald says. The offending occurred between March 2011 until September 2015. During that time, 3,359 contracts were entered into. AAL began in December 2010, the Herald notes. FALCON BUILDING: Former Employee Owed NZ$36K May Not Get Money -------------------------------------------------------------- The New Zealand Herald reports that Auckland resident Moana Smith owed more than NZ$36,000 by her former employer, Falcon Building Solutions Limited, is in a financial wrangle to recover the money after the company went into liquidation. The Herald relates that Ms. Smith was awarded NZ$36,637.42 in compensation, wage arrears and court costs by the Employment Relations Authority last October after she was found to have been unjustifiably dismissed. But a month after the authority's ruling, Falcon Building went into liquidation, leaving Ms. Smith NZ$10,000 out-of-pocket in legal fees and uncertain she'll recover what's owed to her. According to the Herald, Ms. Smith, who has been fighting Falcon Building since her employment ended with the company in December 2017, said the drawn-out battle has taken a financial, mental and emotional toll on her. Ms. Smith said she filed a claim with Falcon Building's liquidator earlier this month and is now waiting to see if she will get any money, according to the Herald. ===================== P H I L I P P I N E S ===================== HANJIN HEAVY: Philippine Unit Collapse Hits Small Businesses ------------------------------------------------------------ Philippine Daily Inquirer reports that owners of small businesses catering mostly to workers of Hanjin Heavy Industries and Construction-Philippines have closed shop as the South Korean shipbuilding company suffers from its worst financial crisis in years. The Inquirer relates that a food stall owner, Vanessa Rapera, 33, used to serve 100 Hanjin workers, earning at least PHP1,000 daily. But since the company began laying off workers last month, Rapera said she was forced to close her business. Nene Regojos, who operates an eatery at Hanjin bus terminal, said her business suffered "huge losses" due to the retrenchment of workers, the Inquirer relays. According to the Inquirer, a dormitory that houses 300 workers near the bus terminal has been empty since December but the owner said it would remain open to accept boarders from other companies. Hanjin's workforce of 30,000 during its peak has been reduced to 3,800. The company has offered a voluntary severance package for workers to cut costs, the Inquirer discloses. The Inquirer adds that Subic Mayor Jefferson Khonghun said Hanjin's situation would affect not just the workers but also the communities and businesses in the town. He said his office had been providing assistance to the retrenched workers. "For now, we can do so little about it, we need help from the national government," he said. According to the Inquirer, Zenaida Angara-Campita, director of the Department of Labor and Employment in Central Luzon, said the decision of an Olongapo City Regional Trial Court that allowed the financial rehabilitation of Hanijn had saved at least 3,800 workers. "It may not need to retrench workers if the company finds new investors and contracts," the report quotes Ms. Angara-Campita as saying. About Hanjin Korea-based Hanjin Heavy Industries & Construction Co. established a shipyard in Subic, west of Manila, and delivered its first vessel from the yard in July 2008. It uses the Philippine yard to build big ships while its facility in Korea focuses on smaller vessels. Hanjin Heavy Industries and Construction Philippines, Inc. (HHIC- Philippines) filed for voluntary rehabilitation on Jan. 8, 2019, at the Olongapo City Regional Trial Court amid "heavy" financial losses and debts amounting to about $400 million from local banks. The company reported that it also had $900 million in debts with lenders in South Korea. The Subic shipyard's assets have been valued at KRW1.84 trillion (US$1.64 billion). HHIC-Philippines employs about 4,000 people. UNITED COCONUT: Moody's Ups Foreign Curr. Deposit Ratings to Ba3 ---------------------------------------------------------------- Moody's Investors Service has upgraded the long-term foreign currency deposit rating of United Coconut Planters Bank to Ba3 from B2. The rating outlook is stable. Moody's has also upgraded UCPB's Baseline Credit Assessment and adjusted BCA to b2 from caa1. At the same time, Moody's has upgraded UCPB's long-term deposit note/CD program rating to (P)Ba3 from (P)B2, long-term counterparty risk ratings to Ba2 from B1, as well as long-term counterparty risk assessment (CRA) to Ba2(cr) from B1(cr). And, Moody's has affirmed the bank's short-term deposit rating and counterparty risk ratings at NP, short-term deposit note/CD program rating at (P)NP, and short-term CRA at NP(cr). RATINGS RATIONALE The upgrade of UCPB's BCA is driven by the improvement in the bank's solvency, and Moody's expectation that the bank's internal capital generation will strengthen. Over the past 10 years, the annual amortization of the bank's PHP29 billion deferred credit charges from legacy problem assets substantially eroded UCPB's retained earnings and as a result internal capital generation was weak. Internal capital generation will increase substantially beginning in 2019 because 2018 marks the last year of amortization of those credit charges and as a result retained earnings will rise. The bank's return on assets remained robust over the past three years, averaging 1.2% over 2015-2017, supported by loan growth and interest income from its investment securities. Over the next 12-18 months, Moody's expects credit costs to rise moderately and weigh on the bank's profits. Asset quality deteriorated over the nine months to September 2018, as reflected by the rise in the gross nonperforming loan (NPL) ratios of the bank's parent entity and thrift bank subsidiary. Moody's expects that the bank's new NPL formation rate will remain high over the next 12-18 months, as loan seasoning continues following strong loan growth in the commercial and consumer segments. Moody's does not incorporate affiliate support in the b2 adjusted BCA of UCPB. UCPB's Ba3 foreign-currency deposit rating takes into account Moody's expectation of a high probability of support for the bank, in times of need, from the Government of the Philippines (Baa2 stable). The assumption of support results in a two-notch ratings uplift from the bank's b2 BCA. WHAT COULD MOVE THE RATING UP/DOWN Moody's could upgrade UCPB's BCA and consequently its deposit rating, if the bank displays an ability to increase its profits, improves its core capitalization, and maintains strong liquidity. Moody's could lower UCPB's deposit rating if (1) its already weak loss-absorption capacity further deteriorates; (2) the bank's liquidity weakens; and/or (3) the likely systemic support from the government falls. Taking into account the announcement, the ratings of UCPB are: - Long-term foreign currency deposit rating upgraded to Ba3 from B2, with a stable outlook - Short-term foreign currency deposit rating affirmed at NP - Long-term foreign currency deposit note/CD program rating upgraded to (P)Ba3 from (P)B2 - Short-term foreign currency deposit note/CD program rating affirmed at (P)NP - Long-term local and foreign currency counterparty risk ratings upgraded to Ba2 from B1 - Short-term local and foreign currency counterparty risk ratings affirmed at NP - BCA and adjusted BCA upgraded to b2 from caa1 - Long-term counterparty risk assessments upgraded to Ba2(cr) from B1(cr) - Short-term counterparty risk assessments affirmed at NP(cr) - Outlook is stable The principal methodology used in these ratings was Banks published in August 2018. ================= S I N G A P O R E ================= HYFLUX LTD: Zero Recovery for Sub. Noteholders in Liquidation ------------------------------------------------------------- The Business Times reports that Hyflux Ltd faced its anxious creditors on Jan. 18 for the second time since it filed for bankruptcy protection, in a bid to rally support to carry through what has proven to be a tough rescue deal. No definitive answers were given when investors asked repeatedly how much of their money they could expect to recover, the report says. Only one new figure was shared by EY, the financial adviser, according to BT. In a liquidation scenario, among retail investors, only senior unsecured creditors, namely note holders, will get paid. They can expect a recovery rate of 3.8 to 8.7 per cent. However, subordinated creditors such as perpetual and preference shareholders will get nothing in such a scenario, BT discloses. According to the report, Hyflux chief executive Olivia Lum opened two townhall sessions at Hyflux Innovation Centre on Jan. 18 by addressing why she was not using her own cash to recapitalise Hyflux despite repeated calls for her to do so. BT relates that Ms. Lum told perp and pref holders: "With SM Investments coming into the company, this is effectively a takeover and I no longer will own much shares, in fact almost no shares. So I will no longer be in the driving seat." In October last year, a consortium comprising Salim Group and Medco Group tabled a deal to invest and lend SGD560 million to Hyflux in exchange for a 60 per cent stake in the company once it has settled all its debts, BT recalls. Ms. Lum added to light applause: "I know many people do not like to see my face anymore. I'm ok. I'm prepared to step down, I just want to make sure I hand over the company properly to the new investor," the report relays. The consortium, SM Investments, has left a 40 per cent equity stake on the table for Hyflux's various stakeholders to share in a rescue plan. "I'm only worried for the papas and mamas, that in the case of liquidation, they will really get zero value . . . without support for the rescue plan, the alternative for Hyflux will likely be liquidation," the report quotes Ms. Lum as saying. Hyflux owes SGD900 million in principal value to perp and pref holders. It was hinted that they might have to take a debt-for- equity conversion, though how fair the conversion rate would be was not discussed, the report states. Hyflux's medium-term noteholders, who are owed a nominal value of SGD265 million, were told that they might receive some cash and equity. Again, exact quantums were not discussed, BT notes. It remains to be seen how much cash there is to go around after budgeting for working capital is factored in. Asked if the company could extend the maturity of the notes and pay noteholders a lower coupon before redemption, Arief Sidarto, chief executive of SM Investments, replied "no," the report relays. Hyflux's business is capital-intensive and he said he wants to make sure it is ready to move forward after the restructuring is completed. Most noteholders seemed more easily comforted by what they heard and their question-and-answer session ended early. But reactions from perp and pref holders were more mixed, and many questions were left unanswered when the session was cut off promptly at 9:00 p.m., according to BT. BT says Hyflux intends to finalise the terms of the restructuring deal by mid-February, including exactly how much in cash or equity each creditor group will be allocated. A third round of townhall meetings will be held on March 13, the report notes. Also in February, Hyflux will go to court to ask for approval to call a scheme meeting, and all creditors will vote on the scheme of arrangement by the end of March, BT adds. About Hyflux Singapore-based Hyflux Ltd -- https://www.hyflux.com/ -- provides various solutions in water and energy areas worldwide. The company operates through two segments, Municipal and Industrial. The Municipal segment supplies a range of infrastructure solutions, including water, power, and waste-to-energy to municipalities and governments. The Industrial segment supplies infrastructure solutions for water to industrial customers. As reported in the Troubled Company Reporter-Asia Pacific on May 24, 2018, Hyflux Ltd. said that the Company and five of its subsidiaries, namely Hydrochem (S) Pte Ltd, Hyflux Engineering Pte Ltd, Hyflux Membrane Manufacturing (S) Pte. Ltd., Hyflux Innovation Centre Pte. Ltd. and Tuaspring Pte. Ltd. have applied to the High Court of the Republic of Singapore pursuant to Section 211B(1) of the Singapore Companies Act to commence a court supervised process to reorganize their liabilities and businesses. The Company said it is taking this step in order to protect the value of its businesses while it reorganises its liabilities. The Company has engaged WongPartnership LLP as legal advisors and Ernst & Young Solutions LLP as financial advisors in this process. ********* 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 2019. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. *** End of Transmission ***