/raid1/www/Hosts/bankrupt/TCRAP_Public/190131.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
Thursday, January 31, 2019, Vol. 22, No. 022
Headlines
A U S T R A L I A
BLUFF TOWN: Ex-Owner Faces Underpayment, Insolvent Trading Claims
CENTRAL ASIA RESOURCES: Second Creditors' Meeting Set for Feb. 7
INTERMODAL STAFFING: Second Creditors' Meeting Set for Feb. 8
OZ DAIRY: First Creditors' Meeting Set for Feb. 6
RUGS QLD: First Creditors' Meeting Set for Feb. 8
C H I N A
GNC HOLDINGS: Appoints Two New Directors to Fill Board Vacancy
YINGDE GASES: Moody's Raises CFR to Ba3, Outlook Stable
YUZHOU PROPERTIES: Fitch Rates USD500M Sr. Unsec. Notes BB-
I N D I A
ADITYA CHANAKYA: CARE Migrates B+ Rating to Not Cooperating
APOLLO ANIMAL: CARE Migrates B Rating to Not Cooperating Category
ASIA POLY: CARE Lowers Rating on INR45.32cr Loan to B+
BVL INFRASTRUCTURE: CRISIL Assigns 'B' Rating to INR10cr Loan
ESSAR STEEL: Bankruptcy Court Rejects Owners' Settlement Plan
GLASS BUILD: CARE Assigns 'B' Rating to INR9cr LT Loan
JAIDEEP METALLICS: CARE Lowers Rating on INR20cr Loan to B+
JET AIRWAYS: Grounds 3 More Planes on Lease Rental Default
JET AIRWAYS: Seeks Shareholder Nod to Convert Loan Into Shares
JM FERRO: CARE Migrates D Rating to Not Cooperating Category
KAMAL PRESSING: CARE Reaffirms B Rating on INR5cr LT Loan
KEDIA GUAR: CRISIL Assigns B+ Rating to INR7cr Cash Loan
KIRPA RAM: CARE Lowers Rating on INR15cr LT Loan to B+
LAKSHMIGRAHA ENT: CRISIL Cuts Ratings on INR41.5cr Loans to B+
MAHESH DYEING: CRISIL Lowers Rating on INR10cr Loans to D
MAYURESH PROTENZ: CARE Reaffirms B+ Rating on INR20cr LT Loan
NEPTUNE LAMINATES: CRISIL Maintains B+ Rating in Not Cooperating
P.D. AGRO: CRISIL Maintains B Rating in Not Cooperating Category
PARASMAL KHASGIWALA: CARE Assigns B Rating to INR6.60cr Loan
PEOPLE'S EXPORTS: CRISIL Lowers Rating on INR3.39cr Loan to D
PIPE & METAL: CRISIL Maintains D Rating in Not Cooperating
POONAM TRADING: CRISIL Maintains D Rating in Not Cooperating
ROYAL ALLOYS: CARE Assigns B+ Rating to INR7.68cr LT Loan
S.S. AGRO: CARE Lowers Rating on INR20cr Loan to D
S.S. OVERSEAS: CARE Lowers Rating on INR20cr Loan to D
SAMSON AND SONS: CRISIL Maintains D Rating in Not Cooperating
SATISH AGRO: CARE Lowers Rating on INR6cr LT Loan to D
SKD RICE: CARE Assigns B+ Rating to INR4.53cr LT Loan
SHIVALIK I.B.: CRISIL Maintains B+ Rating in Not Cooperating
SHIVALIK VYAPAAR: CRISIL Maintains D Rating in Not Cooperating
SHIVANS POWER: CRISIL Maintains B- Rating in Not Cooperating
SHOPPERS INTERNATIONAL: CRISIL Rates INR27CR Cash Term Loan 'D'
SOM AUTOTECH: CARE Maintains B+ Rating in Not Cooperating
SREE HANUMAN: CRISIL Maintains D Rating in Not Cooperating
TRIPATHI HOSPITAL: CRISIL Maintains B+ Rating in Not Cooperating
UNITED SEAMLESS: NCLT OKs Maharashtra Seamless Acquisition Bid
VEESHNA FLEXITUFF: CARE Assigns B+ Rating to INR15cr LT Loan
VEETEEJAY MOTORS: CRISIL Cuts Rating on INR10cr Loans to D
* INDIA: Cantor, SC Lowy Eye Soured Loans Amid Insolvency Delay
J A P A N
AKEBONO BRAKE: Seeks Capital Infusion, Debt Relief from Toyota
PIONEER CORPORATION: Egan-Jones Cuts Sr. Unsecured Ratings to BB
M A L A Y S I A
1MDB: Malaysia Fines Deloitte for Failing to Report Oddities
S I N G A P O R E
ASL MARINE: Bondholders Approve Debt Extension
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A U S T R A L I A
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BLUFF TOWN: Ex-Owner Faces Underpayment, Insolvent Trading Claims
-----------------------------------------------------------------
Cara Waters at The Sydney Morning Herald reports that the former
owner of cafes across Melbourne which have featured in the Good
Food Guide is facing claims of underpayment and trading while
insolvent.
Clare Hu was the owner and operator of Bluff Town in Sandringham,
The Resident in Ashburton, Stepping Stone in South Yarra and V in
South Yarra, SMH discloses.
Lauded as "an (almost) overnight Gen Y success story", the
property developer turned cafe owner had plans to expand her
business to China. However, former employees said Ms. Hu built
her cafe empire by underpaying them, with workers at The Resident
cafe owed AUD169,000, according to SMH.
SMH says Ms. Hu joins a range of hospitality operators who have
been found to have underpaid staff including top chefs Neil
Perry, George Calombaris and Shannon Bennett.
Ms. Hu has now sold Bluff Town cafe and The Resident cafe, and
closed Stepping Stone cafe and V, the report notes.
According to SMH, Trent Saunders worked as a waiter for two years
for Ms. Hu at The Resident cafe and was paid a flat rate with no
penalty rates, which started out at AUD16 an hour and increased
to AUD19.50 an hour over the course of his employment.
When he asked whether he was being underpaid, Ms. Hu suspended
Mr. Saunders, the report relays.
SMH relates that Mr. Saunders pursued Ms. Hu for the unpaid wages
and was awarded a court order for AUD15,582 against Ms. Hu in
December 2017 which remains outstanding.
The Resident Cafe, which changed to the company name Bydcafe
Ashburton, was put into liquidation in October 2018, SMH
discloses.
SMH says Ms. Hu claimed the cafe turned over more than AUD1.5
million a year but a report published this month by liquidator
Bruce Mulvaney found Bydcafe Ashburton owes AUD905,000.
Bydcafe Ashburton was sold to Sun Tribe High in July 2018 for
AUD500,000 and the directors of Sun Tribe High are Ms. Hu's
husband Darui Sun and Hai Gao, a resident of China.
SMH adds that the liquidator said claims for insolvent trading
and breach of directors' duties would be made against Ms. Hu for
moving funds after selling the business to repay her family.
"The company may have been insolvent from as early as 2016 when
the debt owing to the Australian Tax Office started to increase
and payment arrangements were made," Mr. Mulvaney found, SMH
relays. "We will be making every effort to recover funds for the
creditors and employees."
Ms. Hu said she had borrowed funds from family and friends when
starting the business and the repayment of debt was monitored by
her accountant and according to legislation, SMH relays.
"I believe I have been a hard working and fair business
operator," SMH quotes Ms. Hu as saying. "I am no longer running
businesses and have decided to focus on the family side."
CENTRAL ASIA RESOURCES: Second Creditors' Meeting Set for Feb. 7
----------------------------------------------------------------
A second meeting of creditors in the proceedings of Central Asia
Resources Limited has been set for Feb. 7, 2019, at 11:00 a.m. at
the offices of Palisade Business Consulting, at 22 Lindsay
Street, 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 Feb. 6, 2019, at 4:00 p.m.
Jack Robert James and Paula Smith of Palisade Business Consulting
were appointed as administrators of Central Asia Resources on
Feb. 14, 2018.
INTERMODAL STAFFING: Second Creditors' Meeting Set for Feb. 8
-------------------------------------------------------------
A second meeting of creditors in the proceedings of Intermodal
Staffing Pty Ltd has been set for Feb. 8, 2019, at 10:00 a.m. at
the offices of K & L Gates, Level 25, 525 Collins Street, in
Melbourne, Victoria.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 7, 2019, at 3:00 p.m.
Ben Verney and Andrew Beck of Greyhouse Partners were appointed
as administrators of Intermodal Staffing on Dec. 24, 2018.
OZ DAIRY: First Creditors' Meeting Set for Feb. 6
-------------------------------------------------
A first meeting of the creditors in the proceedings of Oz Dairy
Leasing Pty Ltd and Aussie Milk Products Pty Ltd will be held on
Feb. 6, 2019, at 12:00 p.m. and 12:10 p.m., respectively, at the
offices of Atura Dandenong, 5-17 Doveton Avenue, in Doveton,
Victoria.
Steve Naidenov and David Iannuzzi of Veritas Advisory were
appointed as administrators of Oz Dairy on Jan. 24, 2019.
RUGS QLD: First Creditors' Meeting Set for Feb. 8
-------------------------------------------------
A first meeting of the creditors in the proceedings of Rugs Qld
Pty Ltd, trading as Rugs A Million; Rugs W.A. Pty Ltd; and Rugs-
A-Million Pty Ltd. will be held on Feb. 8, 2019, at 10:00 a.m.,
10:30 a.m. and 11:00 a.m., respectively, at the offices of
Morton's Solvency Accountants, Level 11, 410 Queen Street, in
Brisbane, Queensland.
Gavin Charles Morton of Morton's Solvency Accountants were
appointed as administrators of Rugs Qld on Jan. 29, 2019.
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C H I N A
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GNC HOLDINGS: Appoints Two New Directors to Fill Board Vacancy
--------------------------------------------------------------
The Board of Directors of GNC Holdings, Inc., upon designation by
Harbin Pharmaceutical Group Co., Ltd., a company incorporated in
the People's Republic of China ("Hayao"), and based on the
recommendation of the Board's Nominating and Corporate Governance
Committee, has appointed Hsing Chow and Yong Kai Wong to the
Board, effective Jan. 22, 2019. The Board had previously adopted
resolutions to increase the size of the Board to ten members and
Messrs. Chow and Wong have been appointed to fill the two
resulting vacancies.
Since 2015, Mr. Chow has served as group vice president of Hayao.
Prior to his service at Hayao, Mr. Chow served as regional
general manager at Flextronics Global OPS, an electronics
manufacturing services provider focused on delivering complete
design, engineering and manufacturing services to automotive,
computing, consumer, industrial, infrastructure, medical and
mobile OEMs. Mr. Chow holds both a Bachelor of Science and Master
of Science degree from New Jersey Institute of Technology.
Since 2012, Mr. Wong has served as managing director of CITIC
Capital Holdings Limited, an affiliate of Hayao. Mr. Wong holds a
CSREP degree from Harvard University a Masters of Business
Administration from University of Chicago Booth School of
Business and a Master of Laws (LLM) from the University of
Cambridge.
The Company also entered into an Indemnification Agreement and
Confidentiality Agreement with each of Mr. Chow and Mr. Wong. The
Indemnification Agreement provides for indemnification and
advancement of litigation and other expenses to Mr. Chow and Mr.
Wong to the fullest extent permitted by law for claims relating
to his service to the Company or its subsidiaries.
The Board has determined that each of Mr. Chow and Mr. Wong meet
the Designee Qualifications set forth in the Stockholders
Agreement.
About GNC Holdings
GNC Holdings, Inc., headquartered in Pittsburgh, PA, is a global
specialty retailer of health, wellness and performance products,
including protein, performance supplements, weight management
supplements, vitamins, herbs and greens, wellness supplements,
health and beauty, food and drink and other general merchandise.
As of Sept. 30, 2018, GNC had approximately 8,500 locations, of
which approximately 6,400 retail locations are in the United
States (including approximately 2,200 Rite Aid franchise store-
within-a-store locations) and franchise operations in
approximately 50 countries.
GNC Holdings incurred a net loss of $148.9 million in 2017 and a
net loss of $286.3 million in 2016. As of Sept. 30, 2018, the
Company had $1.47 billion in total assets, $1.65 billion in total
liabilities, and a total stockholders' deficit of $170.68
million.
* * *
As reported by the TCR on Nov. 15, 2018, S&P Global Ratings
affirmed its 'CCC+' issuer credit rating on Pittsburgh-based
vitamin and supplement retailer GNC Holdings Inc. and removed all
of its ratings on the company from CreditWatch, where S&P placed
them with negative implications on Feb. 14, 2018. "The
affirmation reflects our belief that GNC's capital structure
remains unsustainable over the long term in light of its current
operating performance, including its cash flow generation,
because of increased competitive threats amid the ongoing secular
changes in the retail industry."
YINGDE GASES: Moody's Raises CFR to Ba3, Outlook Stable
-------------------------------------------------------
Moody's Investors Service has upgraded the corporate family
rating of Yingde Gases Group Company Limited to Ba3 from B1.
At the same time, Moody's has upgraded the senior unsecured
rating on the bonds issued by Yingde Gases Investment Limited and
guaranteed by Yingde Gases to B1 from B2.
The outlook on the ratings is stable.
RATINGS RATIONALE
"The ratings upgrade reflects our expectation that Yingde Gases'
credit profile will remain strong for its rating level, supported
by the company's continued revenue growth, stable profitability
and cash flow generation as a result of continued prudent
financial management," says Gerwin Ho, a Moody's Vice President
and Senior Credit Officer.
Moody's expects Yingde Gases' revenue to grow about 11% over the
next 12-18 months, supported by capacity growth, expansion in its
merchant gas business and the stable operating conditions of the
company's customers in the steel industry.
Moody's also expects that the company's adjusted EBITDA margin
will remain stable at about 31.5%-32.0% over the same period,
which is supported by operating leverage, as the company's
revenue grows.
As a result, Yingde Gases' debt leverage - in terms of adjusted
debt/EBITDA - should improve to about 2.2x over the next 12-18
months from 2.4x in the 12 months to June 30, 2018. This level of
leverage provides a buffer for the company's working capital
needs and against the cyclical nature of its customers'
industries.
"The ratings upgrade also reflects the improvement in Yingde
Gases' working capital, amid its growing scale, due to stronger
receivables management," adds Ho.
Moody's estimates that Yingde Gases accounts receivables days
improved to about 40-45 days in 2018, notably lower than the 55
days and 85 days in 2017 and 2016 respectively, supported by the
stable operating environment of its customers, especially in the
steel industry, and the company's effort in working capital
management.
Yingde Gases' liquidity is adequate. Moody's estimates that the
company's cash holding at the end of 2018 and projected total
operating cash flow over the next 12-18 months can cover its
committed capital expenditure and repayment of maturing debt over
the same period.
Yingde Gases' Ba3 CFR reflects the company's: (1) strong position
in China's onsite gas supply market, where it holds competitive
advantages; and (2) good profitability and recurring cash flow,
supported by its long-term contracts with onsite customers. Such
contracts account for the majority of its revenues.
On the other hand, the CFR is constrained by: (1) the company's
small revenue scale when compared with its international peers
and high exposure to the cyclical domestic steel industry; and
(2) high customer concentration.
The stable ratings outlook reflects Moody's expectation that
Yingde Gases will grow its revenue and maintain its profitability
and cash flow generation, and maintain prudent financial
management, as characterized by disciplined capital expenditure
and acquisitions and shareholder distribution. At the same time,
Moody's expects that the company will be able to refinance its
short-term debt.
Moody's could upgrade Yingde Gases' ratings if the company (1)
achieves revenue growth, as well as stable profitability and
positive free cash flow generation; (2) improves customer and end
market diversification; (3) maintains prudent financial
management, as characterized by disciplined capital expenditure
and acquisitions and shareholder distribution; and (4) further
strengthens its liquidity profile.
Moody's could downgrade the ratings if Yingde Gases: (1)
experiences revenue decline; or (2) exhibits weakened
profitability; or (3) demonstrates a deterioration in its
liquidity or credit profile, such that its adjusted debt/EBITDA
exceeds 3.0-3.5x on a sustained basis, or if the company is
unable to refinance its short-term debt.
The principal methodology used in these ratings was Chemical
Industry published in January 2018.
Yingde Gases Group Company Limited is one of the largest players
in the independent onsite industrial gas market in China, with
RMB5.7 billion in revenue for the six months between January and
June 2018.
At June 30, 2018, it had a total of 75 gas production facilities
in operation and another 16 under development. PAGAC II-2
Limited, an investment partnership managed by private equity
firm, PAG Asia Capital GP II Limited, held a 100% stake in Yingde
Gases at June 30, 2018.
YUZHOU PROPERTIES: Fitch Rates USD500M Sr. Unsec. Notes BB-
-----------------------------------------------------------
Fitch Ratings has assigned Yuzhou Properties Company Limited's
(Yuzhou; BB-/Stable) USD500 million 8.5% senior unsecured notes
due 2023 a final 'BB-' rating.
The notes are rated at the same level as Yuzhou's senior
unsecured rating because they constitute direct and senior
unsecured obligations of the company. Yuzhou intends to use the
net proceeds from the issue to primarily refinance its existing
indebtedness. The final rating is in line with the expected
rating assigned on January 27, 2019 and follows the receipt of
final documentation conforming to information already received.
Yuzhou's ratings are supported by strong contracted sales growth
and regional diversification. The China-based company has a good-
quality low-cost land bank, which upholds its favourable margin
compared with peers. Yuzhou's active land acquisition will
increase contracted sales in the medium term, although it may
have driven leverage, as defined by net debt/adjusted inventory,
above 40% by end-2018. Fitch believes leverage of 40%-45% is
reasonable as the company's operating scale will be larger.
Fitch's assessment of Yuzhou's ratings will depend on whether it
can manage its contracted sales growth without significantly
impairing leverage and margins.
KEY RATING DRIVERS
More Diversified Land Bank: Yuzhou continued to expand its land
bank outside the Yangtze River Delta and West Strait Economic
Zone, where it is well-established. The company had more than 110
projects spread across 17.3 million square metres of land bank in
25 cities as of June 2018. Contracted sales from the Greater Bay
area started in 2017 and Fitch expects some sales from central
China in the short term, as 5% of its land bank is located in
Wuhan.
Fitch believes Yuzhou's acquisition of seven projects from
Coastal Greenland Limited in 2018 will enhance its geographical
diversification, as they include properties in three cities where
it does not yet operate; Beijing, Foshan and Shenyang. The
acquisition will also enable Yuzhou to expand into northern and
central China, as some projects are also located in Tianjin and
Wuhan.
Expansion Pressures Leverage: Fitch believes a rise in leverage,
as defined by net debt/adjusted inventory, to 40%-45% (end-2017:
around 40%) in the short-term would still be reasonable due to
Yuzhou's good-quality land purchases. Fitch expects Yuzhou to use
an average of 55% of its annual presale proceeds to acquire land.
The company remains in expansion mode and is increasing its
investment in joint ventures. Yuzhou's total contracted sales
increased by 38.9% to CNY56.0 billion in 2018, 9% higher than
Fitch's estimate, after rising 73.7% to CNY40.3 billion in 2017.
Slowing Land Acquisitions: Fitch expects Yuzhou to reduce its
land bank life to three to four years, from nearly five years at
end-2016 and four years at end-2017, as it better utilises its
resources to control leverage. The company spent 35% of its
attributable contracted sales, totalling CNY5.7 billion, on land
bank acquisitions in 1H18 and management expected to spend no
more than CNY25.0 billion on land acquisitions in 2018. Yuzhou
spent 49% of its attributable contracted sales on land purchases
in 2017, compared with 86% in 2016.
Better-than-Peer Margin: Yuzhou is cautious about cost control
amid its national expansion. Fitch expects its 2018 land
acquisition costs to have remained below 50% of contracted sales,
partly due to the low average land cost it paid for the
acquisition of seven projects in China from Coastal Greenland in
August 2018. Fitch expects its land cost to remain at around 30%
of its average selling price and forecast an EBITDA margin of
around 28%-31%, which is high relative to that of 'BB-' category
peers. Its strong margin stems from good-quality land purchases,
with 70% of its land bank in Tier 1 and 2 cities, and low
selling, general and administrative expenses.
DERIVATION SUMMARY
CIFI Holdings (Group) Co. Ltd. (BB/Stable) is Yuzhou's closest
peer in terms geography, as both companies focus on the Yangtze
River Delta region, although Yuzhou is also strongly positioned
in the West Strait Economic Zone and has less exposure to the
Bohai Rim region. CIFI has higher attributable contracted sales
and lower leverage, which explains the one notch rating
difference against Yuzhou. CIFI has higher sales efficiency than
Yuzhou but a lower EBITDA margin.
In terms of scale, Times China Holdings Limited (BB-/Stable),
which is focused in the Greater Bay area, had a similar level of
2017 attributable contracted sales as Yuzhou, at around CNY30
billion. Times China has adopted a faster churn strategy and thus
its EBITDA margin is lower than that of Yuzhou, as is its
leverage.
KWG Group Holdings Limited (BB-/Stable) has marginally smaller
attributable contracted sales than Yuzhou. KWG's focus is in
Guangzhou, although both companies have some exposure to Suzhou,
Shanghai and Tianjin. KWG has a slower churn model than Yuzhou,
which explains its slightly higher EBITDA margin. KWG's leverage
is rising towards the level of Yuzhou.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
include:
- Consolidated contracted sales at CNY37 billion-59 billion
a year in 2018-2021 (2017: CNY29 billion)
- Contracted average selling price to drop by 15% in 2018 then
rise by 5% each year in 2019-2021 (2017: 33% rise)
- Contracted gross floor area sold to rise by 50% in 2018 and
then 10% on average in 2019-2021 (2017: 30% rise)
- Land acquisition costs to account for 48%-58% of total
contracted sales in 2018-2021 (2017: 49%)
- Land costs to fall by 20% in 2018 and rise with inflation by
3% per year in 2019-2021 (2017: 31% fall)
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Attributable contracted sales sustained above CNY30 billion
(2017: CNY30.3 billion)
- Proportionally consolidated net debt/adjusted inventory
sustained below 40% (2017: 39.7%)
- Proportionally consolidated contracted sales/gross debt
sustained above 1.2x (2017: 1.0x)
- EBITDA margin sustained above 25% (2017: 33.7%)
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Proportionally consolidated net debt/adjusted inventory
above 45% for a sustained period
- Proportionally consolidated contracted sales/gross debt below
1.0x for a sustained period
- EBITDA margin below 20% for a sustained period
LIQUIDITY
Healthy Liquidity: Yuzhou has a healthy liquidity position. It
had unrestricted cash of CNY16 billion and uncommitted undrawn
facilities of CNY12 billion at end-2017, which was enough to
cover short-term debt of CNY17 billion and support its planned
expansion. Of the short-term debt, CNY10 billion was puttable
corporate bonds, with 20% due in 2018, 50% in 2019 and 30% in
2020.
Yuzhou stepped up the coupon rate for the puttable bonds in 2017
and 2018, and thus did not need to repay most of the principal
due during that period. Management is confident bondholders will
agree to accept a similar increase in the coupon rate in 2019 in
return for a deferment on principal repayment. The company has
diversified funding channels to ensure sustainable liquidity;
besides bank loans, it has established channels for onshore and
offshore bond issuance as well as equity placements.
Yuzhou issued USD500 million of three-year senior notes at a
coupon rate of 8.625% in January 2019. In 2018, it issued USD375
million of senior notes at a coupon rate of 6.375% and USD625
million at a coupon rate of 7.900%. Its onshore bond issuance
included CNY1.0 billion at 7.850% on August 28, 2018 as well as
CNY1.2 billion at 7.800% and CNY0.8 billion at 7.850% on
September 21, 2018. The company also issued CNY591 million in
supplier-chain asset-backed securities in October 2018.
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I N D I A
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ADITYA CHANAKYA: CARE Migrates B+ Rating to Not Cooperating
-----------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Aditya
Chanakya Group (ACG) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 6.00 CARE B+; Stable, Issuer Not
Facilities Cooperating; Based on best
Available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from ACG to monitor the ratings
vide e-mail communications/letters dated October 4, 2018,
November 14, 2018 and December 18, 2018 and numerous phone calls.
However, despite CARE's repeated requests, the firm has not
provided the requisite information for monitoring the ratings. In
line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information, which
however, in CARE's opinion is not sufficient to arrive at a fair
rating. The rating on ACG's bank facility and will now be denoted
as CARE B+; Stable, ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The ratings take into account the small scale of operations with
low capitalisation, weak capital structure and debt coverage
indicators, and working capital intensive nature of operations.
The rating is further constrained by its presence in a highly
fragmented industry, low order book position and partnership
nature of constitution.
The rating, however, derives strength from extensive experience
of the partners in construction industry, comfort from price
escalation clause embedded in the contracts and moderate profit
margins.
Detailed description of the key rating drivers
At the time of last rating on December 28, 2017, the following
were the rating strengths and weaknesses.
Key Rating Weaknesses
Small scale of operations with low capitalization: The scale of
operations remained small with total operating income and
tangible net worth base of INR10.50 crore and INR1.89 crore as on
March 31, 2017. Furthermore, owing to low capital base of the
firm financial flexibility is restricted.
Weak capital structure and debt service coverage indicators: The
capital structure of the firm remained weak on account of higher
utilization of working capital bank borrowings. Moreover, higher
reliance on debt with lower accruals led by thin profit margins
resulted in moderate and debt coverage indicators.
Working capital intensive nature of operations: The working
capital cycle of the firm is stretched owing to high gross
current asset days of 288. The firm is indirectly dependent on
the recovery of funds from government agencies being a small size
sub-contractor. The working capital requirement is met by a cash
credit limit, which was utilized in the range of 90-96% during
the last 12 months ended November 2017.
Low order book position: ACG has a low outstanding order book
position as on November 30, 2017 which is to be executed over a
period of 18 months providing only short-term revenue visibility.
Furthermore, timely execution of these projects would be critical
for maintaining adequate cash flows of the firm.
Fragmented nature of business: ACG operates in the construction
industry which is characterized by high competition due to low
entry barriers, high fragmentation and presence of a large number
of players in the organized and unorganized sector. Thus the
entities in present in the segment have a low bargaining power
vis-Ö-vis their customers.
Partnership nature of constitution: The partnership nature of
entity limits its financial flexibility in the time of
contingency and also poses a risk of withdrawal of capital by
partners.
Key Rating Strengths
Experienced partners: The firm is spearheaded by Mr. Dhananjay
Shende and Mr. Janavi Yerpuda. The partners are well versed with
the intricacies of the business on the back of about one decade
experience in construction sector through ACG. Being in the
industry for about a decade, the partners have established good
relationship with labor contractors and the material suppliers
resulting in smooth execution of projects and regular receipt of
orders from them.
Moderate profitability margins: The PBILDT margin has improved
significantly in FY17 owing to decline in raw material cost and
remained in the range of 12-18% during last three years.
Moreover, PAT margin has also seen a significant improvement in
FY17.
Comfort from price escalation clause in all the contracts: The
contracts in hand are from various players and all contracts
have price escalation clause. The escalation amount is pegged to
a basket of construction commodities. This mitigates the risk
arising out of adverse movement in raw material price and labour
cost to an extent.
ACG was established in the year 2006 as partnership firm by
Mr.Dhananjay Shende and Mr. Janavi Yerpuda. The firm is
engaged in civil construction and within civil construction it
undertakes the constructions of construction of buildings, and
civil structures. The firm has its presence in Maharashtra state
and receives order from private players as sub contract.
APOLLO ANIMAL: CARE Migrates B Rating to Not Cooperating Category
-----------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Apollo
Animal Medical Group Trust (AAMGT) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 8.00 CARE B; Stable; Issuer not
Facilities cooperating; Based on best
available information
Short-term Bank 5.00 CARE A4; Issuer not
Facilities cooperating; based on best
available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from AAMGT to monitor the
rating(s) vide email dated November 16, 2018, December 12, 2018
and January 2, 2019 and numerous phone calls. However, despite
CARE's repeated requests, the firm has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is
not sufficient to arrive at a fair rating. Further, AAMGT has not
paid the surveillance fees for the rating exercise as agreed to
in its Rating Agreement. The rating on AAMGT's bank facilities
will now be denoted as CARE B; Stable/CARE A4; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating assigned to the bank facilities of Apollo Animal
Medical Group Trust (AAMGT) continues to be constrained by
relatively modest scale of operation, declining profitability,
increasing competition and susceptibility to regulatory
changes in the education sector. The rating continues to derive
strength from the trust's long track record of operations, well-
experienced management and trustees in the education sector. The
ability of AAGMT to increase its scale of operations with
improved profitability and timely renewal of the license to run
the college and enroll the students are the key rating
sensitivities.
Detailed description of the key rating drivers
At the time of last rating on March 9, 2018, the following were
the rating strengths and weaknesses (updated for the information
available from client).
Key Rating Weakness
Relatively small scale of operation with continuous decline in
(TOI) and net losses: AAMGT offers Bachelors degree in Veterinary
Science & Animal Husbandry (B.V.Sc. & A.H.). College get licence
to run the course for 2 years & it is a 5 years course. During
FY16 the rules changed & it didn't get the license to run the
college as per standard regulation every medical college should
have own medical hospital too which AAMGT didn't have. Thus it
posted no income in FY17. Only income received was in form of
donation. However during FY18, AAMGT completed the construction
of its medical hospital and it has again got the license to run
the course and got fees of INR4.80 crore through enrolment of 78
students. The profitability margins of AAMGT stood low marked by
SBID of INR0.02 crore in FY17 (vis-Ö-vis INR0.34 crore in FY16)
on account of low realization of income due to no new admissions
during the year and deficit of INR0.15 crore in Fy17 (vis -Övis
surplus of INR0.15 crore in FY16) on account of high operating
expenses and didn't receive any fees which lead to losses.
Weak Liquidity position: The liquidity position of AAMGT stood
weak marked by current ratio and quick ratio stood below unity on
account of low revenue generation for past seven years and
additions of debt to support operations.
Going forward the AAMGT has availed bank overdraft and bank
guarantee to meet operational expenses and to undertake repairs
and maintenance of the college Volume driven business with
intense competition in the auto dealership industry. Indian
automobile industry is highly competitive in nature as there are
large numbers of players operating in the market. Further, VMC's
total operating income is derived from the sale of Tata Motors
passenger vehicles and hence its performance is highly dependent
on the performance of Tata Motors, its key principal.
Susceptibility to adverse regulatory changes in education sector:
The operations of medical colleges are medical council of India
which has detailed procedures for granting permissions to set up
new institutions, and approvals which need to be renewed. Even
enhancing the number of seats requires approval. These agencies
conduct detailed study on the facilities, technology, faculty and
track record of institution before getting approvals. The various
courses offered by the trust have to comply with various specific
operational and infrastructural norms laid down by regulatory
bodies. Thus, the trust needs to regularly invest in its
workforce and infrastructure.
Key Rating Strengths
Long track record of operations and experienced trustee: AAMGT is
into existence since 2003 and affiliated by Rajasthan University
of Veterinary Sciences, Bikaner as India's first private
veterinary Institute The Promoters have an average experience of
more than two decades in education field and have works with many
NGOs to promote education .Further directors have infused owns
capital continuously in form of unsecured loan to meet
operational expenses.
Comfortable capital structure and weak debt coverage indicators:
Capital structure of the trust has remains comfortable in absence
of long term debt. Further directors have infused owns capital
continuously in form of unsecured loan to meet operational
expenses, hence the overall gearing remains stagnant and stood
comfortable at 0.29 times as on March 31, 2017. Total debt to GCA
stood at weak 164.46 times as on March 31, 2017 due to increase
in debt level coupled with low cash accruals owing to no fees
received during FY17, on account of no new admission due to
cancelation of licence in 2011.
Good infrastructure facilities: AAMGT has a good campus spread
over 19 acres of land. The main college building is housing
departments as per VCI regulations for UG course with ample scope
for future expansion.17 different departments comprising of
Clinical, Paraclinical & Production science departments. Teaching
Veterinary Clinical Complex (TVCC) and Instructional Livestock
Farm Complex (ILFS) are separate units under independent control
with status of a department. Excellent library with having
stalking and reading room facilities spread in 3000 sq. ft. area.
It has triple storey modern hostel building for boys to
accommodate nearly 200 students and it is well equipped with
indoor games, Gym, TV, reading room etc
Founded in the year 2002, Apollo Animal Medical Group Trust
(AAMGT), Jaipur is the pioneer institution in private sector for
imparting quality Veterinary Medical education. It offers
Bachelors degree in Veterinary Science & Animal Husbandry
(B.V.Sc. & A.H.). This college is affiliated with the Rajasthan
University of Veterinary and Animal Sciences (RAJUVAS), Bikaner.
It follows the curriculum prescribed under minimum standards for
veterinary education degree course- BVSc&AH, Regulations, 1993,
as amended in 2008 by Veterinary Council of India (VCI).
ASIA POLY: CARE Lowers Rating on INR45.32cr Loan to B+
------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Asia Poly Films Industries (APFI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 45.32 CARE B+; Stable Revised from
Facilities CARE BB; Stable
Short-term Bank
Facilities 3.00 CARE A4 Reaffirmed
Detailed Rationale & Key Rating Drivers
The revision in ratings assigned to the bank facilities of APFI
takes into account cash losses reported by the firm during FY18
leading to leveraged capital structure and weak debt coverage
indicators resulting into requirement of support by partners in
the form of fund infusion to ensure timely debt servicing.
Further, the ratings continue to be constrained due to
vulnerability of APFI's profitability to volatility in raw
material prices, supplier concentration risk (albeit close
proximity), working capital intensive operations, modest
liquidity position and presence in a highly competitive and
fragmented industry having low entry barriers.
The ratings, however, continue to derive strength from
experienced and resourceful partners, modest capacity utilization
during its first year of operations and favorable demand
prospects for the flexible packaging industry APFI's ability to
increase its scale of operations along with improvement in its
profitability in the light of volatile raw material prices along
with effective working capital management are the key rating
sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Losses reported during FY18 leading to leveraged capital
structure and requirement of support by partners to ensure timely
debt servicing: Although APFI reported healthy sales during its
first year of operations, APFI reported net loss and cash loss of
INR18.83 crore and INR10.31 crore respectively during FY18. The
loss during FY18 has led to substantial erosion of the net-worth
base and resulted into deterioration in APFI's capital structure
as indicated by overall gearing of 3.55 times as on March 31,
2018. To ensure timely servicing of monthly debt obligations
(interest plus principal), additional funds have been infused in
the form of partners' capital and unsecured loans.
Vulnerability of profitability to volatility in raw material
prices: PP homo polymer (PPHP), a crude oil derivative, is the
key raw material and its prices are subject to volatility in line
with those of global crude oil prices. Hence, APFI's
profitability is vulnerable to any adverse movement in the prices
of its raw material, especially because of its low bargaining
power vis-a-vis its customers and the competitive market for
plastic films.
Supplier concentration risk albeit close proximity: APFI
primarily sources raw material requirements from Reliance
Industries Ltd.'s Jamnagar petrochemical manufacturing facility
and has limited bargaining power against the supplier. However,
APFI benefits from its close proximity to its majority supplier,
which provides flexibility to procure raw material within a short
notice and translates into lower inventory holding period.
Working capital intensive operations and modest liquidity
position: APFI has limited bargaining power against its supplier,
which results into low credit period available of 3-4 days
whereas it allows ~12-15 days credit to its customers and also
keeps inventory of around 20 days which results in moderate
operating cycle of around one month during FY18. Also, the
average utilization of the fund based facility remained in the
range of around 90%-95% and the non-fund based facility remained
almost fully utilized during FY18.
Presence in a highly competitive and fragmented industry having
low entry barriers: The flexible packaging industry is highly
fragmented in nature having few large players and several
unorganized regional players apart from rising imports. Moreover,
owing to low entry barriers associated with industry, moderate
initial capital investment and ease of access to technology,
there is large influx of small players in the industry. However,
APFI operates in BOPP film industry whose growth is closely
linked to various end uses like packaging, textile and cosmetic
products.
Key Ratings Strength
Experienced and resourceful partners: APFI has 13 partners from 2
different families and the overall management of APFI is handled
by Mr. Kiritbhai Jivrajbhai Fultariya and Mr. Dipeshkumar
Mansukhbhai Patel. Mr. Kiritbhai Jivrajbhai Fultariya is BE
Mechanical engineer and has an experience of around 10 years in
the packaging industry. During FY18, the partners have infused
additional funds of about Rs12.00 crore in the form of partners'
capital and unsecured loans to meet out the losses and debt
obligations.
Modest capacity utilization during its first year of operations:
APFI started commercial operations to manufacture BOPP film with
an installed capacity of 25,000 MTPA from April, 2017. BOPP films
find diverse applications in areas such as wrappers, packaging,
multi-packs, CDs and DVDs and for lamination etc. The capacity
utilization level of APFI remained at around 60-65% during FY18
and H1FY19.
Favorable demand prospects for the flexible packaging industry:
Flexible packaging typically includes materials such as plastic
films, paper and aluminum foil. Over the years, BOPP Film (forms
of plastic-based flexible packaging film) has become the
preferred choice for packaging consumer articles including food,
personal products and clothing. Flexible packaging improves the
shelf life of products while increasing its product appeal.
Increase in purchasing power in the developing countries has
resulted in a significant rise in per capita consumption of
flexible packaging materials.
Asia Poly Films Industries (APFI), a Morbi based partnership firm
was formed in December 2015. APFI is engaged in the manufacturing
of BOPP films at its plant located at Lajai, Morbi, Gujarat with
an installed capacity of 25,000 metric tonnes per annum (MTPA).
APFI started its commercial production from April 2017. APFI has
13 partners from 2 different families and the overall management
of APFI is handled by Mr. Kiritbhai Jivrajbhai Fultariya and Mr.
Dipeshkumar Mansukhbhai Patel. APFI has two group entities 'M/s
Tirthak Paper Mill Pvt. Ltd. (TPMPL)' and 'M/s Wallstone Ceramic
(WC)', incorporated in the year 2006 and 2014 respectively by Mr.
Kiritbhai Jivrajbhai Fultariya. TPMPL is engaged in the
manufacturing of paper products and WC is engaged in the
manufacturing of wall tiles on job work basis.
BVL INFRASTRUCTURE: CRISIL Assigns 'B' Rating to INR10cr Loan
-------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable' rating on the long-term
bank facilities of BVL Infrastructure Private Limited (BIPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL B/Stable (Assigned)
The rating reflects BIPL's modest scale of operations with large
working capital requirement and susceptibility of its operating
margin to volatility in raw material prices and foreign exchange
(forex) rates. These weaknesses are partially offset by extensive
industry experience of the promoters.
Analytical Approach
For arriving at the ratings, CRISIL has considered the unsecured
loans of INR9.06Crore as of March 31, 2018 as neither debt nor
equity as these loans are extended by the promoters and are non-
interest bearing and are expected to be retained in business over
the medium term.
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale of operations with large working capital
requirement: Scale of operations is modest with turnover of
INR7.52Crore in fiscal 2018. Moreover the operations are working
capital intensive as reflected in the high gross current assets
of 217 days driven mainly by high inventory of 138 days.
* Susceptibility of operating margin to volatility in raw
material prices and foreign exchange rates: The company is
exposed to intense competition from unorganised players in the
granite industry, and demand from overseas markets, which is
cyclical. Also the operating margin remains susceptible to the
prices of granite blocks and fluctuation in forex rates.
Strengths
* Extensive industry experience of the promoters: BIPL is
promoted by Mr. Bellam Ravi Chandra, who has an experience of
more than decade in this industry which enabled to establish
healthy relationship with suppliers and customers.
Outlook: Stable
CRISIL believes that BIPL will continue to benefit from its
promoter's extensive industry experience and his established
relationships with suppliers and customers. The outlook may be
revised to 'Positive' if significant growth in revenue and
operating margin, leads to an improvement in financial risk
profile, especially capital structure. The outlook, may be
revised to 'Negative' in case of lower-than-expected revenue and
operating margin or any large debt funded capital expenditure
leads to weakening of financial risk profile.
Liquidity:
* Bank Limit Utilization: Average utilisation of the bank limits
was at 93.07% for nine months ended September, 2018.
* Net cash Accruals against repayment obligations: BIPL is
expected to report negative net cash accrual against repayment
obligation of INR32 lakhs in fiscal 2019. However liquidity is
expected to be supported by need based timely fund support from
the promoters.
* Fund Support from promoters: The promoters have been extending
need based fund support in the form of non-interest bearing
unsecured loans. Unsecured loans of INR9.06 Crores were extended
by the promoters as on March 31, 2018.
BVL Infrastructure Private Limited is a private limited company
incorporated in the year 2007. However, the commercial operations
started in fiscal 2018. It is based out in Tanguturu, Andhra
Pradesh.
ESSAR STEEL: Bankruptcy Court Rejects Owners' Settlement Plan
-------------------------------------------------------------
Reuters reports that India's bankruptcy court said on Jan. 29
creditors could reject a $7.5 billion offer from the owners of
debt-stricken Essar Steel to settle the company's debts, giving a
boost to global steel giant ArcelorMittal's bid to takeover the
plant.
The settlement proposal presented to the consortium of lenders by
the billionaire Ruia family was not "maintainable", and it would
not be illegal for the banks to reject the offer, the National
Company Law Tribunal (NCLT) said, according to television news
channels, Reuters relays.
An appellate court had asked the NCLT to rule on Essar Steel -
one of the biggest defaulters in India's $150 billion mountain of
bad loans - by Jan. 31, according to Reuters.
Lawyers said, however, that the actual intent of the ruling could
only be understood in its entirety after a copy of the order has
been seen, and that based on procedures the Ruia family could
potentially appeal the decision, Reuters states.
While any appeal could further draw out the protracted case, the
ruling gives a shot in the arm to foreign investors, who had been
getting impatient with India's lengthy bad loan resolution
process, the report notes.
"We hope now for a swift resolution to this case," ArcelorMittal
said in a statement, adding the tribunal ruling was a positive
development for India's bankruptcy process, Reuters relays.
The resolution process for Essar Steel has taken more than 500
days so far, well beyond the 270-day limit stipulated under
India's two-and-a-half year-old bankruptcy law, notes Reuters.
According to Reuters, the bid for Essar Steel's assets has seen
several back and forths in the tribunal courts since it was
admitted into bankruptcy, with global and Indian steel majors and
financial investors vying for the company.
In October, creditors of Essar Steel, which has a 10 million
tonnes steel plant in western India, approved a INR420 billion
($5.9 billion) joint bid from ArcelorMittal and Japan's Nippon &
Sumitomo Metal Corp as the final offer for the debt-laden
company.
However, Essar Steel made a higher offer of INR543.89 billion to
creditors to settle their claims.
In a statement after the ruling Essar said its offer was "the
most compelling proposal available to Essar Steel creditors".
About Essar Steel
Incorporated in 1976, Essar Steel India Ltd. is a part of the
Essar Group and is having 10 MTPA integrated steel manufacturing
facilities at Hazira, Gujarat and iron ore beneficiation and
pelletisation facilities in Paradeep, Odisha (12 mtpa) and Vizag,
Andhra Pradesh (8 mtpa). The company also owns and operates two
iron ore slurry pipelines -- one each in Odisha (Dabuna to
Paradip) and Andhra Pradesh (Kirandul-Vizag), which transport the
iron ore slurry from the beneficiation plant (located near the
iron ore mines in Dabuna and Kirandul) to the pellet plant
(located near the Paradip and Vizag ports). A large portion of
the iron ore pellets produced are intended for captive
consumption by ESIL's steel plant at Hazira for cost
optimization.
The National Company Law Tribunal (NCLT) - Ahmedabad Bench
admitted Essar Steel's insolvency case on Aug. 2, 2017.
Satish Kumar Gupta of Alvarez and Marsal India has been appointed
as interim resolution professional upon the suggestion of State
Bank of India (SBI).
Essar Steel owes more than INR45,000 crore to lenders, of which
INR31,671 crore had already been declared as non-performing as of
March 31, 2016, The Economic Times disclosed. The SBI-led
consortium of 22 creditors accounts for 93% of this amount. Essar
Steel owes $450.67 million to Standard Chartered Bank (SCB).
GLASS BUILD: CARE Assigns 'B' Rating to INR9cr LT Loan
------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Glass
Build Industry (GBI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 9.00 CARE B; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of GBI is tempered on
account of project execution risk with debt yet to be tied up,
its presence in fragmented and competitive industry and
constitution of entity as a proprietorship firm limiting
financial flexibility in times of stress.
The ratings, however, draw support from the experience of the
proprietor and long standing business relations with suppliers
through group concern.
The ability of the firm to complete the project as per schedule
timeline without any cost overrun is the key rating sensitivity.
Detailed description of the key rating drivers
Key Rating Weaknesses
Project execution risk with debt yet to be tied up: The entity is
in process of setting up a glass manufacturing facility at
Kamtee, Nagpur (Maharashtra). The total cost of the project is
INR 13.72 crore, which is proposed to be funded by DER of 4.12x.
As on January 08, 2019, the firm has incurred a cost of INR0.30
crore toward civil construction which was funded through
proprietor's contribution. The entity is expected to commence its
operations from December 2020. However, financial closure for the
project has not yet been achieved. The ability of firm to
complete the project within envisaged cost and timeline will be
critical from credit perspective.
Presence in competitive and fragmented nature of industry: GBI
operates in an industry characterized by competition due to low
entry barriers, fragmentation and the presence of a large number
of players in the organized and unorganized sector.
Proprietorship nature of constitution: Being a proprietorship
firm, GBI is exposed to the risk of withdrawal of capital by
proprietor due to personal exigencies, dissolution of firm and
restricted financial flexibility due to inability to explore
cheaper sources of finance leading to limited growth potential.
This also limits the firm's ability to meet any financial
exigencies.
Key Rating Strengths
Experienced proprietor along with long standing business
relations with suppliers: GBI is promoted by Mr. Sachin Jagmohan
Pachisia. He is associated with glass industry for more than a
decade through its group entity "Glass Guard India Private
Limited". He will look after overall management of the entity
with adequate support from a team of experienced professionals to
support the growth of operations of the entity. Further, as the
proprietor is associated with glass manufacturing industry for
approximately a decade he has longstanding relationship with the
suppliers. Being in the industry for more than a decade has
helped the promoter in gaining adequate acumen about the business
which will aid in smooth operations of GBI.
GBI is a Nagpur based firm promoted by Mr. Sachin J Pachisia and
was established in September 2017. The entity is expected to be
engaged in the business of manufacturing of laminated and
toughened glass to be used in Auto and Construction Industry at
its manufacturing facility located at Kamtee, Nagpur
(Maharashtra). The proposed capacity of the facility for
Toughened glass (5MM) will be 270000 Lakhs Square Meters per
month, 60000 Square Meters per month for Laminated Glass, and
1800 Pieces per month for Bus Glass. The entity is expected to
commence its operations from December 2020.
JAIDEEP METALLICS: CARE Lowers Rating on INR20cr Loan to B+
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Jaideep Metallics & Alloys Private Limited (JMAPLPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 20.00 CARE B+; Stable; Issuer not
Facilities cooperating; Revised from
CARE BB-; Stable on the basis
of best available information
Short term Bank 5.50 CARE A4; Issuer not
Facilities cooperating; Based on best
available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from JMAPLPL to monitor the
rating(s) vide e-mail communications/letters dated November 16,
2018, December 28, 2018, and January 2, 2019 and numerous phone
calls. However, despite CARE's repeated requests, the company
has not provided the requisite information for monitoring the
ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the publicly available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. Jaideep Metallics & Alloys Private
Limited has not paid the surveillance fees for the rating
exercise agreed to in its Rating Agreement. In line with the
extant SEBI guidelines, CARE's rating on Jaideep Metallics &
Alloys Private Limited's bank facilities will now be denoted as
CARE B+; Stable/CARE A4; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in the long term rating assigned to the bank
facilities of Jaideep Metallics & Alloys Private Limited
(JMAPLPL) factors in the project execution risk with pending
financial closure along with the status of the same not known,
significant decline in the scale of operations coupled with low
profitability margins marked by net losses in FY18, moderately
leveraged capital structure and moderately weak debt coverage
indicators and working capital intensive nature of operations.
The ratings however continue to be constrained by susceptibility
of margin to volatility in raw material prices and presence in
competitive nature of industry.
Detailed description of the key rating drivers (Updated for
FY18).
Key Rating Weaknesses
Project execution risk with pending financial closure with the
status of the same not known: JMAPL had undertaken a project to
set up the plant for manufacturing of molten metal at a total
cost of INR18.44 crore, which would be funded through DE ratio of
1.44x wherein debt for the project was yet to be tied up. Out of
the total projected cost a total cost of INR3.28 crore had been
incurred till August 9, 2017 which was funded through promoter's
contribution. However, risk remains for balance portion of the
project in light of pending financial closure and fluctuation in
input prices. JMAPL's ability to timely tie-up the bank debt and
thereby, fund the balance project would be critical and
subsequently timely complete the project without any cost overrun
would be critical. Further, the status of the project is not
available with CARE.
Significant decline in the scale of operations coupled with low
profitability margins marked by net losses in FY18: The company
has achieved total operating income (TOI) of INR 3.91 crore in
FY18. Further, the PBILDT and PAT margin of JMAPL stood at 2.61%
and -12.69% respectively in FY18. JMAPL incurred net losses in
FY18 amounting to INR 0.50 crore which has led to negative net
profit margin. The tangible net worth also stood small at INR
6.92 crore thus limiting the financial flexibility of the
company.
Moderately leveraged capital structure and moderately weak debt
coverage indicators: The capital structure of JMAPL marked by
overall gearing ratio stood moderately leveraged at 1.92x as on
March 31, 2018. Further, the debt coverage indicators stood
moderately weak with total debt to GCA at 135.75 times as on
March 31, 2018 and interest coverage ratio of 4.04 times as on
March 31, 2018.
Working capital intensive nature of operations and weak liquidity
position: The operations of JMAPL are working capital intensive
owing to funds blocked in inventory. The creditor's days stood at
35 days in FY18 and the operating cycle stood at 67 days in FY18.
Further, the company faces stretched liquidity due to below unity
current ratio and quick ratio in FY18 due to company being in
project phase and FY18 being the first year of operations.
Susceptibility of margins to volatility in raw material prices:
The key raw material for JMAPL is scrap steel whose prices are
volatile in nature on account of demand and supply factor. Thus
its ability to mitigate the fluctuating prices of raw materials
and pass on the same to its client shall be critical.
Presence in competitive nature of industry: JMAPL is engaged into
melting of scrap steel for production of billets which is a part
of overall steel manufacturing value chain. The entity faces
competition from other large number of players in the industry
from both organized and unorganized sector. Further the entity is
susceptible to demand and supply dynamics of the steel industry
with linkages to demand from end use industry and margins being
affected by the steel prices.
Key rating Strengths
Experienced and resourceful promoters along with strong group
support: JMAPL is a part of part of reputed group with company
namely Singhnia System Technologists Pvt. Ltd and M/s. Sun
Metallics and Alloys Pvt. Ltd (SMA) & Jaideep Ispat & Alloys Pvt.
Ltd which are engaged into similar line of business. Further the
promoters have been in the business of steel manufacturing since
1987.Promoters of JMAPL holds an average of three decades of
experience in manufacturing and supply of steel products. Thus
JMAPL derives huge operational and financial synergies owing to
same management coupled with the group's presence in the steel
industry since three decades.
Strategic location of plant and support from group entity:
JMAPL's primarily raw material is scrap steel, company intends to
import the same, thus it shall benefit due to the plant being
located in close proximity to JNPT port area resulting in lower
transportation cost for imported scrap steel (basic raw material
for manufacturing of molten metal , which would accounts for
around 70% of the total cost of sales). Further the entity would
largely be supplying its product to its group entity as JMAPL is
being setup as a backward integration project thus providing some
comfort towards revenue visibility. Also JMAPL is expected to get
subsidy of INR 1.40 crore annually for next 15 years from
Government of Maharashtra as per New Industrial Policy for new
entities (start-up). Further due to presence in Wada region which
is designated as B+ zone (backward zone) it will receive INR 0.50
paise per unit subsidy on power cost. Also since the plant is
located adjacent to SMA's plant it will save labour charges and
freight charges of INR250 per MT.
Incorporated in the March 2017, Jaideep Metallics & Alloys
Private Limited (JMAPL) is part of reputed group with company
namely Singhnia System Technologists Pvt. Ltd and M/s. Sun
Metallics and Alloys Pvt. Ltd (SMA) & Jaideep Ispat & Alloys Pvt.
Ltd. which are engaged in the business of manufacturing of steel
products namely TMT Bars, M.S and alloy steel ingots.
Currently the group is implementing a backward integration
project for one of its company, Sun Metallics & Alloys Pvt. Ltd
to manufacture molten metal (which was previously procured from
outside market) under JMAPL at its factory located at Wada, with
proposed installed capacity of 54500 MTPA.
The overall estimated cost of the above mentioned project is INR
18.44 crore, which would be funded with the debt equity ratio of
1.44x. The commercial production is expected to commence from
December 2017.
JET AIRWAYS: Grounds 3 More Planes on Lease Rental Default
----------------------------------------------------------
Press Trust of India reports that Jet Airways India Ltd. was on
Jan. 29 forced to ground three of its Boeing 737 planes due to
non-payment of lease rentals, leading to cancellation of around
20 domestic flights, according to sources.
With three more planes taken out of operations, the number of
aircraft on ground due to non-payment of lease rentals by the
carrier now stand at six in the last two days, the source added,
PTI relates.
Due to the fresh grounding of the planes, the airline, which is
negotiating with its partner Etihad for additional cash infusion,
has cancelled as many as 19 flights to/from Delhi, Chennai,
Mumbai, Pune, Hyderabad, Port Blair and Bengaluru, the source
added, PTI relays.
Based in Mumbai, India, Jet Airways (India) Limited --
https://www.jetairways.com/EN/PH/Home.aspx -- provides passenger
and cargo air transportation services. It operates through two
segments, Air Transportation and Leasing of Aircraft. The company
also leases aircrafts. It operates flights to 64 destinations in
India and international countries, including Abu Dhabi,
Amsterdam, Bahrain, Bangkok, Colombo, Dammam, Dhaka, Doha, Dubai,
Hong Kong, Jeddah, Kathmandu, Kuwait, London Heathrow, Muscat,
Paris, Riyadh, Sharjah, Singapore, and Toronto. As of August 31,
2017, the company had a fleet of 113 aircraft, which includes a
mix of Boeing 777-300 ERs, Airbus A330-200/300 aircraft, Next
Generation Boeing 737s, and ATR 72-500/600s.
As reported in the Troubled Company Reporter-Asia Pacific on
Dec. 28, 2018, ICRA revised the ratings on certain bank
facilities of Jet Airways (India) Limited to [ICRA]C from
[ICRA]B. The rating downgrade considers delays in the
implementation of the proposed liquidity initiatives by the
management, further aggravating its liquidity, as reflected in
the delays in employee salary payments and lease rental payments
to the aircraft lessors. Moreover, the company has large debt
repayments due over the next four months (December-March) of
FY2019 (INR1,700 crore), FY2020 (INR2,444.5 crore) and FY2021
(INR2,167.9 crore). The company is undertaking various liquidity
initiatives, which includes, among others, equity infusion and a
stake sale in Jet Privilege Private Limited (JPPL), and the
timely implementation of these initiatives is a key rating
sensitivity. Moreover, the company continues to witness a stress
in its operating and financial performance.
JET AIRWAYS: Seeks Shareholder Nod to Convert Loan Into Shares
--------------------------------------------------------------
Reuters reports that Jet Airways Ltd said on Jan. 28 it was
seeking shareholder approval for converting existing debt into
shares or convertible instruments.
At a shareholder meeting scheduled for Feb. 21, the airline will
also seek approval for their lenders to appoint a nominee
director to the board, the debt-laden company said, Reuters
relays.
Based in Mumbai, India, Jet Airways (India) Limited --
https://www.jetairways.com/EN/PH/Home.aspx -- provides passenger
and cargo air transportation services. It operates through two
segments, Air Transportation and Leasing of Aircraft. The company
also leases aircrafts. It operates flights to 64 destinations in
India and international countries, including Abu Dhabi,
Amsterdam, Bahrain, Bangkok, Colombo, Dammam, Dhaka, Doha, Dubai,
Hong Kong, Jeddah, Kathmandu, Kuwait, London Heathrow, Muscat,
Paris, Riyadh, Sharjah, Singapore, and Toronto. As of August 31,
2017, the company had a fleet of 113 aircraft, which includes a
mix of Boeing 777-300 ERs, Airbus A330-200/300 aircraft, Next
Generation Boeing 737s, and ATR 72-500/600s.
As reported in the Troubled Company Reporter-Asia Pacific on
Dec. 28, 2018, ICRA revised the ratings on certain bank
facilities of Jet Airways (India) Limited to [ICRA]C from
[ICRA]B. The rating downgrade considers delays in the
implementation of the proposed liquidity initiatives by the
management, further aggravating its liquidity, as reflected in
the delays in employee salary payments and lease rental payments
to the aircraft lessors. Moreover, the company has large debt
repayments due over the next four months (December-March) of
FY2019 (INR1,700 crore), FY2020 (INR2,444.5 crore) and FY2021
(INR2,167.9 crore). The company is undertaking various liquidity
initiatives, which includes, among others, equity infusion and a
stake sale in Jet Privilege Private Limited (JPPL), and the
timely implementation of these initiatives is a key rating
sensitivity. Moreover, the company continues to witness a stress
in its operating and financial performance.
JM FERRO: CARE Migrates D Rating to Not Cooperating Category
------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of JM
Ferro Alloys Private Limited (JM) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 7.50 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Short-term Bank 12.00 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from JM to monitor the ratings
vide e-mail communications/ letters dated January 4, 2019 and
January 9, 2019 and numerous phone calls. However, despite CARE's
repeated requests, the firm has not provided the requisite
information for monitoring the ratings. In the absence of
minimum information required for the purpose of rating, CARE is
unable to express opinion on the rating. In line with the extant
SEBI guidelines CARE's rating on JM's bank facilities will now be
denoted as ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on October 6, 2017, the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Delay in debt servicing
As per the interaction with the banker, the account has turned
NPA.
Incorporated in 2011 as private limited company, J M Ferro Alloys
Private Limited (JM) is engaged in the business of trading of
steel products namely Hot Rolled (HR) sheets/coils/CTL,
Galvanized Plain (GP) coil/sheet, scrap, Pipe, Tube, TMT bars and
others. JM's products find application mainly in automobile,
electrical, construction and consumer durable industry. Around
60% of JM purchases are from the domestic market and balance is
imported indirectly through agents. Revenues are generated
entirely from the domestic market. JM stocks traded material at
its warehouse situated at Kalamboli and supplies as per the
customer's requirements.
KAMAL PRESSING: CARE Reaffirms B Rating on INR5cr LT Loan
---------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Kamal Pressing Factory (KPF), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 5.00 CARE B; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of KPF continues to be
constrained by declining scale of operations with low
profitability margins owing to limited value addition,
susceptibility of margins to fluctuation in the raw material
prices, seasonality associated with cotton availability,
leveraged capital structure and weak debt coverage indicators.
The rating is further constrained by presence of entity in a
highly fragmented and regulated cotton industry, working capital
intensive nature of operations and limited financial flexibility
owing to proprietorship nature of constitution.
The rating, however, continues to factor in the extensive
experience of promoter along with long track record of operations
of firm and location advantage emanating from proximity to raw
material source.
The ability of the entity to increase its scale of operations,
improve its solvency position and profitability margins admist
intense competition and efficient management of working capital
requirement are the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Declining scale of operations with low profitability: The scale
of operations of KPF declined significantly by ~73% during FY17-
FY18, owing to limited availability of raw cotton due to deficit
monsoons and stood small as reflected by TOI of INR 5.49 crore
for FY18 and low tangible net-worth base of INR0.54 crores as on
March 31, 2018. The small scale of operations of entity limits
its financial flexibility in times of stress and deprives it of
scale benefits.
Leveraged capital structure and weak debt coverage indicators:
The capital structure of the firm remained leveraged on account
of higher reliance on external borrowings. Further, with low
profitability and high gearing levels the debt coverage
indicators of KPF continued to remain weak. Working capital
intensive nature of operations: The operations of KPF remained
working capital intensive in nature with funds being blocked in
inventory and debtors. The working capital requirements of the
entity are met by the cash credit facility, the average
utilization of which remains high during peak season.
Susceptibility of margins to raw material price fluctuation: The
price of raw cotton in India is regulated through function of MSP
by the government. Furthermore, the price of raw cotton is highly
volatile in nature and depends upon factors like area under
production, yield for the year, international demand-supply
scenario, export quota decided by government and inventory
carried forward from previous year. Hence, any adverse change in
government policy and climatic condition may negatively impact
the prices of raw cotton in domestic market and could result in
lower realizations and profit for KPF.
Presence in seasonal and fragmented industry: Operation of cotton
business is highly seasonal in nature, as the sowing season is
from March to July and the harvesting season is spread from
November to February. Furthermore, the cotton industry is highly
fragmented with large number (approx 80%) of players operating in
the unorganized sector. Hence, KPF faces stiff competition from
other players operating in the same industry, which further
result in its low bargaining power against its customers.
Proprietorship nature of constitution: Being a proprietorship
firm, KPF is exposed to the risk of withdrawal of capital by
proprietor due to personal exigencies, dissolution of firm due to
retirement or death of proprietor and restricted financial
flexibility due to inability to explore cheaper sources of
finance leading to limited growth potential.
Key Rating Strengths
Long experience of promoters and established track record of
operations of the company: KPF was established in 1998 and has
established longstanding relations with its customers and
suppliers. Furthermore, the promoter has an average experience of
around two decades in cotton ginning & pressing business which
aids in smooth operations of the entity. Location advantage
emanating from proximity to raw material: The manufacturing
facility of KPF is located at Marathwada, Maharashtra which
contributes to ~65% of cotton production in Maharashtra (2nd
largest cotton producer in India). The presence of KPF in cotton
producing region fetches a location advantage owing to lower
logistics expenditure and easy availability of customers and
suppliers.
KPF was established in the year 1998. The firm is engaged in the
business of cotton ginning and pressing at its manufacturing
facility located at Marathwada, Maharashtra. The firm has an
installed capacity to manufacture 40000 bales (1 bale = 170 kg)
per annum.
KEDIA GUAR: CRISIL Assigns B+ Rating to INR7cr Cash Loan
--------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facility of Kedia Guar Gum Private Limited (KGGPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL B+/Stable Assigned
The rating reflects the company's average turnover amidst intense
competition in the guar processing industry, moderate financial
risk profile and the low operating profitability and return on
capital employed. These rating weaknesses are partially offset by
the extensive experience of promoters.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to intense competition limiting scalability: Despite
being in the industry for over 7 years, KGGPL's scale of
operations remains moderate, as reflected in turnover of INR37.33
crore in fiscal 2018. Intense competition from several
unorganised players constrains the firm's scalability and profit
margin. Yet, operating income has increased fiscal on fiscal, led
by strong growth prospects and established clientele of over 100
exporters and manufacturers of guar gum powder. Revenue is likely
to grow 50-60% in fiscal 2019, with turnover of INR45 crore
already reported by December 2018.
* Low operating profitability and susceptible to fluctuation in
prices: Operating margin was low around 2% in fiscal 2018,
constrained by the trading nature of business. Further margins
remain susceptible to change in prices of commodity. Crisil
believes that margin will remain low over the medium term also.
* Modest financial risk profile: Financial risk profile is marked
by a modest networth of INR3.36 crore as on March 31, 2018, which
may improve aided by sustained accretion to reserves. Total
outside liabilities to tangible networth ratio was moderate at
1.84 times as on March 31, 2018, vis-Ö-vis 1.97 times a year
before. Debt protection metrics were also moderate, marked by
interest coverage and net cash accrual to total debt ratios of
1.6 times and 0.05 time, respectively, in fiscal 2018.
Strengths
* Extensive experience of the promoter: The decade-and-half-long
presence of the promoter, in the agriculture industry, and his
healthy relationships with suppliers and clientele, will continue
to support the business risk profile. Crisil believes that strong
support from promoters continue to remain key supporting factor
for business risk profile.
Outlook: Stable
CRISIL believes KGGPL will continue to benefit from the extensive
experience of its promoter. The outlook may be revised to
'Positive' if significant and sustained increase in accrual,
efficient working capital management, or a sizeable capital
infusion by the promoter, strengthens the financial risk profile
considerably. The outlook may be revised to 'Negative' if a
decline in revenue or profitability, or large debt contracted to
fund capital expenditure or working capital requirement, weakens
the financial risk profile.
Liquidity
Liquidity remains adequate, aided by expected cash accrual of
INR0.57-0.92 crore in fiscals 2019 and 2020, against nil maturing
debt obligation or any major capex plan in the medium term. Bank
limit utilisation was high, averaging around 95% in the 12 months
through December 2018. Current ratio was adequate over 1.48 times
as on March 31, 2018.
KGGPL was set up by the promoter Mr Naresh Kumar Kedia in 2012.
Rajgarh (Rajasthan)-based company processes guar seeds into guar
splits (daal) and by-products, churi and korma.
KIRPA RAM: CARE Lowers Rating on INR15cr LT Loan to B+
------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Kirpa Ram Dairy Private Limited (KRDPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 15.00 CARE B+; Stable; Issuer not
Facilities cooperating; Revised from
CARE BB-; Stable on the
basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from KRDPL to monitor the
rating vide e-mail communications/letters dated January 8, 2019,
January 3, 2019, January 1, 2019, December 31, 2018 and numerous
phone calls. However, despite CARE's repeated requests, the
company has not provided the requisite information for monitoring
the ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. The rating on Kirpa Ram Dairy Private
Limited's bank facilities will now be denoted as CARE B+; Stable;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of moderation in total
operating income during FY18. The company has below average
financial risk profile characterized by declining scale of
operations, high gearing levels and low liquidity position.
Detailed description of the key rating drivers At the time of
last rating on September 15, 2017 the following were the rating
strengths and weaknesses (updated for the information available
from Registrar of Companies):
Key Rating Weaknesses
Financial risk profile marked by low profitability margins and
moderate coverage indicators: The company's total operating
income deteriorated from INR 100.69 crore in FY17 (A) to Rs 57.13
crore in FY18 (A). The PBILDT margin for FY18 (A) stood at 4.06%
as against 2.85% in FY16 (A). Overall gearing of the company has
also marginally declined to 2.90x as on March 31, 2018 as against
2.75x as on March 31, 2017.
Working capital intensive operations: The operations of the
company are highly working capital intensive marked by elongated
operating cycle and high utilization of sanctioned working
capital limits. The average collection days and average inventory
days stood at 54 days and 93 days in FY18 respectively (23 days
and 51 days in FY17 respectively). The payments to creditors are
also stretched to 38 days in FY18 (PY: 10 days) while part of
milk purchase is done on cash basis also.
Susceptibility of margins to intense competition and raw material
related risk: KRDPL faces stiff competition from the established
players in the organized market in milk and ghee segments. On the
liquid milk front, competition gets intense with presence of
unorganized players and independent milk vendors leading to
pricing pressures. The same is also reflected in low
profitability margins of players in this industry.
Key Rating Strengths
Experienced promoters: KRDPL, incorporated in 2007, is promoted
by Gupta family which includes Mr Sant Kumar Gupta, his wife Ms
Sushma Rani and their two sons, Mr Amit Gupta and Mr Sumit Kumar
Gupta. The promoters Mr Sant Kumar Gupta and his wife have
rich experience of around three decades in processing and trading
of milk through a proprietorship firm named Kirpa Ram Dairy while
their sons have a prior experience of 10 years and 5 years
respectively in same line of business.
Established milk procurement system and distribution network:
Milk is the primary raw material for the company, which they
procure from the local collection centres. The company owns 2
village level collection centres (VLC) each at Muradnagar and
Gajroula and has tie-ups with 15-20 VLCs for continuous milk
supply. The permanent 2 VLCs fulfils nearly 20% requirement of
milk of the company. The company is benefitted for being located
in milk producing belt in UP. KRDPL sells milk products under the
brand name "Leeladhar" in Telangana, Tamil Nadu, Andhra Pradesh,
Delhi NCR, Haryana, Punjab, Maharashtra, Gujarat, West Bengal and
Rajasthan through consignee agents.
Kirpa Ram Dairy Private Limited (KRDPL) was incorporated in June
2007. The company, with the promoters and their relatives/
associates having 100% equity holding, is promoted by Gupta
family which includes Mr Sant Kumar Gupta, his wife Mrs Sushma
Rani and their two sons, Mr Amit Gupta and Mr Sumit Kumar Gupta.
It is engaged in processing of various dairy products like
Skimmed Milk Powder (SMP), desi ghee, white butter, milk cream,
etc. As on March 31, 2017, the company has an installed capacity
of 2 Lac Litres per Day (LLPD) of milk processing, 9 tons per day
(TPD) of ghee and 6 TPD of SMP at its manufacturing facility
located at Ghaziabad, Uttar Pradesh.
LAKSHMIGRAHA ENT: CRISIL Cuts Ratings on INR41.5cr Loans to B+
--------------------------------------------------------------
CRISIL has upgraded its long term rating on the the bank
facilities of Lakshmigraha Enterprises (LE) to 'CRISIL B+/Stable'
from 'CRISIL B/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 33 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Channel Financing 7.5 CRISIL B+/Stable (Upgraded
from 'CRISIL B/Stable')
Inventory Funding 0.5 CRISIL B+/Stable (Upgraded
Facility from 'CRISIL B/Stable')
Proposed Cash 0.5 CRISIL B+/Stable (Upgraded
Credit Limit from 'CRISIL B/Stable')
The upgrade reflects improvement in the business and financial
risk profile. The company has a healthy scale of operations as
indicated by the topline of around INR340 crores in 2018. The
financial risk profile is expected to gradually improve in the
medium term, on account of improvement in the capital structure.
Further, the company has adequate liquidity marked by sufficient
net cash accruals against minimum repayment obligations. Also,
the need based funding support from partner's provides comfort to
liquidity profile.
The rating continues to reflect the firm's average financial risk
profile and low operating profitability. These weaknesses are
partially offset by the extensive experience of LE's partners.
Key Rating Drivers & Detailed Description
Weakness
* Low operating profitability: Operating profitability has been
low at around 1.4-1.8% over the three years through fiscal 2018,
mainly because of the trading nature of business. Profitability
is likely to improve over the medium term due to the introduction
of diversified products in its trading portfolio auto dealership
of Piaggio - two wheeler, which command higher margin compared to
other segment firm deals in.
* Average financial risk profile: The firm has an average
financial risk profile marked by high gearing of around 13 times
and modest networth of INR3 crores in 2018. Further, the interest
coverage and NCATD was 1.4 times and 3 percent respectively in
2018. However, the financial risk profile is expected to
gradually improve in the medium term.
Strength
* Extensive experience of the partners: The partners has an
extensive experience of around three decades in the textile and
automobile industry. LE will continue to derive benefit from the
experience of the partners in the medium term.
Outlook: Stable
CRISIL believes LE will continue to benefit from its established
position as a distributor of Reliance Industries Ltd (RIL) in
South India. The outlook may be revised to 'Positive' if
improvement in cash accrual or capital infusion strengthens
financial risk profile. The outlook may be revised to 'Negative'
if cash accruals decline due to fall in sales or profitability or
if any large working capital debt weakens capital structure.
Liquidity
The firm is highly utilizing the bank limits at around 97% in the
past thirteen months ending December 2018. The firm has
sufficient net cash accruals (NCA) of INR1.2 crores against the
minimum repayment obligations of around INR0.2 crores in fiscal
2018. Going forward, LE is expected to generate sufficient NCA to
meet the term debt obligations in the medium term. Further, the
need based funding support from partner's in terms of unsecured
loans supports the liquidity profile.
Set up in 1986, LE is a partnership firm managed by Ms R Nandini
and Mr. Gopi Kumar. The firm is a distributor of RIL for its
polyester fibre, including polyester-filament yarn, polyester-
stable fibre, polyester-textured yarn, and related products.
Further, the firm is also engaged in the trading of Piaggio two
wheeler vehicle.
MAHESH DYEING: CRISIL Lowers Rating on INR10cr Loans to D
---------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Mahesh Dyeing and Printing Mills Private Limited (MDPMPL) to
'CRISIL D' from 'CRISIL B+/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.1 CRISIL D (Downgraded from
'CRISIL B+/Stable')
Proposed Long Term .18 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B+/Stable')
Rupee Term Loan 4.72 CRISIL D (Downgraded from
'CRISIL B+/Stable')
The downgrade reflects delays by MDPMPL in repayment of bank debt
due to stretched liquidity.
The company also has weak financial risk profile and large
working capital requirement. However, it benefits from the
extensive experience of the promoters in the dyeing and
processing industry.
Key Rating Drivers & Detailed Description
Weakness
* Delay in meeting term debt obligation: Cash accrual remained
insufficient to meet debt obligation, leading to delays in
repayment of bank debt. Utilisation of the cash credit facility
also remained high, averaging 101% during the 12 months ended
December 31, 2018.
* Weak financial risk profile: Gearing was high at 2.85 times as
on March 31, 2018, with networth of INR5.65 crore. Net cash
accrual to total debt ratios were average at 0.07 time in fiscal
2018.
* Large working capital requirement: Operations may remain
working capital intensive over the medium term. Gross current
assets were high at 245 days as on March 31, 2018, due to
receivables and inventory of 150 days and 77 days, respectively.
Strength
* Extensive experience of the promoters: Benefits from the
promoters' experience of over two decades, their strong
understanding of local market dynamics, and healthy relations
with customers and suppliers should continue to support the
business.
Liquidity
Liquidity stretched marked by insufficient cash accruals to meet
debt obligation. The fund-based limit of INR6 crore remained high
at an average of 101% over the 12 months ended December 31, 2018.
MDPMPL, incorporated in 1997 at Surat (Gujarat), dyes and
processes fabrics, catering mainly to textile players in Surat.
Mr Nandkishore Rathi and family are the promoters.
MAYURESH PROTENZ: CARE Reaffirms B+ Rating on INR20cr LT Loan
-------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Mayuresh Protenz Private Limited (MPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 20.00 CARE B+; Stable Reaffirmed
Facilities
(fund based)
Detailed Rationale & Key Rating Drivers
The rating reaffirmation assigned to the bank facility of MPPL
continues to be constrained by subdued financial performance in
FY18 (refers to the period April 1 to March 31) owing to adverse
movement in key raw material prices (majorly tur), operating in a
highly fragmented/ competitive industry with ongoing import
restrictions on its raw material, small scale of operations,
product concentration risk, thin profitability margins, leveraged
capital structure and profit margin susceptible to volatile raw
material prices and currency fluctuations.
However, the rating derives strength from the long track record
of the company coupled with extensive experience and
resourcefulness of the promoters, locational advantage coupled
with established sourcing and distribution network and moderate
working capital cycle.
Going forward, the ability of the company to scale up its
operations, improve its profitability margins along with
improvement in capital structure through efficient management of
the working capital cycle are the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Subdued operational performance in FY18 and product concentration
risk: The company's operating performance remained subdued in
FY18 characterised by decline in revenue, profitability and gross
cash accruals generated by the company. The decline in revenue
was owing to fall in prices of Tur dal from INR150/kg in FY16 to
INR80/kg in FY17 and further to INR51/kg in FY18. Despite selling
higher volumes, the company's operations were affected adversely
impacting the profitability on account of lower prices and higher
Minimum Support Prices. The company is an agri-commodity player
with primarily deriving its revenues from sale of Tur which
constitutes around 84%, followed by 15% from sale of chana and
remaining from various other agro products. Thus, with major
revenues derived from one or two commodities, the revenues of the
company are exposed to high product concentration risk.
Leveraged capital structure: The total debt in the company
majorly includes working capital bank borrowings and loan from
promoters. The overall gearing though declined from 5.47x as on
March 31 2017 to 3.52x as on March 31, 2018, it continues to
remain on the higher side.
Presence in highly competitive and fragmented agro-processing
industry exposed to commodity price fluctuation risk and import
restrictions: MPPL operates in a highly fragmented and
competitive agro-processing industry with intense competition
from various organized and unorganized players coupled with
import restrictions on its raw material. Moreover, the
profitability margins of the entity are highly susceptible to
cyclical vagaries of demand and supply of the agro commodities it
deals in.
Small scale of operations: With turnover of INR142.27 crore in
FY18 and networth of INR 8.09 crore as on March 31, 2018, MPPL is
a small-sized entity.
Key Rating Strengths
Experienced promoters: Mayuresh Protenz Private Limited (MPPL),
incorporated in 2006 and part of the Mayuresh group has an
established presence in the agro-processing industry. The
founders of the group have been engaged in the agro-processing
business since 1950. MPPL is currently owned and managed by the
third generation-Mr Subhash Agarwal, Mr. Anil Agarwal and Mr.
Shreegopal Barasia having more than two and a half decades of
experience.
Established sourcing arrangements and established distribution
network: MPPL procures agricultural produce from farmers and
stockists with whom it has an established relationship and also
imports additional requirements from various countries.
Furthermore, MPPL distributes its products all over India through
brokers empanelled with the company in every region of the
respective state.
Location advantage with close proximity to Navsheva: MP has its
warehouse and processing unit located 50 km away from Navsheva,
New Bombay. Since it imports raw material from counties like
Mozambique, Tanzania and Sudan, it benefits from its close
proximity to the Navsheva port, resulting in minimal
transportation costs and thus providing a competitive edge.
Earlier, established as a partnership firm in 2005, Mayuresh
Protenz Private Limited (MPPL) was reconstituted as a private
limited company in January 2006. MPPL is engaged in the business
of processing and trading of arhar (tur) dal, chunni, and chana
dal. Among these, Tur contributed ~84% to the total sales of the
company in FY18.
MPPL has a marketing office in Navi Mumbai and two processing
units at Khopoli, Maharashtra. The plant is utilized for
processing all kinds of pulses by cleaning, grading and
computerized colour sorting with an installed capacity of 160
tonnes/day.
NEPTUNE LAMINATES: CRISIL Maintains B+ Rating in Not Cooperating
----------------------------------------------------------------
CRISIL has been consistently following up with Neptune Laminates
Private Limited (NLPL) 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)
Term Loan 4.4 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 NLPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on NLPL 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 NLPL continues to be 'CRISIL B+/Stable Issuer not
cooperating'.
NLPL, incorporated in 2013, is promoted by the Veraval, Gujarat-
based Limbani family and others. It manufactures laminates and
started commercial production in January 2015.
P.D. AGRO: CRISIL Maintains B Rating in Not Cooperating Category
----------------------------------------------------------------
CRISIL has been consistently following up with P.D. Agro
Processors (PDAP) 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 8 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Term Loan 4.55 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 PDAP, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on PDAP 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 PDAP continues 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.
PDAP was established in July 2013 as a partnership firm by Mr.
Bhupender Agarwal and Ms. Kamla Agarwal. The firm processes non-
basmati rice (Sona Masuri, Samba Masuri, HMT) at its unit in Rae
Bareilly, Uttar Pradesh, which has installed milling and sorting
capacity of 15 tonne per hour. PDAP commenced operations in
January 2014.
PARASMAL KHASGIWALA: CARE Assigns B Rating to INR6.60cr Loan
------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Parasmal Khasgiwala Memorial Charitable Trust (PKMCT), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 6.60 CARE B; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of PKMCT is primarily
constrained on account of project implementation risk associated
with its greenfield project for construction of hospital. The
rating, further, constrained on account of high competition along
with the highly regulated nature of the industry. The rating,
however, favourable takes into account experienced and well
qualified promoters with group support and proposed wide range of
medical care services.
The ability of the trust to complete the project within the
envisaged cost and time would remain key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weakness
Project Implementation risk: PKCMT undertook a green-field
project for setting up a 44-bed multi-specialty hospital with the
latest advance technology machine at Ajmer, Rajasthan. It has
envisaged total cost of INR10.15 crore towards the project
envisaged to be funded through term loan of INR6.60 crore and
balance by trustee both by way of capital as well as unsecured
loans, implying debt equity mix of 1.85:1. PKCMT has incurred
INR3.00 crore towards the project till November 30, 2018 funded
through the term loan of INR0.80 crore and remaining through the
capital. The expected COD for the project is August 2019
translating to project risk involving time overruns in addition
to risk involved in the stabilization of operations.
High competition along with the highly regulated nature of the
industry: The healthcare sector is highly fragmented with few
large players in the organised sector and numerous small players
in the unorganised sector leading to high level of competition in
the business. Thus, differentiating factors like range of
services offered, quality of service, reputation of doctors,
success rate in the treatment of complex cases will be crucial in
order to attract patients and increase occupancy. Further, the
healthcare industry in India is well regulated by the government
and require strict adherence to the norms stipulated by the
concerned authorities. Moreover, healthcare is a highly sensitive
sector where any mishandling of a case or negligence on part of
any doctor and/or staff of the unit can lead to distrust among
the masses. Thus, all the healthcare providers need to monitor
each case diligently and maintain standard of services in order
to avoid the occurrence of any unforeseen incident.
Key Rating Strength
Highly experienced and well-qualified promoters: The promoters of
CKS are highly qualified and have vast experience in the similar
line of business. Dr Rajkumar Khasgiwala, Urologist by
qualification and Dr Minal Khasgiwala, specialist in intensive
critical care has more than two decade of experience in the
healthcare industry will look after the overall affairs of PKMCT.
Dr Rajkumar Khasgiwala has been practicing in Ajmer since 2005
under its clinic; namely Raj Uro Care Centre which is specialist
centre in Urology.
Further they are assisted by other trustees, Mr Mukesh Karnawat
who will look after the accounts and finance of the hospital and
Dr L.M Bhandari will look after the general administration both
have more than a decade of experience in their respective field.
Also PKMCT will appoint a team of qualified employees including
nursing staff, resident doctors, dieticians, Pharmacists , Lab
attendants and other helpers to help in smooth functioning of the
hospital.
Wide range of medical care services proposed with group support:
The hospital being set up under PKMCT proposes to provide
comprehensive super-specialty services in the disciplines of
Radiography, Pharmacy, Pathology, Gastrointrology, Blood Bank,
nursing and consultancy. The wide range of service offerings and
affordability proposed will result in a fair occupancy rate.
Further, PKCMT is also supported by its group concern namely; Raj
Uro Care Centre under which the trustee are running a urologist
centre in Ajmer.
Ajmer (Rajasthan) based Parasmal Khasgiwala Memorial Charitable
Trust (PKMCT) was formed in the year July, 2010, by Khasgiwala
family with an objective to set up a multi and super-specialty
hospital. The hospital will provide various medical specialties
viz. Radiography, Pharmacy, Pathology, Gastrointrology, Blood
Bank , nursing and consultancy. PKMCT will consists of 44 beds
which includes 20 beds in general ward, 16 beds in deluxe room ,
8 beds in Intensive-Care Units (ICU). The hospital is proposed to
have four floors and basement having a total built-up area of
32,000 sq feet. The company has envisaged total project cost of
INR10.15 crore to be funded promoter's fund of INR2.65 crore and
term loan of INR7.50 crore. The project is envisaged to be
completed by August, 2019.
PEOPLE'S EXPORTS: CRISIL Lowers Rating on INR3.39cr Loan to D
-------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
People's Exports Private Limited (PEPL) to 'CRISIL D/CRISIL D'
from 'CRISIL B/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 0.5 CRISIL D (Downgraded from
'CRISIL B/Stable')
Foreign Bill 1.5 CRISIL D (Downgraded from
Purchase 'CRISIL B/Stable')
Packing Credit 3 CRISIL D (Downgraded from
'CRISIL B/Stable')
Proposed Long Term 1.61 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B/Stable')
Term Loan 3.39 CRISIL D (Downgraded from
'CRISIL B/Stable')
The downgrade reflects recent instances of delay in interest and
principal repayments due on term loan. The last instalment due on
December 31, 2018, has not been paid yet. Further, cash credit
and packing credit facilities, too, are over utilized in the
month of December and yet to be regularized.
The rating continues to reflect PEPL's modest scale of operations
in the highly fragmented footwear industry and working capital-
intensive operations. These weaknesses are partially offset by
promoter's extensive industry experience.
Key Rating Drivers & Detailed Description
Weakness
* Modest scale of operations in the highly fragmented footwear
industry: The scale of operations has declined in fiscal 2018 to
INR4.59 crores from INR16.43 crores in previous fiscal, due to
low order book received.
* Working capital-intensive operations: Operations are highly
working capital-intensive in nature, with gross current assets of
224-1035 days over the four fiscals ended March 31, 2018, because
of the lengthy manufacturing process as shoes manufacturing is a
labour-intensive process. Furthermore, demand for shoes is
seasonal and bulk of the sales take place during the peak
seasons.
Strengths
* Promoter's extensive industry experience and their customer
relationships: Presence over four-decade in the footwear
manufacturing business has enabled the promoters to establish
relationships with customers and suppliers.
Liquidity
Liquidity is weak because of delay in term loan payment due for
December 2018. Further, both cash credit and packing credit
limit, were overutilized in the month of December, which are yet
to be regularized. CRISIL expected liquidity to remain stretched
over the medium term.
PEPL was incorporated in 1990, promoted by the Pippal family. The
company, based in Agra, manufactures shoes.
PIPE & METAL: CRISIL Maintains D Rating in Not Cooperating
----------------------------------------------------------
CRISIL has been consistently following up with Pipe & Metal
(India) (PMI) 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 D (ISSUER NOT
COOPERATING)
Proposed Fund- 4.25 CRISIL D (ISSUER NOT
Based Bank Limits COOPERATING)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of PMI, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on PMI 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 PMI continues to be 'CRISIL D Issuer not
cooperating'.
Set up in 1986, PMI is a Ghaziabad (Uttar Pradesh)-based
proprietorship firm of Mr. Narendra Gupta. It trades in iron and
steel tubes and pipes in Uttar Pradesh, Haryana, Delhi, and
Rajasthan.
POONAM TRADING: CRISIL Maintains D Rating in Not Cooperating
------------------------------------------------------------
CRISIL has been consistently following up with Poonam Trading
Company (PTC) 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 8 CRISIL D (ISSUER NOT
COOPERATING)
Inland/Import 17 CRISIL D (ISSUER NOT
Letter of Credit COOPERATING)
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of PTC, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on PTC 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 PTC continue to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
Furthermore, the company has not paid the fee for conducting
rating surveillance as agreed to in the rating agreement.
Set up in 1998 and based in Tenkasi, Tamil Nadu, PTC trades in
and processes timber. It is promoted and managed by Mr. Navin
Patel and Mr. Haresh Patel.
ROYAL ALLOYS: CARE Assigns B+ Rating to INR7.68cr LT Loan
---------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Royal
Alloys (RA), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 7.68 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of RA is constrained
by the recent start of operations along with highly competitive
and cyclical nature of the industry. The rating is further
constrained by the susceptibility of margins to raw material
price volatility and constitution of the firm being a partnership
concern.
The rating, however, derives strength from the experienced
promoters and favorable location of operations. Going forward,
the ability of the firm to ramp up its operations, achieve the
projected income and profitability levels and improve its overall
solvency position will remain the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating weaknesses
Recent start of operations: The operations of the firm started in
June 2018. Going forward, the ability of the firm to ramp up its
operations, achieve the envisaged income and profitability levels
and improve its overall solvency position will remain the key
rating sensitivities.
Margins susceptible to the volatility in raw material prices: The
value addition in the steel construction materials like rounds
and flats is low, resulting into low product differentiation in
the market. The producers of steel construction materials are
essentially price-takers in the market, which directly expose
their cash flows and profitability to volatility in the steel
prices.
Cyclicality inherent in the steel industry: The steel industry is
sensitive to the shifting business cycles, including changes in
the general economy, interest rates and seasonal changes in the
demand and supply conditions in the market.
Key Rating Strengths
Experienced promoters: The firm is promoted by Mr. Anoop Kumar
Sood, Ms. Kirti Sood, Ms. Meenakshi Sood and Mr. Jatin Sood, who
have long experience in the steel business. Mr. Anoop Kumar Sood
has more than two decades of experience, in the steel industry,
through other group concerns engaged in the similar line of
business. The other partners are having experience ranging
between 5-10 years in the industry. The partners collectively
look after the overall operations of the firm.
Favorable location of operations: RA's manufacturing facility is
located in Mandi Gobindgarh, Punjab, which is in close proximity
to various manufacturers of billets and ingots, the main raw
material for manufacturing of its products. Further, the firm
mainly markets its products through its sales team, dealers and
distributors to Punjab and the NCR region. Proximity of the plant
to the source of raw-material and to the clients results in
savings of transportation cost.
Liquidity position: The liquidity position of the firm is
expected to remain moderate. RA offers a comfortable credit
period ranging from ~15-30 days to its clients and gets a similar
amount of credit period from its suppliers. The firm also
maintains a comfortable inventory holding period (upto 30 days).
The average utilisation of cash credit limit, however, remained
high at ~95% for the 6 month period ended November, 2018. The
firm has a total debt repayment obligation of INR0.57 cr. in
FY19, which is proposed to be met through the internal accruals.
Mandi Gobindgarh, Punjab based Royal Alloys (RA) is a partnership
firm established in 2016. The commercial operations of the plant
started from June 18, 2018. The firm is engaged in the
manufacturing of steel products i.e. flats and bars with an
aggregate installed capacity of 30,000 MTPA, as on June 30, 2018.
The manufacturing facility of the firm is situated at Mandi
Gobindgarh, Punjab.
Besides RA, the promoters are also involved in other group
concerns namely Royal Ispat Udyog (RIU; rated 'CARE BB; Stable')
established in 2008 and engaged in manufacturing of steel flats
and bars, Royal Steel Rolling Mill (RSRM) established in 1980 and
engaged in the manufacturing of steel flats, Royal Industries
(RI) established in 1993 and engaged in manufacturing of steel
flats.
S.S. AGRO: CARE Lowers Rating on INR20cr Loan to D
--------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
S. S. Agro, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 20.00 CARE D Revised from CARE BB-;
Stable
Short-term Bank
Facilities 5.00 CARE D Revised from CARE A4
Detailed Rationale & Key Rating Drivers
The revision in the ratings assigned to the bank facilities of
S. S. Agro factors in ongoing delays in the servicing of the debt
obligation by the firm.
Detailed description of the key rating drivers
Ongoing delays in debt servicing: There are ongoing delays in the
servicing of the debt obligation for the working capital limits
availed by the firm. The cash credit limit has remained overdrawn
for more than 30 days. The delays are on account of weak
liquidity position as the firm is unable to generate sufficient
funds in a timely manner.
Analytical Approach: Combined Approach. The financial and
business risk profiles of S.S. Agro and S. S. Overseas have been
combined as both the entities (together referred to as 'Group')
operate in the same line of business, are promoted by the same
promoter group, have common management team and operational
linkages.
S. S. Agro (SSA) belongs to the SS Group, founded in 1990. The
group primarily comprises of three entities- SSA, S. S. Overseas
(SSO; rated CARE D/CARE D) and S. S. Timber Traders (SSTT). Both
SSA and SSO are engaged in the processing of paddy/semi-processed
to rice (basmati and non-basmati rice) and also sells its by-
products like bardana, bran, husk, etc. Both SSA and SSO have
their manufacturing units located in Jalalabad, Punjab with
installed capacity of processing 8TPH (tonnes per hour) each.
SSTT is engaged in the trading of timber, which includes Sagwan
and Kapur wood, imported from Switzerland, Malaysia, etc.
S.S. OVERSEAS: CARE Lowers Rating on INR20cr Loan to D
------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
S. S. Overseas, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 20.00 CARE D Revised from CARE BB-;
Stable
Short-term Bank
Facilities 5.00 CARE D Revised from CARE A4
Detailed Rationale & Key Rating Drivers
The revision in the ratings assigned to the bank facilities of
S. S. Overseas factors in ongoing delays in the servicing of the
debt obligation by the firm.
Detailed description of the key rating drivers
Ongoing delays in debt servicing: There are ongoing delays in the
servicing of the debt obligation for the working capital limits
availed by the firm. The cash credit limit has remained overdrawn
for more than 30 days. The delays are on account of weak
liquidity position as the firm is unable to generate sufficient
funds in a timely manner.
Analytical Approach: Combined Approach. The financial and
business risk profiles of S.S. Agro and S. S. Overseas have been
combined as both the entities (together referred to as 'Group')
operate in the same line of business, are promoted by the same
promoter group, have common management team and operational
linkages.
S. S. Overseas (SSO) belongs to the SS Group, founded in 1990.
The group primarily comprises of three entities- SSO, S. S. Agro
(SSA; rated CARE D/CARE D) and S. S. Timber Traders (SSTT). Both
SSO and SSA are engaged in the processing of paddy/semi-processed
rice to rice (basmati and non-basmati rice) and also sells its
by-products like bardana, bran, husk, etc. Both SSA and SSO have
their manufacturing units located in Jalalabad, Punjab with
installed capacity of processing 8TPH (tonnes per hour) each.
SSTT is engaged in the trading of timber, which includes Sagwan
and Kapur wood, imported from Switzerland, Malaysia, etc.
SAMSON AND SONS: CRISIL Maintains D Rating in Not Cooperating
-------------------------------------------------------------
CRISIL has been consistently following up with Samson And Sons
Builders And Developers Private Limited (SSBDPL) 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
---------- ----------- -------
Project Loan 14 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 SSBDPL, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on SSBDPL
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 SSBDPL continue to be 'CRISIL D Issuer not
cooperating'.
Established in 2005 as a partnership between Mr. John Jacob and
Mr. Samuel Jacob and reconstituted as a private limited company
in 2009, SSBDPL undertakes residential real estate development in
and around Trivandrum.
SATISH AGRO: CARE Lowers Rating on INR6cr LT Loan to D
------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Satish Agro Industries (SAi), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.00 CARE D; Issuer not cooperating;
Facilities Revised from CARE BB-: Stable;
on the basis of best available
information
Detailed Rationale & Key rating Drivers
CARE has been seeking information from SAi to monitor the ratings
vide e-mail communications dated December 3, December 13,
December 25 and numerous phone calls. However, despite CARE's
repeated requests, the firm has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the ratings on the basis of
the available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. Further, SAI has not paid
the surveillance fees for the rating exercise as agreed to in its
Rating Agreement. The ratings on SAI's bank facilities will now
be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The revision in the ratings of SAI takes into account delay in
the debt servicing.
Detailed description of the key rating drivers
Key rating weaknesses
Irregularity in debt servicing: As per banker interaction, there
are overdrawing for more than 30 days in cash credit account.
Indore (Madhya Pradesh) based Satish Agro Industries (SAI) was
formed as a proprietorship concern by Mr. Satish Jain in 1998.
SAI is engaged in manufacturing of agricultural spray pumps,
power sprayers and other machinery parts. The firm supplies its
product to government departments, private sector unit and direct
counter sale to farmers.
SKD RICE: CARE Assigns B+ Rating to INR4.53cr LT Loan
-----------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of of SKD
Rice Industries Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 4.53 CARE B+; Stable Assigned
Short-term Bank
Facilities 2.00 CARE A4
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of SKD Rice
Industries Private Limited are constrained by its short track
record and small scale of operation with moderately low
profitability margins, fragmented and competitive nature of
industry, regulated nature of industry and high working capital
intensity and exposure to vagaries of nature. However, the
aforesaid constraints are partially offset by its diversified
experience of management, close proximity to raw material sources
and stable demand outlook of rice and moderate leveraged ratio
with satisfactory debt coverage indicators. The ability of the
company to grow its scale of operations and improve its profit
margins and ability to manage working capital effectively would
be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Strengths
Diversified experience of management: The company is into rice
milling and processing business. Mr. Ashutosh Kar (aged about 30
years), who has experience around 06 years in the transportation
and logistics business. Mr. Brajendra Narayan Dash (aged about 66
years) who is a retired assistant commissioner of police and 03
years of experience in rice milling business and Mr. Sandeep
Singh (aged about 35 years), Mr. Mahendra Kumar Agarwal (aged
about 58 years) and Mr. Vinit Sharma (aged about 28 years) who
have experience around 08 years, 25 years and 06 years
respectively in rice milling and processing business, look after
the day to day operation of the company. They are further
supported by a team of experienced professionals. The benefit
derived from the experience directors and healthy relation with
customers and suppliers are continuing to support the company.
Close proximity to raw material sources and stable demand outlook
of rice: SKD Rice Industries Private Limited's plant is located
in Cuttack district, Odisha which is in close proximity to the
paddy growing areas of the state. The entire raw material
requirement is met locally from the farmers helping the company
to save simultaneously on transportation cost and paddy
procurement cost. Further, rice being a staple food grain with
India's position as one of the largest producer and consumer,
demand prospects for the industry is expected to remain good in
near to medium term. Rice, being one of the primary food articles
in India, demand is high throughout the country and with the
change in life style and health consciousness; by-products of the
same like rice bran oil etc. are in huge demand.
Moderate leveraged ratio with satisfactory debt coverage
indicators: The capital structure of the company remained
moderate marked by long term debt-equity ratio of 0.86x and
overall gearing ratio of 1.16x, as on March 31, 2018.
Furthermore, the debt equity ratios and overall gearing ratio
improved as on March 31, 2018 due to scheduled repayment of term
loan, repayment of unsecured loan and lower utilization of
working capital limits. The debt coverage indicators remained
satisfactory marked by total debt to GCA of 5.17x in FY18. The
interest coverage ratio improved in FY18 on account of decrease
in interest cost vis-Ö-vis increase in PBILDT level. Due to
comparatively higher generation of cash accruals in FY18, the
total debt to GCA also improved.
Key Rating Weaknesses
Short track record and small scale of operation with moderately
low profitability margins: SKD Rice Industries Private Limited is
a relatively small player in the rice milling and processing
business having total operating income and PAT of INR5.64 crore
(Rs.5.38 crore in FY17) and INR0.08 crore (Rs.0.09 crore in
FY17), respectively, in FY18. The total operating income is
increasing on year on year basis mainly on account of stable
demand of rice and its by-products. The tangible net worth of the
company was at INR4.27 crore as on March 31, 2018. The small size
restricts the financial flexibility of the company in terms of
stress and deprives it from benefits of economies of scale. Due
to its relatively small scale of operations, the absolute profit
levels of the company also remained low. Furthermore, the
profitability margins of the company remained moderately low
marked by PBILDT margin of 29.01% (FY17: 30.59%) and PAT margin
of 1.38% (FY17: 1.64%) in FY18. However, the profitability
margins marginally deteriorated in FY18 on account of
comparatively higher operating cost and capital charges. This
apart, the company achieved sale of around INR4.02 crore during
8MFY19.
Fragmented and competitive nature of industry: The commodity
nature of the product makes the industry highly fragmented, with
numerous players operating in the unorganized sector with very
less product differentiation. There are several small scale
operators which are not into end-to-end processing of rice from
paddy, instead they merely complete a small fraction of
processing and dispose-off semiprocessed rice to other big rice
millers for further processing.
Regulated nature of industry: The Government of India (GoI)
decides a minimum support price (MSP-to be paid to paddy growers)
for paddy every year limiting the bargaining power of rice
millers over the farmers. The MSP of paddy was increased during
the crop year 2018-19 to INR1750/quintal from INR1550/quintal in
crop year 2017-18. Given the market determined prices for
finished product vis-a-vis fixed acquisition cost for paddy, the
profitability margins are highly volatile. Such a situation does
not augur well for the company, especially in times of high paddy
cultivation.
High working capital intensity and exposure to vagaries of
nature: Rice milling is a working capital intensive business as
the rice millers have to stock rice by the end of each season
till the next season as the price and quality of paddy is better
during the harvesting season. Further, the millers are required
to extend a credit period of around 30 days to its customers.
Also, paddy cultivation is highly dependent on monsoons, thus
exposing the fate of the entities' operation to vagaries of
nature. Accordingly, the working capital intensity remains high
leading to higher stress on the financial risk profile of the
rice milling units. Furthermore, the average utilization of
working capital remained at about 85% during the last 12 months
ended November 2018.
SKD Rice Industries Private Limited was incorporated in March
2014 with an objective to enter into the rice milling and
processing business. The manufacturing unit of the company is
located at Radhadamodarpur, Khuntuni in Cuttack district with an
installed capacity of 24000 metric tons per annum. The company is
procuring raw paddy from the local farmers and small paddy
agents. The company also engaged in custom milling activity of
around 65% of its revenue for Odisha State Civil Supplies
Corporation Limited. Mr. Ashutosh Kar, who has experience around
6 years in the transportation and logistics business. Mr.
Brajendra Narayan Dash who is a retired assistant commissioner of
police and 3 years of experience in rice milling business and Mr.
Sandeep Singh, Mr. Mahendra Kumar Agarwal and Mr. Vinit Sharma
who have experience around 8 years, 25 years and 6 years
respectively in rice milling and processing business, look after
the day to day operation of the company.
SHIVALIK I.B.: CRISIL Maintains B+ Rating in Not Cooperating
------------------------------------------------------------
CRISIL has been consistently following up with Shivalik I.B.
Autogem Private Limited (SAPL) 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
---------- ----------- -------
Electronic Dealer 15 CRISIL B+/Stable (ISSUER NOT
Financing Scheme COOPERATING)
(e-DFS)
'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 SAPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SAPL 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 SAPL continue to be 'CRISIL B+/Stable Issuer not
cooperating'.
Incorporated in 2013 and promoted by Mr. Vishnu Patel and his
family, SAPL is an authorised dealer of passenger vehicles of
HMIL. The company operates a showroom in Ahmedabad with 3S
(sales, service, and spares) facilities.
SHIVALIK VYAPAAR: CRISIL Maintains D Rating in Not Cooperating
--------------------------------------------------------------
CRISIL has been consistently following up with Shivalik Vyapaar
Private Limited (SVPL) 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 9 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Long Term 18.96 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING)
Term Loan .67 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 SVPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SVPL 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 SVPL continues to be 'CRISIL D Issuer not
cooperating'.
Set up by Mr. Rajendra Agarwal in 2005, SVPL manufactures
automotive and industrial batteries and valve-regulated lead-acid
(VRLA) batteries. The company has a battery manufacturing
facility in Sanwar (Madhya Pradesh).
SHIVANS POWER: CRISIL Maintains B- Rating in Not Cooperating
------------------------------------------------------------
CRISIL has been consistently following up with Shivans Power &
Irrigation Private Limited (SPIPL) 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 1.87 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
Packing Credit .13 CRISIL A4 (ISSUER NOT
COOPERATING)
Proposed Long Term 6.00 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 SPIPL, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on SPIPL 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 SPIPL continues to be 'CRISIL B-/Stable/CRISIL A4
Issuer not cooperating'.
Incorporated in 2007, Shivans Power and Irrigation Pvt Ltd
(SPIPL) is engaged in trading of various types of pipes. It is
also engaged in trading of rice and sugar.
SHOPPERS INTERNATIONAL: CRISIL Rates INR27CR Cash Term Loan 'D'
---------------------------------------------------------------
CRISIL has assigned its 'CRISIL D' rating to the long-term bank
facilities of Shoppers International Malls Private Limited
(SIMPL). The rating reflects instances of delay by the company
in servicing its term-debt interest obligations.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Term Loan 27 CRISIL D (Assigned)
The rating also factors in the exposure to risks related to the
project. These weaknesses are partially offset by the extensive
entrepreneurial experience of the promoters.
Key Rating Drivers & Detailed Description
Weakness
* Exposure to risks related to ongoing projects: The company is
currently executing a commercial and residential real estate
projects, in Thrissur (Kerala). Implementation and completion is
exposed to aggressive timelines with shortage of manpower
(project engineers and skilled labour) in this sector. Any delay
in completion of these projects and lower sale of units, would
affect the company. Also, the company is exposed to geographic
concentration in revenues.
Strength
* Extensive entrepreneurial experience of the promoters: The main
promoter, Mr PP Sunny, has sound understanding of the real estate
sector and has been associated with other similar projects.
Liquidity
Liquidity is marked by delay in repayment of term loan interest
and principal by about 7-10 days from the due date of payment.
Nevertheless, during the construction phase, the liquidity is
partially supported by funds brought in by the promoters, in the
form of unsecured loans.
SIMPL was set up in 2011 in Thrissur. The company is setting up a
commercial cum residential complex in prime area of Thrissur. It
intends to lease the commercial units while selling the
residential complex.
SOM AUTOTECH: CARE Maintains B+ Rating in Not Cooperating
---------------------------------------------------------
CARE had, vide its press release dated April 4, 2018, placed the
ratings of Som Autotech Private Limited (SAPL) under the 'issuer
non-cooperating' category as SAPL had failed to provide
information for monitoring of the rating. SAPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
January 8, 2019, January 7, 2019 and September 24, 2018. In line
with the extant SEBI guidelines, CARE has reviewed the ratings on
the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair ratings.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 26.71 CARE B+; Stable; Issuer Not
Facilities Cooperating; based on best
available information
Short term Bank 9.71 CARE A4; Issuer Not
Facilities Cooperating; based on best
available information
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on April 4, 2018, the following were
the rating strengths and weaknesses.
Key Rating Weaknesses
Low profitability margins: The profitability margins of SAPL
remained low and declining owing limited value addition nature of
business of company.
Leveraged capital structure: The capital structure of the firm
remained leveraged on account of higher reliance on external
borrowings to support its increased scale of operations.
Weak debt coverage indicators: The debt coverage indicators of
SAPL continued to remain weak owing to low profitability and high
gearing levels.
Raw material price fluctuation risk: The key raw material
required for manufacturing steel bars is MS ingots which are
procured at market-linked rates. SAPL operates at moderate
margins with raw material being the major cost driver. Hence, the
company's profitability is sensitive to adverse movement in
prices of finished goods and/or raw materials. Presence in the
fragmented auto ancillary industry with dependence on performance
of automobile industry: The Indian auto component is highly
fragmented and predominately controlled by the unorganised
sector. Hence, the stiff competition makes it difficult to
completely pass on the rising input cost to the OEMs. The
replacement and export market is also much priced sensitive and
hence the auto component manufacturers hardly have any bargaining
power in these segments as well. The sector also faces major
challenge from cheap imports. SAPL caters majorly to one industry
i.e. automobile industry and thus, the fortunes of the company
are closely tied to this industry. The automobile industry has
historically exhibited high degrees of cyclicality and therefore,
SAPL is exposed to variability in performance arising due to
business cycle.
Key Rating Strengths
Experienced promoters: The promoters of the company have an
experience of more than two decades in the auto ancillary
industry which has helped them in developing adequate acumen
about the business.
Reputed client base: SAPL manufactures high pressure die casting
parts for two wheelers of Bajaj Auto Limited (BAL) which has
contributed more than 90 percent of the total sales in the past
three years endedFY16. Reputed customer base: The customer base
of SAPL includes reputed customers as Greaves Cotton Limited,
Varrock Polymers Private Limited, Bajaj Auto Limited and Value
India Private Limited. The association of SAPL with reputed
clientele limits the counterparty risk to some extent.
Aurangabad (Maharashtra) based, SAPL, was incorporated in the
year 2011 and is promoted by Mr. Vishwanath Jalnapurkar and Mr.
Anil Mali in the strength of Director. The company is into
manufacturing of auto components and assemblies. Brief Financials
SREE HANUMAN: CRISIL Maintains D Rating in Not Cooperating
----------------------------------------------------------
CRISIL has been consistently following up with Sree Hanuman Infra
Private Limited (SHIPL) 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 5 CRISIL D (ISSUER NOT
COOPERATING)
Cash Credit 5 CRISIL D (ISSUER NOT
COOPERATING)
Overdraft 1 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Long Term
Bank Loan Facility 4 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 SHIPL, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on SHIPL 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 SHIPL continue to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
Incorporated in 2005, SHIPL is promoted by Mr. Chavali
Ramanjaneyulu and his family. The firm undertakes civil
construction works such as construction of roads and railway
tunnels.
TRIPATHI HOSPITAL: CRISIL Maintains B+ Rating in Not Cooperating
----------------------------------------------------------------
CRISIL has been consistently following up with Tripathi Hospital
Private Limited (THPL) 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 20 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 THPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on THPL 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 THPL continue to be 'CRISIL B+/Stable Issuer not
cooperating'.
THPL, incorporated in November 2001, provides medical services in
the fields of orthopaedics and gynaecology/obstetrics. It was
originally established as a partnership firm in 2000 and was
reconstituted as a private limited company in 2001. The company
is managed by Mr B K Tripathi and his wife Ms. Nidhi Tripathi. It
has a 100bed hospital at Noida in Uttar Pradesh.
UNITED SEAMLESS: NCLT OKs Maharashtra Seamless Acquisition Bid
--------------------------------------------------------------
Business Standard reports that Maharashtra Seamless said that the
Hyderabad Bench of National Company Law Tribunal on Jan. 21
approved the Resolution Plan submitted by the Company for
acquisition of United Seamless Tabulaar (USTPL) under the
Corporate Insolvency Resolution Process (CIRP) initiated against
USTPL under the Insolvency and Bankruptcy Code 2016 (IBC).
United Seamless Tubulaar Private Limited (USTPL) is a 60:40 joint
venture between the Hyderabad-based Kamineni group and the
Malaysia-based UMW group. USTPL operates a 300,000 MT per annum
(MTPA) seamless pipe manufacturing facility in Nalgonda district
of Telangana. The UMW group is a USD4.12 billion conglomerate
with interests in automotive, oil and gas equipment and
engineering. The partners of the joint venture are United Steel
Allied Industries Private Limited (USAIPL), Oil Country Tubular
Limited (OCTL) and UMW India Ventures (the investment arm of UMW
in India), holding shares of 40%, 20% and 40%, respectively, in
USTPL. USTPL's facility has the capability to manufacture
seamless pipes of varying diameters (outside diameters of 5
inches to 14.4 inches) including drill, casing, tubular and line
pipes. Key financial indicators (audited).
VEESHNA FLEXITUFF: CARE Assigns B+ Rating to INR15cr LT Loan
------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Veeshna Flexituff LLP (VFTL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 15.00 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of VFTL is constrained
on account of the project implementation and stabilization risk
associated with its on-going debt-funded green-field capex. The
rating is further constrained on account of its limited liability
partnership nature of constitution, raw material price volatility
risk with high bargaining power of suppliers and its presence in
highly competitive and fragmented packaging industry.
The rating, however, derives strength from extensive experience
of VFTL's partners in same line of business along with support of
group entities, easy availability of raw material, accessibility
to existing selling and distribution network of the associate
companies as well as eligibility of VFTL for subsidy under
Technology Upgradation Funds Scheme (TUFS).
The ability of VFTL to successfully commission the ongoing capex
without any time and cost overruns is the key rating sensitivity.
Further, achieving envisaged level of sales and profitability in
light of competition and fluctuating raw material price are also
the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Project implementation and stabilization risk associated with on-
going debt-funded green-field capex: VFTL is currently
implementing greenfield project to manufacture plastic packaging
products with proposed installed capacity of 4200 MTPA of
products per annum. The total cost of project is envisaged at
INR25.85 crore which is proposed to be funded by term loan of
INR13.50 crore from bank, partners' capital of INR7.00 crore and
INR5.35 crore of unsecured loans from relatives. With the given
funding mix, the project gearing stands at 2.69 times. Around 23%
of the project was completed as on September 27, 2018. The
operations were earlier expected to commence by H2FY19. Further,
there exists stabilization risk of the manufacturing facilities
post project implementation while achievement of the envisaged
scale of business. However, an established client network and
partners' experience in the same line of business will help in
mitigating the risk to a certain extent.
Limited liability partnership nature of constitution: The
constitution as a limited liability partnership firm restricts
VFTL's overall financial flexibility in terms of limited access
to external funds for any future expansion plans. Further, there
is inherent risk of possibility of withdrawal of capital in times
of personal contingency as it has limited ability to raise
capital and poor succession planning may result in dissolution of
the firm.
Raw material price volatility risk and high bargaining power of
suppliers: The prices of inputs like Polypropylene (PP), Low
Density Polyethylene (LDPE), Linear Low-Density polyethylene
(LLDP) and High Density Polyethylene (HDPE) granules and chips
are derivatives of crude oil. Hence, any adverse fluctuation in
the crude oil prices is likely to impact the profitability
margins of VFTL. Furthermore, the market of VFTL's raw materials
is seller dominated as there are limited producers of HDPE, PP,
LLDPE or LDPE which restricts the bargaining power of the buyers.
Presence in highly competitive and fragmented packaging industry:
Indian Plastic industry is becoming more and more competitive day
by day. Furthermore, due to low entry barriers the competition
gets intensified, which might put pressure for survival on
existing as well as new players. Due to the fragmented nature of
the industry, bargaining power of VFTL with customers is also
restricted.
Key Rating Strengths
Extensive experience of partners in same line of business along
with support of group entities: VFTL is formed and managed by Mr.
Vipul Shah, Mr. Minesh Shah and Mr. Naman Shah (as a
representative of Veeshna Polypack Pvt Ltd) having wide
experience of around more than 25 years in plastic industry
through its associate entity.
Mr. Minesh Shah has very strong network with reputed corporate
clients. Mr. Vipul Shah has vast experience in managing
production and purchase department in associate entities. Also,
the long standing industry experience of the partners and
relationship with the suppliers and customers via group entities
is expected to bolster the sales during its preliminary year
of operations.
Availability of raw material in close proximity: The main raw
material used in manufacturing of different products is PP, LDPE,
LLDP and HDPE granules. This will be easily available from local
market. The group companies of VFTL are having sound business
relations with suppliers from whom raw materials will be
purchased. This will give an edge for VFTL for continuous and
easy availability of raw materials.
Accessibility of existing selling and distribution network of the
associate companies: The promoters of VFTL have long experience
in the plastic industry through their association with its
associate entities. These associate entities are majorly engaged
into manufacturing of PP, HDPE bags and Tarpaulin. VFTL has an
advantage of established selling and distribution network of its
associate companies.
Eligibility for subsidy under TUFS: VFTL is proposing to
manufacture various plastic packaging products under technical-
textiles, owing which it is eligible for subsidy under TUFS. VFTL
is eligible for 10% capital subsidy from the central government
and 7% interest rate subsidy from the state government. These
subsidies are expected to increase the cash flow in the short-
medium term.
Ahmedabad-based (Gujarat) VFTL is a limited liability partnership
firm, formed on 27th December, 2017. The firm is currently
implementing a greenfield project for manufacturing plastic
packaging products primarily; Polypropylene (PP) woven bags,
Biaxially Oriented Polypropylene (BOPP) Bags, Laminate Pouches,
PP Fabrics and PP Bags plastic products mainly from different
types of plastic granules. The final products of VFTL are used as
packing material for chemicals, fertilizers, grains, salt etc.
VEETEEJAY MOTORS: CRISIL Cuts Rating on INR10cr Loans to D
----------------------------------------------------------
CRISIL has downgraded its rating on the bank facilities of
Veeteejay Motors Private Limited (VMPL) to 'CRISIL D' from
'CRISIL BB-/Stable'. The ratings reflects delay in the servicing
of debt obligations.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Inventory Funding 6 CRISIL D (Downgraded from
Facility 'CRISIL BB-/Stable')
Proposed Long Term 4 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL BB-/Stable')
The rating reflects the company's susceptibility to intense
competition in the automotive dealership segment. The weakness is
partially offset by the moderate scale of operations and
promoter's extensive entrepreneurial experience.
Key Rating Drivers & Detailed Description
Weakness
* Susceptibility to intense competition in the automotive
dealership segment: The company faces intense competition from
dealers of other major car brands such as Maruti, Toyota, Ford,
and also from other dealers of Hyundai in Kerala.
Strengths
* Moderate scale of operations: The moderate scale is reflected
in revenue of INR112 crore in fiscal 2018. Operating margin was
comfortable at around 4-5% over the three fiscals through March
2018.
* Extensive experience of the promoter: The business risk profile
is benefited by the entrepreneurial experience of three decades
of promoter Mr Thomas J Vayalat.
Liquidity
The bank limits have been fully utilized with instances of
overdrawals in the working capital facilities for over 30 days on
account of the working capital intensive nature of operations.
The company has reported cash accruals of INR1.67 crores in 2018
against the repayment obligations of around 0.90 crores.
The company is an authorized dealer of passenger vehicles of
Hyundai Motor India Ltd (HMIL) and is based in Kochi, Kerala. It
operates two 3S (sales, service and spares) showrooms and three
sales outlets in Kochi. It is promoted by Mr Thomas J.
* INDIA: Cantor, SC Lowy Eye Soured Loans Amid Insolvency Delay
---------------------------------------------------------------
Denise Wee at Bloomberg News reports that many global funds have
pushed for India to resolve its bankruptcy cases faster, but some
investors are finding opportunities in the delays.
As Indian lenders seek to offload soured debt worth billions of
dollars, overseas firms such as Cantor Fitzgerald and SC Lowy see
the chance for investors to reap returns from delays in the
bankruptcy process, Bloomberg says.
According to Bloomberg, Indian banks' bad debt problem, second in
the world only to Italy, along with the inefficiencies in the
country's bankruptcy process, offer opportunities for a
potentially lucrative form of investing known as merger
arbitrage. Such trades focus on the risks of bids for companies
falling through, the potential for other bidders to push up
prices and the process dragging on, Bloomberg relates citing
Rousseau Anai, head of Asia Pacific at Cantor Fitzgerald, whose
firm's investors are looking for minimum returns of 15 percent in
U.S. dollar terms.
Only three firms among the so-called dirty dozen -- India's
largest stressed borrowers that the central bank asked in
June 2017 to be resolved under the bankruptcy framework -- have
been worked out so far, with the rest stuck in various stages of
litigation, Bloomberg notes.
Bloomberg says India's top court last week upheld a law that bars
founders of defaulted companies from buying back stressed assets,
a move that may help the nation more quickly resolve bad debt.
Banks are inviting bids as loan sales will help them bolster
capital buffers, as the pace of credit growth picks up in the
nation.
State Bank of India, the nation's largest lender, this month
sought bids for INR154 billion ($2.2 billion) of loans made to
Essar Steel India Ltd. Central Bank of India, a commercial bank,
is considering the sale of loans made to Bhushan Power & Steel
Ltd., people familiar with the matter said last week, Bloomberg
adds.
It makes particular sense for lenders to try to sell loans that
could fetch prices above what they've provisioned for, Mihir
Chandra, head analyst at SC Lowy, said.
"As the insolvency processes drag on, we foresee more
opportunities to buy loan portfolios from lenders," Bloomberg
quotes Chandra as saying.
=========
J A P A N
=========
AKEBONO BRAKE: Seeks Capital Infusion, Debt Relief from Toyota
--------------------------------------------------------------
Reuters reports that Akebono Brake Industry Co. is seeking a
capital infusion from top shareholder Toyota Motor Corp. and a
moratorium on debt repayment as part of a revival plan, sending
its shares tumbling by a quarter on Jan. 30.
Reuters relates that the brake-maker, a supplier to automakers
including General Motors Co., which makes up about a quarter of
Akebono's sales, said in a statement it has filed for assistance
with a government-certified third-party body which had been
accepted.
Akebono, whose troubled U.S. business has hurt its earnings, said
it was confident its operations would be turned around under an
out-of-court plan and that it will present a revival plan to
lenders at a meeting next month, Reuters relays.
The Nikkei financial daily first reported Akebono's move to seek
capital from Toyota and a debt moratorium. A spokeswoman for
Akebono told Reuters that "the content written in Nikkei is
true."
"We are not facing any financing issues at the moment, but we
will prepare to seek assistance from our main lenders should such
a situation arise," the company said in a statement, which did
not make mention of Toyota, Reuters relays.
Reuters adds that Toyota, which owned 11.6 percent of Akebono as
of September, said in a statement it has not received a request
from the brake-maker for capital assistance.
Akebono's latest financial woes date back to around 2014, when
the company was struggling to fill a surge in orders from
customers in the United States, where vehicle sales were climbing
to record highs, Reuters states.
The scramble to manufacture more products beyond its production
capabilities resulted in additional manufacturing costs,
including labor and shipping costs, leading to a three-year run
of operating losses in North America to the 2016 financial year,
Reuters says.
Years of production issues also led to a slump in sales in the
region, as Akebono has failed to secure orders for new models
from U.S. automakers.
Akebono's shares fell as much as 26 percent on Jan. 30 to JPY158,
their lowest in 17 years. The shares had slid more than 40
percent in 2018, Reuters notes.
About Akebono Brake
Founded in 1929, Akebono Brake Industry Co., Ltd. engages in the
research, development, manufacture, and sale of brakes, and
related components and parts worldwide. The company offers disc
brake calipers, disc brake pads, disc rotors, corner modules,
drum brake linings, drum brake shoes, wheel cylinders, drum-in-
hat brakes, brake drums, sensors, etc. for automobiles; and disc
brake calipers, disc brake pads, master cylinders, etc. for
motorcycles. It also provides brakes for rolling stock, including
disc brakes and brake linings for bullet trains, brake linings
for regular trains, disc brakes for monorail, brake linings for
rolling stock, brake shoes for railroad trains, etc.
PIONEER CORPORATION: Egan-Jones Cuts Sr. Unsecured Ratings to BB
----------------------------------------------------------------
Egan-Jones Ratings Company, on January 22, 2018, downgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Pioneer Corporation to BB from BBB-.
Pioneer Corporation commonly referred to as Pioneer, is a
Japanese multinational corporation based in Tokyo, Japan, that
specializes in digital entertainment products. The company was
founded by Nozomu Matsumoto in 1938 in Tokyo as a radio and
speaker repair shop, and its current president is Susumu Kotani.
===============
M A L A Y S I A
===============
1MDB: Malaysia Fines Deloitte for Failing to Report Oddities
------------------------------------------------------------
Anisah Shukry at Bloomberg News reports that Malaysia imposed the
maximum fine on Deloitte PLT for breaches related to a bond
issuance by 1MDB, becoming the first auditor of the scandal-
ridden state fund to face penalties.
According to Bloomberg, the Securities Commission imposed a
MYR2.2 million (US$536,000) fine on Deloitte for failing to
immediately report irregularities in a MYR2.4 billion Islamic
bond sale that may have had material effect on 1MDB's ability to
repay creditors. Deloitte was the auditor for 1MDB units Bandar
Malaysia Sdn, the sukuk issuer, and 1MDB Real Estate Sdn for
financial years ended March 2015 and 2016, the report says.
"The SC finds the breaches committed by Deloitte serious in
nature, as it has failed to discharge its statutory obligations,"
it said in an emailed statement, Bloomberg relays.
Bloomberg relates that the state fund, whose full name is
1Malaysia Development Bhd., has used many of the world's top
auditors including KPMG and Ernst & Young. The fund was started
to bring in investments to the country, but has instead become
the center of worldwide investigations into possible corruption
and money laundering.
According to Bloomberg, Malaysia's securities regulator said
Deloitte was unable to get enough evidence to determine whether
the advances to 1MDB from, among others, the sukuk proceeds could
be recovered, it said in the statement on Jan. 30. The breach led
to a MYR2 million fine, the maximum allowed. The SC imposed an
additional MYR200,000 fine for Deloitte's failure to send copies
of Bandar Malaysia's 2015 and 2016 audited financial statements
to the sukuk's trustee in time.
1MDB's new management, which is overseen by the finance ministry,
was also investigating the testimony given by Tan Theng Hooi, the
former Malaysia head of Deloitte, Finance Minister Lim Guan Eng
said in a written response to parliament in November, Bloomberg
recounts. Bloomberg says Tan had defended the auditor's opinion
on 1MDB's 2013 and 2014 financial accounts to the parliament's
Public Accounts Committee, before Deloitte said in July 2017 that
its audited financial statements for those years shouldn't be
relied upon.
Deloitte said in November that it was cooperating fully with
authorities on matters linked to 1MDB, in response to the probe
into Tan, Bloomberg adds.
"We stand by our professionalism, quality, independence and
ethics in the services we provide," Deloitte Malaysia said in the
November emailed statement, Bloomberg relays.
About 1MDB
Kuala Lumpur-based 1Malaysia Development Bhd (1MDB) operates as a
government agency. The Company offers financial assistance,
analysis, and advice through investors, corporations, and
consultants to startups and growth companies. 1MDB focuses on
investments with strategic value and high multiplier effects on
the economy, particularly in energy, real estate, tourism, and
agribusiness.
As reported in the Troubled Company Reporter-Asia Pacific in
June 2015, Reuters relayed that Singapore Police Force has frozen
two bank accounts to help with an investigation in to Malaysia's
troubled state-owned investment fund 1Malaysia Development Bhd
(1MDB), which is being probed by authorities in Malaysia for
financial mismanagement and graft. Reuters said the freezing of
the Singapore bank accounts follows a similar move in Malaysia
where a task force investigating 1MDB said earlier in July that
it had frozen half a dozen bank accounts following a media report
that nearly $700 million had been transferred to an account of
Malaysia's Prime Minister Najib Razak.
The Wall Street Journal reported in July 2015 that investigators
looking into 1MDB had traced close to US$700 million of deposits
moving through Falcon Bank in Singapore into personal bank
accounts in Malaysia belonging to Najib.
The TCR-AP, citing Bloomberg News, reported in November 2015,
that 1MDB agreed to sell its power assets to China General
Nuclear Power Corp. for MYR9.83 billion (US$2.3 billion) as the
state investment company moved one step closer to winding down
operations after its mounting debt raised investor concern.
Bloomberg, citing President Arul Kanda in October 2015, related
that the company faced cash-flow problems after a planned initial
public offering of Edra faced delays amid unfavorable market
conditions. The listing plan was later canceled as the company
opted for a sale of the assets, Bloomberg noted.
The TCR-AP, citing The Wall Street Journal, reported in April
2016, that the company defaulted on a $1.75 billion bond issue,
triggering cross defaults on two other Islamic notes totaling
MYR7.4 billion ($1.9 billion).
Asian Nikkei Review reported in June 2016 that Malaysia has
replaced the board of 1Malaysia Development Berhad with treasury
officials, paving the way for the dissolution of the troubled
state investment fund.
=================
S I N G A P O R E
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ASL MARINE: Bondholders Approve Debt Extension
----------------------------------------------
The Strait Times reports that ASL Marine has received consent
from bondholders to extend the maturity dates of their notes,
among other changes, at a meeting held on Jan. 30, the marine
services company disclosed.
The notes are in relation to holders of the firm's $100 million
of originally 4.75 per cent notes due 2017, and $50 million of
originally 5.35 per cent notes due 2018, the report says.
For the 2017 notes, ASL Marine asked bondholders to extend the
maturity by five years, to March 28, 2025, from a previously
extended March 28, 2020, the Strait Times discloses. The interest
on the notes was 6 per cent from March 28, 2018, until, but
excluding, Sept 28, 2018. From Sept 28, 2018 onwards, the notes
will bear a revised coupon comprising a base 3 per cent rate and
an additional interest rate based on ASL Marine's earnings.
According to the Strait Times, ASL Marine also sought to delay
the maturity of its 2018 notes to Oct. 1, 2026, from a previously
extended Oct. 1, 2021. For the 2018 notes, the coupon between
April 1, 2018, and Oct. 1, 2018, was 6.35 per cent. From Oct. 1,
2018 onwards, the coupon will also be revised to a base 3 per
cent rate and an additional interest based on the company's
earnings.
In its filing to the Singapore bourse, ASL Marine said
noteholders representing about $84.9 million, or 91.75 per cent
of the principal amount of its 2017 notes outstanding voted at a
meeting held on Jan. 30. A total of 367 votes were cast, of which
365 votes, or 99.46 per cent of the votes were made in favor of
amending the notes' terms, the report relays.
Bondholders representing $41.2 million, or 89 per cent of the
principal amount of its 2018 notes, outstanding voted at the
meeting. A total of 178 votes were cast, of which 174 votes, or
97.75 per cent of the votes, were in favor of the amendments, the
report says.
ASL Marine shares last traded flat at seven cents apiece on
Jan. 25, adds the Strait Times.
About ASL Marine
Headquartered in Singapore, ASL Marine Holdings Ltd. --
http://aslmarine.infinitesparks.com/-- provides marine services
primarily in the Asia Pacific, South Asia, Europe, Australia, and
the Middle East.
*********
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 ***