/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/190204.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Monday, February 4, 2019, Vol. 22, No. 024 Headlines A U S T R A L I A BRAZA MIRANDA: First Creditors' Meeting Set for Feb. 8 DRIVERS EDGE: First Creditors' Meeting Set for Feb. 11 EASTERN GOLDFIELDS: Creditors Back AU22 Million Rescue Plan FERNBREW PTY: First Creditors' Meeting Set for Feb. 11 IPILOT AUSTRALIA: First Creditors' Meeting Set for Feb. 11 NAPOLEON PERDIS: Beauty Business Enters Into Administration NAPOLEON PERDIS: First Creditors' Meeting Set for Feb. 12 OBRIEN SAFETY: First Creditors' Meeting Set for Feb. 8 UNIVERSAL DRONES: First Creditors' Meeting Set for Feb. 11 C H I N A 361 DEGREES: S&P Alters Outlook to Negative & Affirms 'BB' ICR YIHUA ENTERPRISE: Moody's Lowers CFR to B3, Outlook Negative YIDA CHINA: S&P Cuts ICR to CCC+ on Weak Liquidity I N D I A AGRO PULPING: CRISIL Migrates B+ Rating to Not Cooperating BAJRANG STEEL: Ind-Ra Affirms BB+ Issuer Rating, Outlook Stable DIWANKA ENERGY: CRISIL Hikes Rating on INR7cr Cash Loan to B G M COLD: CRISIL Reaffirms B+ Rating on INR11cr Loans HLM EDUCATIONAL: CRISIL Cuts Rating on INR9cr Term Loan to D J. NIZAR: CRISIL Migrates B Rating in Not Cooperating Category KEEN AND CORE: CRISIL Withdraws B- Rating on INR6cr Cash Loan LIMENAPH CHEMICALS: CRISIL Migrates B+ Rating to Not Cooperating MAHARAJA AGROFOODS: Ind-Ra Lowers Long Term Issuer Rating to 'D' NATIONAL HOTELS: Ind-Ra Raises Long Term Issuer Rating to 'B+' P. L. ASSOCIATES: CRISIL Maintains B Rating in Not Cooperating PATIL AND COMPANY: CRISIL Withdraws D Rating on INR23cr Loans POOJA INDUSTRIES: CRISIL Maintains D Rating in INR6cr Loans PUNJAB LIQUORS: CRISIL Maintains B+ Rating in Not Cooperating PUPNEJA RICE: CRISIL Maintains D Rating in Not Cooperating RELIANCE COMMUNICATIONS: To File for Insolvency SAJJALA BIO: CRISIL Withdraws B+ Rating on INR9.35cr Loans SASWAD MALI: Ind-Ra Affirms 'D' LT Issuer Rating, Outlook Stable SATKAR PAPER: CRISIL Maintains B Rating in Not Cooperating SEETA INTEGRATED: CRISIL Keeps B+ Rating in Not Cooperating SREE GURU: CRISIL Maintains B Rating in Not Cooperating Category SRI GOKUL: CRISIL Maintains B Rating in Not Cooperating Category SUNSAT INFOTECH: CRISIL Maintains B+ Rating in Not Cooperating SUPREME GLAZES: Ind-Ra Migrates BB- LT Rating to Non-Cooperating TIRUMALLA OIL: CRISIL Maintains B+ Rating in Not Cooperating VASUNDHARA CHEM: CRISIL Assigns 'B+' Rating to INR9cr Loans WATER SYSTEMS: CRISIL Migrates B+ Rating to Not Cooperating I N D O N E S I A SAWIT SUMBERMAS: Moody's Alters Outlook on B1 CFR to Negative N E W Z E A L A N D CHRISTIAN SAVINGS: Fitch Hikes IDR to BB, Outlook Stable S I N G A P O R E EZRA HOLDINGS: Unit Placed Under Creditors Voluntary Liquidation NO SIGNBOARD: Net Loss Widens to SGD573,643 in Q1 Ended Dec. 31 S O U T H K O R E A HYUNDAI HEAVY: Posts KRW633 Billion Net Loss in 2018 - - - - - ================= A U S T R A L I A ================= BRAZA MIRANDA: First Creditors' Meeting Set for Feb. 8 ------------------------------------------------------ A first meeting of the creditors in the proceedings of Braza Miranda Pty Ltd will be held on Feb. 8, 2019, at 11:00 a.m. at Level 27, 259 George Street, in Sydney. Andrew John Spring of Jirsch Sutherland was appointed as administrator of Braza Miranda on Jan. 29, 2019. DRIVERS EDGE: First Creditors' Meeting Set for Feb. 11 ------------------------------------------------------ A first meeting of the creditors in the proceedings of Drivers Edge Pty Ltd will be held on Feb. 11, 2019, at 10:30 a.m. at the offices of Wild Apricot Corporate Insolvency & Advisory Services at Level 1, 5 Everage Street, in Moonee Ponds, Victoria. Altan Djenab of Wild Apricot was appointed as administrator of Drivers Edge on Jan. 30, 2019. EASTERN GOLDFIELDS: Creditors Back AU22 Million Rescue Plan ----------------------------------------------------------- Peter Milne at The West Australian reports that failed Eastern Goldfields will be looking to raise at least AUD22 million and return to share trading after creditors approved a rescue plan on Jan. 31. The Michael Fotios-backed company, which owns the Davyhurst and Mt Ida gold projects north-west of Kalgoorlie, fell into administration in November, days after a AUD75 million recapitalisation plan was withdrawn, the report says. According to the West Australian, creditors at the Perth meeting chaired by administrator Martin Jones of Ferrier Hodgson voted to accept the deed of company arrangement for all Eastern Goldfields entities. The report says the motion for the parent company Eastern Goldfields Limited was approved by 40 creditors owed AUD55 million and opposed by eight owed AUD15 million. The West Australian relates that the DOCA proponent, US investor Hawke's Point, plans to recapitalise Eastern Goldfields and relist it on the Australian Securities Exchange. Forty per cent of debts to unsecured creditors will be converted to equity, with 22 cents in the dollar paid on the remaining 60 per cent, the report discloses. A AUD7.3 million trust will be set up to pay creditors, the West Australian adds. A report by administrators said the miner could have fallen into insolvency as early as August 2017, when operations began at the Davyhurst mine, the West Australian relays. About Eastern Goldfields Based in Balcatta, Australia, Eastern Goldfields Limited operates as a gold exploration and production company. It owns 100% interest in the Davyhurst and the Mt Ida gold projects, which are located to the north-west of Kalgoorlie. It also holds interests in Siberia, Riverina, Callion, Waihi, and LOI projects. The company was formerly known as Swan Gold Mining Limited and changed its name to Eastern Goldfields Limited in December 2015. Andrew Smith and Martin Jones of Ferrier Hodgson were appointed Administrators of the following Companies on Nov. 29, 2018, pursuant to Section 436A of the Corporations Act 2001: - Eastern Goldfields Limited - Monarch Nickel Pty Ltd - Monarch Gold Pty Ltd - Carnegie Gold Pty Ltd - Siberia Mining Corporation Pty Ltd - Mt Ida Gold Operations Pty Ltd - Ida Gold Operations Pty Ltd - Pilbara Metals Pty Ltd - Mt Ida Gold Pty Ltd - Eastern Goldfields Mining Services Pty Ltd - Siberia Gold Operations Pty Ltd FERNBREW PTY: First Creditors' Meeting Set for Feb. 11 ------------------------------------------------------ A first meeting of the creditors in the proceedings of Fernbrew Pty. Limited will be held on Feb. 11, 2019, at 9:00 a.m. at the Wilarra Room, The Grace Hotel, at 77 York Street, in Sydney, NSW. David Ingram, Richard Albarran and Brent Kijurina of Hall Chadwick Chartered Accountants were appointed as administrators of Fernbrew Pty on Jan. 30, 2019. IPILOT AUSTRALIA: First Creditors' Meeting Set for Feb. 11 ---------------------------------------------------------- A first meeting of the creditors in the proceedings of Ipilot Australia Pty Ltd will be held on Feb. 11, 2019, at 12:30 p.m. at the offices of SM Solvency Accountants, at Level 8/490 Upper Edward Street, in Spring Hill, Queensland. Brendan Nixon of SM Solvency Accountants was appointed as administrator of Ipilot Australia on Jan. 31, 2019. NAPOLEON PERDIS: Beauty Business Enters Into Administration ----------------------------------------------------------- Matthew Elmas at SmartCompany reports that beauty business Napolean Perdis has appointed administrators, becoming the second national retailer this month to fall victim to difficult market conditions. Simon Cathro, Chris Cook and Ivan Glavas of Worrells Solvency Accountants were appointed as administrators of the business on Jan. 31, SmartCompany discloses. All 56 of the company's stores remained closed for stocktake Jan. 31 before re-opening on Feb. 1 as a sale process is undertaken. SmartCompany says the administrators have so far been unable to confirm the number of employees working for the business. According to SmartCompany, the eponymous brand was started by Australian makeup artist Napoleon Perdis in 1995 with an initial concept store in Sydney which expanded out of a makeup academy. It grew to international prominence, particularly in the United States, where it traded for over a decade until 2015, when it was forced to pull out of the market. SmartCompany relates that the troubles continued from there, with Mr. Perdis signalling a restructuring last year by closing stores and pulling products out of David Jones in an attempt to right- size the business. He pivoted to Australian Pharmaceutical Industries' (API) Priceline business, inking a nationwide distribution deal last year, and was even speaking to potential investors about reentering the US, as well as expanding into Asia, SmartCompany notes. SmartCompany says Priceline has vouched support for the brand through the administration process. In a statement released by Worrels on Jan. 31, Mr. Perdis did not delve into the specific circumstances behind the collapse but said the brand is still in "high demand" among customers. "The brand is still in high demand from our customers and is more innovative than ever, so by restructuring the business in this manner, we believe, puts it in a prime position to continue to evolve through continued trade or in a sale," the statement reads, SmartCompany relays. "My family and I are 100 per cent committed to achieving the best outcome for all stakeholders. We are fortunate that throughout our business, we have staff and teams who have not only underpinned the business success, but who are our extended family." The beauty category has become fiercely competitive amid the entry of international competitors such as Mecca and Sephora. Last year, Priceline was forced to cycle between promotions, some of which wiped up to 50% off, to maintain sales growth, with executive Richard Vincent blaming a decline in comparable sales on price deflation last April. "We expect the appointment will generate significant interest in the sale of the business. The Napoleon Perdis brand touts pioneer achievements and accolades, which encompasses spearheading industry benchmarks as an educator, trailblazer, and award- winners." No store closures have been flagged yet, but Worrels said it would undertake daily assessments of the network throughout the administration, SmartCompany adds. NAPOLEON PERDIS: First Creditors' Meeting Set for Feb. 12 --------------------------------------------------------- A first meeting of the creditors in the proceedings of Napoleon Perdis Cosmetics Pty Limited and Napoleon Perdis Cosmetics Australia Pty Ltd will be held on Feb. 12, 2019, at 2:30 p.m. at the offices of: - Fraser Room, 33 Erskine St, in Sydney, NSW; - Level 8, 102 Adelaide Street, in Brisbane, Queensland; - Level 15, 114 William St, in Melbourne, Victoria; and - Level 4, 15 Ogilvie Rd, in Mount Pleasant, WA, Simon Cathro, Chris Cook and Ivan Glavas of Worrells Solvency & Forensic Accountants were appointed as administrators of Napoleon Perdis on Jan. 31, 2019. OBRIEN SAFETY: First Creditors' Meeting Set for Feb. 8 ------------------------------------------------------ A first meeting of the creditors in the proceedings of OBrien Safety and Environmental Systems Pty Ltd will be held on Feb. 8, 2019, at 2:30 p.m. at the offices of Worrells Solvency & Forensic Accountants, at Level 15, 114 William Street, in Melbourne, Victoria. Ivan Glavas and Matthew Jess of Worrells Solvency & Forensic Accountants were appointed as administrators of OBrien Safety on Jan. 29, 2019. UNIVERSAL DRONES: First Creditors' Meeting Set for Feb. 11 ---------------------------------------------------------- A first meeting of the creditors in the proceedings of Universal Drones Pty Ltd will be held on Feb. 11, 2019, at 2:00 p.m. at the offices of SV Partners, 22 Market Street, in Brisbane, Queensland. Anne Meagher of SV Partners was appointed as administrator of Universal Drones on Jan. 30, 2019. ========= C H I N A ========= 361 DEGREES: S&P Alters Outlook to Negative & Affirms 'BB' ICR -------------------------------------------------------------- S&P Global Ratings revised the outlook on 361 Degrees International Ltd to negative from stable. At the same time, S&P affirmed its 'BB' long-term issuer credit rating on 361 Degrees and its 'BB' long-term issue rating on the company's senior unsecured notes. S&P said, "We revised the outlook to negative to reflect our view that 361 Degrees International Ltd.'s growth prospects and market position could continue to weaken, given intensifying competition in China's sportswear industry. This is likely to push the company's debt-to-EBITDA ratio to breach our downgrade trigger of 3.0x in 2018-2019, from 2.9x in 2017. That said, 361 Degrees has ample liquidity to manage its debt leverage profile, if it chooses to." 361 Degrees could continue to lose market share to global brands and leading domestic sportswear brands over the next 12 months due to lack of product differentiation and limited pricing power. Competition in the sportswear industry in China is intensifying, given global brands' penetration into lower-tier cities and leading domestic brands' store expansion. According to market- research group Euromonitor, 361 Degrees' market share declined to 3.2% in 2018, from 3.6% in 2017 and 4.1% in 2016. S&P said, "We expect 361 Degrees' revenue growth to decelerate to 0%-4% over the next 12 months, from about 8% in the first half of 2018, underperforming the industry growth of 7%-9%. This is following the company's weaker-than-expected sales in 2017 due to a one-off delayed delivery of about Chinese renminbi (RMB) 400 million of orders to distributors. Nevertheless, our base case assumes a moderate recovery in the company's revenue growth in 2020, driven by its efforts to shift its product mix toward more functional sportswear and faster penetration into the online sales channel. The company changed the operation of its e- commerce business from distributorship to self-operation by acquiring its online sales distributor in August 2016. "We anticipate that 361 Degrees' EBITDA margin will fall slightly to 16%-17% in 2019 and 2020, from our estimate of about 17% in 2018, given intense competition and likely rising production and distribution costs. Annual operating cash flow will moderate to RMB400 million-RMB500 million in 2018-2020, from about RMB718 million in 2017, because of moderating sales growth. "We affirmed the rating because we expect 361 Degrees to remain one of larger sportswear brands in China despite the slight market share loss and maintain good profitability over the next 12 months. Furthermore, we see a possibility that the company may choose to use its liquidity to manage its debt leverage profile, given the U.S.-dollar-denominated notes will become callable after June 3, 2019. "The negative outlook reflects our expectation that 361 Degrees' growth prospects and market position could continue to weaken due to intensifying competition in the sportswear industry in China. The company's debt-to-EBITDA ratio could increase to slightly above 3.0x over the next 12 months amid slower revenue growth, breaching our downgrade threshold. "We could lower the rating if 361 Degrees' debt-to-EBITDA ratio exceeds 3.0x without the prospect of a quick reversal. This could happen if the company's revenue growth continues to be slower than our expectation or its margin deteriorates due to intense competition. "We could also lower the rating if 361 Degrees' market position weakens materially. Ongoing slower-than-industry sales growth or a decline in market share could indicate such weakening. "We could revise the outlook back to stable if 361 Degrees' operating results are better than our expectations, such that its market share stabilizes and debt-to-EBITDA ratio sustains meaningfully below 3.0x." YIHUA ENTERPRISE: Moody's Lowers CFR to B3, Outlook Negative ------------------------------------------------------------ Moody's Investors Service has downgraded Yihua Enterprise (Group) Co., Ltd.'s corporate family rating to B3 from B2. At the same time, Moody's has downgraded to Caa1 from B3 the rating on the backed senior unsecured notes issued by Yihua Overseas Investment Ltd and guaranteed by Yihua Group. The ratings outlook remains negative. RATINGS RATIONALE "The downgrade of the ratings reflects our concerns that the volatility in the group's projected earnings coincides with Yihua Group's high refinancing needs; factors which will add to the group's liquidity risk over the next 12-18 months," says Stephanie Lau, a Moody's Vice President and Senior Analyst. The volatility in Yihua Group's projected earnings is mainly driven by the weakened performance of Yihua Lifestyle - a key listed operating subsidiary of Yihua Group - and which accounted for 67% of Yihua Group's total revenue in the nine months between January and September 2018. On January 15, 2019, Yihua Lifestyle issued a profit warning on the Shanghai Stock Exchange. The company expects that its net profit will decline by 26%-36% year-on-year in 2018. Yihua Group's liquidity is weak. Moody's points out that Yihua Group has high refinancing needs in the coming 12-18 months. At the end of 3Q 2018, the company had RMB5.9 billion of cash and projected annual operating cash flow of around RMB1.5 billion in the next 12 months. However, it has debt obligations maturing over the next 12 months, namely a total of RMB8.6 billion in short-term bank borrowings, as well as long-term bank borrowings due within one year and maturing onshore bonds, in addition to RMB1.0 billion in onshore puttable bonds. Beyond the next 12 months, the company has to refinance RMB1.5 billion in onshore bonds due in 4Q 2019 and RMB1.7 billion of puttable bonds in the same period. Moody's notes that Yihua Group and Yihua Healthcare issued a total RMB1.9 billion of domestic corporate public and private bonds in Q4 2018. Moody's expects that the volatility in the group's operations will impair its access to funding, thereby increasing its refinancing risk. Moody's also says that it is uncertain as to whether or not the group can monetize its alternative liquid sources to meet its near-term refinancing needs. Moody's will monitor the company's cash balances and ability to monetize its physical and financial assets in the next two to three months. Yihua Group's B3 CFR reflects the company's high refinancing needs and liquidity risks, as well as the projected earnings volatility in the next 12-18 months. It also reflects its status as a private company, with partial shareholdings in its key furniture and healthcare businesses. On the other hand, the rating also accounts for the group's recurring investment income and property earnings that provide some support to its cash flow, and diversified funding access. The ratings outlook is negative, reflecting Moody's expectations that Yihua Group will continue to show operational volatility and high refinancing needs; adding uncertainty to its liquidity position. The company is not under any ratings upgrade pressure, given the negative ratings outlook. Nevertheless, the ratings outlook could return to stable if Yihua Group (1) improves its liquidity to an adequate level; and (2) arrests the decline in its revenue, profit margin and operating cash flow on a sustained basis. Downward ratings pressure could emerge if (1) Yihua Group cannot refinance its debt obligations; and/or (2) its operating and financial profiles deteriorate further. Yihua Enterprise (Group) Co., Ltd. was established in April 1995 and is based in Shantou, China. Yihua Group is a diversified private company that operates in four key segments: (1) furniture manufacturing, (2) healthcare, (3) property development, and (4) financial investment. YIDA CHINA: S&P Cuts ICR to CCC+ on Weak Liquidity -------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit rating on Yida to 'CCC+' from 'B-' and the long-term issue rating on the company's senior unsecured notes to 'CCC' from 'CCC+'. S&P said, "We downgraded Yida China Holdings Ltd. because we believe the company's capital structure is unsustainable in the longer run. Yida has a small cash balance and sizable short-term debt maturities. Although the company has rolled over some debt over the past six months, its liquidity is likely to remain very tight. "We believe Yida will continue to rely heavily on refinancing to address its near-term debt maturities, leaving little room for error. The company's borrowings of about Chinese renminbi (RMB) 6.2 billion, (37% of the total) will be due in 2019. This includes RMB2 billion in domestic corporate bonds to be repaid in March, which we expect Yida to be able to refinance. In contrast, the company's unrestricted cash balance is low, at RMB1 billion as of Dec. 31, 2018, due to delay in collection for land sale at the Dalian Tiandi project." Yida's liquidity is likely to remain exceptionally weak in 2020 without new funding or a significant improvement in cash generation. In 2020, another RMB7.6 billion of borrowings will be due for repayment, excluding any short-term refinancing in 2019, which may further add to maturities in 2020. Yida's sub-par cash generation should also result in high leverage over the next two years. While the company's contracted sales grew 18% in 2018 and it had good cash collections, they were mainly driven by a one-off land sale of the Dalian Tiandi project to Longfor Group Holdings Ltd. Excluding the land sale, Yida's contracted sales were RMB6 billion, 18% lower than in 2017. S&P expects sales growth to be 30%-35% in 2019 and 5%-10% in 2020. While Yida's strategy to expand outside of Dalian may allow it to boost sales from more projects, it also brings significant execution risk because the company has limited experience in markets outside Dalian. S&P said, "We do not expect Yida to deleverage in the coming two years, given its geographical expansion and continued capital expenditure on investment properties. We forecast the company's debt-to-EBITDA ratio to remain at 12x-14x in 2019 and 2020." S&P said, "We continue to view China Minsheng Investment Group's cancellation in 2018 of its plan to subscribe to new shares of Yida as an indication of its lack of support for Yida. We believe any future equity injection from existing shareholders is unlikely, which leads to further uncertainty on Yida's liquidity and leverage." Yida has further delayed dividend payments due to its insufficient offshore funding. In addition to poor liquidity, this demonstrates the company's weak internal control and lack of strategic planning. Therefore, S&P continues to assess Yida's management and governance as weak. S&P said, "The negative outlook on Yida reflects our view that the company faces increasing refinancing challenges, although they are unlikely in the next 12 months. We believe Yida's capital structure, with limited cash balance and weak liquidity, is unsustainable in the longer run and is vulnerable to adverse market conditions. "We could lower the rating on Yida if the company fails to present a feasible refinancing plan or if its operating cash flows weaken beyond our expectation, such that it faces difficulty in repaying its upcoming debt maturities. Such a scenario could arise if the company's access to the onshore capital market and bank borrowings weakens, or its proceeds from property sales are lower than we expect. "We may raise the rating if Yida can significantly improve its liquidity to a more sustainable level. This could happen if the company raises new equity or long-term funding, or disposes assets to improve its capital structure. Yida will also need to demonstrate an improving ability to generate cash to maintain a significantly higher unrestricted cash balance. An indication of such improvement could be the ratio of liquidity sources to uses being close to 1x." ========= I N D I A ========= AGRO PULPING: CRISIL Migrates B+ Rating to Not Cooperating ---------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Agro Pulping Machinery Private Limited (APMPL) to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 1.3 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) Cash Credit 1.5 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Proposed Bill 2.0 CRISIL A4 (ISSUER NOT Discounting COOPERATING; Rating Migrated) Facility Proposed Letter 5.0 CRISIL A4 (ISSUER NOT of Credit COOPERATING; Rating Migrated) Proposed Long 0.2 CRISIL B+/Stable (ISSUER NOT Term Bank Loan COOPERATING; Rating Migrated) Facility Proposed Packing 3.0 CRISIL A4 (ISSUER NOT Credit COOPERATING; Rating Migrated) CRISIL has been consistently following up with APMPL for obtaining information through letters and emails dated August 23, 2018, December 14, 2018 and December 19, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of APMPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on APMPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' category or lower. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of APMPL to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. Incorporated in 1991, APMPL manufactures pulping and paper manufacturing equipment. The company also specialises in chemical recovery from the wastes of paper mills. The company, promoted by Mr. S Raghavan, has its manufacturing facility in Chennai. BAJRANG STEEL: Ind-Ra Affirms BB+ Issuer Rating, Outlook Stable --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Bajrang Steel and Alloys Limited's (BSAL) Long-Term Issuer Rating at 'IND BB+'. The Outlook is Stable. The instrument-wise rating action is: -- INR140 mil. Fund-based working capital limits affirmed with IND BB+/Stable rating. KEY RATING DRIVERS The affirmation reflects BSAL's continued medium scale of operations as indicated by revenue of INR883.03 million in FY18 (FY17: INR750.02 million). The rise in revenue was on account of increased demand for steel products. The company's return on capital employed was 4% in FY18 and EBITDA margin was modest at 2.5% (FY17: 2.3%). The marginal improvement in the margin was because of a decline in operating expenses. The ratings continue to factor in BSAL's modest credit metrics as reflected by gross interest coverage (operating EBITDA/net interest expenses) of 2.1x in FY18 (FY17: 1.9x) and net financial leverage (total adjusted net debt/operating EBITDA) of 1.4x (2.8x). The improvement in the credit metrics was on account of an increase in absolute EBITDA and a decline in total debt. The ratings also reflect BSAL's modest liquidity position with 70.16% average use of its fund-based limits during the 12 months ended December 2018. The company's cash flow from operations increased to INR29.46 million in FY18 (FY17: INR17.25 million), due to an improvement in net working capital cycle to 57 days (80 days). At FYE18, the company's cash and cash equivalents stood at INR102.2 million. However, the ratings remain supported by the company's promoters' two decades experience in the iron and steel industry. RATING SENSITIVITIES Positive: An increase in the revenue driven by growth in sales volume, along with a sustained improvement in the credit metrics will be positive for the ratings. Negative: Any decline in the revenue or EBITDA margin leading to deterioration in the credit metrics on a sustained basis will be negative for the ratings. COMPANY PROFILE Incorporated in December 1998, BSAL manufactures mild steel ingots and mild steel structures at its plant in Rourkela (Odisha). The site has an installed capacity of 25,400 tons per annum of mild steel structures and 32,000 tons per annum of mild steel ingots. It is also engaged in the trading of crushed slags, mild steel structures and mild steel scrap. The company is managed by directors Mr. Ramesh Kumar Aggarwal, Mr. Ashok Kumar Kansal and Mr. Ashok Kumar Agarwal. DIWANKA ENERGY: CRISIL Hikes Rating on INR7cr Cash Loan to B ------------------------------------------------------------ CRISIL has upgraded its ratings on bank facilities of Diwanka Energy Private Limited (DEPL) to 'CRISIL B/Stable' from 'CRISIL B-/Stable', short term rating reaffirmed at 'CRISIL A4'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 7 CRISIL B/Stable (Upgraded from 'CRISIL B-/Stable') Letter of Credit 1.5 CRISIL A4 (Reaffirmed) The upgrade reflects improvement in financial risk profile of DEPL, especially liquidity. The improvement in liquidity is reflected by sufficient cash accruals generation of INR1.88 crore in fiscal 2018 which is further expected to increase to INR3.9-4 crore in fiscal 2019 against term debt repayments of INR1 crore, moderate bank limit utilization of around 70-80 per cent thereby providing additional cushion to liquidity and continued support from promoters in the form of unsecured loans of 20 crore as on 31st March 2018. The ratings continue to reflect the below-average financial risk profile, marked by a small networth, high gearing and weak debt protection metrics, and exposure to intense competition in the steel industry, and cyclicality in demand from end-user industries. These rating weaknesses are partially offset by the extensive experience of the promoters and established customer relationships. Key Rating Drivers & Detailed Description Weakness * Below-average debt protection metrics: Debt protection metrics are below-average, with interest coverage and net cash accrual to total debt ratios at 1.4 times and 0.06 time, respectively, in fiscal 2018, mainly led by higher reliance on working capital debt. * Exposure to intense competition: The steel manufacturing industry is highly fragmented because of low entry barrier. Furthermore, this segment is inherently cyclical as prices are linked to the growth of the primary end-user segments such as infrastructure, real estate, and automobiles; any slowdown in which may adversely affect demand for steel products. Hence, revenue and operating margin will remain susceptible to intense competition, large capacity addition by primary players, and cyclicality in end-user industries. Strengths * Extensive experience of the promoters and established customer relationship: Benefits from the two decade-long presence of the promoter, Mr Priyank Diwanka, in the steel trading business, and his experience in manufacturing of ingots, billets, and thermo- mechanically treated (TMT) bars through other entities, will continue. Due to its wide product profile, company had been able to establish a diversified network of customers consisting of brokers, dealers and traders. The diversified customer base also helps mitigate the cyclical risk of various industries to an extent. Outlook: Stable CRISIL believes DEPL will continue to benefit from the extensive experience of its promoter, and the established customer relationships. The outlook may be revised to 'Positive' if substantial growth in revenue and profitability, leads to higher cash accrual and moderate liquidity. The outlook may be revised to 'Negative' if decline in profitability or revenue, or stretch in the working capital cycle results in lower-than-expected cash accrual, thus constraining the financial risk profile especially liquidity. Liquidity Liquidity is moderate, reflected in net cash accrual of INR1.88 crore in fiscal 2018. Bank limit was moderately utilized at 74% during the 12 months ended December 2018 on account of working capital-intensive operations. Accruals are expected to be at around INR3.9-4 crore against debt obligation of ~Rs 1 crore in fiscal 2019. However liquidity is supported by unsecured loan of 20 crore as on March 31, 2018, which is expected to remain in the firm over the medium term. Incorporated in 2009, DEPL trades in a variety of steel products, including hot- and cold-rolled coils and plates, angles, channels, sponge iron, and TMT bars. The Nagpur-based company has also started manufacturing billets, strips and pipes since July 2015, and has total capacity of 60,000 tonne per annum. Operations are managed by Mr Priyank Diwanka. G M COLD: CRISIL Reaffirms B+ Rating on INR11cr Loans ----------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long- term bank facilities of G M Cold Storage Private Limited (GMCSPL). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 6 CRISIL B+/Stable (Reaffirmed) Proposed Fund- Based Bank Limits 3.05 CRISIL B+/Stable (Reaffirmed) Working Capital Facility 1.95 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect the company's exposure to intense competition in the cold storage industry and weak financial risk profile. These weaknesses are partially offset by promoters' extensive experience. Key Rating Drivers & Detailed Description Weaknesses * Exposure to intense competition and government regulations: The potato cold storage industry in West Bengal is regulated by the West Bengal Cold Storage Association, with rental rates are fixed by the department of agricultural marketing, West Bengal. Fixed rental will continue to limit players' ability to earn profits based on their respective strengths and geographical advantages. Pressure to offer discounts to ensure healthy utilisation of storage capacity, especially given the intense competition, will also constrain profitability. * Weak financial risk profile: Networth remained small at INR4.12 crore as on March 31, 2018, despite marginal improvement in recent years on account of accretion to reserve. Gearing and total outside liabilities to tangible networth ratio were high at 1.94 times and 2.04 times, respectively, because of loans extended to farmers, especially around end of fiscal. Debt protection metrics are likely to remain moderate: interest coverage and net cash accrual to total debt ratios were 3.97 times and 0.06 time, respectively, in fiscal 2018. Strength * Promoters' extensive experience: Presence of around three decades in the cold storage segment has enabled the promoters to establish healthy relationship with farmers and traders, thereby ensuring healthy utilisation of storage capacity. Outlook: Stable CRISIL believes GMCSPL will continue to benefit from the extensive experience of its promoters. The outlook may be revised to 'Positive' if scale of operation increases along with increase in the cash accrual and working capital management improves. The outlook may be revised to 'Negative' if considerably low cash accrual, or significant, debt-funded capital expenditure further weakens financial risk profile, especially liquidity. Liquidity Liquidity is adequate. Net cash accrual was around INR47 lakh against nil term loan repayment in fiscal 2018. Unencumbered cash and bank balance was INR1.6 crore as on March 31, 2018. However, bank limit remains highly utilised during March-April as these two months are the peak season for cold storage owners. Current ratio remained moderate at 1.37 times as on March 31, 2018. Incorporated in 1986 and promoted by Kolkata-based Gorai family, GMCSPL provides cold storage facilities to potato farmers and traders and also trades in potatoes. Unit is located in Bankura, West Bengal. HLM EDUCATIONAL: CRISIL Cuts Rating on INR9cr Term Loan to D ------------------------------------------------------------ CRISIL has downgraded its ratings on the bank facilities of HLM Educational Society (HLM) to 'CRISIL D/CRISIL D' from 'CRISIL BB-/Stable/CRISIL A4+'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 3.5 CRISIL D (Downgraded from 'CRISIL BB-/Stable') Overdraft 4.03 CRISIL D (Downgraded from 'CRISIL A4+') Proposed Term Loan 3.47 CRISIL D (Downgraded from 'CRISIL BB-/Stable') Term Loan 9 CRISIL D (Downgraded from 'CRISIL BB-/Stable') The downgrade reflects delays (of around 60 days) by HLM in repayments of term loan due to cash flow mismatches. The ratings are also constrained by small scale of operations. These weaknesses are partially offset by the experience of the trustee and his funding support. Key Rating Drivers & Detailed Description Weaknesses * Delays in servicing interest and repayment of term obligation: HLM had availed of a term loan of INR4.4 crore. Since the society has been irregular in repayment of this debt, the bank has classified HLM's account as special mention account 2. * Small scale of operations: Intense competition may continue to constrain scalability, pricing power, and profitability. Revenue was modest at INR5.83 crore in fiscal 2018. Strengths * Experience of the trustee and his funding support: Benefits from the trustee's experience of over a decade in education sector. Further, the trustees infused INR1.75 crore of unsecured loan for the liquidity support. Liquidity Liquidity is likely to remain stretched over the medium term. Bank limit was almost fully utilised for over 12 months through Oct'18. Also, cash accrual has been inadequate to meet maturing debt. About the Society HLM was set up in 2005 by Mr Sunil Miglani (Chairman of the Migsun group) in the memory of his late father, Mr Harbans Lal Miglani. The Ghaziabad based society provides education courses such as law, business management and Medical. J. NIZAR: CRISIL Migrates B Rating in Not Cooperating Category -------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of J. Nizar (JN) to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 3.1 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) Bill Discounting 2.0 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) Cash Credit 4.9 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with JN for obtaining information through letters and emails dated September 7, 2018, December 18, 2018 and December 24, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of JN, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on JN is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' category or lower. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of JN to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. J. Nizar is a proprietorship firm involved in civil construction works like construction of roads, bridges and construction and maintenance for irrigation facilities in Kerela. The firm is being managed by Mr J. Nizar. KEEN AND CORE: CRISIL Withdraws B- Rating on INR6cr Cash Loan ------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Keen and Core Developers (KCD) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 10 CRISIL A4/Issuer Not Cooperating (ISSUER NOT COOPERATING; Rating Withdrawn) Cash Credit 6 CRISIL B-/Stable/Issuer Not Cooperating (ISSUER NOT COOPERATING; Rating Withdrawn) CRISIL has been consistently following up with KCD for obtaining information through letters and emails dated March 28, 2018, April 10, 2018, April 16, 2018, and December 31, 2018, among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of KCD. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for KCD is consistent with 'Scenario LL' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has Continues the ratings on the bank facilities of KCD to 'CRISIL B-/Stable/CRISIL A4 Issuer not cooperating'. Set up as a proprietorship firm in June 2008 by Mr. Satyabeer Singh, KCD undertakes civil, building, and road construction projects in Uttar Pradesh and Madhya Pradesh. LIMENAPH CHEMICALS: CRISIL Migrates B+ Rating to Not Cooperating ---------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Limenaph Chemicals Private Limited (LCPL) to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 11 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Letter of Credit 1.25 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long 1.75 CRISIL B+/Stable (ISSUER NOT Term Bank Loan COOPERATING; Rating Migrated) Facility CRISIL has been consistently following up with LCPL for obtaining information through letters and emails dated September 28, 2018, December 18, 2018 and December 24, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of LCPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on LCPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' category or lower. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of LCPL to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. Established in 1983 and based in Chennai, LCPL manufactures lime powder and other paint-related products. Operations are managed by the director, Mr P B Jeyasubramanian. MAHARAJA AGROFOODS: Ind-Ra Lowers Long Term Issuer Rating to 'D' ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Maharaja Agrofoods Private Limited's (MAFPL) Long-Term Issuer Rating to 'IND D' from 'IND BB+'. The Outlook was Stable. The instrument-wise rating actions are: -- INR70 mil. Fund-based limits (Long-term/Short-term) downgraded with IND D rating; and -- INR80 mil. Term loan (Long-term) due on October 2019 Downgraded with IND D rating. KEY RATING DRIVERS The downgrades reflect ongoing delays in debt servicing by MAFPL owing to a stressed liquidity position, resulting from increased working capital requirement. RATING SENSITIVITIES Positive: Timely debt servicing for three consecutive months could result in an upgrade. COMPANY PROFILE Incorporated in 2011 by Mr. Sunder Singh and Mr. Bijendra Nagar, MAFPL is engaged in the processing and packaging of milk for Mother Dairy. The company is also involved in the trading of raw milk. It has an installed processing capacity of 0.5 million liters per day at its unit in Bhiwadi, Rajasthan. NATIONAL HOTELS: Ind-Ra Raises Long Term Issuer Rating to 'B+' -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded National Hotels Limited's (NHL) Long-Term Issuer Rating to 'IND B+' from 'IND B-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR30 mil. Fund-based working capital facilities Long-term rating upgraded and short-term rating affirmed with IND B+/Stable/IND A4 rating; and -- INR39.441 mil. (reduced from INR50 mil.) Term loan due on April 2026 upgraded with IND B+/Stable rating. KEY RATING DRIVERS The upgrade reflects NHL's improved operating performance during FY18. Revenue grew to INR113.96 million in FY18 (FY17: INR81.31 million) and EBITDA margin to 16.7% (5.15%), on account of increased occupancy rate of its hotel of 52.45% (37%). Also, gross coverage (operating EBITDA/gross interest expense) rose to 1.65x in FY18 (FY17: 0.32x) and net leverage (adjusted net debt / operating EBITDAR) reduced to 7.97x (36.55x), due to improved EBITDA of INR19.03 million (INR4.19 million). The improvement in revenue would have been more if not for the fall in average revenue generated/room to INR3,505 in FY18 (FY17: INR4,351). The company achieved revenue of INR66.427 million in 9MFY19. However, the scale of operations remains small, margins modest due to competition and metrics moderate due to high debt levels. The company had inter-company deposits of INR85 million (FY17: INR67 million) in FY18; excluding which net leverage stood at 3.9x in FY18 (FY17: 21.1x). The management does not anticipate any major debt-led capex in the near-medium term. Ind-Ra thus expects the credit metrics to improve in FY19, on account of higher EBITDA and lower long-term debt. The ratings are factor in NHL's modest liquidity, with its average utilization of fund-based limits being 87% for the 12 months ended December 2018. The company has scheduled debt repayment of INR9.83 million during FY19, which likely to meet by internal accruals. The company had INR7.49 million (FY17: INR2.28 million) of cash and cash equivalent at FYE18; moreover, the company has inter-company deposits to support its liquidity. The ratings are further supported by the company's promoter's decade-long experience in the hospitality business. RATING SENSITIVITIES Negative: A decline in the revenue and EBITDA margin leading to deterioration in the credit metrics, on a sustained basis, or stretched liquidity would lead to a negative rating action. Positive: Sustained growth in the revenue and EBITDA margin leading to an improvement in overall credit metrics, on a sustained basis, would lead to positive rating action. COMPANY PROFILE Incorporated in 2006, Gujarat-based NHL provides hospitality services. It owns The Ummed Hotel in Jodhpur, Rajasthan. NHL is managed by Mr. Harshendra Pandya and Mr. Ashwin Patel. P. L. ASSOCIATES: CRISIL Maintains B Rating in Not Cooperating --------------------------------------------------------------- CRISIL has been consistently following up with P. L. Associates (PL) 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 1.5 CRISIL B/Stable (ISSUER NOT COOPERATING) Foreign Letter 5.0 CRISIL B/Stable (ISSUER NOT 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 PL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on PL 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 PL continue to be 'CRISIL B/Stable Issuer not cooperating'. PL, set up in 2010 in Gandhidham, is promoted by Mr Salabh Kumar Agarwal. It processes and trades in pine wood logs and lumbers. PATIL AND COMPANY: CRISIL Withdraws D Rating on INR23cr Loans ------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Patil and Company (PAC) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 15 CRISIL D/Issuer Not Cooperating (ISSUER NOT COOPERATING; Rating Withdrawn) Cash Credit 8 CRISIL D/Issuer Not Cooperating (ISSUER NOT COOPERATING; Rating Withdrawn) CRISIL has been consistently following up with PAC 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. '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 PAC. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for PAC is consistent with 'Scenario LL' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has Continues the ratings on the bank facilities of PAC to 'CRISIL D/CRISIL D Issuer not cooperating'. PAC was established in 1974, by Mr Basanna Tipanna Yelure and subsequently other family members joined in. It undertakes end- to-end execution of projects related to construction of roads, primarily for government undertakings in Maharashtra and Karnataka. POOJA INDUSTRIES: CRISIL Maintains D Rating in INR6cr Loans ----------------------------------------------------------- CRISIL has been consistently following up with Pooja Industries (Indore) (PI) 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 CRISIL D (ISSUER NOT COOPERATING) Term Loan 1 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 PI, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on PI 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 PI continues to be 'CRISIL D Issuer not cooperating'. PI established in 1991 is a partnership firm engaged in the manufacturing and trading of torches and torch parts. Mr. Jagdish Agrawal, Narendra Agrawal and Mr. Aman Agrawal oversee the day to day operations of the firm. PII has its manufacturing facility at Indore, Madhya Pradesh and sells its torches under the 'Cosmos' brand. PUNJAB LIQUORS: CRISIL Maintains B+ Rating in Not Cooperating ------------------------------------------------------------- CRISIL has been consistently following up with Punjab Liquors Private Limited (PLPL) 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 ---------- ----------- ------- Proposed Cash 7 CRISIL B+/Stable (ISSUER NOT Credit Limit 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 PLPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on PLPL 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 PLPL continues to be 'CRISIL B+/Stable Issuer not cooperating'. The Delhi-based company distributes both Indian Made Foreign Liquor (IMFL) and country liquor, primarily in Haryana. PLPL was incorporated in 2006 and promoted by Mr. Shiv Lala Doda, Mr. Gagan Doda and Mr. Arun Deep Doda. PUPNEJA RICE: CRISIL Maintains D Rating in Not Cooperating ---------------------------------------------------------- CRISIL has been consistently following up with Pupneja Rice Mills (PRM) 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 13.15 CRISIL D (ISSUER NOT COOPERATING) Long Term Loan .2 CRISIL D (ISSUER NOT COOPERATING) Warehouse Financing 6.0 CRISIL D (ISSUER NOT COOPERATING) 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of PRM, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on PRM 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 PRM continues to be 'CRISIL D Issuer not cooperating'. PRM was established in 1982 as a partnership firm in Jalalabad, Punjab. The firm was founded by Mr. Suraj Chand, along with his son, Mr. Hari Chand, and their partner, Mr. Ramesh Kumar. In 2006, Mr. Suraj Chand and Mr. Ramesh Kumar retired from the firm, and subsequently, Mr. Hari Chand's sons, Mr. Sunny Pupneja and Mr. Rajan Pupneja took over the business. PRM hulls and mills paddy rice. It has a processing mill with a capacity of 5 tonne per hour. RELIANCE COMMUNICATIONS: To File for Insolvency ----------------------------------------------- BloombergQuint reports that Reliance Communications Ltd. said it will approach the National Company Law Tribunal to seek debt resolution under the insolvency law after the Anil Ambani- controlled company failed to make progress on its own. "The board noted that, despite the passage of over 18 months, lenders have received zero proceeds from the proposed asset monetisation plans, and the overall debt resolution process is yet to make any headway," it said in a stock exchange filing, BloombergQuint relays. "RCom and only two of its subsidiaries, Reliance Telecom Ltd. and Reliance Infratel Ltd., will take appropriate steps shortly to implement the board decision." BloombergQuint relates that the company, with a debt of more than INR47,000 crore in the previous financial year, had invoked strategic debt restructuring in June 2017. BloombergQuint says the telecom operator was expected to sell spectrum, towers, fibre and other assets worth INR25,000 crore to older brother Mukesh Ambani's Reliance Jio Infocomm Ltd. It's not clear if the deal with Reliance Jio stands as the company awaited approval from the Department of Telecommunications. It planned to repay an additional INR10,000 crore by selling 125- acre real estate in Navi Mumbai, BloombergQuint notes. According to BloombergQuint, RCom said lack of consensus and approval among its over 40 lenders "despite the passage of 12 months and over 45 meetings" as mandated by the Reserve Bank of India still remains an unresolved challenge for debt resolution. Numerous pending legal issues at high courts, Telecom Disputes Settlement and Appellate Tribunal, and the Supreme Court are also impeding progress, it said. The company said there will be no impact on business and operations of its other subsidiaries, BloombergQuint relates. SAJJALA BIO: CRISIL Withdraws B+ Rating on INR9.35cr Loans ---------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Sajjala Bio Labs Private Limited (SBLPL) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 2 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Withdrawn) Long Term Loan 7.35 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Withdrawn) CRISIL has been consistently following up with SBLPL for obtaining information through letters and emails dated May 31, 2018 among others, apart from telephonic communication. However, the issuer has remained non cooperative. The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of SBLPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for SBLPL is consistent with 'Scenario 2' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BBB' rating category or lower. Based on the last available information, CRISIL has Continues the ratings on the bank facilities of SBLPL to 'CRISIL B+/Stable Issuer not cooperating'. Incorporated in 2015, by Dr. Y Srinivasulu, SBLPL is a private limited company that specialises in the manufacture of biogeneric formulations. It commenced commercial operations at its plant in Hyderabad in April 2016, and is managed by Dr. Y Srinivasulu and Mr. S Ramakrishna. SASWAD MALI: Ind-Ra Affirms 'D' LT Issuer Rating, Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed The Saswad Mali Sugar Factory Ltd.'s Long-Term Issuer Rating at 'IND D' and simultaneously migrated the rating to the non-cooperating category. The issuer did not participate in the rating exercise, despite continuous requests and follow-ups by the agency. Thus, the rating is based on the best available information. Investors and other users are advised to take appropriate caution while using the rating. The rating will now appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR764.7 mil. Cash credit limits (Long-term) affirmed and migrated to non-cooperating category with IND D (ISSUER NOT COOPERATING) rating; and -- INR864.23 mil. Term loans (Long term) due on March 2019 - August 2025 affirmed and migrated to non-cooperating category with IND D (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: Issuer did not cooperate; Based on the best available information KEY RATING DRIVERS The affirmation reflects continuous delays in debt servicing by the company during the 12 months January 2018 due to tight liquidity. RATING SENSITIVITIES Positive: Timely debt servicing for at least three consecutive months would be positive for the ratings. COMPANY PROFILE The Saswad Mali Sugar Factory, located at Malinagar in Solapur district, Maharashtra was incorporated in 1932. The company has daily sugarcane crushing capacity of 3,500 metric tons. In addition, it has a 60,000 liters/day distillery capacity and 14.8MW co-generation capacity. SATKAR PAPER: CRISIL Maintains B Rating in Not Cooperating ---------------------------------------------------------- CRISIL has been consistently following up with Satkar Paper Mills Private Limited (SPMPL) 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 CRISIL B/Stable (ISSUER NOT COOPERATING) Term Loan 11.14 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 SPMPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on SPMPL 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 SPMPL continue to be 'CRISIL B/Stable Issuer not cooperating'. Incorporated in May 1989 and promoted by Mr. Gurmit Singh, Mr. Gagandeep Singh, and Mr. Avnit Singh, SPMPL manufactures kraft paper at its existing unit in Ludhiana and is setting up another kraft paper plant for enhancing its production capacities. SEETA INTEGRATED: CRISIL Keeps B+ Rating in Not Cooperating ----------------------------------------------------------- CRISIL has been consistently following up with Seeta Integrated Steel & Energy Limited (SISEL) 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 8.5 CRISIL B+/Stable (ISSUER NOT COOPERATING) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of SISEL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. Based on the last available information, the ratings on bank facilities of SISEL continue to be 'CRISIL B+/Stable Issuer not cooperating'. SISEL was set up in 2002 as Seeta Sponge Iron Ltd by Joshi family; it was renamed in 2008. In April 2010, Mr. Ashok Agarwal, Mr. Bajrang Kumar Agarwal, Mr. Rahul Mittal, and Mr. Ajay Kumar Goel acquired the company from the Joshi family. SISEL manufactures sponge iron at its facility in Rourkela, which has installed capacity of 45,000 tonnes per annum. SREE GURU: CRISIL Maintains B Rating in Not Cooperating Category ---------------------------------------------------------------- CRISIL has been consistently following up with Sree Guru Renuka Rice Industries (SGRRI) 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 5.62 CRISIL B/Stable (ISSUER NOT COOPERATING) Proposed Long Term Bank Loan Facility .03 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 SGRRI, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on SGRRI 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 SGRRI continue to be 'CRISIL B/Stable Issuer not cooperating'. Set up as a proprietorship firm in 2006 by Mr. B M Nanjiah, SGRRI processes paddy into rice. It has an installed milling capacity of about 500 tonne per day at Davangere, Karnataka. SRI GOKUL: CRISIL Maintains B Rating in Not Cooperating Category ---------------------------------------------------------------- CRISIL has been consistently following up with Sri Gokul Kannan Modern Rice Mill (SGK) 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 6 CRISIL B/Stable (ISSUER NOT COOPERATING) Long Term Loan 2 CRISIL B/Stable (ISSUER NOT COOPERATING) Proposed Long 1 CRISIL B/Stable (ISSUER NOT Term Bank Loan COOPERATING) Facility The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of SGK, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on SGK 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 SGK continue to be 'CRISIL B/Stable Issuer not cooperating'. Set up in 2007, SGK mills and processes paddy. The firm is managed by Mr. S A Ramar. SUNSAT INFOTECH: CRISIL Maintains B+ Rating in Not Cooperating -------------------------------------------------------------- CRISIL has been consistently following up with Sunsat Infotech Private Limited (SIPL) 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 16.25 CRISIL B+/Stable (ISSUER NOT COOPERATING) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of SIPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on SIPL 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 SIPL continue to be 'CRISIL B+/Stable Issuer not cooperating'. SIPL, based in Delhi, was incorporated in 2008. The company's operations are managed by its director, Mr Satpal Singh. It has set up a warehouse facility, which has been rented out for e-retailing. Commercial operation is expected to start from August 2016. SUPREME GLAZES: Ind-Ra Migrates BB- LT Rating to Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Supreme Glazes Private Limited's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using the rating. The rating will now appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR100 mil. Fund-based limits migrated to Non-Cooperating Category with IND BB- (ISSUER NOT COOPERATING) / IND A4+ (ISSUER NOT COOPERATING) rating; and -- INR10 mil. Term loans due on March 2020 migrated to Non- Cooperating Category with IND BB- (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on February 16, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Established in 2004 in Bharuch (Gujarat), Supreme Glazes manufactures ceramic glaze frits used for providing glaze in ceramic tiles. The unit has an installed frit production capacity of 21,170 metric tons per annum). Mr. Kalpesh B Patel, Mr. Jigar B Patel, Mr. Dashrath B Patel and Mr. Shailesh B Patel are the promoters. TIRUMALLA OIL: CRISIL Maintains B+ Rating in Not Cooperating ------------------------------------------------------------ CRISIL has been consistently following up with Tirumalla Oil Refinery Private Limited (TORPL) 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 11.3 CRISIL B+/Stable (ISSUER NOT COOPERATING) Term Loan 5.5 CRISIL B+/Stable (ISSUER NOT COOPERATING) The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of TORPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on TORPL 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 TORPL continue to be 'CRISIL B+/Stable Issuer not cooperating'. Incorporated in January 2015, TORPL refines crude edible oil and sells it under own brand 'Tirumalla'. It is promoted by Mr. Suresh Kute and Mrs. Archana Kute, and its manufacturing unit is located at Beed (Maharashtra). It has started operations from April 2016. VASUNDHARA CHEM: CRISIL Assigns 'B+' Rating to INR9cr Loans ----------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facilities of Vasundhara Chem Plast Industries (VCPI). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 8 CRISIL B+/Stable (Assigned) Proposed Long Term Bank Loan Facility 1 CRISIL B+/Stable (Assigned) The rating reflects the modest scale of VCPI's operations in the intensely competitive plastic industry, and an average financial risk profile. These weaknesses are partially offset by the extensive experience of the partners. Analytical Approach Unsecured loans (outstanding at INR1 crore as on March 31, 2018) extended to VCPI by the partners and their families have been treated as neither debt nor equity. That is because these interest-free loans are expected to remain in the business over the medium term. Key Rating Drivers & Detailed Description Weakness * Modest scale of operations amid intense competition: Intense competition may continue to constrain scalability, pricing power, and profitability. Revenue was modest at INR21.41 crore in fiscal 2018. * Average financial risk profile: Networth was low at INR3.23 crore as on March 31, 2018, with high gearing of 3.20 times. Debt protection metrics were also weak, with interest coverage and net cash accrual to adjusted debt ratios of 1.5 times and 0.05 time, respectively, in fiscal 2018. Strengths: * Extensive experience of the partners: Benefits from the partners' experience of over three decades, their strong understanding of local market dynamics, and healthy relations with customers and suppliers should continue to support the business. Outlook: Stable CRISIL believes VCPI will continue to benefit from the extensive experience of the partners. The outlook may be revised to 'Positive' if a substantial and sustainable increase in revenue, profitability, and cash accrual strengthens the financial risk profile, especially the capital structure. Conversely, the outlook may be revised to 'Negative' if significantly low cash accrual, or any larger-than-expected, debt-funded capital expenditure weakens the financial risk profile and liquidity. Liquidity * High bank limit utilization: Utilisation - around 101% for the 12 months ended December 31, 2018 -- is expected to remain high over the medium term due to large working capital requirement. * Cash accrual and debt obligation: Cash accrual projected at over INR1 crore per annum over the medium term should comfortably meet the yearly maturing debt of INR0.26 crore; the surplus cash will enhance financial flexibility. * Low current ratio: The ratio was 0.89 time as on March 31, 2018. * Funding support from partners: The partners are expected to continue extending timely, need-based unsecured loans to aid financial flexibility. VCPI was set up in 1997 as a partnership between Mr. Ravi Gupta, Vinod Gupta and Pista Devi Gupta. The Daman-based firm manufactures and supplies die cut handle bags, loop handle bags, T-shirt bags, trash can liners and garbage bags. WATER SYSTEMS: CRISIL Migrates B+ Rating to Not Cooperating ----------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Water Systems India Private Limited (WSIPL) to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 5 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) Cash Credit 1 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Letter of Credit 0.5 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) Proposed Long Term 0.5 CRISIL B+/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Rating Migrated) CRISIL has been consistently following up with WSIPL for obtaining information through letters and emails dated September 28, 2018, December 18, 2018 and December 24, 2018 among others, apart from telephonic communication. However, the issuer has remained non-cooperative. 'The investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the company. Detailed Rationale Despite repeated attempts to engage with the management, CRISIL failed to receive any information on either the financial performance or strategic intent of WSIPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on WSIPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' category or lower. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of WSIPL to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Furthermore, the company has not paid the fee for conducting rating surveillance as agreed to in the rating agreement. Set up by Mr N Krishnan in 2000, WSIPL is an engineering company based in Chennai. It undertakes turnkey projects and offers start-to-end solutions in water purification and management, wastewater treatment plants, recycling and revamping of effluent treatment plants, and rejuvenation of water supply projects. It caters to government and private sector entities. ================= I N D O N E S I A ================= SAWIT SUMBERMAS: Moody's Alters Outlook on B1 CFR to Negative ------------------------------------------------------------- Moody's Investors Service has affirmed the B1 corporate family rating of Sawit Sumbermas Sarana Tbk (P.T.) and the B1 senior unsecured rating on the $300 million notes issued by its wholly owned subsidiary, SSMS Plantation Holdings Pte. Ltd. At the same time, Moody's has revised the outlook on these ratings to negative from stable. RATINGS RATIONALE "The change in SSMS' ratings outlook to negative reflects our expectation that SSMS' credit metrics will remain weak for its B1 ratings over the next 12-18 months, in light of higher than expected borrowings and the limited likelihood of a material increase in earnings through organic growth," says Maisam Hasnain, a Moody's Analyst. "We also expect SSMS' credit metrics to remain materially outside of our range for the ratings in the absence of debt reduction or an earnings accretive acquisition" adds Hasnain, also Moody's lead analyst for the company. SSMS' CFR reflects the credit quality of its parent, Citra Borneo Indah (P.T.) (CBI), which consolidates SSMS. CBI's credit metrics have weakened in recent years, in part due to elevated capital spending to construct a palm oil refinery and industrial park. CBI started its refinery operations in mid-2018, which will help increase scale and diversification over the longer term. However, CBI remains exposed to execution and operational risks, and higher start-up costs for the refinery will continue to weigh on CBI's earnings and cash flows. Moody's expects CBI to generate negative operating cash flow in 2018, with adjusted leverage - as measured by adjusted debt to EBITDA - to increase to 4.7x in 2018 from 3.0x in 2016. As a result, upstream operations of oil palm cultivation and crude palm oil (CPO) production at SSMS will continue to generate a majority of CBI's consolidated earnings over the next 12 months, and CBI will remain exposed to volatile CPO prices, which fell around 20% in 2018. CBI's liquidity is strong, with a large cash balance of around IDR2.2 trillion at September 30, 2018. Such a situation provides some financial flexibility. However, Moody's does not expect that the company will use these funds to repay debt. Instead, Moody's expects that CBI will use excess cash to make earnings-accretive acquisitions of palm oil plantations. "Any plantation acquisitions will take time and entail execution risk, as the company integrates the new businesses into its operations," adds Hasnain. In the absence of such acquisitions, Moody's expects CBI's adjusted leverage will be around 4.5x through 2019, continuing to breach the downward trigger for its B1 CFR of 4.0x. The negative ratings outlook reflects Moody's expectations that CBI's credit metrics will remain weak for its current ratings, in light of elevated debt levels, and in the absence of a material increase in earnings. Upward ratings pressure is unlikely, given the negative ratings outlook. Nevertheless, the outlook could revert to stable if CBI shows improved earnings or reduced debt, while maintaining prudent financial policies. Credit metrics indicative of a change in the ratings outlook to stable include adjusted debt/EBITDA below 4.0x and adjusted EBITA/interest above 2.5x on a sustained basis. Moody's could downgrade SSMS' ratings if: (1) CBI fails to implement its business plan, in particular, for its downstream business, such that earnings growth is adversely affected; (2) SSMS undertakes large debt-funded acquisitions for growth, with such acquisitions materially weakening its credit profile; or (3) there is evidence of cash leakage outside of CBI. Credit metrics indicative of downward ratings pressure include adjusted debt/ EBITDA above 4.0x and adjusted EBITA/interest expense below 2.5x, both on a sustained basis. The principal methodology used in these ratings was Global Protein and Agriculture Industry published in June 2017. ==================== N E W Z E A L A N D ==================== CHRISTIAN SAVINGS: Fitch Hikes IDR to BB, Outlook Stable -------------------------------------------------------- Fitch Ratings has upgraded Christian Savings Limited's Issuer Default Rating to 'BB' from 'BB-', as a result of its improved capitalisation and stronger earnings and profitability outlook over the next few years. At the same time, Fitch has affirmed the ratings of Wairarapa Building Society (WBS) and First Credit Union. The Outlook is Stable for all three institutions. The IDRs and Viability Ratings of these institutions reflect their small market shares in the New Zealand market system, meaning they are generally "price takers" and which is unlikely to change. However, their competitive positions are typically stronger in their local or niche markets as a result of community or member support. These institutions typically maintain capital ratios above their larger peers, and in moderate excess of their regulatory minimums. However, Fitch considers this prudent in light of their high concentration risks, small absolute size and (with the exception of CSL) limited access to new common equity. Deposits remain the key source of funding, as they generally have only limited access to wholesale funding sources and with no access to the Reserve Bank of New Zealand's repo facility. All three entities have some form of concentration within their deposit base, whether by geography or sector. KEY RATING DRIVERS IDRS AND VIABILITY RATINGS CSL Fitch expects CSL's capitalisation to remain broadly stable over the next 12 months, but could see some modest improvement if capital-raising activities continue and growth remains moderate. CSL's Fitch Core Capital (FCC) ratio improved significantly as a result of capital-raising activities, which commenced in late 2017 and continued through 2018. CSL also redeemed its existing preference shares and converted some of this into common equity, which boosted the FCC ratio further. CSL's earnings and profitability continued to rise at a faster rate than Fitch had anticipated, driven by an ongoing focus on margin management and expense control. Fitch expects a softening in profitability in 2019 as CSL has indicated that it intends to raise investment expenditure, but its profitability should remain stronger than 2017 levels. CSL's lending activities are fully funded by a combination of church and household deposits, and reinvestment rates remained strong in 2018. Its loan/deposit ratio remains stronger than at most of its peers, which Fitch expects will continue. CSL has improved its risk appetite in recent years through tighter risk controls and underwriting although it continues to lag some larger peers, partly a reflection of its niche focus on the church-lending segment and high concentration. Strong growth in recent years has been driven mainly by an expansion of its target market rather than through aggressive lending practices. WBS WBS's Viability Rating reflects its small absolute size and moderate franchise, which constrains its ratings. This is partly offset by the benefit from strong community support through its service-oriented model, but the society remains susceptible to competition and is generally a price taker. Conservative underwriting standards are reflected in low loan/value mortgages across its loan book, which supports asset quality. Loan impairments have historically been low, but are prone to some spikes due to its small size and higher single-name concentration compared with its peers. Strong loan growth has resulted in earnings growth and a reduction in the cost-to-income ratio. However, slower loan growth and rising regulatory and compliance costs could pressure profit growth over the next 12-24 months. The property-investment portfolio has historically provided stable rental returns, but adds potential volatility through fair-value market adjustments. Loan growth over the last four years has outpaced the rise in equity levels, and resulted in a reduction in capital ratios. However, WBS remains adequately capitalised with a satisfactory level of buffers over its regulatory minimum requirements for its size, and is likely to maintain the current levels. The funding structure is sound, consisting mainly of member deposits, but geographic deposit concentration is high - reflecting its business model. WBS's modest on-balance-sheet liquidity is stable and managed appropriately. FCU FCU's ratings reflect its higher risk appetite relative to most other deposit-taking institutions in New Zealand. As a result, Fitch believes asset quality is likely to be more volatile through the cycle. The ratings also take into account the credit union's modest profitability relative to its risk profile and higher liquid-asset holdings relative to peers. Risk appetite is evident through the loan portfolio composition. Consumer loans, which have a higher risk profile than residential mortgages, make up about 45% of the loan portfolio, which is unlikely to change in the foreseeable future. In addition, FCU's concentration of residential mortgages with a loan/value ratio greater than 80% is higher than at most of its peers. Fitch believes FCU's earnings and profitability are low relative to the risk it has undertaken. This limits FCU's ability to absorb higher loan losses and generate capital. Profitability was particularly affected in 2018 as a result of implementation costs and investment. However, Fitch expects profitability to improve in 2019 as the implementation of the new core banking system and establishment of its insurance business is now largely complete. Fitch believes some deterioration in FCU's Fitch Core Capital (FCC) ratio is possible in 2019 as a result of additional capital being put aside for the insurance operations and potential write- down of its base capital note holdings in New Zealand Association of Credit Unions. Any write-down of the notes is unlikely to impact FCU's regulatory capital ratios as these investments are already deducted from the capital base. Fitch expects that FCU's FCC ratio will continue to remain at the top end of peers and provides some offset to its risks. SUPPORT RATING AND SUPPORT RATING FLOOR The Support Rating and Support Rating Floor of these three institutions reflect its view that while support from the New Zealand sovereign (AA/Stable) is possible, it cannot be relied on. The institutions are not part of the Open Bank Resolution Scheme (OBR), which allows for the imposition of losses on depositors and senior debt holders to recapitalise failed institutions. However, Fitch believes the existence of the OBR in conjunction with the institutions' low systematic importance will make sovereign support unlikely. RATING SENSITIVITIES IDRS AND VIABILITY RATING CSL CSL's ratings are sensitive to a weakening in its franchise or a loss of support from its target market as this would ultimately have a significant impact on its financial profile. Negative rating action may be taken if CSL's risk appetite weakens through a loosening in underwriting standards, controls or aggressive growth. Positive rating action on the IDR and VR would require a significant improvement in CSL's franchise and risk appetite. WBS WBS's IDRs and Viability Rating would be sensitive to an increase in its risk appetite, possibly from weaker underwriting or continued strong growth, which could result in a deterioration of its asset quality, profitability or capitalisation. WBS's IDR is unlikely to be upgraded due to its limited franchise, small absolute capital base, concentration risks, and limited access to additional liquidity sources such as the central bank's repo facility. FCU FCU's IDRs and Viability Rating are sensitive to a change in the credit union's risk appetite and earnings. The ratings may be upgraded if there is a sustained tightening in risk appetite, possibly through lower-risk underwriting or a stronger risk- control framework, while maintaining strong capital ratios and high liquidity. Positive rating action may also occur if earnings become more commensurate with the level of risk assumed by FCU. Alternatively, the ratings would be likely to face downward pressure if there is a weakening in FCU's risk appetite, possibly due to a deterioration in underwriting standards that increases the risk of significant deterioration or greater volatility in key financial metrics. SUPPORT RATING AND SUPPORT RATING FLOOR The Support Rating and Support Rating Floors are sensitive to any changes in assumptions around the propensity of the New Zealand government to provide timely support. The rating actions are as follows: Christian Savings Limited Long-Term Foreign-Currency IDR upgraded to 'BB' from 'BB-'; Outlook Stable Short-Term Foreign-Currency IDR affirmed at 'B' Long-Term Local-Currency IDR upgraded to 'BB' from 'BB-'; Outlook Stable Short-Term Local-Currency IDR affirmed at 'B' Viability Rating upgraded to 'bb' from 'bb-' Support Rating affirmed at '5' Support Rating Floor affirmed at 'No Floor' Wairarapa Building Society Long-Term Foreign-Currency IDR affirmed at 'BB+'; Outlook Stable Short-Term Foreign-Currency IDR affirmed at 'B' Long-Term Local-Currency IDR affirmed at 'BB+'; Outlook Stable Short-Term Local-Currency IDR affirmed at 'B' Viability Rating affirmed at 'bb+' Support Rating affirmed at '5' Support Rating Floor affirmed at 'No Floor' First Credit Union: Long-Term Foreign-Currency IDR affirmed at 'BB'; Outlook Stable Short-Term Foreign-Currency IDR affirmed at 'B' Long-Term Local-Currency IDR affirmed at 'BB'; Outlook Stable Short-Term Local-Currency IDR affirmed at 'B' Viability Rating affirmed at 'bb' Support Rating affirmed at '5' Support Rating Floor affirmed at 'No Floor' ================= S I N G A P O R E ================= EZRA HOLDINGS: Unit Placed Under Creditors Voluntary Liquidation ---------------------------------------------------------------- Splash247 reports that Ezra Holdings has announced that subsidiary Emas Energy Services was placed under creditors' voluntary liquidation on Jan. 31. The move comes after a resolution was passed at an extraordinary general meeting and confirmed by creditors, Splash247 says. According to Splash247, KPMG Services have been appointed to act as liquidators for the purpose of winding up the subsidiary, which specialised in well intervention as well as plug and abandonment. Splash247 says Ezra Holdings has been in a state of limbo since it filed for chapter 11 protection in the Southern District of New York in March 2017. Shipbuilding subsidiary Triyards is also under court protection in Singapore while it looks to restructure, while Emas Offshore is negotiating a restructuring with a potential investor from the Philippines, Splash247 discloses. About Ezra Holdings Founded in 1992, Ezra Holdings Limited -- http://www.ezraholdings.com/-- is an offshore contractor and provider of integrated offshore solutions to the global oil and gas industry. Ezra is incorporated in Singapore with its registered office at 15 Hoe Chiang Road #28-01 Tower Fifteen Singapore 089316. Its shares were listed on the SGX Sesdaq on Aug. 8, 2003, and moved to the Mainboard of the Singapore Exchange since Dec. 8, 2005. It also issued certain notes (S$150,000,000 4.875% Notes due 2018 comprised in Series 003) which have been listed on the Singapore Exchange since 2013. Ezra established and maintains an office in the United States located at 75 South Broadway, Fourth Floor, Office Number 489, White Plains, New York 10601. Ezra also has a wholly owned New York subsidiary, Ezra Holdings (NY) Inc., which was incorporated in the United States of America with 200 shares at a nominal issue price per share. EMITS, a wholly owned subsidiary of Ezra, provides supporting information technology services to each of the Ezra Group's business divisions. Ezra Marine, another wholly owned subsidiary of Ezra, has a leasehold interest in the marine base in Singapore located at 51 Shipyard Road, Singapore 628139 and leases out the base's facilities and provides various support services in connection with the marine base to the Ezra Group's operating entities. Ezra Holdings and two affiliates -- Ezra Marine Services Pte. Ltd. and EMAS IT Solutions Pte Ltd -- filed voluntary Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 17-22405) on March 18, 2017, before the Honorable Robert D. Drain. In the petition signed by Tan Cher Liang, director, Ezra Holdings estimated $500 million to $1 billion in assets and $100 million to $500 million in liabilities. The Debtors' Chapter 11 Cases are being jointly administered for procedural purposes only. Lawyers at Saul Ewing, led by Sharon L. Levine, Esq., serve as the Debtors' Chapter 11 counsel. The Debtors tapped as general Singapore counsel Drew & Napier LLC; and claims and noticing agent, Prime Clerk LLC. Foxwood LLC also serves as special counsel. The Ezra Group's joint venture, EMAS CHIYODA Subsea Limited, and certain of its affiliate companies filed voluntary Chapter 11 petitions (Bankr. S.D. Tex. Lead Case No. 17-31146) on Feb. 27, 2017. ECS' wholly-owned subsidiary, EMAS-AMC AS, has also been placed under members' voluntary liquidation in Norway. Ezra guaranteed substantial charter hire liabilities of the ECS Group, as well as certain loans owed by the ECS Group to financial institutions, Ezra faces potentially significant contingent liability if the creditors call on the guarantees. Ezra received statutory demands from Svenska Handelsbanken AB (Publ), Singapore Branch and Forland Subsea AS on Jan. 24, 2017, and Feb. 6, 2017, respectively. These statutory demands have since expired under Singapore law and these two creditors may commence winding up applications against Ezra. Ezra also received a statutory demand from VT Halter Marine, Inc. on March 9, 2017. NO SIGNBOARD: Net Loss Widens to SGD573,643 in Q1 Ended Dec. 31 --------------------------------------------------------------- The Strait Times reports that catalist-listed seafood restaurant operator No Signboard Holdings sank deeper in the red with a net loss of SGD573,643 for the first quarter ended Dec 31, 2018, from a restated loss of SGD416,366 a year ago. This comes as the numbers from a year ago were significantly restated after the company adopted the latest accounting rules, the Strait Times says. Under the new accounting framework, the group reported a restated net loss of SGD416,366 for the fiscal first quarter ended December 2017, a marked difference from the SGD1.4 million net profit it had initially reported under the old accounting rules, the report discloses. In the latest quarter, revenue fell 16.1 per cent to SGD5.6 million, as a result of loss of revenue from the closure of a seafood restaurant outlet for a month to carry out major repair works, a drop in average spending per customer in the restaurant business, as well as the termination of non-performing sales contracts of customers in the entertainment establishments as part of the beer business restructuring exercise, according to the Strait Times. Loss per share stood at 0.12 cents for the quarter, compared to 0.09 cents a year ago, the report discloses. No dividend was declared, the Strait Times notes. According to the Strait Times, the group said in a filing to the Singapore Exchange (SGX) on Feb. 1 that it expects to open two more outlets under the Hawker brand and planned to open one outlet under Mom's Touch brand, in which it has secured under an exclusive master franchise agreement to development and operate in Singapore and Malaysia. The Strait Times relates that No Signboard said that it is continuing to work on the development of new brands, as well as its overseas expansion plans. "With the completion of the beer business restructuring exercise, the beer business will work on expanding the distribution channels for the beer in according with the new sales strategy," said the group. On Jan. 31, No Signboard halted trading in its shares after the morning session which saw the stock surge nearly 24 per cent, prompting a query from SGX, the report says. It also requested a trading halt pending an announcement at 12:30 p.m. on Jan. 31. The company has not yet responded to the market regulator's queries, the Strait Times notes. No Signboard Holdings Ltd., an investment holding company, manages and operates food and beverage outlets in Singapore. The company operates a chain of seafood restaurants under the No Signboard Seafood brand that serve various seafood cuisine prepared in Chinese and Singapore styles. It owns and operates three restaurants, as well as operates one restaurant under a franchise agreement. The company also produces, promotes, and distributes beer under the Draft Denmark brand; and distributes various third party brands of beer, as well as operates as an OEM beer supplier for third party brands. In addition, it produces and distributes ready meals through a network of vending machines. Further, the company engages in leasing financial intangible assets, such as patents, trademarks, brand names, etc. ==================== S O U T H K O R E A ==================== HYUNDAI HEAVY: Posts KRW633 Billion Net Loss in 2018 ---------------------------------------------------- Yonhap News Agency reports that Hyundai Heavy Industries Co., the world's largest shipbuilder by sales, said on Jan. 31 that it posted a net loss last year due to higher thick steel plate prices and less work. According to Yonhap, the shipyard said it posted a net loss of KRW633 billion (US$569 million), compared with KRW93.4 billion in the red a year earlier. Hyundai Heavy blamed the loss on higher costs in building vessels and less demand for specialty ships, Yonhap says. Yonhap relates that the shipbuilder said it also logged an operating loss of KRW474 billion, shifting from an operating income of KRW14.6 billion. Sales dropped 15.2 percent on-year to KRW13.1 trillion, the company said, Yonhap relays. Hyundai Heavy Industries builds ships for commercial, and military purposes. The Company manufactures oil tankers, cargo and passenger vessels, and warships. Hyundai Heavy Industries also produces heavy industrial machineries, wind turbines, solar panels, electrical components for engines and power trains, and industrial vehicles, such as cranes and bulldozers. ********* 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 ***