/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/190509.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Thursday, May 9, 2019, Vol. 22, No. 93 Headlines A U S T R A L I A ALL STAR: First Creditors' Meeting Set for May 15 LA TROBE 2019-1: S&P Assigns B (sf) Rating to Class F RMBS MOOROOKA SPORTS: First Creditors' Meeting Set for May 16 PONTEFRACT PTY: Supercuts Hairdressing Goes Into Liquidation SLEEP MANAGEMENT: First Creditors' Meeting Set for May 16 STERLING FIRST: 85 Jobs Axed Following Administration STUDYWIZ PTY: First Creditors' Meeting Set for May 16 T & K GRENTELL: First Creditors' Meeting Set for May 16 C H I N A LOGAN PROPERTY: Fitch Affirms 'BB-' LT IDR, Alters Outlook to Pos. N-SECURITIES CO: In Regulator's Crosshairs Over Financial Health WINTIME ENERGY: China Starts Trading of Defaulted Corporate Bonds ZHENRO PROPERTIES: Fitch Affirms 'B' LT IDR, Outlook Positive I N D I A ADROIT CORPORATE: CARE Assigns 'D' Rating to INR26.75cr Loan AJAY INDIA: CARE Downgrades Rating on INR8.90cr Loan to B+ AJAY SYNTHETICS: CARE Maintains B- Rating in Not Cooperating BABA BHUMAN: CARE Maintains 'B' Rating in Not Cooperating Category BEEPEE HOSPITALITY: CARE Reaffirms 'B' Rating on INR10.23cr Loan BRMSCO GARMENTS: Ind-Ra Raises Long Term Issuer Rating to 'BB' BYRNIHAT COAL: CARE Lowers Rating on INR4.50cr LT Loan to B- CHAUDHARY RICE: CARE Maintains 'B' Rating in Not Cooperating ESSEM ENTERPRISE: CARE Migrates B Rating to Not Cooperating ETHOS POWER: Ind-Ra Migrates 'BB' Issuer Rating to Non-Cooperating GARG RICE: CARE Maintains 'B' Rating in Not Cooperating JAYPEE INFRA: Hearing on IDBI's Deadline Extension Plea on May 21 KAILASH RICE: CARE Migrates 'B' Rating to Not Cooperating KITCHEN FOODS: CARE Assigns B+ Rating to INR9.76cr LT Loan KOMAL SINGH: CARE Lowers Rating on INR7.69cr Loan to B+ LODHA DEVELOPERS: Fitch Affirms 'B' LT IDR, Alters Outlook to Neg. LYKA BDR: Ind-Ra Migrates 'B' LT Issuer Rating to Non-Cooperating MEGHALAYA CAST: Ind-Ra Affirms BB LT Issuer Rating, Outlook Stable NAGABHUSHANAM & CO: Ind-Ra Raises Long Term Issuer Rating to 'B-' NOVARC LABS: CARE Lowers Rating on INR7.00cr LT Loan to 'D' PADMAVATHI COTTON: ICRA Migrates 'D' Rating to Not Cooperating PARIXIT IRRIGATION: Ind-Ra Affirms 'D' LT Issuer Rating, Not Coop. PRAKASH STEELAGE: CARE Migrates 'D' Rating to Not Cooperating RAJARAMSEVAK MULTIPURPOSE: CARE Cuts INR12.94cr Loan Rating to D RELIANCE COMMUNICATIONS: NCLT Begins Bankruptcy Process RIDDHI SIDDHI: CARE Lowers Rating on INR15.10cr Loan to D S.A.AANANDAN SPINNING: Ind-Ra Affirms 'BB' Long Term Issuer Rating SAI ENGINEERING: ICRA Keeps B+ INR35cr Loan Rating in Not Coop. SANIMO POLYMERS: CARE Assigns B+ Rating to INR18cr LT Loan SANT AUTOS: CARE Cuts Rating on INR6.0cr LT Loan to B-, Not Coop. SHALIMAR ISPAT: CARE Cuts Rating on INR6cr LT Loan to D, Not Coop. SHIV GORAKH: CARE Lowers Rating on INR10cr ST Loan to D, Not Coop. STAR GRANITO: CARE Assigns B+ Rating to INR5.29cr LT Loan THREE SIXTY: CARE Assigns B+ Rating to INR6.0cr LT Loan VIVEK REALTY: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating I N D O N E S I A STAR ENERGY: Fitch Affirms $580MM Sr. Sec. Notes Rating at 'BB-' M O N G O L I A TRADE AND DEVELOPMENT: Moody's Puts 'B3' Rating to to MTN Drawdown N E W Z E A L A N D CREDIT UNION: Fitch Affirms BB LT IDR ff. Merger w/ 3 Credit Unions Q CARD TRUST: Fitch Affirms 'Bsf' Rating on Class F-2018-1 Notes P H I L I P P I N E S PALAWAN BANK: Placed Under PDIC Receivership S I N G A P O R E HYFLUX LTD: Debt Moratorium Extended to May 29 - - - - - ================= A U S T R A L I A ================= ALL STAR: First Creditors' Meeting Set for May 15 ------------------------------------------------- A first meeting of the creditors in the proceedings of All Star Construction Group Pty Ltd will be held on May 15, 2019, at 10:30 a.m. at the offices of Pitcher Partners, at Level 11, 12-14 The Esplanade, in Perth, WA. Renee O'Driscoll and Daniel Bredenkamp of Pitcher Partners were appointed as administrators of All Star on May 6, 2019. LA TROBE 2019-1: S&P Assigns B (sf) Rating to Class F RMBS ---------------------------------------------------------- S&P Global Ratings assigned ratings to nine classes of residential mortgage-backed securities (RMBS) issued by Perpetual Corporate Trust Ltd. as trustee for La Trobe Financial Capital Markets Trust 2019-1. La Trobe Financial Capital Markets Trust 2019-1 is a securitization of nonconforming and prime residential mortgages originated by La Trobe Financial Services Pty Ltd. (La Trobe Financial). The ratings reflect: -- That the credit risk of the underlying collateral portfolio and the credit support provided to each class of notes are commensurate with the ratings assigned. Credit support is provided by subordination and excess spread. The credit support provided to the rated notes is sufficient to cover the assumed losses at the applicable rating stress. The assessment of credit risk takes into account La Trobe Financial's underwriting standards and approval process, which are relatively consistent with industry-wide practices, and La Trobe Financial's servicing quality. -- That the transaction's cash flows can meet timely payment of interest and ultimate payment of principal to the noteholders under the rating stresses. Key factors are the level of subordination provided, the condition that a minimum margin will be maintained on the assets, an amortizing liquidity facility sized at 1.5% of the note balance, the principal draw function, the trapping of excess spread in the yield reserve, the retention amount built from excess spread before the call date, the amortization amount built from excess spread after the call date or upon a servicer default, and the provision of an extraordinary expense reserve. All rating stresses are made on the basis that the trust does not call the notes at or beyond the call date, and that all rated notes must be fully redeemed via the principal waterfall mechanism under the transaction documents. -- That S&P also has factored into its ratings the legal structure of the trust, which has been established as a special-purpose entity and meets our criteria for insolvency remoteness. -- The counterparty support provided by National Australia Bank Ltd. as liquidity facility provider and Commonwealth Bank of Australia as bank account provider. The transaction documents for the liquidity facility and bank accounts include downgrade language consistent with our "Counterparty Risk Framework: Methodology And Assumptions" criteria, published on March 8, 2019, that requires the replacement of the counterparty or other remedy, should its rating fall below the applicable rating. RATINGS ASSIGNED La Trobe Financial Capital Markets Trust 2019-1 Class Rating Amount (mil. A$) A1S AAA (sf) 135.00 A1L AAA (sf) 390.00 A2S AAA (sf) 90.00 A2L AAA (sf) 38.25 B AA (sf) 30.75 C A (sf) 24.75 D BBB (sf) 17.25 E BB (sf) 11.25 F B (sf) 6.75 Equity NR 6.00 NR--Not rated. MOOROOKA SPORTS: First Creditors' Meeting Set for May 16 -------------------------------------------------------- A first meeting of the creditors in the proceedings of Moorooka Sports and Community Club will be held on May 16, 2019, at 9:30 a.m. at Level 8, 102 Adeladie Street, in Brisbane, Queensland. Lee Andrew Crosthwaite of Worrells Solvency & Forensic Accountants was appointed as administrator of Moorooka Sports on May 7, 2019. PONTEFRACT PTY: Supercuts Hairdressing Goes Into Liquidation ------------------------------------------------------------ Ashleigh Howarth at Queensland Times reports that liquidators have been appointed to the 32-year-old hair dressing chain Supercuts ending a battle to save the business. Mark Pearce, of Brisbane insolvency firm Pearce & Heers, was on April 30 appointed liquidator of Pontefract Pty Ltd, trading as Supercuts Hairdressing. Supercuts operated 14 stores in Queensland including Cairns, Mackay, Yeppoon, Townsville, Runaway Bay, Toowoomba, Capalaba and Springwood. It also had three stores in South Australia. According to the report, Sharon Gambrill, the centre manager of the Runaway Bay Centre, said she was informed on April 30 that tenant Supercuts had gone into liquidation. "We understand the departure of Supercuts Hairdressing from our centre may cause some disappointment to our customers," the report quotes Ms. Gambrill as saying. "Responding to a dynamic retail environment is part of our business as usual--we see this as an opportunity for our team to work with other retailers to fill this space. "We're always looking at our retail mix to ensure we're meeting the changing demands of our customers and, as a result, we will be speaking with other suitable retailers." Queensland Times says workers at Supercuts Hairdressing Salons in Booval Fair, Riverlink and Redbank Plaza and Toowoomba's Clifford Gardens Shopping Centre were sent home on May 7. The Booval Fair store was closed but no sign was left on the door. Supercuts, established in 1987, initially struck trouble in 2015 when administrators were appointed to the business, which owed an estimated AUD2.3 million to creditors, the report noes. The company and directors entered a deed of company arrangement with the administrators in December 2015 in an attempt to salvage the business, according to Queensland Times. SLEEP MANAGEMENT: First Creditors' Meeting Set for May 16 --------------------------------------------------------- A first meeting of the creditors in the proceedings of The Sleep Management Group Pty Ltd will be held on May 16, 2019, at 11:00 a.m. at MGSM CBD Executive Conference Centre, Macquarie University Sydney City Campus, at Level 24, Angel Place, 123 Pitt Street, in Sydney, NSW. Geoffrey Peter Granger and Brian Raymond Silvia of BRI Ferrier were appointed as administrators of Sleep Management on May 6, 2019. STERLING FIRST: 85 Jobs Axed Following Administration ----------------------------------------------------- Sean Smith at The West Australian reports that administrators have taken control of a WA-based property management and investment group straddling more 3,500 rental properties in three States. The collapse has affected about 85 staff across the country, the report says. Martin Jones and Wayne Rushton from Ferrier Hodgson were put into 12 associated companies under the South Perth-headquartered Sterling First group last week, The West Australian discloses. According to the report, Sterling First describes itself as "a first of its kind company" committed "to creating better lives for all Australians through innovative investment opportunities and housing solutions". The group includes a funds management arm, including Sterling Income Trust, and Rental Management Australia, which manages 3500 rental properties worth AUD900 million in WA, Queensland and Victoria. The West Australian adds that Mr. Jones said the administrators were still assessing the group. On May 3, 2019, Martin Bruce Jones and Wayne Anthony Rushton of Ferrier Hodgson were appointed as administrators of Sterling First (Aust) Ltd and subsidiaries: -- Acquest Capital Pty Ltd -- Acquest Property Pty Ltd -- Gage Management Ltd -- SHL Management Services Pty Ltd -- Silver Link Investment Company Ltd -- Silverlink Securities Pty Ltd -- Sterling Corporate Services Pty Ltd -- Sterling First Projects Pty Ltd -- Sterling First Property Pty Ltd -- Rental Management Australia Pty Ltd -- Rental Managment Australia Developments Pty Ltd STUDYWIZ PTY: First Creditors' Meeting Set for May 16 ----------------------------------------------------- A first meeting of the creditors in the proceedings of Studywiz Pty Ltd will be held on May 16, 2019, at 11:00 a.m. at the offices of SM Solvency Accountants, at Level 10/144 Edward Street, in Brisbane, Queensland. Brendan Nixon of SM Solvency Accountants was appointed as administrator of Studywiz Pty on May 7, 2019. T & K GRENTELL: First Creditors' Meeting Set for May 16 ------------------------------------------------------- A first meeting of the creditors in the proceedings of T & K Grentell Pty Ltd, trading as Central Coast Cabinetmakers, will be held on May 16, 2019, at 3:00 p.m. at Level 54, 111 Eagle Street, in Brisbane, Queensland. Stephen Dixon of Hamilton Murphy was appointed as administrator of T & K Grentell on May 3, 2019. ========= C H I N A ========= LOGAN PROPERTY: Fitch Affirms 'BB-' LT IDR, Alters Outlook to Pos. ------------------------------------------------------------------ Fitch Ratings has revised the Outlook on Chinese homebuilder Logan Property Holdings Company Limited to Positive from Stable, and has affirmed its Long-Term Foreign-Currency and Local-Currency Default Rating at 'BB-'. The agency has also affirmed Logan's senior unsecured rating and outstanding foreign-currency senior unsecured debt ratings at 'BB-', and its subordinated perpetual capital securities rating at 'B'. The Outlook revision reflects Logan's improving financial profile, with Fitch expecting the company's leverage to fall below 40% in the next 6-12 months, and remain at this lower level because the company has sufficient land bank to support its growth. Logan has shown financial discipline during its business expansion, which was evident in the decline in leverage, and maintained high profitability with EBITDA margin of around 30%. KEY RATING DRIVERS Reduced Leverage: Logan's leverage, measured by net debt/adjusted inventory that proportionately consolidates joint ventures and associates, reduced to 41% by end-2018 from 48% at end-2017. This just shy of 40%, the level at which Fitch will consider upgrading Logan's ratings. The company spent CNY34.7 billion on replenishing its land bank in 2018, or 49.6% of its contracted sales during the year. Logan's land acquisitions/contracted sales ratios were 58% in 2017 and 42% in 2016. By end-2018, the company had a total land reserve of 36.3 million square metres (sq m), which was sufficient for development in the next five to six years. Fitch expects the company to spend 45%-50% of consolidated contracted sales on land replenishment in 2019-2020 and to maintain a land bank sufficient for five to six years of development, and the company's leverage to fall below 40% in the next 6-12 months. Homebuilders' rising interest in acquiring new land in Tier 2 cities may drive up land cost, which may delay Logan's pace of deleveraging versus its expectation. Sustained High Margins: Logan's EBITDA margin, excluding capitalised interest from cost of sales, stayed high at 32% in 2018 (2017: 33%). The sustained high profitability contributes to its deleveraging. Fitch expects profitability to remain high in the next two to three years, supported by the start of presales in 2018 from high-margin redevelopment projects in Shenzhen and Huizhou. The EBITDA margin is likely to be maintained at above 30% in 2019-2020. Larger Sales Scale: Logan's contracted sales rose by 65% to CNY71.8 billion in 2018, following a 81% increase in contracted floor space sold to 4.4 million sq m while contracted average selling price (ASP) decreased by 9% to CNY16,022/sqm. Sales were also more geographically diversified. Fitch expects Logan's annual contracted sales to increase further to CNY89 billion in 2019 and CNY112 billion in 2020. Lower Concentration Risk: Fitch believes Logan's well-located land bank and expansion into new cities, including the Yangtze River Delta, Hong Kong and Singapore, in the last 12-24 months will mitigate concentration risks over the next year or two. Logan's contracted sales were concentrated in Guangdong province, with Shenzhen and the Greater Bay Area (including Shenzhen) accounting for around 9% and 42% of 2018 contracted sales (2017: 15% and 39% respectively). Fitch expects the Greater Bay Area to account for 35%-40% of Logan's total attributable sales in 2019-2020. DERIVATION SUMMARY Logan's contracted sales are comparable with 'BB' rated Chinese homebuilders such as CIFI Holdings (Group) Co. Ltd.'s (BB/Stable) CNY76 billion, and is higher than that of 'BB-' rated peers, which have contracted sales of CNY40 billion-60 billion, including KWG Group Holdings Limited (BB-/Stable), China Aoyuan Group Limited (BB-/Positive) and Yuzhou Properties Company Limited (BB-/Stable). Logan's EBITDA margin is also similar to that of margin-focused homebuilders, such as KWG and Yuzhou. Logan's leverage of 41% at end-2018 is comparable with the 40%-50% of 'BB-' rated Chinese developers, such as KWG, Yuzhou and Times China Holdings Limited (BB-/Stable). KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Contracted sales of CNY89 billion in 2019 and CNY112 billion in 2020 (2018: CNY71 billion) - EBITDA margin, with capitalised interest excluded from cost of sales, of 30%-31% in 2019-2021 (2018: 32%) - 40%-50% of contracted sales proceeds to be spent on land acquisitions in 2019-2020 to maintain a land bank sufficient for around five years of development RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action - Leverage, as measured by net debt/adjusted inventory that proportionately consolidates its joint ventures and associates, sustained below 40% - EBITDA margin, excluding capitalised interests from cost of goods sold, sustained above 30% Developments that May, Individually or Collectively, Lead to Negative Rating Action - Failure to maintain the positive rating sensitivities over the next 12-18 months will lead to the Positive Outlook reverting to Stable LIQUIDITY Sufficient Liquidity: Logan had total cash on hand of CNY35.7 billion, including CNY8 billion of restricted cash and pledged deposits, as of end-2018, sufficient to cover short-term debt of CNY16.4 billion and liabilities under cross-border guarantee arrangements of CNY2.5 billion. FULL LIST OF RATING ACTIONS Logan Property Holdings Company Limited - Long-Term Foreign-Currency IDR affirmed at 'BB-'; Outlook revised to Positive from Stable - Long-Term Local-Currency IDR affirmed at 'BB-'; Outlook revised to Positive from Stable - Senior unsecured rating affirmed at 'BB-' - Ratings on outstanding senior unsecured notes affirmed at 'BB-' - Rating on subordinated capital securities affirmed at 'B' N-SECURITIES CO: In Regulator's Crosshairs Over Financial Health ---------------------------------------------------------------- Yue Yue and Timmy Shen at Caixin Global report that an indebted regional securities firm linked to a secretive tycoon with interests in peer-to-peer lending and bitcoin mining has found itself in the crosshairs of China's financial watchdogs amid concerns over its financial health. Caixin relates that the Liaoning province branch of the China Securities Regulatory Commission (CSRC) said it has installed officials in the offices of N-Securities Co. Ltd., which is headquartered in the northeastern rustbelt province, to monitor its operations including money transfers, asset disposals, personnel arrangements, the use of company seals and contract signing. According to Caixin, regulators have rarely stepped in to oversee a securities firm's operations in such detail and the action indicates they have identified major risks in the business, judging by regulations enacted in 2008 that specify how officials should work to defuse risks in securities companies. From 2004 to 2006, the CSRC intervened to defuse risks among dozens of securities firms, closing 19 brokerages and reorganizing one firm for a variety of reasons including misappropriation of client funds and share price manipulation, the report says. The onsite inspection of N-Securities could lead to punitive action including the suspension of the company's business while it carries out remedial action, or even a takeover by regulators if they discover serious financial problems such as poor ability to control risk, according to the 2008 regulations, Caixin relays. Caixin notes that the Liaoning branch of the CSRC said its decision to send in investigators follows months of monitoring the company's financial health. On March 5, the watchdog said N-Securities failed to meet regulatory requirements on at least four risk-control indicators--including its capital leverage ratio and net stable funding ratio, which assess a company's ability to meet its financial obligations--in December and January and was given 20 days to make improvements. The following day, the watchdog issued a statement highlighting poor management of the firm's information technology systems, Caixin says. According to Caixin, N-Securities, based in Liaoning's provincial capital city of Shenyang, has been dogged by problems including weak profitability and rising debt. Among the 98 brokerages tracked by the government-backed Securities Association of China, the self-regulatory body for the securities industry, the firm ranked last in terms of net assets and net capital in 2017, and 93rd in terms of net profit, Caixin discloses citing a report released in June 2018. The brokerage posted a net loss of CNY2.9 billion ($429 million) in 2018, down from a net profit of CNY8.8 million the previous year, according to its latest annual report. Its total liabilities surged to CNY23.8 billion at the end of 2018 from CNY1 billion at the end of 2017, Caixin discloses. Caixin says N-Securities is also embroiled in a legal dispute with a rural credit cooperative in the central province of Henan which won a court order in December to have CNY191.4 million of the firm's assets frozen. Industry sources have told Caixin that the credit cooperative took the brokerage to court because it failed to repay money borrowed by pledging bonds as collateral. N-Securities is indirectly controlled by financial tycoon Zhang Zhenxin, a low-profile businessman who owns and chairs financial conglomerate UCF Holdings Group Ltd. In 2014, United Venture Capital Group Co. Ltd., a UCF affiliate, became the brokerage's controlling shareholder and held a 55.61% stake at the end of 2018, according to its annual report. Two local state-owned enterprises in Shenyang hold the remaining shares, according to Caixin. Mr. Zhang, 47, controls a string of financial businesses ranging from peer-to-peer lending and bitcoin mining to fund management companies and licensed banks. UCF Holdings is a controlling shareholder in Hong Kong-listed Chong Sing Holdings FinTech Group Ltd., and N-Securities affiliate NCF Wealth Holdings Ltd. gained a backdoor listing in the U.S. in March when it completed a merger with Nasdaq-listed Hunter Maritime Acquisition Corp. WINTIME ENERGY: China Starts Trading of Defaulted Corporate Bonds ----------------------------------------------------------------- Zhang Yuzhe and Denise Jia at Caixin Global report that after record defaults on corporate bonds, China is allowing the trading of matured defaulted bonds for the first time on two state-owned financial-asset transaction platforms. Caixin relates that the first completed transactions were in matured bonds of China's second-largest defaulter of last year, Wintime Energy Co. Three transactions with a total face value of CNY282 million ($41.6 million) of Wintime's defaulted bonds were conducted in February and March at Beijing Financial Assets Exchange, the report says. This is an important innovation to proactively dispose of defaulted bonds, stabilize the market and prevent malicious escape from debts, a person close to the central bank told Caixin. Trading in defaulted bonds at steep discounts from face value will become a normal operation at the Beijing Financial Assets Exchange and the central bank's China Foreign Exchange Trade Center as part of an effort by the central bank to establish a defaulted-bond trading system, sources said, Caixin relays. "Since the transfer prices at the Beijing Financial Assets Exchange are transparent, the valuation on some defaulted bonds could become the reference for a future junk bond market," one market participant told Caixin. Buyers of such bonds bet that defaulters may eventually pay up, while sellers benefit by recovering some portion of the unpaid debts. Defaults on Chinese corporate bonds reached a record last year and continued to take place this year, reflecting business struggles amid cooling economic growth, Caixin discloses. Last year, defaults on corporate bonds soared nearly fourfold from 2017 to a record CNY120 billion. The value also exceeded the combined amount for the previous four years, when defaulted corporate bonds totaled CNY110.5 billion. Chinese issuers defaulted on bonds with a total face value of CNY23.3 billion during the first four months of 2019, a 70% increase from the same period in 2018, Caixin reports citing Reuters. The Financial Market Department of the People's Bank of China is working on specific rules and regulations on the trading of defaulted bonds, Caixin learned from several sources. Wintime and Jiangsu Hongtu High Technology Co. Ltd. are the only two companies whose defaulted bonds have been traded so far, Caixin notes. Wintime, a coal producer in the northwest province of Shanxi, was China's second-largest defaulter in 2018 with outstanding debts totaling CNY63.2 billion, Caixin discloses. It defaulted on bond repayments of CNY18.8 billion as of February. According to Caixin, Shanghai-listed electronics manufacturer Jiangsu Hongtu High Technology has been punished for falsely claiming that investors agreed to extend the repayment period for a bond on which it subsequently defaulted. In the latest auctions at the China Foreign Exchange Trade Center last month, five institutions participated in bidding on two Wintime bonds and one Jiangsu Hongtu bond. Only Jiangsu Hongtu's bonds were successfully sold. However, market participants see significance in this move even if no deals are reached. One of Wintime's defaulted bonds listed on the Beijing Financial Assets Exchange has a face value of CNY200 million and a listing price of CNY110 million, Caixin notes. Even though the exchange hasn't disclosed a final transfer price on the bond, one bond investor said such a price would represent a high recovery rate. Many investors still believe Wintime eventually might be able to repay the bond, the investor said, adds Caixin. About Wintime Energy China-based Wintime Energy Co., Ltd., engages in the power, mining, petrochemical, logistics and investment, and other businesses in China. The company generates power; mines and produces coking coal; and processes shale gas. It has an electric power installed capacity of 10.94 million kilowatts; a total of 14 producing mines; and shale gas exploration rights. The company is also involved in the new energy business; and distribution of petrochemicals. In addition, it invests in strategic emerging industry projects, financial sector, coking coal and thermal coal projects, and power and new energy projects. As reported in the Troubled Company Reporter-Asia Pacific on Oct. 24, 2018, Reuters said Wintime Energy Co. had defaulted on principal and interest payments on a puttable medium-term note after investors exercised their options to sell bonds back to the company. The payments, worth a total of CNY1.49 billion (US$214.74 million), were due Oct. 22, the company said in a statement on the website of the Shanghai Clearing House, Reuters relates. In a separate statement, the company said the default had triggered cross-protection clauses in six of its other outstanding debt instruments. ZHENRO PROPERTIES: Fitch Affirms 'B' LT IDR, Outlook Positive ------------------------------------------------------------- Fitch Ratings has affirmed Zhenro Properties Group Limited's Long-Term Foreign-Currency Issuer Default Rating at 'B'. The Outlook is Positive. Zhenro's financial profile improved throughout 2018, with leverage--as defined by net debt/adjusted inventory, including proportional consolidation of joint ventures and associates--falling to 52%, from 68% in 2017, following debt repayment from IPO proceeds and slower land acquisitions. Fitch will assess whether Zhenro can sustain its adequate leverage headroom over the next six months before considering an upgrade, particularly as Chinese homebuilders have been more aggressive in land acquisitions in 2019. Zhenro's IDR is constrained by its small land bank and significant minority shareholders, which could prevent its deleveraging, and is helped by a high-quality and diverse land bank that drives contracted sales growth, sales churn and decent margins. KEY RATING DRIVERS Possible Upgrade on Deleveraging: Fitch will consider an upgrade if Zhenro remains prudent in land acquisitions during the next six months, such that it maintains leverage below 55% for a sustained period. Leverage fell to 52% in 2018 following debt repayment from its HKD4.4 billion IPO proceeds and prudent land acquisitions. Zhenro spent CNY19 billion on land acquisitions in 2018, which represented 34% of 2018 attributable contracted sales. Fitch forecasts Zhenro to spend CNY35 billion on land acquisition in 2019, resulting in leverage of 50%-55%. However, Chinese homebuilders have been more active in acquiring land in tier 2 cities during 2019, resulting in higher land premiums. Zhenro's total land bank of 25 million square metres (sq m) at end-2018, or about 13 million sq m excluding joint ventures, represented 3.9 years of land bank life, down from 4.9 years at end-2017. Zhenro does not intend to accumulate excessive land to avoid policy risk, however, it requires continual land bank acquisitions to sustain contracted sales growth. This is likely to drive the company to replenish its land bank at market prices and could limit its ability to significantly deleverage. Land acquisitions that are higher than Fitch expects and not supported by a significant increase in contracted sales could see leverage remaining above 55%. High-Quality Land Bank: Zhenro's land bank is focused on tier 2 cities and is diversified across China's eastern, northern, southeast and central regions. No single city contributes a significant portion to total sales, avoiding reliance and regional policy risks. This allowed Zhenro to achieve robust attributable contracted sales growth in the previous three years, with sales reaching CNY56 billion in 2018. The average selling price (ASP) dropped by 9% in 2018 due to a lower proportion of sales from tier 1 cities, but was still higher than that of most 'B' category peers at CNY16,770. The company expanded its land bank to 13 new cities mainly through bidding and joint ventures with other developers. Stronger Liquidity: The cash/short-term debt ratio improved to 1.2x in 2018, from 0.9x in 2017, and Fitch expects further improvement in 2019. Funding cost should also continue to fall, as more expensive trust loans are replaced with lower-cost financing. Zhenro has diversified its funding sources since its IPO in 2018. The percentage of onshore non-bank borrowings, such as trust loans, dropped to 36% of total debt, from 56% in 2017, and the company continues to replace onshore non-bank borrowings with longer-tenor US dollar bonds. Enhanced Sales Efficiency: Fitch expects sales churn, as measured by contracted sales/total debt, to stay at 1.1x-1.3x in the medium term, after improving to 1.1x 2018 on attributable basis (2017: 1.0x), with the help of better economies of scale after expanding contracted sales. Significant Minority Shareholders: Fitch expects Zhenro to seek higher shareholdings in its projects to increase profit attributable to shareholders. This could result in lower contributions from minority shareholders in new projects and drive up leverage. Total non-controlling interest in Zhenro's balance sheet increased by CNY7 billion in 2018 to CNY8 billion; almost all was capital injections by minority shareholders in the company's new projects, meaning Zhenro did not have to take on more debt to develop the projects. Total non-controlling interest was 32% of total equity at end-2018. Satisfactory Margin: Fitch expects Zhenro's EBITDA margin, which edged down to 27% in 2018, from 29% in 2017, to continue decreasing, but to stay at 25%-26% in the medium-term due to higher land costs amid fierce competition on land bidding in 2019. Zhenro acquired new land at an average cost of CNY4,829/sq m in 2018, which accounted for about 29% of its contracted sales ASP in 2018. Small Investment-Property Contribution: Zhenro's investment-property portfolio is small, generating rental revenue and property-management income of CNY161 million in 2018. Rental revenue should increase, as Zhenro has a pipeline of new investment properties due to open in 2019. Occupancy rates of existing malls are 95%-100% and Fitch forecasts recurring EBITDA interest coverage to stay low at below 0.1x in 2019-2022. DERIVATION SUMMARY Zhenro's leverage of 50%-55% and small land bank constrains its ratings to the 'B' category, while its sustainable contracted sales scale and diverse and quality land bank is comparable with those of 'BB-' peers. Zhenro's land bank drives its contracted sales scale and satisfactory margin. Attributable contracted sales of CNY56 billion and an EBITDA margin of 27% in 2018 were comparable with those of 'BB-' peers, such as Times China Holdings Limited (BB-/Stable) and Yuzhou Properties Company Limited (BB-/Stable). Zhenro's proportional consolidated leverage fell to 52% in 2018. Fitch expects leverage to hover around this level in the medium term if the company maintains a prudent land-acquisition strategy. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Attributable contracted sales of CNY67 billion-90 billion a year in 2019-2022 (2018: CNY56 billion) - 10% drop in ASP in 2019, followed by a 2% rise each year in 2020-2022 (2018: CNY16,770) - Annual land premium accounting for about 40%-60% of attributable contracted sales (2018: 34%) - EBITDA margin of 25%-26% in 2019-2022 (2018: 27%) RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action: - Leverage (net debt/adjusted inventory) sustained below 55% (2018: 52%) - Sales churn (contracted sales/total debt) sustained above 1.0x (2018: 1.1x) Developments that May, Individually or Collectively, Lead to Negative Rating Action - Failure to maintain the above positive rating sensitivities will lead to the Positive Outlook reverting to Stable LIQUIDITY Sufficient Liquidity: Zhenro had unrestricted cash of CNY22.5 billion, pledged deposits of CNY1.0 billion, restricted cash of CNY4.9 billion and unused bank credit facilities of CNY25.8 billion at end-2018, enough to cover the short-term borrowings of CNY23.8 billion. The company has a concrete plan to refinance its CNY23.8 billion short-debt. ========= I N D I A ========= ADROIT CORPORATE: CARE Assigns 'D' Rating to INR26.75cr Loan ------------------------------------------------------------ CARE Ratings has assigned rating to the bank facilities of Adroit Corporate Services Private Limited (ACSPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 26.75 CARE D Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of Adroit Corporate Services Private Limited (ACSPL) is constrained by ongoing delays in debt servicing led by stretched liquidity position. The ability of ACSPL to timely repay the debt obligations with improvement in liquidity position by efficiently managing the operating cycle remains the key rating sensitivity. Detailed description of the key rating drivers Key Rating Weaknesses Weak liquidity position leading to ongoing delays in debt servicing: The liquidity position of ACSPL is weak leading to ongoing delays in debt servicing. There have been delays in repayment of principal & interest of term loans by over two installments, whereas the account has been classified as SMA-2 by the banker as on March 26, 2019. Incorporated in June 1994 by Mr. Sadashiv Shetty, Adroit Corporate Services Private Limited (ACSPL) is engaged in providing Business Process Outsourcing (BPO) services to various banks for their various transactional processes, software, web design & mobile development for the banks & corporates, and registrar & share transfer (R&T) services to the individual investors. ACSPL is a SEBI registered, Category-I Registrar to Issues and Securities Transfer with depository connectivity with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The company derives majority of its revenues from the BPO services (68.29% of the net sales in FY18), followed by software products (23.59% of the net sales in FY18), and the balance from R&T services. AJAY INDIA: CARE Downgrades Rating on INR8.90cr Loan to B+ ---------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Ajay India Limited (AIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 8.90 CARE B+; Stable; Issuer not Facilities cooperating; Revised from CARE BB- on the basis of Best available information Short-term Bank 0.06 CARE A4; Issuer not cooperating; Facilities Based on best available information Detailed Rationale & Key rating Drivers CARE had, vide its press release dated February 26,2018, placed the rating(s) of AIL under the 'issuer non-cooperating' category as AIL had failed to provide information for monitoring of the rating and had not paid the surveillance fees for the rating exercise as agreed to in its Rating Agreement. AIL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated March 15, 2019, March 23, 2019 and March 29, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of last rating on February 26, 2018 the following were the rating strengths and weaknesses. Key Rating Weakness Financial risk prafile marked by maderate prafitability, leveraged capital structure and weak liquidity position: During FY18, TOI of the company increased over FY17 and stood at INR77.96 crore. Further, the profitability margins remained moderate with PBILDT margin of 8.65% and PAT margin of 2.05% as on March 31, 2018. The capital structure remained lebveraged with an overall gearing of 3.71 times as on March 31, 2018, deteriorated from 3.64 times as on March 31,2017 mainly due to higher debt obligation. The liquidity position remains stressed due to elongated operating cycle of 121 days in FY18 along with current and quick ratio of 1.30 times and 0.35 times as on March 31, 2018. Limited presence in textile value chain and volatility associated with raw material prices: All has limited presence in the textile value chain as it is engaged in the business of fabric manufacturing only. The price of key raw material has been volatile in nature and All is exposed to the raw material price fluctuation risk due to high inventory holding period of two months. Operations in competitive synthetic fabric industry: The synthetic fabrics industry in India is highly fragmented with predominant presence of unorganized sector. The entry barriers to the industry are very low and the operating margin is susceptible to new capacity additions in the industry. Key Rating Strengths Experienced promoters Being a part of Ajay Group of Industries, All derives synergic benefits in the form of experienced management and established distribution network. Mr Rameshwar lal Kabra'imd Mr Ashok Kabra are promoter directors of All and have more than two decades experience in' the textile industry. Established track record of operations and marketing network All has a long track record of operations of over a decade. The company sells finished synthetic fabric under the brand name of 'Wipro' and 'Sparsh'. Being associated with the textile industry since 1987, the group has' a well-established network of agents and dealers, present across India in various states in Northern, Central and Southern region of India and some parts of Eastern region. Presence in textile cluster with ease of availability of raw material and labour: All's manufacturing facilities are located in Bhilwara (Rajasthan) which is one of the largest textile clusters in India and known as the 'Textile city of India'. This results'in benefits in' terms of easy availability of main raw material, labour as well as proximity to selling area. AIL, incorporated in 1996, is promoted by Kabra family of Bhilwara (Rajasthan) and belongs to Ajay Group of Industries based out of Bhilwara, Rajasthan. The group is engaged in the business of manufacturing of finished synthetics fabrics from polyester yarn. AJAY SYNTHETICS: CARE Maintains B- Rating in Not Cooperating ------------------------------------------------------------ CARE Ratings said the rating for the bank facilities of Ajay Synthetics Private Limited (ASPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 10.00 CARE B-; Issuer not cooperating; Facilities Revised from CARE BB- on the basis of best available information Detailed Rationale & Key rating Drivers CARE had, vide its press release dated February 26,2018, placed the rating(s) of ASPL under the 'issuer non-cooperating' category as ASPL had failed to provide information for monitoring of the rating and had not paid the surveillance fees for the rating exercise as agreed to in its Rating Agreement. ASPL continues to be noncooperative despite repeated requests for submission of information through e-mails, phone calls and a letter/email dated March 15, 2019, March 23, 2019 and March 29, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of last rating on February 26, 2018 the following were the rating strengths and weaknesses. Key Rating Weakness Financial risk profile marked by thin profitability, leveraged capital structure and weak liquidity position: During FY18 (refers to 1 April to 31 March), the company registerd operating and net loss mainly due to significant decline in TOI. The capital structure of the company stood leveraged with negative overall gearing. Further, debt coverage indicators stood weak owing to operating loss as well as cash loss. The liquidity position of company stood stressed marked by elongated working capital cycle of 164 days in FY18. Limited presence in textile value chain and volatility associated with raw material prices: ASPL has limited presence in the textile value chain as it is engaged in the business of fabric manufacturing only. The price of key raw material has been volatile in nature and ASPL is exposed to the raw material price fluctuation risk due to high inventory holding period of two months. Operations in competitive synthetic fabric industry: The synthetic fabrics industry in India is highly fragmented with predominant presence of unorganized sector. The entry barriers to the industry are very low and the operating margin is susceptible to new capacity additions in the industry. Key Rating Strengths Experienced promoters: Mr. Omprakash Kabra and Mr Ajay Kabra are the directors of ASPL and has vast experience in the textile industy. Established track record of operations and marketing network: Being a part of Ajay Group of Industries, ASPL derives synergic benefits in the form of experienced management and established distribution network. Presence in textile cluster with ease of availability of raw material and labour: AIL's manufacturing facilities are located in Bhilwara (Rajasthan) which is one of the largest textile clusters in India and known as the 'Textile city of India'. This results in benefits in terms of easy availability of main raw material, labour as well as proximity to selling area. Ajay Synthetics Private limited (ASPL), incorporated in 1987, is promoted by Kabra family and belongs to Ajay Group of Industries based out of Bhilwara (Rajasthan). The group is engaged in the business of manufacturing of finished synthetics fabrics from polyester yarn since 1987. BABA BHUMAN: CARE Maintains 'B' Rating in Not Cooperating Category ------------------------------------------------------------------ CARE Ratings said the rating for the bank facilities of Baba Bhuman Shah Ji Industries (BBS) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 10.80 CARE B; Stable; Issuer not Facilities cooperating, Based on best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated February 13, 2018, placed the rating(s) of BBS under the 'issuer non-cooperating' category as BBS had failed to provide information for monitoring of the rating. BBS continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and email dated April 22, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of last rating on February 13, 2018 the following were the rating strengths and weaknesses: Key Rating Weaknesses Short track record, small scale of operations with low PAT margins: Due to its establishment in 2014 only, the firm's scale of operations has remained small marked by Total Operating Income (TOI) of INR 38.19 crore in FY16 (refers to the period of April 1 to March 31). However, the PBILDT margin of the firm stood at a moderate level of 6.49% in FY16. The PAT margin remained below unity during last two financial years on account of high depreciation and interest costs. Leveraged capital structure and weak debt coverage indicators: The capital structure of the firm stood leveraged with overall gearing ratio of 8.16x as on March 31, 2016 mainly on account of firm's high reliance on borrowings to fund various business requirements. Additionally, the debt coverage indicators also remained weak with the total debt to GCA at 47.31x for FY16 and interest coverage ratio at 1.31x in FY16. Elongated operating cycle: The operating cycle of the firm stood elongated at 244 days for FY16. Susceptibility to fluctuation in raw material prices and monsoon dependent operations: Agro-based industry is characterized by its seasonality, due to its dependence on raw materials whose availability is affected directly by the vagaries of nature. Adverse climatic conditions can affect their availability and leads to volatility in the raw material prices. Any sudden spurt in the raw material costs may not be passed on to customers due to firm's presence in highly competitive industry. Fragmented nature of industry coupled with high level of government regulation: The commodity nature of the product makes the industry highly fragmented with numerous players operating in the unorganized sector with very less product differentiation. Partnership nature of constitution: BBS's constitution as a partnership firm has the inherent risk of possibility of withdrawal of the partners' capital at the time of personal contingency and firm being dissolved upon the death/retirement/insolvency of partners. Key Rating Strengths Experienced partners: Mr Rakesh Kumar, Mr Ram Kishan and Mr Rakesh Kumar have an industry experience of around one and a half decades. On the other hand, Mr Sunil Kumar and Mr Harish Kumar have an industry experience of 5 years gained through their association with BBS and the group concerns of BBS, ie, RKB and RKR. Location advantages: BBS's manufacturing unit is located in Fazilka, Punjab. The area is one of the hubs for paddy/rice, leading to its easy availability and resulting in procurement at competitive rates and lower logistical costs. Baba Bhuman Shah Ji Industries (BBS) was established in February 2014 as a partnership firm by Mr Harish Kumar, Mr Rakesh Kumar, Mr Ram Kishan, Mr Sunil Kumar, Mrs Vanita Rani and Mr Rakesh Kumar, sharing profit and loss in the ratio of 18%, 17%, 15%, 20%, 20% and 10%, respectively. The firm is engaged in processing of paddy at its manufacturing facility located in Fazilka, Punjab, with an installed capacity of 25,000 Metric Tonnes per annum as on December 31, 2017. BBS has two group concerns namely Ramesh Kumar Rakesh Kumar (RKR) and Rajinder Kumar and Brother (RKB). Both these entities were established in 2011 as a proprietorship firm and are working as a commission agent for buying and selling of paddy and wheat. BEEPEE HOSPITALITY: CARE Reaffirms 'B' Rating on INR10.23cr Loan ---------------------------------------------------------------- CARE Ratings reaffirmed ratings on certain bank facilities of Beepee Hospitality LLP (BHL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 10.23 CARE B; Stable Reaffirmed Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of BHL is constrained by project stabilization risk, nascent & small scale of operations, low capitalization & weak debt coverage indicators. The rating is further constrained by highly fragmented nature of industry and susceptibility of profit margin to adverse fluctuations in raw material prices. The rating however, derives strength from experienced along with operational synergies with associate entities and strategic location with easy access to semi-finished material and labour. Detailed description of Key rating drivers Key Rating Weaknesses Project stabilization risk BHL has completed its project in March 2019 as against Jan 2019 which was earlier estimated mainly on account of addition of few machineries which mainly include sizzing machine, mercerising machine, weft streightner, RO & ETP, hydrolic jigger. Further the same has resulted in increase in the project cost from INR7.00 crore to INR12.47 crore for expansion purpose. The escalated project cost is to be funded by 70% through term loan and balance through promoters' contribution. Furthermore the repayment of term loan will start from April 2019, which will be repaid through own funds in the initial month and then firm will start to generate revenue and then the repayment will be managed through the business operations. Nascent & Small Scale of Operations BHL commercial production has already started from March 2019. Thus the overall operations are at nascent stage. In FY19Prov BHL has generated total revenue of INR 0.81 Crore from processing of fabrics on job work basis. Going forward, its ability to use the capacity at envisaged utilization levels and generate sufficient accruals to meet the debt obligations shall be critical from credit perspective. Low capitalization & weak debt coverage indicators BHL net worth has improved to INR0.96crore in FY19 (as against INR0.39 crore as on March 31, 2018) due to infusion of partner's capital amounting to INR0.58crore during FY19. Moreover, due to improvement in net worth the overall gearing has improved to 11.14x as on March 31st 2019 (14.72x as on March 31st 2018). Further the debt coverage indicator stood weak owing to cash losses. Presence in highly fragmented industry leading to stiff competition BHL is engaged in the business of cotton, non-cotton spinning, combing, cleaning, preparing, packing, weaving and manufacturing which is highly fragmented with a high level of competition from both the organized and largely unorganized sector, along with the susceptibility of margins to volatile raw material prices. Key rating Strengths Experienced promoters along with operational synergies with associate entities: BHL is being promoted by Mr. Anup Poddar and Mr. Anil Poddar having an experience of more than two decades in the home textile industry through his association with company and other associate mainly BEPL which is engaged in similar further, they look after the overall management of the company with the support of chief promoter of the BeePee group Mr.Chandra Kishor Poddar he is the founder of the company and he is having more than three decades of experience in the same line of industry. Strategic location with easy access to semi-finished material and labour BHL processing facility is located at Bhiwandi which is one of the textile hubs of India. The semi-finished raw material i.e. raw fabric (both cotton and polyester) is easily available in Bhiwandi market; thereby the company enjoys proximity to raw material resulting in lower transportation cost and relatively easy availability. Moreover, knowledgeable technician's and skilled labour is also easily available. Beepee Hospitality LLP (BHL) was established on November 4, 2011 as a Limited Liability Partnership. BHL is being promoted by Mr. Anup Poddar and Mr. Anil Poddar which is engaged in the business of processing of fabrics (viz. Polyster and cotton)i.e spinning, combing, cleaning, weaving and dyeing on job work basis as well as through own production . The firm was established in 2011; however commercial production has started from March 2019. BRMSCO GARMENTS: Ind-Ra Raises Long Term Issuer Rating to 'BB' -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Brmsco Garments Private Limited's (BGPL) Long-Term Issuer Rating to 'IND BB' from 'IND BB-.' The Outlook is Stable. The instrument-wise rating actions are: -- INR60.7 mil. (reduced from INR82.6 mil.) Term loan due on May 2022 upgraded with IND BB/Stable rating; -- INR100.0 mil. Fund-based working capital Long-term rating upgraded and short-term rating affirmed with IND BB/Stable/IND A4+ rating; and -- INR50.0 mil. (increased from INR30.0 mil.) Non-fund-based facilities affirmed with IND A4+ rating. KEY RATING DRIVERS The upgrade reflects a 20.2% YoY rise in BGPL's revenue to INR543.0 million in FY18 and further to INR624 million at FYE19 due to increased orders from existing, longstanding customers and overall improved demand for polypropylene bags. However, the company's scale of operations is small-to-medium. At end-April 2019, BGPL's order book was INR150 million, to be executed by September 2019. Ind-Ra expects BGPL's revenue to grow stably in FY20, backed by a strong order book and capacity expansion. The ratings continue to reflect BGPL's moderate credit metrics due to modest margins because of intense competition in the packing industry and fluctuating raw material cost. Net leverage (adjusted net debt/operating EBITDAR) improved slightly to 3.9x in FY18 (FY17: 4.1x) due to a fall in the total debt. EBITDA interest coverage (operating EBITDA/gross interest expense) deteriorated marginally to 2.5x (2.8x) due to a fall in operating EBITDA to INR58 million from INR62 million. At FYE19, interest coverage was 2.7x and net leverage was 3.9x. EBITDA margins declined to 10.6% in FY18 and further to 9.5% at FYE19 (FY17: 13.5%). ROCE was 9% in FY18 (FY17:9%) The ratings continue to reflect BGPL's tight liquidity position with its average utilization of the fund-based limits being 99% during the 12 months ended April 2019. The company had unutilized limits of INR3.9 million at end-March 2019. Moreover, the cash flows from operations turned positive (INR34 million) in FY18 (FY17: negative INR15 million) on a shorter net working capital cycle of 123 days in FY18 (FY17: 137 days) due to lower debtor days. The ratings are supported by BGPL promoter's experience of over a decade in the polypropylene woven sack manufacturing business. RATING SENSITIVITIES Positive: A significant increase in the revenue and operating profit margins resulting in improved credit metrics, all on a sustained basis, could be positive for the ratings. Negative: A decline in the profitability margins or elongation of working capital cycle resulting in deterioration of the credit metrics and/or liquidity, all on a sustained basis, can be negative for the ratings. COMPANY PROFILE Established in 2008, BGPL is managed by TK Vijayan. It manufactures polypropylene woven sack/high-density polyethylene and fabrics at its unit in Kochi, Kerala. BYRNIHAT COAL: CARE Lowers Rating on INR4.50cr LT Loan to B- ------------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of Byrnihat Coal Private Limited (BCPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 4.50 CARE B-; Stable; ISSUER NOT Facilities COOPERATING; Revised from CARE B; Stable; ISSUER NOT COOPERATING on the basis of best available information Short-term Bank 2.50 CARE A4; ISSUER NOT COOPERATING; Facilities Based on the basis of best Available information Detailed Rationale and key rating drivers CARE has been seeking information from BCPL to monitor the rating vide e-mail communications/letters dated April 18, 2019, April 22, 2019, April 24, 2019 and numerous phone calls. However, despite CARE's repeated requests, the entity has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on BCPL's bank facilities will now be denoted as CARE B-; Stable; ISSUER NOT COOPERATING/CARE A4; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The revision in the long term rating assigned to the bank facilities of BCPL takes into account the deterioration in the overall financial risk profile of the company during FY18 as marked by net loss, weak debt coverage indicators and elongated operating cycle. The ratings continue to remained constrained by its relatively small scale of operation with low profits margins, volatility in prices of traded goods, working capital intensive nature of operations, moderate capital structure with weak debt coverage indicators and intense competition due to low entry barriers. Moreover, that ratings continue to drive strength from experienced promoters. Detailed description of the key rating drivers Key Rating Weakness Small scale of operations with low profit margins: The size of the operations of the company remained small marked by total operating income of INR5.29 crore with a net loss of INR0.12 crore in FY18 (refers to the period April 1 to March 31). Furthermore, the networth base of the company also remained low at INR5.62 crore as on March 31, 2018. Volatility in prices of traded goods: BCPL purchases trading goods (different sizes of coal) from domestic suppliers, depending on receipt of confirmed orders and inventory requirement for trading on stock & sale basis. However, the management has stated that some of the sales are made based on back-to-back orders, insulating the company from price volatility to a certain extent. Working capital intensive nature of operations: The operation of BCPL remained highly working capital intensive as reflected by its very high operating cycle at 556 days in FY18 which resulted in high working capital utilization during last twelve months ended in March 2019. Moderate capital structure with weak debt coverage indicators: The capital structure of the company remained moderate marked by overall gearing ratio of 1.21x as on March 31, 2018. Further debt coverage indicators remained weak marked by interest coverage of 0.88x in FY18. Intense competition due to low entry barriers: The company is into trading of coal which is highly fragmented and competitive in nature due to low entry barriers. Further all the entities trading the same products with a little product differentiation resulting into price driven sales. Intense competition restricts the pricing flexibility of the company in the bulk customer segment. Key Rating Strengths Experienced promoters: Mr. Naresh Kumar Harlalka (Managing Director), having more than two decade of experience in diversified line of business like rice milling, edible oil industry and coal trading activities. Mr Harlalka looks after the overall management of the company. Further Mr Harlalka is supported by Mrs Babita Harlalka and Mr. Rohit B Marak who are also having more than a decade of experience. Assam based Byrnihat Coal Private Ltd (BCPL) was incorporated in March 2005 by Mrs. Babita Harlalka and Mr. Suresh Kumar Agarwala. After remaining dormant for about eight years, BCPL has started trading of different size of coal in August 2013. The company procures coal from local players and sells it to clients across Assam and Meghalaya. Liquidity Position: The liquidity position of the company was weak marked by its current ratio of 1.09x as on March 31, 2018. The company has free cash and bank balance of INR0.39 crore as on March 31, 2018. The company has generated negative gross cash accrual of INR0.12 crore during FY18. CHAUDHARY RICE: CARE Maintains 'B' Rating in Not Cooperating ------------------------------------------------------------ CARE Ratings said the rating for the bank facilities of Chaudhary Rice Mills (CRM) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 8.40 CARE B; Stable; Issuer not Facilities cooperating, Based on best available Information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated February 13, 2018, placed the rating(s) of CRM under the 'issuer non-cooperating' category as CRM had failed to provide information for monitoring of the rating. CRM continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and email dated April 22, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of last rating on February 13, 2018 the following were the rating strengths and weaknesses: Key Rating Weaknesses Small scale of operations with low PAT margins: The firm's scale of operations has remained small marked by Total Operating Income (TOI) of INR 33.97 crore in FY17 (Provisional; refers to the period of April 1 to March 31) and net-worth base of INR 1.46 crore as on March 31, 2017. The small scale of operations limits the firm's financial flexibility in times of stress and deprives it from scale benefits. The operating margins of the firm stood moderate as reflected by PBIDT margin of 6.48% in FY17. However, the PAT margin remained below unity during last three financial years on account of high depreciation and interest costs. Leveraged capital structure and weak debt coverage indicators: The capital structure of the firm is leveraged with overall gearing ratio of 10.08x as on March 31, 2017 (Provisional) (PY:8.67x). Additionally, the debt coverage indicators also remained weak with the total debt to GCA at 21.65x for FY17 (PY:19.49x) and interest coverage ratio at 1.45x in FY17 (PY: 1.41x). Elongated operating cycle: The operating cycle of the firm stood elongated at 139 days for FY17 mainly due to high inventory period. Susceptibility to fluctuation in raw material prices and monsoon dependent operations: Agro-based industry is characterized by seasonality due to its dependence on raw materials whose availability is affected directly by the vagaries of nature. Adverse climatic conditions can affect their availability and leads to volatility in raw material prices. Fragmented nature of industry coupled with high level of government regulation: The commodity nature of the product makes the industry highly fragmented with numerous players operating in the unorganized sector with very less product differentiation. Additionally, the raw material (paddy) prices are regulated by government to safeguard the interest of farmers, which in turn limits the bargaining power of the rice millers. Partnership nature of constitution: CRM's constitution as a partnership firm has the inherent risk of possibility of withdrawal of the partners' capital at the time of personal contingency and firm being dissolved upon the death/retirement/insolvency of partners. Key Rating Strengths Established track record of operations along with experienced partners: CRM was established in 1981 and is currently being managed by Mr. Anil Kumar and Mrs. Vijeta Rani having an industry experience of three and a half decades and a little more than two and a half decades respectively through their association with CRM only. Both the partners have adequate acumen about various aspects of business which is likely to benefit CRM in the long run. Chaudhary Rice Mills (CRM) was established in 1981 as a partnership firm and is currently being managed by Mr. Anil Kumar and Mrs. Vijeta Rani sharing profit and losses equally. The firm is engaged in processing of paddy at its manufacturing facility located in Fatehabad, Haryana with an installed capacity of 72,000 Tonnes per annum as on March 31, 2017. ESSEM ENTERPRISE: CARE Migrates B Rating to Not Cooperating ----------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Essem Enterprise (Essem) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 8.86 CARE B; Stable; Issuer not Facilities cooperating; based on best available information Short-term bank 1.43 CARE A4; Issuer not cooperating; Facilities Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information Essem to monitor the rating vide e-mail communications/letters dated April, 17 2019 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on Essem's bank facilities will now be denoted as CARE B; Stable; ISSUER NOT COOPERATING/CARE A4; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. Detailed description of the key rating drivers At the time of last rating in Feb. 7, 2018 the following were the rating strengths and weaknesses. Key Rating Weaknesses Small scale of operations with moderate profit margins: The size of the operations of the entity remained small with total operating income of INR19.63 crore in FY17 and a PAT of INR1.06 crore in FY17. Furthermore, the total capital employed was also low at INR20.64 crore as on March 31, 2017.The profitability margins of the entity remained moderate with operating margin at 14.96% and PAT margin of 5.41% in FY17. Proprietorship nature of constitution: Essem, being a proprietorship entity, is exposed to inherent risk of the capital being withdrawn at time of personal contingency of the proprietor and the entity being dissolved upon the death/insolvency of the proprietor. Moreover, the proprietorship entity has restricted access to external borrowing as credit worthiness of the proprietor would be the key factors affecting credit decision for the lenders. Volatility in input prices: The major inputs for any civil contractors are bitumen, asphalt, murram, stone chips and metals, the prices of which are volatile. Furthermore, all the contracts executed by the entity do not contain any price escalation clause and the entity is exposed to volatility in prices of input materials. This apart, it does not enter into any agreement with contractees to safeguard its margins against any increase in labour prices and being present in a highly labour intensive industry, it remains susceptible to the same. Working capital intensive nature of operations: The operations of the entity are highly working capital intensive mainly due to high inventory and debtor collection period. The average inventory period was on the high side mainly due to work uncertified as on account closing dates. Due to its low bargaining power coupled with high competition in the industry Essem has to allow high credit period to its customer. Moreover, it receives credit of about four months from its creditors which mitigates its working capital intensity to a certain extent. The aforesaid reason led to high utilization of its bank limit at around 98% during the last 12 months ended on Dec. 2017. Leveraged capital structure with moderate debt coverage indicators: The capital structure of Essem has remained leveraged as on March 31, 2017 marked by overall gearing of 2.83x. The debt protection indicators remained moderate marked by satisfactory interest coverage of 1.79x and moderate total debt to GCA of 11.35x years in FY17. Intense competition and sluggish economic scenario: The entity has to bid for the contracts based on tenders opened by the various public sector units like Kolkata Municipal Corporation, Indian Railway. Upon successful technical evaluation of various bidders, the lowest bid is awarded the contract. Since the type of work done by the entity is mostly commoditized, the entity faces intense competition from other players. The entity receives projects which majorly are of a short to medium tenure (i.e. to be completed within maximum period of one to two years). Apart from this, present economic slowdown is also having a negative bearing on the construction sector which may also hinder the growth of the entity. Key Rating Strengths Long track record of operations and experienced management: The entity is into civil construction activities since 1985 and thus has more than three decades of track record of operations. Furthermore, the proprietor, Mr. Santanu Mukherjee has around 32 years of experience in the civil construction industry, looks after the day to day operations of the entity. Kolkata (West Bengal) based Essem Enterprise (Essem) was established as proprietorship entity in the year 1985 by Mr. Santanu Mukherjee. Since its inception, the entity has been engaged in civil construction activities in the segment like construction of road, bridges, water drain, box culvert and buildings. Along with civil construction activities, the entity has also been engaged in allied electrical, underground pipeline and mechanical jobs. The entity participates in tenders and executes orders for the Indian Railway, Kolkata Municipal Corporation, Hindustan Aeronautics Limited etc. The entity has an order book position of INR50.77 crore (3.35x of total sales for FY16) as on January 6, 2017 which is to be completed by October 2018. ETHOS POWER: Ind-Ra Migrates 'BB' Issuer Rating to Non-Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated Ethos Power Private Limited's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR90 mil. Fund-based working capital limit migrated to non- cooperating category with IND BB (ISSUER NOT COOPERATING) / IND A4+ (ISSUER NOT COOPERATING) rating; and -- INR240 mil. Non-fund-based limit migrated to non-cooperating category with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May 10, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Formed in 2012, Ethos Power is a Gurugram (Haryana) based project management company. It undertakes turnkey projects for the development of transmission and distribution infrastructure for state electricity boards. Additionally, it provides energy-efficient products and solutions for reducing transmission and distribution losses. GARG RICE: CARE Maintains 'B' Rating in Not Cooperating ------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Garg Rice Mills continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 13.75 CARE B; Stable; Issuer not Facilities cooperating; Based on best available information Short term Bank 0.25 CARE A4; Issuer not cooperating; Facilities Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from Garg Rice Mills to monitor the rating(s) vide e-mail communications/ letters dated April 22, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on Garg Rice Mills's bank facilities will now be denoted as CARE B; Stable/ CARE A4; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of last rating in February 22, 2018 the following were the rating strengths and weaknesses: Key rating Weaknesses Small scale of operations with low profitability margins: The firm's scale of operations has remained small marked by TOI of INR89.93 crore for FY16 (refers to the period April 1 to March 31) and tangible net worth of INR 2.93 crore as on March 31, 2016. The moderate scale limits the firm's financial flexibility in times of stress and deprives it from scale benefits. Furthermore, the profitability margins of the firm stood low as indicated by PBILDT margin and PAT margin of 1.56% and 0.33% respectively in FY16. The profitability margins have been low owing to firm's presence in highly competitive and fragmented industry. High gearing and total debt to GCA: GRM has highly leveraged capital structure with overall gearing ratio of 6.25x as on March 31, 2016. The same, however, improved from 11.76x as on March 31, 2015 mainly on account of repayment of term loans as well as unsecured loans coupled with increase in net worth owing to accretion of profits and infusion of partners' capital amounting to INR0.66 crore in FY16. Additionally, total debt to GCA stood weak at 38.28x for FY16 and the same has improved from 50.35x for FY15 due to decline in debt level of the firm and improvement in gross cash accruals. Elongated operating cycle: The average operating cycle of the firm stood elongated at 94 days for FY16 (113 days for FY15). Owing to the seasonality of paddy harvest, the firm has to maintain suitable raw material inventory to ensure uninterrupted production and also maintain inventory of finished/ traded goods to meet the uncertain demand of customers, thereby elongating inventory period. The firm offers a credit period of around two months to its customers. However, the firm receives a credit period of one month from its suppliers. Foreign exchange fluctuation risk: The firm is dependent upon exports and its exports contribution to total sales stood at 89% in FY16 while the raw material is completely procured from the domestic markets. With initial cash outlay for sales in domestic currency & significant chunk of sales realization in foreign currency, the firm is exposed to the fluctuation in exchange rates. Though, the firm hedges 50% of its exports receivables through forward contracts, around 50% remains unhedged exposing it to sharp appreciation in the value of rupee against foreign currency which may impact its cash accruals. Susceptibility to fluctuation in raw material prices and monsoon dependent operations: Agro-based industry is characterized by its seasonality, as it is dependent on the availability of raw materials, which further varies with different harvesting periods. The price of rice moves in tandem with the prices of paddy. Availability and prices of agro commodities are highly dependent on the climatic conditions. Adverse climatic conditions can affect their availability and leads to volatility in raw material prices. Fragmented nature of industry coupled with high level of government regulation: The commodity nature of the product makes the industry highly fragmented with numerous players operating in the unorganized sector with very less product differentiation. There are several small scale operators which are not into end-to- end processing of rice from paddy, instead they merely complete a small fraction of processing and dispose-off semiprocessed rice to other big rice millers for further processing. Furthermore, the raw material (paddy) prices are regulated by government to safeguard the interest of farmers, which in turn limits the bargaining power of the rice millers. Partnership nature of constitution: GRM's constitution as a partnership firm has the inherent risk of possibility of withdrawal of the partners' capital at the time of personal contingency and firm being dissolved upon the death/retirement/insolvency of partners. Key Rating Strengths Experienced partners and established track record of entity: The firm was established in 1980 and is currently being managed by Mr. Radhe Shyam, Mr. Nilesh Garg, Mr. Ramesh Garg, Mr. Nitin Garg and Mr Sachin Garg. Mr. Radhe Shyam and Mr. Ramesh Garg have total work experience of three decades, Mr. Nilesh Garg and Mr. Nitin Garg have total work experience of around one decade and Mr Sachin Garg has industry experience of 2 years. The partners have accumulated this experience through their association with GRM and another group concern namely RT Overseas which is engaged in milling and trading of rice. Location advantages: GRM is engaged in processing of paddy and milling of rice. The main raw material (Paddy) is procured directly from local grain markets located in Haryana. The firm's processing facility is situated at Taraori, Haryana which is one of the largest producers of paddy in India. Its presence in the region gives additional advantage over the competitors in terms of easy availability of the raw material as well as favorable pricing terms. Garg Rice Mills (GRM) was established in 1980 as a partnership firm and is currently being managed by Mr Radhe Shyam, Mr Nilesh Garg, Mr. Ramesh Garg, Mr Nitin Garg and Mr Sachin Garg as its partners sharing profit and loss equally. The firm is engaged in processing of paddy and milling of rice at its manufacturing facility located at Taraori (Haryana) having an installed capacity of 11500 tonnes per annum as on March 31, 2016. The firm is also engaged in trading of rice [income from trading constituted around 60% of the total revenue in FY16 (refers to the period April 1 to March 31)]. JAYPEE INFRA: Hearing on IDBI's Deadline Extension Plea on May 21 ----------------------------------------------------------------- BloombergQuint reports that Jaypee Infratech Ltd.'s insolvency proceedings will continue for now as the Allahabad bench of National Company Law Tribunal has posted the matter for hearing on May 21 after lead lender IDBI Bank Ltd. sought extension of process beyond the deadline that expired on May 6. BloombergQuint relates that IDBI Bank had approached the NCLT seeking extension of the corporate insolvency resolution process beyond the May 6 deadline as the proceedings are still underway to find a buyer for the Jaypee Group's realty firm. According to the report, sources said the Allahabad bench has posted the matter for hearing on May 21 and till then "status quo" will be maintained. A meeting of committee of creditors has been scheduled for today, May 9, Jaypee Infratech's Interim Resolution Professional Anuj Jain informed last week, BloombergQuint relays. BloombergQuint relates that sources had said the committee of creditors will now discuss the proposal of state-owned NBCC Ltd. to acquire Jaypee Infratech, the real estate arm of Jaypee group. Jaypee Infratech is a subsidiary of Jaiprakash Associates, the flagship firm of Jaypee group. The creditors, which include banks and home buyers, on May 3 rejected the bid of Mumbai-based Suraksha group, the lone contender left after rejection of NBCC's bid on the ground that the offer did not have the approvals of government authorities, BloombergQuint relays. As the NBCC has now got the necessary approvals, the CoC is ready to discuss on NBCC's bid once again on May 9, the report notes. In January this year, the NCLT had extended the period of the CIRP by another 90 days as 180 days mandated under the Insolvency and Bankruptcy Code was ending on Feb. 5, 2019, BloombergQuint recounts. Under the IBC, a resolution process has to be completed under 180 days with a further extension of 90 days to 270 days. And if the company fails to complete the CIRP within the mandated 270 days, then the company goes for liquidation. BloombergQuint adds that in the last hearing on April 29, IDBI Bank had requested the tribunal to deduct the number of days in litigation period at several judicial forums, which include the National Company Law Appellate Tribunal and the Supreme Court. BloombergQuint relates that IDBI's plea was supported by the representative of the home buyers, who have also got the status of financial creditors after amendments in the insolvency and bankruptcy court. However, the promoters of Jaypee Infratech had opposed any move to extend the resolution period. In 2017, the NCLT admitted the application by an IDBI Bank-led consortium seeking resolution of Jaypee Infratech. During the first round of insolvency proceedings, the INR7,350 crore bid of Lakshdeep, part of Suraksha group, was rejected by lenders as it was found to be substantially lower than the company's net worth and assets, BloombergQuint recalls. In October 2018, the resolution professional started a fresh initiative to revive Jaypee Infratech on the NCLT's direction, adds BloombergQuint. About Jaypee Infratech Jaypee Infratech Limited (JIL) is engaged in the real estate development. The Company's business segments include Yamuna Expressway Project and Healthcare. The Company's Yamuna Expressway Project is an integrated project, which inter alia includes construction of 165 kilometers long six lane access controlled expressway from Noida to Agra with provision for expansion to eight lane with service roads and associated structures on build, own, operate and transfer basis. The Company provides operation and maintenance of Yamuna Expressway for over 36 years, collection of toll and the rights for development of approximately 25 million square meters of land for residential, commercial, institutional, amusement and industrial purposes at over five land parcels along the expressway. The Healthcare business segment includes hospitals. The Company has commenced development of its Land Parcel-1 at Noida, Land Parcel-3 at Mirzapur and Land Parcel-5 at Agra. On August 8, 2017, the National Company Law Tribunal (NCLT), Allahabad bench accepted lender IDBI Bank's plea and classified JIL as an insolvent company. With this, the board of directors of the company remains suspended. Anuj Jain was appointed as Interim Resolution Professional (IRP) to manage the company's business. The IRP had invited bids from investors interested in acquiring JIL and completing the stuck real estate projects in Noida and Greater Noida. In September 2017, the Supreme Court of India stayed the insolvency proceedings initiated against JIL, after various associations of homebuyers moved a batch of petitions fearing they will lose their apartments and not get any compensation, according to Livemint. The stay was later revoked by the court, which directed the resolution professional to submit an interim resolution plan that takes into account the interest of homebuyers. The court also directed the parent company, JAL, to deposit INR2,000 crore to protect the interest of homebuyers. Out of this, only INR750 crore has been deposited so far, Livemint relayed. JIL features in the Reserve Bank of India's first list of non-performing assets accounts and had debt exposure of over INR9,783 crore as of September 2017. The parent company, JAL owes more than INR29,000 crore to various banks, the report added. KAILASH RICE: CARE Migrates 'B' Rating to Not Cooperating --------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Kailash Rice and General Mills (KRG) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 9.20 CARE B; Stable; Issuer not Facilities cooperating, Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from Kailash rice and General Mills to monitor the rating(s) vide e-mail communications/letters dated April 22, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on Kailash Rice and General Mills' bank facilities will now be denoted as CARE B; Stable; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers At the time of last rating on February 26, 2018 the following were the rating strengths and weaknesses: Key rating Weaknesses Small though growing scale of operations with low profitability margins: The firm's scale of operations has remained small marked by Total Operating Income (TOI) of INR 36.75 crore in FY16. The small scale of operations limits the firm's financial flexibility in times of stress and deprives it from scale benefits. Furthermore, the profitability margins of the firm stood low marked by PBILDT margin and PAT margin of 2.77% and 0.04% respectively in FY16. Leveraged capital structure and weak debt coverage indicators: The capital structure of the firm stood highly leveraged with overall gearing ratio of 6.93x as on March 31, 2016. Additionally, the debt coverage indicators also remained weak with the total debt to GCA at 38.14x for FY16 and interest coverage ratio at 1.30x in FY16 {PY: 32.26x and 1.37x respectively}. Elongated operating cycle: The operating cycle of the firm stood elongated at 78 days for FY16. Susceptibility to fluctuation in raw material prices: Agro-based industry is characterized by its seasonality, due to its dependence on raw materials whose availability is affected directly by the vagaries of nature. Adverse climatic conditions can affect their availability and leads to volatility in raw material prices. Any sudden spurt in the raw material costs may not be passed on to customers due to firm's presence in highly competitive industry. Fragmented nature of industry coupled with high level of government regulation: The commodity nature of the product makes the industry highly fragmented with numerous players operating in the unorganized sector with very less product differentiation. Partnership nature of constitution: KRG's constitution as a partnership firm has the inherent risk of possibility of withdrawal of the partners' capital at the time of personal contingency and firm being dissolved upon the death/retirement/insolvency of partners. Key Rating Strengths Experienced partners and long track record of operations of the entity: KRG is engaged in processing of paddy since two and a half decades which has resulted in established relationship with both suppliers and customers. The firm is being managed by Mr. Mohan Lal and Mrs. Saroj Bala. Both have an industry experience of two and a half decades gained through their association with KRG only. Location advantages: KRG's manufacturing unit is located in Kaithal, Haryana. The area is one of the hubs for paddy/rice, leading to its easy availability. The unit is also in proximity to the grain market resulting in procurement at competitive rates and lower logistical costs. Kailash Rice & Gen. Mills (KRG) was established in 1991 as a partnership firm by Mr. Mohan Lal and Mrs. Saroj Bala as its partners sharing profit and losses equally. The firm is engaged in processing of paddy at its manufacturing facility located in Kaithal, Haryana with an installed capacity of 26,280 Tonnes per annum as on December 31, 2017. Furthermore, the firm is also engaged in trading of rice [income from trading constituted ~2% of the total revenue in FY16 (refers to the period April 1 to March 31)]. KITCHEN FOODS: CARE Assigns B+ Rating to INR9.76cr LT Loan ---------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Kitchen Foods (KF), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 9.76 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of Kitchen Foods (KF) is primarily constrained on account of its fluctuating and moderate scale of operations with low profitability, leveraged capital structure, weak debt coverage indicators and modest liquidity position during FY18 (refers to the period April 01 to March 31). Further, the rating remains constrained on account if KF's constitution as partnership firm, its presence in highly fragmented agro-processing industry, susceptibility of its profit margins to raw material price fluctuations and foreign exchange rates along with operations subject to government interventions. The rating, however, derives strength from the vast experience of partners in agro commodity processing industry and location advantage. The ability of KF to increase its scale of operations and profitability along with an improvement in its solvency and liquidity position are the key rating sensitivities. Detailed description of key rating drivers Key Rating Weaknesses Fluctuating and moderate scale of operations with low profitability: The scale of operations of KF remained fluctuating as marked by total operating income (TOI) ranging from INR39.89 crore to INR65.68 crore for past three years ended FY18. During FY18, TOI remained moderate at INR39.89 crore, a decline by 39.26% on a y-o-y basis. Profitability remained low as marked by PBILDT of INR2.46 crore (6.16%) during FY18 as against INR2.57 crore (3.92%) during FY17. However, PAT margin decreased and remained thin at 0.03% during FY18 as against 0.31% during FY17 owing to proportionate increase in depreciation and finance cost during FY18. Leveraged capital structure and weak debt coverage indicators: The capital structure of KF though improved remained moderately leveraged marked by overall gearing of 2.27 times as on March 31, 2018 (3.83 times as on March 31, 2017), owing to reduction in total debt level coupled with an increase in net worth base of the firm led by capital infusion by partners. The debt coverage indicators remained weak marked by Total Debt to Gross Cash Accruals (TDGCA) of 15.33 years as on March 31, 2018 (14.43 years as on March 31, 2017), while interest coverage ratio remained moderate at 1.50 times during FY18 as against 1.62 times during FY17. Modest liquidity position: Liquidity position of KF remained modest as marked by the current ratio at 1.08 times as on March 31, 2018 (0.97 times as on March 2017). Further, during FY18 the operating cycle remained elongated at 100 days, while the average working capital limits utilization remained around 95% during past twelve months period ended January, 2019. Cash and bank balance remained low at INR0.23 crore as on March 31, 2018 while cash flow from operations remained at INR1.75 crore during FY18. Presence in highly fragmented agro-processing industry and constitution as partnership firm: High proportion of small scale units operating in the agro commodity processing has resulted in the fragmented nature of the industry as well as intense competition within the players. Players present in segment operate at very low bargaining power against its customers. In addition to this; the firm faces inherent risk of withdrawal of capital and limited financial flexibility owing to its partnership nature of its constitution. Susceptibility of its profit margins to raw material price fluctuations and foreign exchange rates and operations subject to government interventions: KF is primarily engaged in the processing and milling of various agro based products to manufacture wheat flour, maida, sooji, bran etc. All products being an agricultural output and staple food, its price is subject to intervention by the government. In the past, the prices of wheat have remained volatile mainly on account of the government policies in respect of Minimum Support Price (MSP) & controls on its exports. The prices are also sensitive to seasonality in wheat production, which is highly dependent on monsoon. Any volatility in the wheat prices will have an adverse impact on the performance of the flour mill and consequently their profit margins. Furthermore, KF is also exposed to foreign exchange rate fluctuations risk as it is engaged in exports and no active hedging policy is implemented. Key Rating Strengths Vast experience of partners in agro commodity processing industry: KF was established by partners namely Mr. Manjeet Singh Bhatia, Ms. Puneet Kaur Bhatia, Ms. Sanjali Jain and Mr. Vishwas Jain in 2013. All the partners have average experience of more than five decades in agro commodity industry which led to an established relationship with customers and suppliers. Location Advantage: KF is located in wheat growing belt of Madhya Pradesh having large network of wheat producers, which benefits KF in terms of transportation and connectivity. KF's presence in wheat producing region results in benefit in terms of easy availability of raw materials, customer base and availability of labour as well. Indore-based (Madhya Pradesh) KF; was established as Partnership Firm in July, 2013 by Mr. Manjeet Singh Bhatia, Ms. Puneet Kaur Bhatia, Ms. Sanjali Jain and Mr. Vishwas Jain. KF mainly manufactures and processes wheat into different products like refined wheat flour (maida), semolina (sooji) and whole wheat flour (atta), post which it sells under the brand name of 'Kitchen Foods'. KF's flour mill facility is located at Khargone, Madhya Pradesh having capacity of processing 150 Metric tonnes of wheat per day (MTPD). The partners collectively manage all the operations of KF. KOMAL SINGH: CARE Lowers Rating on INR7.69cr Loan to B+ ------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Komal Singh Kothari Rajendra Singh Kothari (KSRS), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 7.69 CARE B+;Stable; Issuer not Facilities cooperating; Revised from CARE BB-;Stable; ISSUER NOT COOPERATING on the basis of best available information Short-term Bank 1.50 CARE A4; Issuer not Facilities cooperating; Based on best available information Detailed Rationale & Key Rating Drivers CARE had vide its press release dated February 21 2018, placed the rating(s) of KSRS under the 'issuer non-cooperating' category as KSRS had not paid the surveillance fees for the rating exercise as agreed to in its Rating Agreement. KSKRSK continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and a letter dated April 22, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). The revision in the rating assigned to the bank facilities of KSRS is primarily constrained on account of its modest scale of operations with financial risk profile marked by leveraged capital structure and stressed liquidity position and constitution as a partnership concern. The rating is, further, constrained on account of its presence in a highly competitive and fragmented nature of industry. The rating, however, derives strength from the experienced management, healthy profitability margins with revenue from different streams and Location advantage being present at one of the prime areas of Udaipur and franchisees and leasing of outlets of renowned brands. Detailed description of the key rating drivers At the time of last rating on February 16, 2018, the following were the rating strengths and weaknesses Key Rating Weakness Modest scale of operations with constitution as a partnership concern: During FY17, TOI of the firm decreased by 9.35% over FY16 and registered TOI of INR2.52 crore. Further, its constitution as a partnership concern with low net worth base restricts its overall financial flexibility in terms of limited access to external funds for any future expansion plans. Further, there is inherent risk of possibility of withdrawal of capital and dissolution of the firm in case of death/insolvency of the partners. Financial risk profile marked by highly leveraged capital structure and stressed liquidity position: The capital structure of the firm stood highly leveraged with an overall gearing of 7.63 times as on March 31, 2017; deteriorated from 7.51 times as on March 31, 2016 on account of higher utilization of working capital bank borrowings. Further, the debt coverage indicators of the firm stood weak marked by total debt to GCA of 11.85 times in FY17, declined marginally from 11.59 times in FY16 mainly on account of increase in increase in total debt level. The interest coverage ratio of the firm stood moderate at 2.20 times in FY17. The liquidity position of the firm stood stressed marked by full utilization of working capital bank borrowing during last twelve months ended January, 2017. The liquidity of the firm stood weak marked by below unity level of current and quick ratio. Highly competitive and fragmented nature of industry: KSRS has franchisees of Westside, INC 5 Shoes Private Limited and 109 degree Fahrenheit which are major brands dealing in apparels, sports shoes, denim, etc. as well as has leased outlets of major brands. The industry is dominated by unorganized retailers (approximately 92% of total industry size) which are small players. The industry has large number of small players due to the low entry barriers and low investment required for starting a retail store. The high degree of fragmentation also leads to stiff competition amongst the retailers. Smaller companies in general are more vulnerable to intense competition and have limited pricing flexibility, which constrains their profitability as well. Key Rating Strengths Experienced management: The overall affairs of the firm are managed by both the partners. Mr. Komal Singh Kothari, Bachelor of Engineering, has an experience of more than two decades in the industry and Mr. Rajendra Singh Kothari, Post Graduate Diloma in Management (PGDM), looks after finance functions. Further, both of them are assisted by Mr. Deepesh Kothari, son of Mr. Komal Singh Kothari, MBA, looks after gaming zone and marketing/promotions of the mall and manages the stores which are leased out by the firm. Healthy profitability margins with revenue from different streams: PBILDT margin improved by 517 bps and stood at 49.18% in FY17. However, PAT margin of the firm declined by 31 bps mainly due to higher depreciation and interest and finance cost. Location advantage being present at one of the prime areas of Udaipur and franchisees and leasing of outlets of renowned brands: RKay mall is situated in Udaipur City which is the major tourist hub for Indian as well as International visitors. The major tourist attractions in the city of Udaipur are Lake Pichola, City Palace Complex, Bagore Ki Haveli, Ambrai Ghat, Fateh Sagar Lake and many more temples which are an hour distance from the mall. Mall has different branded stores coupled with gaming and food zone in it, which fascinates localities as well as tourist to visit and enjoy during its leisure time. The firm has leased out its mall to around 20 different outlets which includes major brands like John Players, Zodiac, Denizen, Fabindia, Zari, etc. and operates three franchisees of renowned brands named Westside, INC 5 Shoes Private Limited and 109 degree Fahrenheit in the mall. Further, the mall has a gaming zone which has a bowling alley, video games, bike racing car racing, etc as well as food court and cafes in it. Udaipur (Rajasthan) based Komal Singh Kothari Rajendra Singh Kothari (KSRS) was formed in 2005 as a partnership concern by Mr. Komal Singh Kothari and Mr. Rajendra Singh Kothari and shares profit and loss in the ratio of 50:50 respectively. KSRS has developed a commercial complex, 'RKay Mall' situated at Panchwati, near Chetak Circle (Udaipur) which has 5 floors including ground floor and basement parking (For 50 cars and 100 two wheelers) total construction area of 1 lakh square feet. The firm has leased out its mall to around 20 stores and runs three franchisees of Westside, INC 5 Shoes Private Limited and 109 degree Fahrenheit in the mall. The promoters have also promoted Kay Travels and Tours (KTT), formed in 1994 as a partnership concern by Mr. Komal Singh Kothari and Mr. Rajendra Kothari and shares profit and loss in the ratio of 55%:45%. The firm is engaged in the business of air tickets, package tours, hotels and services. LODHA DEVELOPERS: Fitch Affirms 'B' LT IDR, Alters Outlook to Neg. ------------------------------------------------------------------ Fitch Ratings has revised the Outlook on India-based Lodha Developers Limited to Negative from Stable and has affirmed the Long-Term Issuer Default Rating at 'B'. Fitch has also affirmed the USD325 million 12% senior unsecured bond due in 2020, issued by Lodha Developers International Limited and guaranteed by Lodha and certain subsidiaries, at 'B' with a Recovery Rating of RR4. The Negative Outlook reflects Lodha's weakening liquidity position, as cash and operating cash flow will be insufficient to meet INR69 billion of debt maturities due in the financial year ending March 2020 (FY20). Fitch expects repayments on the GBP290 million (INR26 billion) construction-finance loan at London-based subsidiary, Lodha Developers 48CS Limited, due December 2020 to be covered through project sales and Indian debt maturities of INR20 billion to be refinanced in light of Lodha's large inventory and land bank. However, Fitch believes addressing the remaining maturities will require alternate funding sources, like asset sales and inventory financing. Lodha has received a GBP25 million advance for the planned 28% stake sale in its London projects and further sales will alleviate liquidity risk. A failure to execute its refinancing plan may result in the rating being downgraded by one or more notches. The affirmation reflects Lodha's strong positioning, with the highest volume market share in the Mumbai metropolitan region, and deleveraging capacity as the company completes the construction of its London projects and starts to access cash over FY20-FY22. KEY RATING DRIVERS Limited Financing Flexibility: Fitch believes Lodha's cash and operating cash flow will be insufficient to repay its USD325 million (INR23 billion) bond due March 2020. Fitch expects INR39 billion of the cash collected in FY20 from sales at the 48CS project and half of the sales at the larger London GSQ project to fully cover repayments on the GBP290 million construction loan for the 48CS project and partly cover the bond's refinancing. Fitch believes the receipt of INR9.5 billion for the 28% stake sale of Lodha's London projects and a similar value from inventory financing in London or commercial assets sales in India in the next few months will help mitigate near-term liquidity risk. Weak Domestic Sales: Fitch expects domestic pre-sales to increase at a 7% CAGR over FY19-FY22, supported by demand growth in the affordable segment in light of a substantial housing deficit and government initiatives. Collections in FY19 were strong at INR92 billion (FY18: INR91 billion), but are likely to moderate on weak FY19 domestic pre-sales of INR72 billion (FY18: INR81 billion). Fitch believes the lower sales were driven by a weaker-than-Fitch-expected demand environment, tighter housing-finance credit availability and the near-term effect of a lower goods and services tax on under-construction properties from FY20. Brexit Overhang on London Sales: Fitch estimates FY20 London-project pre-sales of INR8 billion (FY19: INR6 billion, FY18: INR24 billion) on continued uncertainty regarding the form and timing of the UK's exit from the EU, since the negotiation period has been extended out to October 2019, but for FY21 pre-sales to improve to INR12 billion once the Brexit outcome is known and the two projects are completed. Fitch believes the weak FY19 London pre-sales reflect Brexit-related uncertainty that is weighing on confidence for purchasing property. High Leverage: Fitch expects Lodha's leverage, as measured by net adjusted debt/adjusted inventory, to remain high at around 79% in FY19, before improving to 75% in FY20 and 71% in FY21 as the London-based projects are completed and collections become due. Lodha has one of the highest leverage levels among 'B' category property-developer peers in Asia Pacific, reflecting its aggressive growth strategy; the long collection cycle of Lodha's Indian projects is linked to construction and collections of its London projects become due only on construction completion. The recent slowdown in sales is exacerbating the impact on leverage. DERIVATION SUMMARY Lodha's rating and the Negative Outlook is driven by the developer's weakening liquidity position, with INR69 billion in debt maturities in FY20 against INR20 billion in projected free cash flow and INR11 billion of headroom to take on new debt to fund incremental construction. Fitch believes Lodha's USD325 million bond due March 2020 would require support from alternate funding sources, such as asset sales and inventory financing. Lodha is one of the highest leveraged companies among 'B' category property-developer peers in Asia Pacific. Xinyuan Real Estate Co., Ltd. (B/Negative) is a small regional developer in China, with a need to constantly replenish land bank. The company also has low EBITDA margins of around 20%-21% due to its limited operating scale. Lodha has a stronger business profile, with land reserves of around 4,450 acres in the Mumbai metropolitan region and EBITDA margins of around 40%, but its leverage of around 80% is weaker than Xinyuan's 57%. PT Alam Sutera Realty Tbk's (ASRI, B/Stable) ratings are supported by stable leverage of 43%-42% over 2019 and 2020, strong presales in 2018, a substantial low-cost land bank, quality assets and an established domestic franchise. Lodha has a strong market position and larger scale than ASRI, but its leverage is comparatively higher than that of ASRI. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Domestic presales of INR76 billion in FY20 and INR79 billion in FY21 (FY19: INR72 billion) - Domestic cash collection of INR90 billion in FY20 and INR88 billion in FY21 (FY19: INR92 billion) - Domestic construction costs of INR44 billion in FY20 and INR42 billion in FY21 (FY19: INR44 billion) - London property presales of INR8 billion in FY20 and INR12 billion in FY21 (FY19: INR6 billion, FY18: INR24 billion) - London property cash collection of INR39 billion in FY20 and INR23 billion in FY21 (FY19: NA) - London property construction costs of INR10 billion in FY20 (FY19: INR14 billion) RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action - The Outlook may be revised to Stable if Lodha completes its refinancing as planned, is able to deleverage such that net leverage, as measured by net adjusted debt/adjusted inventory, falls to 75% or below by FY20 and is on track to achieve its FY20 domestic pre-sales estimate of INR76 billion. Developments that May, Individually or Collectively, Lead to Negative Rating Action - A failure to achieve the above positive sensitivities or significant weakening in liquidity, such that Lodha does not complete its refinancing as planned, may lead to a downgrade by one or more notches. LIQUIDITY Limited Liquidity: Fitch believes Lodha's liquidity position is tight, with INR69 billion in FY20 maturities against INR20 billion in projected free cash flow and INR11 billion of headroom to take on new debt to fund incremental construction. INR39 billion of collections from the London-based projects would fully cover repayments on 48CS project's GBP290 million construction loan and other statutory payments in FY20, and partly cover the bond's refinancing. Fitch believes the receipt of INR9.5 billion for the 28% stake sale of the London projects and a similar value from inventory financing in London or commercial assets sales in India in the next few months would help mitigate near-term liquidity risks. To this end, Lodha has already received a support letter for inventory financing worth GBP360 million at a loan/value ratio of 60% at its London properties. Lodha did not meet the fixed-charge cover ratio, as defined in the documentation of its US dollar bond indenture, as of FYE18, which prevents the company from drawing on additional debt subject to certain exclusions. Fitch estimates that headroom to draw on INR11 billion in debt for the India business is sufficient to fund incremental construction till FY20. The US dollar bond is due in March 2020. Lodha's India business had INR60 billion of receivables from completed sales and INR71 billion of unsold inventory from completed residential projects as of FYE19 that can be used as cover for domestic refinancing. LYKA BDR: Ind-Ra Migrates 'B' LT Issuer Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Lyka BDR International 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 B (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR134 mil. Fund-based facilities migrated to Non-Cooperating Category with IND B (ISSUER NOT COOPERATING) / IND A4 (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on April 12, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 1993, Lyka BDR International is primarily involved in the trading of pharmaceutical products manufactured by Lyka Labs in its factory, located in Ankleshwar, Gujarat. MEGHALAYA CAST: Ind-Ra Affirms BB LT Issuer Rating, Outlook Stable ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has affirmed Meghalaya Cast & Alloys Private Limited's (MCAPL) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR60 mil. Fund-based limits affirmed with IND BB/Stable rating; -- INR21.38 mil. Non-fund based limits affirmed with IND A4+ rating; and -- INR11.2 mil. (increased from INR6.52 mil.) Long-term loan due on March 2022 affirmed with IND BB/Stable rating. KEY RATING DRIVERS The affirmation reflects MCAPL's continued medium scale of operations, as indicated by revenue of INR740 million in 9MFY19 and INR593.71 million in FY18 (FY17: INR411.47 million). The revenue increased steadily because of growth in demand as well as a favorable change in the pricing of its products. The rating factor in the modest operating margins due to high competition. The EBITDA margin declined to 3.16% in FY18 (FY17: 4.16%) due to an increase in raw material costs. The return on capital employed was 9% (8%). The ratings are constrained by tight liquidity, with 99.6% average maximum utilization of fund-based limits in the 12 months ended April 2019. The cash flow from operations turned negative at INR16.21 million in FY18 (FY17: INR58.27million) due to unfavorable changes in the working capital. The cash and cash equivalent stood at INR1.16 million at end-FY18. MCAPL's credit metrics are moderate. The metrics improved on a YoY basis in FY18 due to an increase in the absolute EBITDA to INR18.78 million (FY17: INR17.10 million) and a decline in net borrowings to INR78.25 million (FY17:INR83.02million). The interest coverage ratio (operating EBITDA/gross interest expense) was 2.1x (1.8x) and net leverage was 4.1x (4.6x). Ind-Ra expects the credit metrics to have improved further in FY19, backed by an increase in the absolute operating profit. The ratings are supported by the founder's experience of over a decade in the manufacturing and casting of mild steel billets. RATING SENSITIVITIES Negative: A sustained deterioration in the credit metrics and worsening of the liquidity profile may lead to negative rating action. Positive: A sustained improvement in the credit metrics and improvement in the liquidity profile may lead to positive rating action. COMPANY PROFILE Incorporated in 2001, MCAPL manufactures mild steel billets. The company's manufacturing plant, located at Burnihat, Meghalaya, has an annual installed capacity of 34,320 metric tons. The plant is operating at 57% capacity. NAGABHUSHANAM & CO: Ind-Ra Raises Long Term Issuer Rating to 'B-' ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Nagabhushanam & Co's (NC) Long-Term Issuer Rating to 'IND B-' from 'IND D'. The Outlook is Stable. The instrument-wise rating actions are: -- INR70 mil. Fund-based working capital limit upgraded with IND B-/Stable/IND A4 rating; and -- INR225 mil. Non-fund-based working capital limit upgraded with IND A4 rating. KEY RATING DRIVERS The upgrade reflects NC's timely debt servicing since October 2019 owing to regular payments by counterparties. However, the liquidity position remains tight on account of the working capital intensive nature of business. The firm's peak utilization of the fund-based facilities was 97% on an average during the six months ended March 2019. It had a cash balance of INR40.0 million and cash flow from the operation was positive at INR61.5 million during FY19, according to provisional financials. The ratings continue to reflect NC's small scale of operations. Revenue declined to INR299.0 million in 9MFY19 (FY18: INR726.7 million; FY17: INR704.5 million), on account of delays in the execution of work orders due to land acquisition problems in Andhra Pradesh State Government projects. The company had an outstanding order book of INR2,783.7 million as of March 2019 (9.3x of FY19 revenue), which will be executed by March 2020. Management expects the top line to increase on account of faster execution of orders during FY20. The ratings factor in NC's moderate credit metrics, with interest coverage (operating EBITDA/gross interest expense) at 2.3x in FY19 (FY18: 3.4x; FY17: 4.0x) and net leverage (adjusted net debt/operating EBITDA) at 2.5x (2.2x; 1.5x). The deterioration in metrics was attributed to an increase in interest expense to INR31.4 million in FY19 (FY18: INR24.1 million; FY17: INR21.7 million) and total debt to INR222.8 million (INR211.0 million; INR161.8 million). The ratings also factor in NC's average EBITDA margins, which ranged between 11.6%-24.6% over FY15-FY19. EBITDA margin was 24.6% in FY19 (FY18: 11.5%, FY17: 12.8%) and return on capital employed was 14% (19%; 27%). The fluctuations in the EBITDA margin were due to variations in the project mix. The management expects the EBITDA margin to remain along similar lines. The ratings are supported by the firm's partner's over 10 years of experience in the civil construction industry. RATING SENSITIVITIES Negative: A decline in the revenue and profitability leading to deterioration in the credit metrics, all on a sustained basis, will be negative for the ratings. Positive: An improvement in the liquidity position along with revenue growth, and stable EBITDA margin, leading to an improvement in the credit metrics, all on a sustained basis, could be positive for the ratings. COMPANY PROFILE Incorporated in 2001, NC executes civil works for the government of Telangana such as the construction and improvement of roads & bridges. The firm is a partnership concern and is operated by two partners Nagabhushana Rao and Visweswara Rao. NOVARC LABS: CARE Lowers Rating on INR7.00cr LT Loan to 'D' ----------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Novarc Labs Private Limited (NLPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 7.00 CARE D; ISSUER NOT COOPERATING Facilities Revised from CARE B; Stable; Issuer not Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated February 19, 2018, placed the rating of NLPL under the 'issuer non-cooperating' category as NLPL had failed to provide information for monitoring of the rating. NLPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and email dated April 22, 2019, April 23, 2019, April 24, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers The rating revision to the bank facilities of Novarc Labs Private Limited (NLPL) is on account of ongoing delays in debt servicing of working capital facility. Key Rating Weakness Ongoing delays in working capital facility: The company was unable to generate sufficient cash flows leading to strained liquidity position resulting in delays in debt serving of working capital facility. Competitive business segment due to presence of numerous companies engaged in trading of medical drugs: As India is the second largest API manufacturer, with increase in the number of Pharma companies. There is a high competition in the industry backed by the regulatory bodies, which may hamper the business of the companies prevailing in the industry. Key Rating Strengths Experienced and well qualified promoter: NSPL is promoted by Mr Thilotham R Kolanu (Managing Director) and Ms Vishali Sravanthi. M (Director), and Ms Pooja N. Mr Thilotham R Kolanu is a qualified Doctorate of Philosophy (Environmental Science) and having one decade of overall experience, with three years of experience in pharma business. Due to the promoters' experience in pharma business, the directors have established relation with customer and suppliers. The overall business of the company is managed by Mr Thilotham R Kolanu. Novarc Labs Private Limited (NLPL) was established in the year 2012, promoted by Mr Thilotham R Kolanu. The company is engaged in trading of medical drug products. The company purchases the medical components (used in manufacturing of medicines) like 2 hydroxy methyl, 2 chloro methyl and 2m5m benzimidizole from suppliers, namely i.e Ariston pharma Novatech, Nexus Drugs and Prabhu Chemicals. The company receives the work orders directly from the customers, namely Ariston Pharma Novatech (P) Ltd, Vijayasri Pharma Chem and Leavochem Labs Private Limited. The company is located at Madhapur, Hyderabad (Telangana). PADMAVATHI COTTON: ICRA Migrates 'D' Rating to Not Cooperating -------------------------------------------------------------- ICRA has moved the rating for the bank facilities of Padmavathi Cotton Industries to 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]D; "ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- LT Fund Based 11.00 [ICRA]D; ISSUER NOT COOPERATING; Limits Rating moved to 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Padmavathi Cotton Industries, located at Chintapally Mandal in Nalgonda district of Telangana, is a partnership firm established in March 2015 and started its operations on 28th January 2016. The firm is engaged in cotton ginning. The ginning facility includes 48 double roller gins, auto pressing and an auto feeder. The installed capacity of the ginning and pressing unit is 351000 Quintals of kappas per annum. PARIXIT IRRIGATION: Ind-Ra Affirms 'D' LT Issuer Rating, Not Coop. ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has affirmed Parixit Irrigation Limited's (PIL: formerly Emtelle India Limited) Long-Term Issuer Rating at 'IND D (ISSUER NOT COOPERATING)'. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Thus, the ratings are on the basis of the best available information. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR26.4 mil. Term loan (long-term) due on April 2019 affirmed with 'IND D (ISSUER NOT COOPERATING)' -- INR375 mil. Cash credit limits (long-term)*# affirmed and withdrawn; and -- INR220 mil. Non-fund-based working capital limits (short- term)*# affirmed and withdrawn; * Affirmed at 'IND D (ISSUER NOT COOPERATING )' before being withdrawn # Ind-Ra is no longer required to maintain the ratings, as the agency has received a no-objection certificate from the rated facilities' lenders. This is consistent with the Securities and Exchange Board of India's circular dated March 31, 2017, for credit rating agencies. Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on the best available information. KEY RATING DRIVERS The affirmation reflects continued delays in the repayment of term loans during the 12 months ended April 2019 due to a tight liquidity position. COMPANY PROFILE Incorporated in 1989, Ahmedabad-based Parixit Irrigation is engaged in the manufacturing and turnkey contracts of micro irrigation systems and a range of polyethylene pipes. PRAKASH STEELAGE: CARE Migrates 'D' Rating to Not Cooperating ------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Prakash Steelage Limited (PSL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 150.00 CARE D; Issuer not cooperating; Facilities Based on best available information Short term Bank 70.00 CARE D; Issuer not cooperating; Facilities Based on best available information Detailed Rationale & Key Rating Drivers: CARE has been seeking information from PSL to monitor the rating(s) vide e-mail dated dated Nov. 12, 2018, April 17, 2019, April 18, 2019, April 22, 2019 and various telephonic interactions. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the ratings. In the absence of minimum information required for the purpose of rating, CARE is unable to express opinion on the rating. In line with the extant SEBI guidelines CARE's rating on Prakash Steelage Limited's bank facilities will now be denoted as CARE D/CARE D; ISSUER NOT COOPERATING, Based on best possible information. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating(s). Detailed description of the key rating drivers The ratings take into account the ongoing delays in servicing of debt obligations as per audited financial statements of FY18 & financial statement of 9MFY19. PSL, incorporated on May 9, 1991, was converted into a public limited company on August 12, 1997 and was listed in August 2010. PSL started its business with trading in the stainless steel (SS) sheets, coils, plates and scrap. The company now is engaged in the manufacturing of stainless steel (seamless and welded) pipes and tubes and trades into stainless steel sheets and coils. The company products are used in heat exchanger, evaporators, heating elements, fluid piping, pumps, valves, condensers and in many other instrumentation equipments. The company exports its products to several countries, such as USA, UAE, South Africa, European countries, Canada, Singapore, Saudi Arabia, Turkey, Vietnam, etc. RAJARAMSEVAK MULTIPURPOSE: CARE Cuts INR12.94cr Loan Rating to D ---------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Rajaramsevak Multipurpose Cold Storage Private Limited (RMCPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 12.94 CARE D; ISSUER NOT COOPERATING Facilities Revised from CARE B; Stable; ISSUER NOT COOPERATING on the basis of best available information Short-term bank 0.20 CARE D; Issuer not cooperating; Facilities Revised from CARE A4; Issuer Not cooperating on the basis of Best available information Detailed Rationale and key rating drivers The revision in the ratings assigned to the bank facilities of RMCPL takes into account the delay in servicing term loan installment of the company. Going forward, the ability of the company to regularize the debt servicing obligations and timely repayment of debt will be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Delays in debt servicing: There was delay in servicing term loan installment of the company. The term loan installment which falls due on March 30, 2019 was repaid with a delay on April 30, 2019. RMCPL was incorporated in February 2012 and presently managed by Mr Raja Chakraborty, Mr Shyamal Kumar Dutta, Mrs Koyanta Chakraborty and Mrs Rita Chakraborty. After remaining dormant for around two years, it has commenced operations of cold storage services and trading of potatoes from February 2014. The cold storage facility of RMCPL is located at Kamarhati, Barasat (West Bengal) with aggregate storage capacity of 18300 metric ton. RELIANCE COMMUNICATIONS: NCLT Begins Bankruptcy Process ------------------------------------------------------- BloombergQuint reports that lenders to the crippled Reliance Communications Ltd. on May 7 moved NCLT to appoint a new resolution professional and form a committee of creditors, the first step to begin the bankruptcy process of the Anil Ambani group company that owes close to INR50,000 crore to 31 lenders led by the State Bank of India. Meanwhile, RCom through the existing Resolution Professional, sought 13 months exclusion in the insolvency process citing the stays it had on the process by the appellate tribunal and the Supreme Court, the report says. BloombergQuint relates that the RP sought the exclusion from April 30, 2018 to May 30, 2019 as the initial insolvency proceedings was stayed by the National Company Law Appellate Tribunal and later by the apex court. Also, the company has not been successful to meet any of the several publicly made promises to pay back the lenders by monetising real estate and spectrum assets. Last month, company chairman Anil Ambani managed to avoid a contempt of the Supreme Court and a possible jail term after a last-minute bailout by elder brother Mukesh who extended him over INR480 crore to pay back vendor Ericsson, which was the first operational creditor to drag it to NCLT last year, BloombergQuint recalls. Earlier, China Development Bank from which RCom had borrowed over $1 billion, had dragged it to the NCLT which was settled after giving a portion of its headquarters DAKC in the nearby Navi Mumbai, BloombergQuint says. On May 3, SBI held a meeting to shortlist an RP after issuing a request for proposal in April for a new RP. According to BloombergQuint, RCom's committee of creditors will have to approve a new RP with a 66 percent vote after the NCLT starts the insolvency process. The Mumbai bench comprising of VP Singh and Ravikumar Duraisamy directed the existing RP to file a progress report by May 30 when it will hear the matter, adds BloombergQuint. About Reliance Communications Based in Mumbai, India, Reliance Communications Ltd (BOM:532712) -- http://www.rcom.co.in/Rcom/personal/home/index.html-- is a telecommunications service provider. The Company operates through two segments: India Operations and Global Operations. India operations segment comprises wireless telecommunications services to retail customers through global system for mobile communication (GSM) technology-based networks across India; voice, long distance services and broadband access to enterprise customers; managed Internet data center services, and direct-to-home (DTH) business. Global operations comprise Carrier, Enterprise and Consumer Business units. It provides carrier's carrier voice, carrier's carrier bandwidth, enterprise data and consumer voice services. The Company owns and operates Internet protocol (IP) enabled connectivity infrastructure, comprising over 280,000 kilometers of fiber optic cable systems in India, the United States, Europe, Middle East and the Asia Pacific region. As reported in the Troubled Company Reporter-Asia Pacific on Feb. 4, 2019, BloombergQuint said Reliance Communications approached 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 company said "[t]he 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." BloombergQuint said that the company, with a debt of more than INR47,000 crore in financial year 2018, had invoked strategic debt restructuring in June 2017. RIDDHI SIDDHI: CARE Lowers Rating on INR15.10cr Loan to D --------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Riddhi Siddhi Cold Storage Pvt Ltd (RSCS), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 15.10 CARE D; ISSUER NOT COOPERATING Facilities Revised from CARE B; Stable; ISSUER NOT COOPERATING, on the basis of best available information Short term Bank 0.21 CARE D; ISSUER NOT COOPERATING Facilities Revised from CARE A4; ISSUER NOT COOPERATING, on the basis of Best available information Detailed Rationale & Key Rating Drivers CARE has been seeking information from RSCS to monitor the rating vide e-mail communications dated April 25, 2019, April 26, 2019, April 29, 2019 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the rating. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on RSCS's bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The revision in the rating assigned to the bank facilities of Riddhi Siddhi Cold Storage Pvt. Ltd. takes into account on-going delays in debt servicing obligations of the company. Detailed description of the key rating drivers Key Rating Weaknesses Ongoing delays in debt servicing: There are several instances of overdrawals in working capital borrowings account for more than 30 days. Riddhi Siddhi Cold Storage Pvt Ltd (RSCS) was incorporated in August 2015 by one Mr Raja Chakraborty and Ms. K Chakraborty from Kolkata to set-up a cold storage and potato trading business. Afterwards the company started to install the cold storage service at Shamuktala in Alipourduar district of West Bengal. During March 2016 the company started weighbridge service at the site and during June 2016 the commercial operation of cold storage service and trading activities of potato has been started with an installed capacity of 27,500 MTPA. The day-to-day affairs of the company are looked after by Mr. Raja Chakraborty (Director) with adequate support from other director - Ms. K Chakraborty (wife of Mr Raja Chakraborty) and a team of experienced personnel. S.A.AANANDAN SPINNING: Ind-Ra Affirms 'BB' Long Term Issuer Rating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has affirmed S.A.Aanandan Spinning Mills Private Limited's (SASMPL) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR110.6 mil. (increased from INR84.5 mil.) Long-term loans due on May 2026 affirmed with IND BB/Stable rating; -- INR450 mil. Fund-based facilities affirmed with IND BB/Stable/IND A4+ rating; and -- INR60 mil. Non-fund-based facilities affirmed with IND A4+ rating. KEY RATING DRIVERS The affirmation continues to reflect SASMPL's modest scale of operations. The company's revenue decreased to INR1,023 million in FY18 from INR1,393 million in FY17 owing to a decline in orders. The company booked gross revenue of INR1,330 million for FY19. The ratings continue to reflect SASMPL's volatile and modest EBITDA margin, which was 5.10%-6.46% over FY14-FY18 (FY18: 6.35%; FY17: 6.08%), owing to fluctuations in commodity prices. In addition, its return on capital employed was 5% in FY18 (FY17: 6%). The ratings are also constrained by SASMPL's weak credit metrics. The company's EBITDA interest coverage (operating EBITDA/gross interest expense) deteriorated to 2.16x in FY18 from 2.37x in FY17 and net financial leverage (adjusted net debt/operating EBITDAR) deteriorated to 7.75x from 6.52x. The deterioration in the credit metrics was primarily due to a decrease in absolute EBITDA to INR65 million in FY18 from INR85 million in FY17. The ratings are further constrained by SASMPL's tight liquidity due to the working capital-intensive nature of business. Its working capital limit use was 99% over the 12 months ended March 2019. Also, its cash flow from operations was INR70 million in FY18 (FY17: INR57 million). Ind-Ra expects SASMPL's FY19 cash flow from operations to have turned negative on account of a forex loss due to the depreciation of the Indian rupee against the US dollar and intense competition. However, the ratings continue to be supported by the promoters more than two decades of experience in the cotton yarn manufacturing business. RATING SENSITIVITIES Negative: A substantial decline in the profitability margin, leading to deterioration in the credit metrics, all on a sustained basis, will lead to negative rating action. Positive: A substantial growth in the top line and profitability margin, leading to an improvement in the credit metrics, all on a sustained basis, will lead to positive rating action. COMPANY PROFILE Incorporated in 1996, SASMPL manufactures cotton yarn in the count range of 20s-100s. It has an annual installed capacity of 21,264 spindles. SAI ENGINEERING: ICRA Keeps B+ INR35cr Loan Rating in Not Coop. --------------------------------------------------------------- ICRA said the rating for the INR35.00-crore bank facility of Sai Engineering Foundation (SEF) continues to remain in the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 35.00 [ICRA]B+ (Stable); ISSUER NOT COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category ICRA has been seeking information from the entity to monitor its performance. Despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA based on the best available/dated/limited information on the issuer's performance. Accordingly, lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as it may not adequately reflect the credit risk profile of the entity. Sai Engineering Foundation (SEF) is a voluntary organisation registered in accordance with the Societies Registration Act XXI of 1860. It is engaged in providing technical consultancy, planning, detailed engineering and implementation of infrastructure projects like buildings, complexes, roads, hydro-electric and solar power projects, with a special focus on hydro power projects. It has executed a number of power projects in Himachal Pradesh for government entities as well as private developers. The entity has also been allotted six hydro projects for which it looks after the operations and maintenance as well. SANIMO POLYMERS: CARE Assigns B+ Rating to INR18cr LT Loan ---------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Sanimo Polymers Private Limited (SPPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 18.00 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of SPPL is constrained by its modest and fluctuating scale of operations with thin profit margins, leveraged capital structure, weak debt coverage indicators and working capital intensive nature of business. The rating is further constrained by company's operations in the competitive and fragmented industry with susceptibility of profit margins to volatility of raw material prices and foreign currency fluctuation risk. The rating, however, derives strength from SPPLs long track record of operations with experienced management and established relationship with diversified & reputed customers and suppliers. The ability of the company to increase scale of operations, improving profit margins, capital structure and efficiently managing the operating cycle are the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Modest and fluctuating scale of operations with thin profitability: The overall scale of operations remained modest with total operating income stood in the range of INR59.95 crore to INR64.58 crore during FY16-FY18. Further, the same has remained fluctuating due to fluctuating demand from domestic and export market. Moreover, the profit margins of the company remained thin due to limited processing nature of operations in textile industry. The PBILDT and PAT margin stood at 6.65% and 0.025 in FY18 respectively as against the operating and net loss incurred in FY17. Leveraged capital structure and weak debt coverage indicators: The capital structure of SPPL remained leveraged with overall gearing stood at 9.06x as on March 31, 2018 (vis-à-vis 9.18x as on March 31, 2017) due to high dependence on the external debt against the low tangible networth base. Furthermore, owing to high gearing and thin profitability, the debt coverage indicators also remained weak. Working capital intensive nature of business: The operations of SPPL remained working capital intensive on account of funds being blocked in inventory and receivables. The average collection period stood significantly higher at 134 days for FY18 due to liberal credit policies adopted by the company. Moreover, the company also keeps high level of inventory for processing and finished goods to meet the regular demand from its customers. Hence, inventory holding stood at 74 days in FY18. As against the same the company receives very low credit from its suppliers. However, the working capital requirements were primarily funded through unsecured loans and hence, the utilization of working capital limits remained moderately high. Operations in the competitive and fragmented industry with volatility of raw material prices: SPPL operates in the textile industry which is highly fragmented in nature with presence of numerous independent small-scale enterprises owing to low entry barriers leading to high level of competition in the textile segment. Further, the profit margins remained susceptible to volatility in the raw material prices i.e. yarn (resco silk yarn, polyster yarn etc.). Considering the highly fragmented nature of textile industry and limited bargaining power with the customers and suppliers; any adverse volatility in the raw material prices may hamper the company's profit margins. Foreign currency fluctuation risk: SPPL is exposed to foreign exchange fluctuation risk, given it exports about 13.52% of the sales to Egypt, Italy, Isreal, Belgium, Canada, US etc. The company hedges the same through use of forward contract to mitigate foreign currency risk to an extent. Nevertheless, any adverse currency price fluctuation along with the mismatch in the timing differences may impact the profitability of the company. Key Rating Strength Long track record of operations with experienced management: SPPL possesses long track record of about two decades of existence in manufacturing of yarn and is currently managed by Mr. Suresh shah (engineering graduate) having total experience of more than three decades in same line of business. Mr. Tejas Shah (Post Graduate) having 7 years of experience in the textile industry. Established relationship with diversified & reputed customers and suppliers: SPPL caters to the reputed clients in textile industry viz. Raymond Ltd, Page Industries Ltd etc. Further, the company procures its raw material i.e. FDY, POY from reputed suppliers Fairdeal Filament Ltd, Reliance Industries Ltd and Wellknown Polyesters Ltd etc. Moreover, overall the customers and supplier profile remained moderately diversified with top 3 customers constituting 20.74% of total sales and 34.07% of total purchase for FY18. Liquidity Position The liquidity position is marked by low current ratio and quick ratio at 1.26 times and 0.64 times respectively as on March 31, 2018. Further, cash flow from operating activities stood positive at INR4.28 crore as on March 31, 2018. The average fund based working capital limits remained ~60-70% utilized during past 12 months ended February 2019. Moreover, free cash and bank balance was INR0.004 crore as on March 31, 2018 (vis-à-vis INR0.08 crore as on March 31, 2017). Sanimo Polymers Private Limited (SPPL) was originally established in 1986 as a private limited company by Mr.Sanjay Nirupam Mohta as plastic manufacturing company. Later, in 1990 the management was taken over by Mr. Suresh shah. Later on, in the 2002 the company started its manufacturing of Polyester Dyed yarn viz. Carpet Yarn, Elastic and Tape Yarn, Suiting and Shirting Yarn, Furnishing Yarn, Embroidery Yarn and Stitching Yarn which finds its application in manufacturing of carpet, shirting-suiting, elastic, knitted fabrics, etc. The company has its in-house facilities of Twisting, Doubling, Dyeing, Multi-fold Plying and Computer Colour Matching and offers more than 15000 shades in different types of products with the weight ranging between 20 grams to 20 tons. SPPL procures its raw material i.e. Resco silk yarn, dyes & chemicals from domestic market The company sells its product under its own brand named Resco star, Sargam, Rhythmm, Sure stitch and Sanimo. The company sells its products to PAN India through various wholesalers and distributors. The Company has installed capacity of 3600 metric tonnes per annum of yarn which was utilized at 72% during FY18. The company has three manufacturing units situated at Gujarat. SANT AUTOS: CARE Cuts Rating on INR6.0cr LT Loan to B-, Not Coop. ----------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Sant Autos (SNA), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 6.00 CARE B-; Stable; ISSUER NOT Facilities COOPERATING; Revised from CARE B; Stable; ISSUER NOT COOPERATING on the basis of best available information Detailed Rationale and key rating drivers CARE has been seeking information from SNA to monitor the rating vide e-mail communications/letters dated April 18, 2019, April 22, 2019, April 24, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on Sant Autos's bank facilities will now be denoted as CARE B-; Stable; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The revision in the rating takes into account the unavailability of information as well as banker could not be contacted owing to non cooperation by the entity. Detailed description of the key rating drivers At the time of last rating in February 15, 2018 the following were the rating strengths and weaknesses; Key Rating Weakness Partnership nature of constitution: SNA, being a partnership firm, is exposed to inherent risk of partners' capital being withdrawn at time of personal contingency. Furthermore, limited ability to raise capital and poor succession planning may result in dissolution of the firm. Risk of non-renewal of dealership agreement from principles: SNA has entered into a dealership agreement with M&M in 2012. The dealership agreement with M&M has been renewed every two years and the same is currently valid till March 2018 subject to renewal of the agreement afterwards, completely at the discretion of M&M. Furthermore, the agreements may get terminated at any time on violation of certain clauses. However, the risk is mitigated to some extent in view of its moderately long association with M&M. Pricing constraints and margin pressure arising out of competition from other auto dealers in the market: SNA faces aggressive competition on account of established presence of authorized dealers of other commercial vehicle manufacturers like TATA, Eicher, etc. Considering the existing competition, SNA is required to offer better terms like providing discounts on purchases to attract new customers. Such discounts offered to customers create margin pressure and may negatively impact the revenue earning capacity of the firm. Furthermore, the revenues of SNA would also be governed by launch of newer models by M&M, and acceptance of the products in the market. Key Rating Strengths Experienced partners with moderately long track record of operation: The firm is managed by Mr Amrik Singh (Managing partner) with the help of other three partners. The partners are having over two decades of experience in business activities. The firm has started from 2011, thus having a moderately long track record of operation. Authorised dealership of Mahindra and Mahindra Ltd: SNA is an authorised dealer of M&M and has started its association since 2012. The firm has one showroom located at Ramgarh, Chandil in Jharkhand. SNA is getting a competitive advantage of being solo dealer of M&M heavy vehicles for this area. M&M has been one of market leaders in the heavy commercial vehicles segment for decades and has a wide & established distribution network of sales and service centres across India, providing it a competitive advantage over its peers. SNA is a partnership firm established in April 2011 by Mr Amrik Singh of Ramgarh along with other three partners. Subsequently, the firm started to initiate an auto dealership business and has setup a selling and servicing facility at Ramgarh, Chandil in Jharkhand. The firm has taken dealership authority from Mahindra and Mahindra Ltd (M&M- truck and bus division) for selling and servicing heavy commercial vehicles like truck and bus. The firm has started commercial operation from April 2011. The day-to-day affairs of the firm are looked after by Mr Amrik Singh (Managing Partner) with adequate support from other three partners and a team of experienced personnel. SHALIMAR ISPAT: CARE Cuts Rating on INR6cr LT Loan to D, Not Coop. ------------------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of Shalimar Ispat Udyog, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 6.00 CARE D; ISSUER NOT COOPERATING Facilities Revised from CARE B; Stable; ISSUER NOT COOPERATING on the basis of best available information Short-term bank 2.00 CARE D; Issuer not cooperating; Facilities Revised from CARE A4; Issuer not cooperating on the basis of best available information Detailed Rationale and key rating drivers The revision in the ratings assigned to the bank facilities of Shalimar Ispat Udyog takes into account the on-going delay in the debt servicing of the entity. Going forward, the ability of the entity to regularize the debt servicing obligations and timely repayment of debt will be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Ongoing delays in debt servicing: There are on-going delays in the debt servicing of the entity. Raipur (Chhattisgarh) based, Shalimar Ispat Udyog (SIU) was established as a partnership firm in May 1994. Since its inception, the firm is engaged in engaged in manufacturing of MS bars, squares & rounds, flats, channels, angels and rectangular bars etc. The manufacturing facility of the firm is located at Raipur, Chhattisgarh with an installed capacity of 9,000 metric tonnes per annum. The key partner Mr. Ravi Daga is having more than two decades of long experience in the same line of business and he looks after the day to day operation of the firm. He is further supported by a team of experienced professionals. Liquidity position: The liquidity position of the entity remained stressed as reflected by its on-going delay in debt servicing. SHIV GORAKH: CARE Lowers Rating on INR10cr ST Loan to D, Not Coop. ------------------------------------------------------------------ CARE Ratings revised the ratings on certain bank facilities of Shiv Gorakh Timber Private Limited, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 1.25 CARE D; Issuer not cooperating; Facilities Revised from CARE B; Stable; Issuer not cooperating on the basis of best available information Short term Bank 10.00 CARE D; Issuer not cooperating; Facilities Revised from CARE A4; Issuer not cooperating on the basis of best available information Detailed Rationale & Key Rating Drivers The revision in the ratings assigned to the bank facilities of Shiv Gorakh Timber Private Limited takes into account instances of devolvement of the Letter of Credit (LC), for more than 30 days, because of weak liquidity position of the company. Detailed description of the key rating drivers Instances of LC devolvement: On account of tight liquidity position of SGTPL, the LC limit availed by the company remained devolved for more than 30 days. The entity was established as a proprietorship firm in 1996 under the name of 'Shiv Gorakh Timber' by Mr. Ravinder Mittal. It was later converted into private limited company in February 2010. The company is being currently being managed by Mr. Devinder Mittal and Mr. Ravinder Mittal. The company is engaged in trading of timber wood and timber logs at its facilities located in Haryana, Gujarat and Punjab. STAR GRANITO: CARE Assigns B+ Rating to INR5.29cr LT Loan --------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Star Granito (STG), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 5.29 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of STG is primarily constrained on account of its nascent stage of operations with net loss, moderate solvency and liquidity position. The rating is, further, constrained on account of vulnerability of margins to fluctuation in the raw material prices, easy availability of substitute products and constitution as a partnership concern. The rating, however, favorably takes into account the experienced partners with group support and strategic location of manufacturing units with close proximity to raw material sources. Stabilization of its operations with increase in scale of operations while maintaining of its profitability margins and better working capital management would be key rating sensitivities. Detailed description of the key rating drivers Key Rating Weakness Nascent stage of operations of the firm albeit healthy PBILDT margin and moderate solvency position: The firm started commercial operations from February, 2018 and 2MFY18 has registered Total Operating Income of INR0.50 crore. The firm registered a gross turnover of INR6.00 crore in FY19 being first full year of operations. Further, BILDT margin of the firm stood healthy at 16.58% during 2MFY18; however being in nascent stage of operations, depreciation cost stood high resulting in net loss of INR0.34 crore in 2MFY18 and registered thin GCA of INR0.02 crore. Furthermore the capital structure of the firm stood moderate with overall gearing of 2.32 times as on March 31, 2018 owing debt funded project undertaken by the firm. The debt coverage indicators stood weak with total debt to GCA of 49.51 times and interest coverage of 1.23 times as on March 31, 2018. It utilizes upto 95% of its working capital bank borrowings during the last twelve months ended in March, 2019. The cash and bank balance stood at INR0.08 crore as on March 31, 2018. Vulnerability of margins to fluctuation in raw material prices and easy availability of substitute products and constitution as a partnership concern: The major raw material required by STG is natural stones. The profitability of the firm is vulnerable to any adverse movement in raw material prices as the firm will not be immediately able to pass on the increased price to its customer and its elongated raw material inventory holding period. Further, there are various substitute products which are easily available in the market and STG faces competition from same. Further, its constitution as a partnership concern with low net worth base restricts its overall financial flexibility in terms of limited access to external funds for any future expansion plans. Further, there is inherent risk of possibility of withdrawal of capital and dissolution of the firm in case of death/insolvency of partners. Key Rating Strengths Experienced partner and group support: Mr Nitesh Jain, partner, looks after the overall affairs of the company and has around 15 years of experience in the industry. Further he is supported by his brother, Mr Mukesh Jain, graduate by qualification and has 19 years of experience in marble and granite industry. Further the management is supported by a team of skilled and experienced employees in smooth functioning of the firm. Furthermore, STG is also supported by its group concern, namely, Sunkit Marbles Private Limited, SPM Marble Private Limited, Jain Marble and Granite, Stone Mart and Swastik Stones which are engaged in the same line of business from two decades. Strategic location of manufacturing units with close proximity to raw material sources: STG's manufacturing facility is located in Rajasthan, strategically located in one of the major minerals producing region of India which makes it easier for the firm to access its primary raw material. With the help of its group concern, STG has developed good business relations with the quarries owners resulting in benefits derived from lower logistic cost, easy and timely availability and procurement of raw materials at effective prices STG based out at Kishangarh-Rajasthan was formed in April 18, 2017 as a partnership concern by Jain family. STG is engaged in trading, processing and cutting of marbles and granites. The firm purchases raw-material from directly from Udaipur and Pali and sells its products all over India and exports its products through third party. STG has completed its green-field project and started commercial production from February, 2018. It incurred total cost of INR6.00 crore towards the project financed through term loan of INR3.50 crore and remaining through partner's contribution. The manufacturing unit of the firm is situated at Kishangarh and operating at an installed capacity of 1,000 Tonnes Per Month (TPM) of Marble and 1,500 TPM of granite slabs as on March 31, 2018. THREE SIXTY: CARE Assigns B+ Rating to INR6.0cr LT Loan ------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Three Sixty Textiles Private Limited (TSTPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 6.00 CARE B+; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of TSTPL are tempered by small scale of operations along with low tangible networth base, cash losses in FY16 and thin Profitability margins, financial risk profile marked by Leveraged capital structure and debt coverage indicators during the review period and highly fragmented industry with intense competition from large number of players. The rating, however, derives its strengths from established track record along with experienced promoters in cotton trading business, growth in Total Operating Income during the review period, comfortable operating cycle days and stable outlook of cotton industry. Going forward, ability of the company to increase its scale of operations, while managing its profitability margins amidst competition and ability of the company to maintain its capital structure and improve debt coverage indicators would be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Small scale of operations along with low tangible networth base Despite of the presence of the company in the market close to decade, the operations remained small i.e., TOI of INR29.51 crore in FY18 and net worth of INR 1.90 crore as on closing balance sheet date March 31, 2018 which is low as compared to other peers in the industry. Cash losses in FY16 and Thin Profitability margins: The company purchased the sick unit (loss making entity) in the year 2013 and it took 4 years for the company to stabilize its operations and generate profits. However, the PBILDT margin of the company has been fluctuating and remained thin during the review period in the range of 2-3% due to fluctuation in employee cost and other selling expenses. Also, PAT margin of the company has been increasing from -6.32% in FY16 to 0.15% in FY18 due to increase in operating profits at the back of increase in scale of operations, however, remained thin. Financial risk profile marked by leveraged capital structure and weak debt coverage indicators: The Capital structure of the company remained leveraged during review period marked by Overall gearing ratio of the company deteriorated from 1.45x as on March 31, 2016 to 2.52x as on March 31, 2018 due to higher utilization of working capital bank borrowings as on closing balance sheet date coupled with decline in tangible networth on account of adjustment of accumulated losses. Debt coverage indicators of the company remained weak during review period i.e., Total debt/GCA of the company stood weak at 44.60x in FY18 due to higher utilization of working capital bank borrowings despite of increase in gross cash accruals. PBILDT Interest coverage ratio of the company deteriorated to 1.27x in FY18 from 2.49x in FY16 due to increase in interest cost although there is an increase of PBILDT in absolute terms. Total debt/cash flow from operations stood at 8.01x as on March 31, 2018 due to increase in cash flow from operating activities on account of stabilization of business and increase in inventory and debtors. Highly fragmented industry with intense competition from large number of players: The company is engaged in trading of cotton yarn and cloth which is highly fragmented industry due to presence of large number of organized and unorganized players in the industry resulting in huge competition. Key Rating Strengths Established track record along with experienced promoters in trading of cotton business: “Three Sixty Business Process India Private Limited" was established in the year 2007 and promoted by Mr. Kasi v Thiagarajan and Mr.T.Nagappan as first directors of the company. During May 2012, the company name has changed to current nomenclature "Three Sixty Textiles Private Limited"(TSTPL). Later in the year 2013, the company was taken over by Mr. S Sethuramasamy, Mr.S. Parimalam, Mr.A.Selvakumar along with their friends and family members. Mr. S Sethuramasamy (Managing Director) and Mr. A. Shanmugasundaram (Director), who manages the day to day operations and has more than three decades and one decade of experience in cotton trading business respectively. Due to long term presence of the director's in the market, the company has good and established relationships with its customers and suppliers. Growth in Total Operating Income during the review period: The Total Operating Income (TOI), has been increasing at CAGR rate of 72.13%, i.e., the TOI of the company increased from INR 9.96 crore in FY16 to INR 29.51 crore in FY18 due to increased demand from existing customers and addition of new customers. The company has achieved a TOI of INR 30.00 crore in 10M FY19 (Prov.,). Comfortable operating cycle days: The operating cycle days of the company remained comfortable and stood at 61 days in FY18 due to comfortable average creditors and inventory days. Company receives the payment from its customers within a period of 30-60 days. Furthermore, the company makes the payment to its suppliers within 30-45 days. The company maintains the inventory level of 30 days to meet the customer demands. The average overdraft utilization during the last 12 months ended January 31, 2019 is 95%. Stable outlook of cotton industry: Cotton plays an important role in the Indian economy as the country's textile industry is predominantly cotton based. India is one of the largest producers as well as exporters of cotton yarn. The Indian textile industry contributes around 5 per cent to country's gross domestic product (GDP), 14 per cent to industrial production and 11 per cent to total exports earnings. The industry is also the second-largest employer in the country after agriculture, providing employment to over 51 million people directly and 68 million people indirectly, including unskilled women. The textile industry is also expected to reach US$ 223 billion by the year 2021. The states of Gujarat, Maharashtra, Telangana, Andhra Pradesh, Karnataka, Madhya Pradesh, Haryana, Rajasthan, and Punjab are the major cotton producers in India. Liquidity Analysis The current ratio of the company is above unity during the review and stood at 1.07x due to relatively high current assets as compared to current liabilities mainly on account of high inventory and debtors. The cash and cash equivalents of the company stood at INR 0.04 crore and on and average the company has 5-10% of overdraft facility to meet the liquidity requirements as on closing balance sheet date. Three Sixty Business Process India Private Limited was established in the year 2007 and promoted by Mr. Kasi v Thiagarajan and Mr.T.Nagappan as first directors of the company. During May 2012, the company name has changed to current nomenclature "Three Sixty Textiles Private Limited"(TSTPL). Later in the year 2013, the company was taken over by Mr. S Sethuramasamy, Mr.S. Parimalam, Mr.A.Selvakumar along with their friends and family members. Company's registered office and factory are located in Thanneerpanthal, Coimbatoreand is engaged in trading of cotton yarn and cloth. TSTPL purchases the cotton yarn and cloth from the manufacturers such as Sambandham Textiles, Vision Textiles, White Wing Apparel etc., located in and around TamilNadu. The Company has the customer bases spread across various states of India such as West Bengal, Maharashtra, Kolkata and TamilNadu. VIVEK REALTY: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated Vivek Realty & Resorts Private Limited's Long-Term Issuer Rating to the non-cooperating category. The issuer did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Therefore, investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating action is: -- INR143.5 mil. Long-term loan due on October 2021 migrated to non-cooperating category with IND BB- (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on May 11, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Vivek Realty & Resorts was incorporated in July 2008 for development of a residential project 'New Cosmocity' in Saha Chowk, NH-6, Mumbai Road- Kharagpur, West Bengal. ================= I N D O N E S I A ================= STAR ENERGY: Fitch Affirms $580MM Sr. Sec. Notes Rating at 'BB-' ---------------------------------------------------------------- Fitch Ratings has affirmed Star Energy Geothermal (Wayang Windu) Ltd.'s (SEG) USD580 million fully amortising 6.75% senior secured notes due 2033 at 'BB-'. The Outlook is Stable. KEY RATING DRIVERS The project benefits from long-term contracts to use geothermal resources and sell electricity to the Indonesian state-owned power company PT Perusahaan Listrik Negara (Persero) (PLN; BBB/Stable). The take-or-pay nature of the electricity sales contract with PLN eliminates most volume and merchant price risks. Fitch expects the supply of geothermal resource to be reliable, subject to appropriate and timely well maintenance and drilling of new wells. SEG's financial profile under the Fitch rating case shows an average annual debt service coverage ratio (ADSCR) of 1.24x and a minimum of 1.08x. The low level of excess cash generation could limit SEG's ability to fund necessary capital expenditures if they need to be accelerated, or other unexpected costs. The metrics are appropriate for a 'BB-' rated facility of this type under Fitch's Renewable Energy Project Rating Criteria. Robust Operating Track Record, Fully Exposed to Cost Overruns: Operation Risk – Weaker SEG has ample operating experience and a strong track record with very high average availability and capacity factors (excluding an outage in 2015) for both of its generation units since they started operations. However, SEG is exposed to the risks of cost overruns and operational underperformance because it operates the geothermal power plant itself. The power plant suffered an extended outage in 2015 due to a landslide that damaged a steam pipeline, although SEG has made considerable changes to reduce the probability of such an event recurring. Operating costs have generally been decreasing over the past few years due to budget discipline and depreciation of the Indonesian rupiah against the US dollar. SEG has a detailed capital investment plan for drilling new wells and maintaining existing wells, which the external technical consultant GeothermEx has reviewed and is satisfied with. However, GeothermEx has also advised that given the nature of the geothermal assets, there is considerable uncertainty regarding the timing of the capex. Due to the better-than-expected performance of the latest well intervention programme and cost synergy with other geothermal projects in the Star Energy Group, management reduced its capex plan for 2018-20. The lack of a detailed operating cost analysis by a third-party technical advisor constrains its assessment. For major drilling programmes (capex exceeding USD100 million over two years), a reserve account will prefund 25% of the well drilling costs, for each half-year period, over the next two years. The reserve account will also cover planned maintenance costs for six months. Well-Supported Production Forecast: Revenue Risk - Volume – Midrange While the volatility and decline in steam supply inherent in the geothermal resource introduces supply risk to electricity generation, SEG has managed to keep the steam depletion rate lower than previous forecast through a well-intervention programme and drilling of make-up wells. The existing geothermal resources are sufficient to support 280MW of electricity generation for 30 years or 390MW of electricity generation for 20 years, according to GeothermEx's technical report in February 2018. Curtailment risk is limited by the take-or-pay nature of the electricity sales contract (ESC) under which PLN is required to pay for 95% of the rated capacity of each of the two generators if it is not dispatched. Supportive Long-Term Power Purchase Agreement: Revenue Risk - Price – Stronger The electricity tariffs are largely fixed under the ESC. The price for electricity produced by Unit 1 may be renegotiated after 2030, but SEG would be required to add USD50 million to the debt reserve account from 2028, which will provide a cash cushion should the renegotiation does not yield similar or better terms. The tariffs are indexed using straightforward, broad-based publicly available indexation formulas. The tariffs are denominated in US dollars but partially indexed to the dollar-rupiah exchange rate, such that SEG's revenues in dollars will decline if the Indonesian rupiah depreciates against the US dollar. However, the cash flow impact of lower revenue is partially offset by lower operating costs in US dollar terms as most of the operating costs, such as labour costs, are denominated in Indonesian rupiah. SEG does not enter into foreign-exchange hedges, leaving it exposed to exchange-rate risk. Fully Amortising Debt: Debt Structure – Midrange The seniority, full amortisation and fixed coupon of the USD580 million bonds are features of a debt structure that would be assessed as a 'Stronger' attribute under Fitch's key rating driver assessment of renewable projects. SEG may have to pay higher coupon rates if it issues debt to fund the development of Unit 3, and the new debt would be required to meet a projected DSCR of 1.3x. If this additional debt is structured as a new debt tranche instead of additional notes issued from the current tranche, the existing notes may not have security over the new assets and may not have access to the cash flows from Unit 3 for debt service. The six-month debt service reserve account (DSRA) is a feature of a 'Midrange' debt structure. The lock-up regime at 1.1x look-back DSCR is not particularly robust and is weaker than some peers'. The debt amortisation results in steady deleveraging, but the annual cash flows and DSCRs are volatile. Overall, Fitch assesses the debt structure as 'Midrange'. Financial Profile In the current review, Fitch has revised its approach for calculating the coverage ratio to use average ADSCR instead of DSCR multiple (i.e. sum of cash flow available for debt service divided by the sum of debt service over the debt life). Underperformance of the geothermal resource, higher-than-expected capex and reduced operational efficiency could impair SEG's ability to service its debt payments. SEG has an average ADSCR of 1.38x and a minimum DSCR of 1.20x under the Fitch base case. This compares with a DSCR multiple of 1.40x under the Fitch base case (1.42x in its last credit review). The Fitch rating case, in which it applies stresses to the capacity factor, availability, operating expenditure and capex, results in an average ADSCR of 1.24x and a minimum DSCR of 1.08x. This compares with a DSCR multiple of 1.27x under the Fitch rating case (lower than 1.29x in its last credit review largely due to revised capex as a result of shifting make-up well drilling from 2018 to 2019 and updated macroeconomic assumptions). The achieved coverage level reflects the higher lifecycle capex risks associated with geothermal facilities compared with other renewable projects, and is appropriate for a 'BB-' rating, although it is above the 'BB-' threshold of 1.20x for concentrated solar power (CSP) projects in Fitch's Renewable Energy Projects Rating Criteria. PEER GROUP Fitch has rated other geothermal projects below investment grade mainly due to uncertainty about resource depletion and lack of substitute fuel, and/or volatile pricing mechanisms. In particular, the default of Coso Geothermal Power Holdings LLC highlights the resource depletion risk inherent in geothermal projects. OrCal Geothermal LLC's (senior secured bonds rated BB/Stable) standalone DSCRs average below 1.0x in the Fitch ratings cases, but the rating is based on the continuing capital contribution by the sponsor to fund discretionary capital expenditures. SEG has a better price risk attribute than peers as a result of its long-term take-or-pay power purchase agreement with PLN, and its resources have been validated through studies by external consultants. The ADSCR projections in Fitch's rating case indicate a robust coverage averaging 1.24x over the debt term. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Negative Rating Action: - The projected average DSCR dropping below 1.25x in Fitch's rating case as a result of production declines or interruptions, operating difficulties, additional debt, or other factors. Future Developments That May, Individually or Collectively, Lead to Positive Rating Action: - Projected average DSCR above 1.35x in Fitch's rating case. CREDIT UPDATE SEG continued to maintain strong operational performance, with high availability factor of 99.98% in 2018, which was better than management's projection of 99.3%. Net capacity factor dropped slightly due to curtailment by PLN and cooling tower maintenance. However, curtailment risk is limited given the take-or-pay arrangement of the ESC under which PLN is required to pay for 95% of the rated capacity if it does not offtake all electricity nominated. Revenue marginally increased in 2018, as lower net dispatch was offset by higher realised tariff. Operating expense was lower than in 2017 and management's projection mainly due to a weaker Indonesian rupiah against the US dollar, budget discipline and some expenses on countermeasure work delayed to 2019. Despite a 1.5-month delay in its make-well drilling programme, SEG maintained its steam supply above the requirement level by well intervention. The well-intervention programme yielded better-than-expected results, leading to a slower decline in steam supply than previously forecast. Due to cost synergy with other geothermal projects in the Star Energy Group, management reduced its capex plan for 2018-20. Fitch Cases The Fitch base case assumes a capacity factor of 97% for both generation units, and uses management's forecast for operating expenses and capex. The Fitch rating case assumes a capacity factor of 95% for both units, which is equal to the lowest level in recent years. Fitch also assumes that major overhauls of the power plants are performed every three years (as they have been historically), compared with every four years in the management's assumptions. The rating case also applies a 15% stress to management's assumptions for operating expenses and a 5% stress to capex. Asset Description SEG is part of the Star Energy Group, the largest geothermal energy producer in Indonesia and the third largest in the world. SEG has the exclusive right to use geothermal resources in the Wayang Windu area in West Java, Indonesia, about 40km south of the city of Bandung. SEG operates two power generation units with a combined gross installed capacity of 227MW. Unit 1 is 110MW and began commercial operations in June 2000, while Unit 2 is 117MW and started in March 2009. =============== M O N G O L I A =============== TRADE AND DEVELOPMENT: Moody's Puts 'B3' Rating to to MTN Drawdown ------------------------------------------------------------------ Moody's Investors Service has assigned a B3 senior unsecured rating to the proposed notes to be issued by Trade and Development Bank of Mongolia LLC (TDBM, B3 stable, b3). The notes are a drawdown from the bank's Global Medium Term Notes Program, which is rated at (P)B3 and was upsized to USD1 billion from previously USD500 million. The rating outlook is stable. RATINGS RATIONALE The B3 rating is in line with TDBM's issuer rating and baseline credit assessment (BCA). The b3 BCA reflects (1) the bank's concentration in corporate loans and weak asset quality; and (2) potential challenges related to corporate governance that could arise from the bank's narrow shareholding structure. Offsetting these weaknesses are TDBM's (1) solid market position as a leading lender in corporate banking; (2) strong profitability because of its strong franchise in corporate banking; and (3) sufficient capitalization, with tangible common equity (TCE)/risk-weighted assets at 12.8% as of year-end 2018. The rating does not incorporate any uplift for systemic support because the rating is already at the same level as the sovereign rating. WHAT COULD MOVE THE RATINGS -- UP/DOWN TDBM's b3 BCA is already at the same level as Mongolia's sovereign rating, and, as such, a positive rating action is unlikely in the absence of an upgrade of the sovereign rating. Factors that could result in a downgrade include (1) a downgrade of Mongolia's sovereign rating, or (2) a downgrade of the bank's BCA. TDBM's BCA could be downgraded if the bank's (1) asset quality deteriorates significantly (for example, if problem loans/gross loans exceeds 9% on a sustained basis); (2) TCE ratio falls below 8%; or (3) profitability deteriorates significantly, leading to annual net losses on a sustained basis. PRINCIPAL METHODOLOGY The principal methodology used in this rating was Banks published in August 2018. Trade and Development Bank of Mongolia LLC is headquartered in Ulaanbaatar, Mongolia. It reported assets of MNT7.28 trillion (approximately $2.78 billion) as of December 31, 2018. ===================== N E W Z E A L A N D ===================== CREDIT UNION: Fitch Affirms BB LT IDR ff. Merger w/ 3 Credit Unions ------------------------------------------------------------------- Fitch Ratings has affirmed the ratings of Credit Union Baywide following its merger with three smaller New Zealand credit unions. The affirmation reflects Fitch's view that the merger process will not significantly impact CUB's credit profile in the short term. The merger should provide greater economies of scale and geographic diversification over the longer term, which in turn should support CUB's financial profile. CUB is the largest of the four merger partners (the others being Credit Union South, Aotearoa Credit Union, and Credit Union Central), accounting for 65% of the combined entity's NZD550 million asset base at March 31, 2019. KEY RATING DRIVERS IDRS AND VIABILITY RATING CUB's Issuer Default Ratings and Viability Rating reflect its greater risk appetite relative to New Zealand banks and building societies, with a focus on growth and riskier target markets in higher loan/value mortgages and consumer lending. Fitch believes these loan classes are more susceptible to higher losses through an economic cycle relative to more traditional residential mortgages, which are the focus of larger domestic peers. CUB's risk controls are adequate for its size and consistent with its similarly sized peers. The combined entity still has a modest franchise, reflected in a small system market share, meaning it is generally a price taker, which is unlikely to change. The merger is likely to weigh on profitability in 2019 due to integration and one-off costs but should support CUB's longer-term earnings and profitability through significant cost synergies. CUB has experienced strong loan growth in recent years, which has resulted in a weakening of capitalisation. However, Fitch believes growth is likely to moderate as management focuses on the integration of multiple entities. CUB's capitalisation levels are above regulatory minimums but buffers are moderate. The credit union has limited sources of new capital beyond retained earnings due to its mutual structure. Customer deposits are likely to remain the main source of funding for CUB, despite the merger providing access to a modest warehouse facility previously utilised by Credit Union South. SUPPORT RATING AND SUPPORT RATING FLOOR The Support Rating and Support Rating Floor of CUB 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, 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 institution's low systemic importance, will make sovereign support unlikely. RATING SENSITIVITIES IDRS AND VIABILITY RATING CUB's IDRs and Viability Rating would be sensitive to a change in its risk appetite. Ratings may be upgraded if there is a sustained improvement in risk appetite, possibly through improved underwriting standards, or a stronger control framework. A negative rating action would result from an increase in risk appetite. Ratings may also be downgraded if management focus is significantly diverted from the ongoing operations of the business during the integration process, leading to a sustained negative impact on CUB's financial profile. SUPPORT RATING AND SUPPORT RATING FLOOR The Support Rating and Support Rating Floor are sensitive to any change in assumptions around the propensity of the New Zealand government to provide timely support. The rating actions are as follows: Credit Union Baywide 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' Q CARD TRUST: Fitch Affirms 'Bsf' Rating on Class F-2018-1 Notes ---------------------------------------------------------------- Fitch Ratings has affirmed the ratings on notes issued by The New Zealand Guardian Trust Company Limited in its capacity as trustee of Q Card Trust. The transaction is a securitisation of New Zealand credit card receivables, and is an asset-backed note programme featuring a multi-class structure that will purchase eligible receivables from related entities of FlexiGroup (New Zealand)(FlexiGroup) Limited (FlexiGroup) on a revolving basis. KEY RATING DRIVERS Stable Credit Card Receivables' Performance: Charge-off performance has remained stable over the past year with gross charge-offs averaging 3.0%, below the Fitch steady state assumption of 4.5%. Monthly payment rate has increased over the past year, averaging 9.5%. Yield has declined in recent months to average 18.7% over the past year. Changes in yield and MPR result from an increasing percentage of receivables being Q Mastercard. The Stable Outlook on the notes reflects Fitch's expectations that the performance and loss multiples will remain supportive of the ratings, which will be underpinned by a stable macroeconomic environment in New Zealand. Originator and Servicer Quality: Fitch believes FlexiGroup to be an effective and capable originator and servicer given its track record. Fitch undertook an onsite operational review and found that the operations of the originator and servicer were comparable with those of other non-bank credit card providers. Counterparty Risk: Fitch's rating on the notes is dependent on the financial strength of certain counterparties. Fitch believes this risk is mitigated as evident from the ratings of the applicable counterparties to the transaction. Counterparty risk was evaluated in the initial transaction analysis through the review of transaction documentation, legal opinion and structural features. Interest Rate Risk: Interest rate risk is mitigated by a combination of interest rate swaps and available credit enhancement. Fitch Steady States: Charge-offs: 4.5% MPR: 7.5% (increased from 7.25) Gross yield: 17.0% (reduced from 17.8%) Purchase rate: 100% Rating Stresses: Ratings: AAAsf / AAsf / Asf / BBBsf / BBsf / Bsf Charge-offs (increase): 4.75x / 4.00x / 3.10x / 2.40x / 1.90x / 1.30x MPR (% decrease): 35.00% / 30.00% / 25.00% / 20.00% / 10.00% / 5.00% Gross yield (% decrease): 35.00% / 30.00% / 25.00% / 20.00% / 15.00% / 10.00% Purchase rate (% decrease): 75.00% / 60.00% / 55.00% / 50.00% / 45.00% / 40.00% Some of the outstanding subordinate tranches of the Q Card Trust may be able to support higher ratings based on the output of Fitch's proprietary cash flow model. The credit card programme is set up as a continuous funding programme and requires that any new issuance does not affect the rating of existing tranches. This means the enhancement levels are set to maintain a constant rating level for each class of issued notes and may provide more than the minimum enhancement necessary to retain issuance flexibility. Therefore, Fitch may decide not to assign or maintain ratings above the current outstanding ratings in anticipation of future issuances. RATING SENSITIVITIES Fitch has evaluated the sensitivity of the existing ratings to decreased yields, increased charge-offs and decreased MPR over the life of the transaction. The model indicates the note ratings are sensitive to an increase in defaults and a reduction in MPR, with less sensitivity to yield reduction. Rating sensitivity to increased charge-off rate: Current ratings for class A, class B, class C, class D, class E, class F (steady state: 4.5%); 'AAAsf'; 'AAsf'; 'Asf','BBBsf', 'BBsf', 'Bsf'. Increase base case by 25%: 'AAAsf'; 'AAsf'; 'Asf', 'BBBsf', 'BBsf', 'Bsf'. Increase base case by 50%: 'AA+sf'; 'A+sf'; 'A-sf'', 'BBB-sf', 'BB-sf', 'Bsf'. Increase base case by 75%: 'AA+sf'; 'Asf', 'BBB+sf', 'BB+sf', 'B+sf', 'Bsf'. Rating sensitivity to reduced MPR: Current ratings for class A, class B, class C, class D, class E, class F (steady state: 7.5%); 'AAAsf'; 'AAsf'; 'Asf','BBBsf', 'BBsf', 'Bsf'. Reduce MPR by 15%: 'AA+sf'; 'AA-sf'; 'A-sf', 'BBBsf', 'BBsf', 'Bsf'. Reduce MPR by 25%: 'AA+sf'; 'A+sf'; 'BBB+sf'', 'BBB-sf', 'BB-sf', 'Bsf'. Reduce MPR by 35%: 'AA-sf'; 'A-sf'; 'BBBsf'', 'BB+sf', 'BB-sf', 'Bsf'. Rating sensitivity to reduced yield: Current ratings for class A, class B, class C, class D, class E, class F (steady state: 17.0%); 'AAAsf'; 'AAsf'; 'Asf','BBBsf', 'BBsf', 'Bsf'. Reduce yield by 15%: 'AAAsf'; 'AAsf'; 'Asf', 'BBBsf', 'BBsf', 'Bsf'. Reduce yield by 25%: 'AAAsf'; 'AAsf'; 'Asf'', 'BBBsf', 'BBsf', 'Bsf'. Reduce yield by 35%: 'AAAsf'; 'AAsf'; 'Asf', 'BBBsf', 'BB-sf', 'Bsf'. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. There were no findings that were material to this analysis. Fitch has not reviewed the results of any third-party assessment of the asset portfolio as part of its ongoing monitoring. Fitch did conduct a file review of a small targeted sample of Q Card Trust's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio. Overall, Fitch's assessment of the asset pool information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. Q Card Trust Class A-2017-1 NZFPFD1010R5; LT AAAsf; Previously Affirmed AAAsf Class A-2017-2 NZFPFD1011R3; LT AAAsf; Previously Affirmed AAAsf Class A-2017-3 NZFPFD1012R1; LT AAAsf; Previously Affirmed AAAsf Class A-2017-4 NZFPFD1013R9; LT AAAsf; Previously Affirmed AAAsf Class A-2018-1 NZFPFD1022R0; LT AAAsf; Previously Affirmed AAAsf Class A-2018-2 NZFPFD1023R8; LT AAAsf; Previously Affirmed AAAsf Class A-2019-1 NZFPFD1030R3; LT AAAsf; Previously Affirmed AAAsf Class B-2017-1 NZFPFD1016R2; LT AAsf; Previously Affirmed AAsf Class B-2018-1 NZFPFD1025R3; LT AAsf; Previously Affirmed AAsf Class B-2019-1 NZFPFD1031R1; LT AAsf; Previously Affirmed AAsf Class C-2017-1 NZFPFD1017R0; LT Asf; Previously Affirmed Asf Class C-2018-1 NZFPFD1026R1; LT Asf; Previously Affirmed Asf Class C-2019-1 NZFPFD1032R9; LT Asf; Previously Affirmed Asf Class D-2018-1 NZFPFD1027R9; LT BBBsf; Previously Affirmed BBBsf Class E-2014-1 NZFPFD1007R1; LT BBsf; Previously Affirmed BBsf Class E-2017-1 NZFPFD1019R6; LT BBsf; Previously Affirmed BBsf Class E-2018-1 NZFPFD1028R7; LT BBsf; Previously Affirmed BBsf Class F-2014-1 NZFPFD1008R9; LT Bsf; Previously Affirmed Bsf Class F-2017-1 NZFPFD1020R4; LT Bsf; Previously Affirmed Bsf Class F-2018-1 NZFPFD1029R5; LT Bsf; Previously Affirmed Bsf Class VFN; LTAAAsf Affirmed; Previously AAAsf Class D-2014-1 NZFPFD1006R3; LT BBBsf; Previously Affirmed BBBsf Class D-2017-1 NZFPFD1018R8; LT BBBsf; Previously Affirmed BBBsf ===================== P H I L I P P I N E S ===================== PALAWAN BANK: Placed Under PDIC Receivership -------------------------------------------- The Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP) prohibited The Palawan Bank (Palawan Development Bank), Inc. from doing business in the Philippines through MB Resolution No. 660.A dated May 2, 2019, which also directed the Philippine Deposit Insurance Corporation (PDIC) as Receiver to proceed with the takeover and liquidation of The Palawan Bank (Palawan Development Bank), Inc. PDIC took over the bank on May 6, 2019. The Palawan Bank (Palawan Development Bank), Inc. is a 10-unit thrift bank with Head Office located at Unit 1 Goldraz Properties Bldg., Malvar St., Brgy. San Miguel, Puerto Princesa City, Palawan. It has nine branches: five are located in Palawan (Brooke's Point, Narra, Quezon, Roxas, and Taytay) and four are located in Cebu (Carcar, Liloan, Minglanilla, and Naga). Latest available records show that as of December 31, 2018, The Palawan Bank (Palawan Development Bank), Inc. has 19,857 deposit accounts with total deposit liabilities of PHP503 million, of which 81% or PHP408.0 million are insured deposits. PDIC assured depositors that all valid deposits and claims shall be paid up to the maximum deposit insurance coverage of PHP500,000.00. Individual account holders of valid deposits with balances of PHP100,000.00 and below do not need to file deposit insurance claims, provided they have no outstanding obligations or have not acted as co-makers of obligations with The Palawan Bank (Palawan Development Bank), Inc. These individual depositors must ensure that they have complete and updated addresses with the bank. PDIC representatives will be distributing Mailing Address Update Forms at the bank premises and depositors may submit the forms until May 21, 2019. For business entities and all other depositors who are required to file claims for deposit insurance, the schedule for filing of claims will be announced through posters in the bank premises and in other public places, the PDIC website www.pdic.gov.ph, and PDIC's official Facebook account. PDIC also reminded borrowers to continue paying their loan obligations with the closed The Palawan Bank (Palawan Development Bank), Inc. and to transact only with designated PDIC representatives at the bank premises. For more information on the requirements and procedures for filing of claims for deposit insurance and settlement of loan obligations, all depositors and borrowers of the bank are enjoined to attend the Depositors-Borrowers' Forum on May 27, 2019. Details will be posted in the bank premises and in other public places. Pursuant to Section 13 of R.A. 3591, as amended, PDIC shall likewise accept Letters of Intent from interested banks and non-bank institutions for possible Purchase of Assets and Assumption of Liabilities (P&A) as a mode of liquidating The Palawan Bank (Palawan Development Bank), Inc. within sixty (60) days from PDIC takeover subject to compliance with the requirements prescribed under the Guidelines in Pre-qualifying Proponents and Evaluating the Proposals for Purchase of Assets and Assumption of Liabilities Mode of Liquidating Closed Banks posted in the PDIC website. All stakeholders and interested parties may communicate with PDIC Public Assistance personnel stationed at the bank premises or call the PDIC Public Assistance Hotline at (02) 841-4630 or the Toll Free Hotline at 1-800-1-888-PDIC (7342) for those outside Metro Manila. Inquiries may also be sent by e-mail to pad@pdic.gov.ph or via private message to the official PDIC Facebook account at www.facebook.com/OfficialPDIC. ================= S I N G A P O R E ================= HYFLUX LTD: Debt Moratorium Extended to May 29 ---------------------------------------------- Grace Leong at The Business Times reports that like a cat with nine lives, Hyflux Ltd has managed to fend off a bid by seven banks to start the legal process for having the troubled firm placed under judicial management. The High Court ruling on May 7 also extended the deadline for Hyflux's debt moratorium with its creditors from May 24 to May 29. According to the report, High Court Justice Aedit Abdullah said he "won't make any order (today)" on whether the seven banks, which collectively hold $648.7 million of debt, will be allowed to start an action to put Hyflux and its Hydrochem Singapore under judicial management. But Hyflux was left under no illusion that it is on borrowed time, the report says. BT relates that Justice Aedit told its lawyer that he will "leave a sword hanging over (the firm's) head", adding: "I will be keeping the company on a tight leash, given that we have been at this for quite a period of time." Hyflux makes its case for extending the debt moratorium on May 29 but Justice Aedit was clear that it will not get an easy ride, the report says. "A moratorium is meant to be a temporary institution to allow a company to put something together . . . but it doesn't mean I can give a blank check for the moratorium going forward," he noted, BT relays. "The moratorium is not likely to be as long as it used to be and I would attach conditions." These include "disclosure of running costs of the company, including all of its restructuring efforts, and there be a timeline given to me of the expected completion of restructuring effort, leading up to a possible scheme application and some assurance of continuing engagement with various creditors", Justice Aedit, as cited by BT, said. BT notes that the seven banks could still start an action for judicial management if Hyflux fails to make further headway in its restructuring efforts. Hyflux is racing to nail down a $400 million rescue deal with Utico, the largest utilities provider in the United Arab Emirates, BT says. Last month, it aborted a $530 million deal with Indonesian consortium SM Investments and is now fighting to claim a $38.9 million deposit from the entity, according to BT. If the banks had prevailed on May 7, they could have asked the court on May 13 to place Hyflux and Hydrochem Singapore--its engineering, procurement and construction business--under judicial management, the report notes. That court date has now been cancelled. About Hyflux Singapore-based Hyflux Ltd -- https://www.hyflux.com/ -- provides various solutions in water and energy areas worldwide. The company operates through two segments, Municipal and Industrial. The Municipal segment supplies a range of infrastructure solutions, including water, power, and waste-to-energy to municipalities and governments. The Industrial segment supplies infrastructure solutions for water to industrial customers. It employs 2,300 people worldwide and has business operations across Asia, Middle East and Africa. As reported in the Troubled Company Reporter-Asia Pacific on May 24, 2018, Hyflux Ltd. said that the Company and five of its subsidiaries, namely Hydrochem (S) Pte Ltd, Hyflux Engineering Pte Ltd, Hyflux Membrane Manufacturing (S) Pte. Ltd., Hyflux Innovation Centre Pte. Ltd. and Tuaspring Pte. Ltd. have applied to the High Court of the Republic of Singapore pursuant to Section 211B(1) of the Singapore Companies Act to commence a court supervised process to reorganize their liabilities and businesses. The Company said it is taking this step in order to protect the value of its businesses while it reorganises its liabilities. The Company has engaged WongPartnership LLP as legal advisors and Ernst & Young Solutions LLP as financial advisors in this process. ********* 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 ***