text: TCRAP_Public/140702.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 Wednesday, July 2, 2014, Vol. 17, No. 129 HeadlinesA U S T R A L I ADSG HOLDINGS: Kordamentha Appointed as ReceiversLOYVIC PTY: S&P Affirms 'BB+' ICR on AUD975MM Bank DebtPNPS PTY: Dean-Willcocks Appointed as AdministratorSAVCOR PTY: In Administration; First Meeting Set July 9C H I N AKWG PROPERTY: S&P Affirms 'BB-' LT CCR; Outlook NegativeREDCO PROPERTIES: S&P Assigns 'B' LT CCR; Outlook StableSINO-FOREST CORP: Gets Partial Accord in US-Canadian Class SuitsYANZHOU COAL: Moody's Assigns Ba1 Rating on $300MM Unsecured BondI N D I AAMBER INTERNATIONAL: ICRA Reaffirms B+ Rating on INR0.25cr LoanFRONTIER KNITTERS: CRISIL Ups Rating on INR83.6MM Loan to 'B+'GLOSTER CABLES: CRISIL Suspends 'B' Rating on INR568.2MM LoansGROSPINZ FABZ: CRISIL Reaffirms 'B+' Rating on INR679.4MM LoansHYDERABAD POLLUTION: CRISIL Suspends B Rating on INR17.5MM LoansKALINGA ALLOYS: CRISIL Assigns 'B+' Rating to INR77.5MM LoansMELA SINGH: ICRA Reaffirms 'B+' Rating on INR9cr LoanMITTAL ELECTRONICS: CRISIL Assigns 'B' Rating to INR51.1MM LoansNAGESH ENTERPRISES: ICRA Assigns 'B-' Rating to INR8.5cr LoansNAMRATA DEVELOPERS: CRISIL Rates INR80MM Bank Loan at 'B'NEWGEN AGRO: ICRA Assigns 'B' Rating to INR10cr LoansR.K. COTTON: CRISIL Ups Rating on INR40MM Loans to 'B+'RATAN ALUMINUM: CRISIL Raises Rating on INR75MM Cash Credit to B+SARWATI POLYMERS: CRISIL Assigns 'B' Rating to INR70MM LoansSATNAM GLOBAL: CRISIL Reaffirms 'B' Rating on INR160MM LoanSATVA INFRATECH: CRISIL Suspends 'B' Rating on INR45MM LoansSHIBSATI COLD: CRISIL Suspends 'D' Rating on INR97MM LoansSHREE RAM: CRISIL Upgrades Rating on INR250MM Loan to 'B+'STYLISH PRECAST: ICRA Cuts Rating on INR15cr Loans to 'D'SURYA OIL: ICRA Reaffirms 'B+' Rating on INR11.09cr LoansSURYA WORLD: CRISIL Suspends 'D' Rating on INR1.50BB LoansSWASTIK TRADERS: CRISIL Reaffirms 'B+' Rating on INR80MM LoansTECHOPS INFRASTRUCTURE: CRISIL Ups Rating on INR55MM Loans to BTRADE INDIA: CRISIL Assigns 'B-' Rating to INR65MM LoansTRIPATHI HOSPITAL: CRISIL Reaffirms 'B' Rating on INR90MM LoanVIRAJ INTERNATIONAL: ICRA Suspends B+ Rating on INR16.5cr LoanVIRAT ALLOYS: CRISIL Reaffirms 'B+' Rating on INR93.4MM LoansYASHWANT ENTERPRISES: CRISIL Puts 'B' Rating on INR120MM LoansZURI HOSPITALITY: ICRA Reaffirms 'D' Rating on INR50.73cr LoansI N D O N E S I ABERAU COAL: Moody's Affirms B1 Corporate Family RatingPAKUWON JATI: Fitch Gives Final 'B+' Rating to $168MM Sr. NotesPERUSAHAAN LISTRIK: Moody's Lowers BCA to ba2; Outlook StableN E W Z E A L A N DDERIVATEK NEW ZEALAND: Mark Whelan Pleads GuiltyPOSTIE PLUS: Sale Completion Extended For Three WeeksWAITAKERE BEARS: Ex-Chairman Gets 10 Months Home DetentionP H I L I P P I N E SASIAN CONSUMERS: Placed Under PDIC ReceivershipS O U T H K O R E AKYONGNAM BANK: Moody's Affirms D+ Bank Financial Strength RatingPANTECH CO: SK Telecom May End Financial HelpSTX GROUP: KDB Suspected of Raising Insolvent Loans to STXV I E T N A MVIETNAM BANK: Fitch Affirms 'B' Long-Term IDR; Outlook Positive - - - - -=================A U S T R A L I A=================DSG HOLDINGS: Kordamentha Appointed as Receivers------------------------------------------------David Winterbottom -- email@example.com -- and RahulGoyal -- email@example.com -- of KordaMentha Restructuringhave been appointed Receivers and Managers of DSG HoldingsAustralia Pty Limited. DSG operates retailers Crazy Clarks andSam's Warehouse with 143 stores across Australia.This follows the appointment of Steve Nicols of Nicols + Brien asVoluntary Administrator of DSG.The Receivers have taken full control of the day to day operationsof DSG and are working with the management of the Company toexplore various options whilst running a store/stockrationalisation program.Mr Goyal said: "We will be immediately exploring the going concernsale of the profitable Crazy Clarks and Sam's Warehouse stores tointerested parties". He added "All stores are currently in 'sale'mode so there should be plenty of great value to be had for ourcustomers whilst we work through that process".Crazy Clarks and Sam's Warehouse sell a range of household goodsincluding furniture, entertainment, grocery, pet, gardening,clothing and leisure goods. DSG bought the business from itsrelated party, Retails Adventures Pty Limited (In Liquidation) in2012.Mr. Goyal said it appeared that the financial pressures of DSGhave been caused by the general decline in the retail sector, andparticularly the decreased demand for discretionary items likethose found in Crazy Clarks and Sam's Warehouse stores.DSG currently employs approximately 2,500 people across 143 retailoutlets, has a distribution centre in Queensland and a head officeat North Ryde. Employees are being advised of developments on aregular basis.Mr. Goyal said it was too early to fully determine thereceivership strategy. The immediate priority was to exit from theunprofitable stores whilst consolidating stock, and trying toeffect a going-concern sale for at least part of the business.LOYVIC PTY: S&P Affirms 'BB+' ICR on AUD975MM Bank Debt-------------------------------------------------------Standard & Poor's Ratings Services said that it has affirmed its'BB+' issue credit rating on Loyvic Pty Ltd.'s amortizing bankdebt, which has a current balance of AUD975 million. S&P has alsoassigned a recovery rating of '4' to the bank debt. Further, S&Phas affirmed the 'BB+' issuer credit rating on IPM Australia Ltd.,which is the trading company for the Loy Yang B power plant. Theoutlooks on the both corporate credit ratings are stable."At the same time, we have assigned our 'BB+' long-term corporatecredit rating to Loyvic under our criteria for rating corporates--previously it was analyzed under the project finance criteria.The assignation of a corporate credit rating to Loyvic reflectsour view this entity has evolved in recent years and now is moreappropriately analyzed under corporate ratings criteria. The newclassification reflects our consideration of Loyvic as being partof a portfolio of assets rather than a stand-alone asset.Moreover the parent companies, GDF Suez and Mitsui & Co., haveshown a track record of support to both Loyvic and other assets inthe portfolio (Hazelwood) to preserve economic value," S&P said.The stable outlook reflects the continued parent support ofLoyvic, and the near-term stable earnings and cashflow, which areunderpinned by the favorable offtake contract with the hedge thatis provided by the State of Victoria; that state hedge is for ofat least 56% of Loyvic's output until 2016. It also reflects theplant's sound operating performance."Downward pressure may emerge in the next 12 months if wholesalepower prices remain weak, reducing the Loy Yan B plant's cash flowand increasing its vulnerability, particularly once the statehedge begins to run off from August 2014 as the plant transitionsto being wholly merchant-based," said credit analyst RichardCreed. The Loy Yang B plant's access to free permits under thecurrent carbon-abatement scheme means the abolition of the schemecould also prove detrimental to cash flow in the short term ifthis constrains Loyvic's ability to meet the onerous back-endeddebt amortization that is required under the bank-loan terms andconditions. "A weakening in the liquidity profile would also leadto pressure on ratings, particularly weakening headroom againstcovenants--for example, a debt-service cover ratio of less than1.4x," said Mr. Creed."In addition, the ratings could be lowered if we believe there isa lessening in parental support--for example demonstrated by anymaterial sell down in ownership, or a delay in remedying anyprospective or actual breach of project covenants."The prospect of a rating upgrade is remote, given S&P'sexpectation for subdued wholesale electricity prices and the back-ended nature of the debt structure.PNPS PTY: Dean-Willcocks Appointed as Administrator---------------------------------------------------Ronald Dean-Willcocks of Dean-Willcocks Insolvency Solutions wasappointed as administrator of P N P S Pty Limited on June 30,2014.A first meeting of the creditors of the Company will be held atDean-Willcocks Insolvency Solutions, Level 2, 32 Martin Place, inSydney, on July 10, 2014, at 4:00 p.m.SAVCOR PTY: In Administration; First Meeting Set July 9-------------------------------------------------------Jannamaria Robertson -- firstname.lastname@example.com -- Cliff Rocke-- firstname.lastname@example.com -- and Scott Kershaw --email@example.com -- of KordaMentha were appointed asadministrators of Savcor Pty Limited on June 27, 2014.A first meeting of the creditors of the Company will be held atKordaMentha Perth Offices, Level 10, 40 St Georges Terrace, inPerth, on July 9, 2014, at 11:00 a.m.=========C H I N A=========KWG PROPERTY: S&P Affirms 'BB-' LT CCR; Outlook Negative--------------------------------------------------------Standard & Poor's Ratings Services affirmed its 'BB-' long-termcorporate credit rating on China-based developer KWG PropertyHolding Ltd. The outlook is negative. S&P also affirmed its'cnBB' long-term Greater China regional scale rating on thecompany. At the same time, S&P affirmed its 'B+' long-term issuerating and 'cnBB-' Greater China regional scale rating on thecompany's senior unsecured notes.S&P affirmed the rating on KWG because it believes: (1) KWG'sproperty sales execution is improving; (2) the company's leveragewill decline although it is unlikely to fall below 5x in the next12 months; and (3) its large investments in jointly controlledentities (JCEs) will continue to contribute significant cash flowsto KWG."The negative outlook reflects our view that KWG's leverage willremain weak for the rating over the next 12 months," said Standard& Poor's credit analyst Matthew Kong. "We expect the company'sdebt to remain high as it needs to ramp up construction andreplenish land to support its growth plan."In S&P's view, the current volatility in the Chinese propertymarket may also constrain KWG's flexibility to reduce its leveragesubstantially given the increasing uncertainty on property salesif the weakening market lasts longer than S&P expects.KWG's high exposure to the high-end residential property segmentand execution risk in new cities are reflected in the company's"fair" business risk profile. However, its well-distributedprojects in major cities, good brand recognition and productquality, improving sales execution, and above-averageprofitability temper these weaknesses.KWG's sales performance is improving. S&P believes the companycan largely meet its sales target in 2014. The company's propertysales are on track and it achieved 39.1% of its annual target ofChinese renminbi (RMB) 21 billion for the first five months ofthis year, making KWG among the best performers in the industry.S&P also expects KWG's revenue recognition to improve over thenext two years with an increase in contracted sales."KWG's gross margin may slide modestly but should remain above theindustry average, supported by the company's brand recognition inthe high-end residential market and a product mix that includesmore than 30% of sales from commercial properties," Mr. Kong said.KWG's leverage and interest coverage in 2013 are weaker than whatS&P had expected on account of the company's aggressive debt-funded expansion and low revenue recognition. KWG's total debt(adjusted for JCE debt) increased 22.4% in 2013 to RMB23.3billion, raising the company's debt-to-EBITDA ratio to 6.0x in2013 from 5.1x in 2012.S&P expects KWG's leverage to improve in the next 12-18 months,resulting from strong property sales and a slowdown in landpurchases. However, in S&P's base-case scenario, the company'sdebt-to-EBITDA ratio will likely remain above 5x in 2014. S&Passess KWG's financial risk profile as "aggressive."In S&P's view, KWG's cash flow contribution from JCEs willcontinue to rise. It reached RMB3.9 billion in 2013. S&P alsonotes that KWG's cash balance increased substantially to RMB10.86billion in 2013 from RMB6.44 billion in 2012. In S&P's view,KWG's abundant cash balance provides the company with a buffer inthis tightening credit environment.The negative rating outlook on KWG reflects S&P's view that thecompany's leverage will remain high in the next 12 months. S&Palso expects KWG to control its debt-funded expansion and manageits balance sheet with discipline.S&P may lower the rating if KWG's debt-funded expansion is moreaggressive than it expects, such that its ratio of debt-to-EBITDAwill not improve toward 5x over the next 12 months. S&P may alsolower the rating if KWG's attributable contracted sales aresubstantially weaker than its expectation of about RMB19 billionfor 2014, and its gross margin decreases materially to below 30%without any signs of recovery.S&P may revise the outlook to stable if the company: (1) executesits sales plan well; (2) maintains its profit margin; and (3)controls total borrowing and reduces leverage, such that its debt-to-EBITDA falls below 5x.REDCO PROPERTIES: S&P Assigns 'B' LT CCR; Outlook Stable--------------------------------------------------------Standard & Poor's Ratings Services said it assigned its 'B' long-term corporate credit rating to China-based property developerRedco Properties Group Ltd. The outlook is stable. S&P alsoassigned its 'cnBB-' long-term Greater China regional scale ratingto the company."The rating reflects our opinion of Redco's high projectconcentration, small operating scale, and exposure to the cyclicalChinese property development industry. The company's acceleratedgrowth strategy following its IPO and other financing plans willincrease its execution risk, in our view," said Standard & Poor'scredit analyst Christopher Yip. "The company's good operatingefficiency for its scale and low-cost land bank temper the risks.Redco has some track record in completing projects in variousregions."Redco's "vulnerable" business risk profile stems from thecompany's small operating scope and the increased execution risksurrounding its fast-paced growth. Redco's contracted salesreached Chinese renminbi (RMB) 3.1 billion in 2013 after anunprecedented year of growth. Redco targets to continue itsaccelerated growth, doubling its contracted sales level by 2015.S&P believes that this pace could put pressure on the company'sresources if market conditions deteriorate beyond its currentexpectations. In addition, Redco's execution and operationalcapabilities will be tested.S&P expects Redco to continue to face project concentration riskover the next one to two years. Although Redco's projects aregeographically diverse for a company of its size, it facesconcentration risk in terms of the limited number of projects.S&P expects Redco's income to largely come from 12 projects in2014, while the company has four more projects in its developmentpipeline. Any delay or problems in delivery could significantlyaffect Redco's revenue. The company has a limited land bank ofjust below 4 million square meters, which presents some constraintfor future projects. Redco focuses on residential housingdevelopments with a small portion of commercial properties forsale.S&P believes Redco has stronger development experience thansimilarly rated peers. Despite the company's relatively limitedscope in the past, it has been in business for over 17 years andhas delivered various residential and commercial projects. Redcohas 21 completed projects across six different cities with gooddiversity in project type. The company has a good track record ofoperating efficiency with a fast-churn model to speed up projectdelivery and generate cash flows.Redco's discipline in financial management is untested because ofits short listing history and recently accelerated growth. S&Pexpects the company's rapid expansion plans to weaken its goodfinancial strength in 2014 and 2015. Higher construction and landacquisition costs could weaken Redco's debt-to-EBITDA ratio to2.5x-3.5x in 2014, from 1.6x in 2013. S&P anticipates that thecompany's overall credit metrics will be commensurate with its"aggressive" financial risk profile.S&P expects Redco to increase its land acquisitions to replenishits land bank, which otherwise may constrain the company's futuregrowth. S&P estimates that the company's total land premiums willincrease to about Chinese renminbi (RMB) 1.7 billion-RMB1.8billion, from RMB1.6 billion in 2013. The total payment includesRMB490 million in committed outstanding land premiums carried overfrom 2013."The stable outlook reflects our expectation that Redco willexpand its operating scale and continue to grow its contractedsales. However, we expect that the company's debt will increaseto fund its expansion, weakening its leverage position in the next12 months," said Mr. Yip.S&P could lower the rating if Redco's expansion is more aggressivethan S&P expected such that its debt-to-EBITDA ratio is over 5.0xor its liquidity becomes "weak.". S&P could also lower the ratingif Redco's contracted sales are substantially below its estimateof RMB3.9 billion.The rating upside is limited over the coming 12 months due toRedco's project concentration and small operating scale.Nevertheless, S&P could raise the rating if the company continuesto expand its scale and improve its project diversity whilemaintaining disciplined financial management.SINO-FOREST CORP: Gets Partial Accord in US-Canadian Class Suits----------------------------------------------------------------Cohen Milstein Sellers & Toll PLLC on June 27 disclosed that therehas been a partial settlement reached in several class actionlawsuits pending in Canada and the United States brought on behalfof purchasers of securities in Sino-Forest Corporation. The totalsettlement is in the amount of CAD $4.2 million (approximatelyUSD$3.9 million). Named plaintiffs in the Canadian class actions,along with Lead Plaintiffs in the U.S. class action, reached thesettlement with David J. Horsley, a former officer of SFC, in May2014.On March 30, 2012, SFC obtained creditor protection in Canadaunder the Companies' Creditors Arrangement Act, and the OntarioSuperior Court of Justice ordered a stay of proceedings againstthe company and other parties. The CCAA Proceeding was recognizedby the United States Bankruptcy Court for the Southern District ofNew York on February 4, 2013, and subsequently a settlement forCAD $117 million with Ernst & Young was approved by the OntarioCourt and recognized by the U.S. Bankruptcy Court.If approved and recognized, the Horsley Settlement will be fundedthrough the Sino-Forest Canadian class actions and held in escrowfor the benefit of the Canadian Class and the U.S. Class. Thedistribution of the settlement fund will be subject to a furtherorder of the Ontario Court.The final approval hearing for the Horsley Settlement will takeplace on July 24, 2014 at 9:00 a.m. (EST), before the OntarioCourt. A simultaneous hearing relating to recognition of thefinal approval order will take place in the U.S. Bankruptcy Court.The Courts will likely be linked by video conference. Objectionsto the approval of the Horsley Settlement and/or the recognitionof that approval in the United States must be filed by July 17,2014 with the respective courts.A notice regarding the details of the Horsley Settlement has beensent to class members in the United States and Canada. If youhave not received one or if you would like further information onthe Horsley Settlement and the SFC class actions, visit:http://www.cohenmilstein.com/cases/274/sino-forestor contact Richard Speirs of Cohen Milstein Sellers & Toll PLLC at 88 PineStreet, New York, New York 10005, (212) 838-7797.Founded in 1969, Cohen Milstein Sellers & Toll PLLC --http://www.cohenmilstein.com-- is a national leader in plaintiff class action lawsuits and litigation. As one of the premier firmsin the country handling major complex cases, Cohen Milstein, with80 attorneys, has offices in Washington, D.C., New York,Philadelphia, Chicago, and Palm Beach Gardens, Fla. About Sino-Forest Corp.Sino-Forest Corporation -- http://www.sinoforest.com/-- is a commercial forest plantation operator in China. Its principalbusinesses include the ownership and management of treeplantations, the sale of standing timber and wood logs, and thecomplementary manufacturing of downstream engineered-woodproducts. Sino-Forest also holds a majority interest inGreenheart Group Limited, a Hong-Kong listed investment holdingcompany with assets in Suriname (South America) and New Zealandand involved in sustainable harvesting, processing and sales ofits logs and lumber to China and other markets around the world.Sino-Forest's common shares have been listed on the Toronto StockExchange under the symbol TRE since 1995.Sino-Forest Corporation on March 30, 2012, obtained an initialorder from the Ontario Superior Court of Justice for creditorprotection pursuant to the provisions of the Companies' CreditorsArrangement Act.Under the terms of the Order, FTI Consulting Canada Inc. willserve as the Court-appointed Monitor under the CCAA process andwill assist the Company in implementing its restructuring plan.Gowling Lafleur Henderson LLP is acting as legal counsel to theMonitor.FTI Consulting commenced a Chapter 15 case for Sino-Forest in NewYork (Bankr. S.D.N.Y. Case No. 13-10361) to give force and effectof Sino-Forest's plan of compromise and reorganization that hasbeen sanctioned by creditors and an Ontario court. The Chapter 15petition claimed assets and debt both exceed $1 billion. JeremyC. Hollembeak, Esq., at Milbank, Tweed, Hadley & McCloy, LLP,serves as counsel in the U.S. case.YANZHOU COAL: Moody's Assigns Ba1 Rating on $300MM Unsecured Bond-----------------------------------------------------------------Moody's Investors Service has assigned definitive Ba1 rating forthe $300 million unsecured perpetual bond issued by YancoalInternational Trading Co., Ltd. and guaranteed by Yanzhou CoalMining Co., Ltd.The rating would continue to be on review for downgrade.The Ba1 corporate family rating of Yanzhou Coal Mining Co Ltd andthe senior unsecured debt rating of Yancoal InternationalResources Development Co Ltd will also continues to be on reviewfor downgrade.The rating review was originally initiated on April 1, 2014following the announcement of Yanzhou's 2013 full-year results,which showed that the company's capital expenditure ( capex) andtotal debt were higher than Moody's expectation.Ratings RationaleMoody's definitive rating on the unsecured perpetual bond confirmsthe provisional rating assigned on 14th May 2014. Moody's ratingrationale was set out in a press release published on the sameday."Our review of Yanzhou Coal continues to focus on company'sability to return its debt leverage to a level appropriate for itsBa1 corporate family rating in 2014. As part of the review,Moody's will also reassess the company's relationship with andpotential degree of support from the Shandong government and fromits parent, Yankuang Group (unrated)." says Simon Wong, a Moody'sVice President and Senior Credit Officer/Manager.Moody's review will also focus on Yanzhou Coal's: (1) businessstrategy and financial policy in managing its growth plans,against the backdrop of a difficult operating environment; (2)flexibility in relation to its 2014 capex budget of RMB9.4billion; (3) recent acquisitions as well as ongoing greenfieldinvestments; (4) plans to reduce its subsidiary debt to totalassets ratio.Yanzhou Coal's standalone credit profile has weakened materiallydue to its higher-than-expected debt level at end-2013, and whichwas the result of a significantly higher level of total capex, aswell as the ongoing difficult operating environment for the coalsector. Its rating could be downgraded if the company's adjusteddebt/EBITDA continues to exceed 4.5-5.0x.The principal methodology used in these ratings was the GlobalMining Industry published in May 2009.Yanzhou Coal Co Ltd was listed in Shanghai, Hong Kong and New Yorkin 1998. It is 56.52%-owned by the Yankuang Group, a state-ownedenterprise that is wholly owned by the Shandong Provincial State-Owned Assets Supervision and Administration Commission.Yanzhou Coal is one of the top coal mining groups in China. It has12 operating mines in Shandong Province, Shanxi Province and InnerMongolia. It also has 14 mines in Australia; nine in productionand five in exploration=========I N D I A=========AMBER INTERNATIONAL: ICRA Reaffirms B+ Rating on INR0.25cr Loan---------------------------------------------------------------ICRA has reaffirmed the long term rating of [ICRA]B+ to theINR0.25 crore fund based bank limits of Amber International. ICRAhas also reaffirmed the short term rating of [ICRA]A4 to theINR5.00 crore short term fund based bank limits of AI. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit- Cash Credit 0.25 [ICRA]B+ Reaffirmed Short Term Fund Based Limits-FDBP 5.00 [ICRA]A4 Reaffirmed Short Term Fund Based Limits- Packaging Credit 3.00 [ICRA]A4 ReaffirmedThe rating reaffirmation continues to factor in the weak financialprofile of Amber International characterized by the small scale ofoperations, moderate profitability and stretched liquidityemanating from high debtors days, which has resulted in highworking capital borrowings. The rating is also constrained bystiff competitive pressures in the industry and susceptibility todemand slowdown in key export markets such as in Europe, as wellas to changes in export incentives and adverse currencyfluctuations.The rating however considers the experience of the promoters inthe home textiles exports business, long association with reputedcustomers across Europe and America and fiscal benefits receivedin the form of export incentives.Started as a proprietorship concern in 1906 by Mr. Paroshttam DasBhagwan Das, Amber Textiles was engaged in trading of home textileproducts in the domestic markets. Later on in 2008, Amber Textilewas split into two different entities, Amber Home and AmberInternational, both engaged into the same line of business. Thefirm is a trading house engaged in the business of export anddomestic supply of terry towels.Recent ResultsIn FY13, the firm reported a net profit of INR0.26 cr on anoperating income of INR11.86 cr. As for the twelve months endingMarch 2014 provisional, the firm reported a profit after tax ofINR0.38 cr on an operating income of INR17.50 cr.FRONTIER KNITTERS: CRISIL Ups Rating on INR83.6MM Loan to 'B+'--------------------------------------------------------------CRISIL has upgraded its rating on the long-term bank facilities ofFrontier Knitters Pvt Ltd to 'CRISIL B+/Stable' from 'CRISIL B-/Stable', and reaffirmed its rating on the company's short-termloan facilities at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1 CRISIL A4 (Reaffirmed) Export Packing Credit 120 CRISIL A4 (Reaffirmed) Foreign Bill Discounting 140 CRISIL A4 (Reaffirmed) Proposed Long Term Bank 83.6 CRISIL B+/Stable (Upgraded Loan Facility from 'CRISIL B-/Stable') Standby Line of Credit 37 CRISIL A4 (Reaffirmed)The rating upgrade reflects CRISIL's belief that FKPL will sustainits improved liquidity over the medium term, driven by moderatecash accruals and absence of term loan obligations. The companyrepaid its entire term loan in 2013-14 (refers to financial year,April 1 to March 31). It is likely to generate cash accruals ofmore than INR50 million over the medium term and does not have anydebt obligation. Though its bank limits were utilised extensivelyto meet large working capital requirements, CRISIL believes thatFKPL's liquidity will remain adequate on the back of steady cashaccruals supported by stable revenue and moderate profitabilityover the medium term. Furthermore, the company does not plan anydebt-funded capital expenditure (capex) over the medium term,supporting its liquidity.The ratings reflect FKPL's customer concentration in its revenueprofile and its working-capital-intensive operations. These ratingweaknesses are partially offset by FKPL's above-average financialrisk profile marked by moderate capital structure and debtprotection metrics, and its established position in the knittedgarments industry.Outlook: StableCRISIL believes that FKPL will continue to benefit over the mediumterm from its promoter's extensive industry experience. Theoutlook may be revised to 'Positive' if FKPL's liquidity improveswith sustained healthy cash accruals and improvement in workingcapital management, while the company maintains its capitalstructure. Conversely, the outlook may be revised to 'Negative' incase of deterioration in FKPL's credit risk profile because oflarge debt-funded capex or working capital requirements, or lowcash accruals.FKPL was established as a partnership firm in 1988 by Mr. MohammedThajutheen in Tirupur (Tamil Nadu) and was reconstituted as aprivate limited company in October 2010. The company manufacturesand exports a wide range of knitted garments.GLOSTER CABLES: CRISIL Suspends 'B' Rating on INR568.2MM Loans--------------------------------------------------------------CRISIL has suspended its ratings on the bank facilities of GlosterCables Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 100 CRISIL A4 Suspended Cash Credit 60 CRISIL B/Stable Suspended Letter of Credit 190 CRISIL A4 Suspended Term Loan 150.2 CRISIL B/Stable Suspended Working Capital Demand Loan 358 CRISIL B/Stable SuspendedThe suspension of ratings is on account of non-cooperation by GCLwith CRISIL's efforts to undertake a review of the ratingsoutstanding. Despite repeated requests by CRISIL, GCL is yet toprovide adequate information to enable CRISIL to assess GCL'sability to service its debt. The suspension reflects CRISIL'sinability to maintain a valid rating in the absence of adequateinformation. CRISIL considers information availability risk as akey credit factor in its rating process and non-sharing ofinformation as a first signal of possible credit distress, asoutlined in its criteria 'Information Availability Risk in CreditRatings'.GCL was set up in 1995 by Mr. Ashish Modi and Mr. RadhakishanRathi. It manufactures LT and HT cables. In 1996, the companyentered into a technical and marketing collaboration with FortGloster Industries Ltd in Kolkata (West Bengal). GCL's cables aresold under the Gloster brand name. The company currently hascapacity to manufacture 24,000 km cables per annum.GROSPINZ FABZ: CRISIL Reaffirms 'B+' Rating on INR679.4MM Loans---------------------------------------------------------------CRISIL's ratings on the bank facilities of Grospinz Fabz Ltdcontinue to reflect GFL's weak financial risk profile marked byhigh gearing, small net worth, and weak debt protection metrics. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 10 CRISIL A4 (Reaffirmed) Cash Credit 50 CRISIL B+/Stable (Reaffirmed) Export Packing Credit 150 CRISIL B+/Stable (Reaffirmed) Foreign Bill Purchase 50 CRISIL B+/Stable (Reaffirmed) Letter of Credit 10 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 89.4 CRISIL B+/Stable (Reaffirmed) Working Capital Demand Loan 140 CRISIL B+/Stable (Reaffirmed) Term Loan 200 CRISIL B+/Stable (Reaffirmed)The ratings also factor in the company's small scale ofoperations, large working capital requirements, and thevulnerability of its operating margin to volatility in the priceof cotton. These rating weaknesses are partially offset by theextensive experience of GFL's promoter in the cotton industry,reflected in healthy ramp-up in scale of operations with presencein both the domestic and export markets.Outlook: StableCRISIL believes that GFL will continue to benefit over the mediumterm from its promoter's extensive experience in the cottonindustry. The outlook may be revised to 'Positive' in case ofsignificant improvement in the company's capital structure, drivenmost likely by fresh equity infusion or improvement in workingcapital management leading to reduced dependence on short-termbank borrowings. Conversely, the outlook may be revised to'Negative' if GFL's working capital requirements increasesignificantly, or if it undertakes a debt-funded capitalexpenditure programme, weakening its financial risk profile.GFL was set up by Mr. Navneet Grover in March 2008; it commencedcommercial production in October 2008, with 2009-10 (refers tofinancial year, April 1 to March 31) being its first full year ofoperations. The company manufactures cotton yarn (in counts of 16sto 32s) at its facility in Ferozepur (Punjab), which has around27,600 spindles. It mainly procures J-34 cotton from the localmarket in Sri Muktsar Sahib (Punjab) for manufacturing yarn.GFL is likely to report a profit after tax (PAT) of INR29.8million on operating income of INR1550 million for 2013-14,against a PAT of INR29.1 million on operating income of INR1152million for 2012-13.HYDERABAD POLLUTION: CRISIL Suspends B Rating on INR17.5MM Loans----------------------------------------------------------------CRISIL has suspended its ratings on the bank facilities ofHyderabad Pollution Controls Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 42.5 CRISIL A4 Suspended Cash Credit 17.5 CRISIL B/Stable SuspendedThe suspension of ratings is on account of non-cooperation byHPL's with CRISIL's efforts to undertake a review of the ratingsoutstanding. Despite repeated requests by CRISIL, HPL's is yet toprovide adequate information to enable CRISIL to assess HPL'sability to service its debt. The suspension reflects CRISIL'sinability to maintain a valid rating in the absence of adequateinformation. CRISIL considers information availability risk as akey credit factor in its rating process and non-sharing ofinformation as a first signal of possible credit distress, asoutlined in its criteria 'Information Availability Risk in CreditRatings'Promoted by Mr. S Gopala Krishnan Nair in the year 1978, HPL isengaged in the design, engineering and manufacture of ventilationplants and air pollution control systems such as industrialblowers and fans dust collection systems, humidification &ventilation systems, pneumatic transport systems and fumeexhaust systems. HPL, based in Hyderabad, Andhra Pradesh is ISO9001 certified manufacturer for these equipments.KALINGA ALLOYS: CRISIL Assigns 'B+' Rating to INR77.5MM Loans-------------------------------------------------------------CRISIL has assigned its 'CRISIL B+/Stable' rating to the bankfacilities of Kalinga Alloys Pvt Ltd (KAPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bill Discounting 30 CRISIL B+/Stable Cash Credit 47.5 CRISIL B+/StableThe rating reflects the extensive experience of the promoters inthe ferro alloy industry. The rating strength is partially offsetby KAPL's small scale of operations and below-average financialrisk profile, marked by its moderate gearing and weak debtprotection metrics.Outlook: StableCRISIL believes that KAPL will continue to benefit from thepromoters' extensive industry experience over the medium term. Theoutlook may be revised to 'Positive' if the company significantlyincreases its cash accruals with enhanced revenue andprofitability, and maintains the working capital cycle.Conversely, the outlook may be revised to 'Negative' if KAPLgenerates significantly low cash accruals, or records a stretchedworking capital cycle, thereby impacting its debt servicingability.KAPL, based in Bhubaneswar (Odisha), began its operations in 1989and is promoted by the Mahipal family. The promoters have beenengaged in beneficiation of Ferro alloys over the past 15 years.MELA SINGH: ICRA Reaffirms 'B+' Rating on INR9cr Loan-----------------------------------------------------ICRA has reaffirmed the long term rating assigned to INR9 crorefund based facilities of Mela Singh Memorial Educational Trust at[ICRA]B+. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund Based Limits 9 [ICRA]B+ (Reaffirmed)The rating continues to reflect limited operational track recordof the institutes managed by trust, which coupled with highrevenue dependency on engineering courses and oversupply situationof colleges offering these courses led to decline in freshenrolments during AY13-14. The ability of the trust to improve thepace of enrolments and limit the dropouts would be critical togenerate sufficient accruals for timely term payments along withfunding capital expenditure plans.The rating is also constrained by high likelihood of cash flowmismatches as term repayments are quarterly and revenues receiptsare collected semi-annually while capital expenditure is incurredregularly throughout the year resulting in stretched liquidity.Further, while the trust has been generating healthy operatingsurplus in the range of ~45% over the last two years which coupledwith moderately leveraged capital structure has led to a moderatefinancial profile.Ability to improve enrolments and total student strength arecritical to improve revenues and surplus and scale of future capexand funding thereof will be critical for managing liquidity andcash accruals going forward and thus would be the key ratingsensitivities.The trust runs Guru Nanak Institutions located at Ambala districtof Haryana, which includes two colleges encompassing fields likeengineering, and management catering to 1490 students in AY 2013-14. The trust is managed by Mr. Tarlochan Singh.Recent ResultsTrust reported net surplus of INR2.51 crore on an operatingsurplus of INR12.85 crore in FY13 as against net surplus ofINR1.38 crore on Revenue Receipts of INR10.11 crore in FY12. Asper provisional estimates, INR12.01 crore of Revenue Receipts hasbeen collected in FY14.MITTAL ELECTRONICS: CRISIL Assigns 'B' Rating to INR51.1MM Loans----------------------------------------------------------------CRISIL has assigned its 'CRISIL B/Stable' rating to the long termbank facilities of Mittal Electronics (ME). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 11.1 CRISIL B/Stable Cash Credit 20 CRISIL B/Stable Proposed Long Term Bank Loan Facility 20 CRISIL B/StableThe rating reflects ME's below-average financial risk profile,marked by low net worth and high gearing, and its small scale ofoperations. These rating weaknesses are partially offset by theextensive experience of the firm's partners in trading in consumergoods, and its prudent risk management policies.Outlook: StableCRISIL believes that ME will continue to benefit over the mediumterm from its diversified product portfolio and its long-standingassociation with established brands. The outlook may be revised to'Positive' if the firm registers significant increase in its scaleof operations and profitability, or benefits from larger-than-expected equity infusion, resulting in improvement in itsfinancial risk profile. Conversely, the outlook may be revised to'Negative' in case of unprecedented lengthening of ME's workingcapital cycle, most likely because of inventory pile-up, resultingin pressure on its liquidity. Substantial debt-funded capitalexpenditure towards setting up new showrooms, leading todeterioration in its capital structure, may also result in a'Negative' outlook.ME, a partnership firm started in 1999, is promoted by Rishra(West Bengal)-based Mr. Om Prakash Agarwal, Mr. Manish Agarwal,and Mr. Atish Agarwal. The firm trades in electronic consumerappliances and consumer durables.NAGESH ENTERPRISES: ICRA Assigns 'B-' Rating to INR8.5cr Loans--------------------------------------------------------------ICRA has assigned long-term rating of [ICRA]B- to the INR3.00crore term loans and INR5.50 crore fund based facilities of NageshEnterprises. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 3.00 [ICRA] B-/assigned Fund based facilities 5.50 [ICRA] B-/assignedThe assigned rating takes into account the long standingexperience of the promoters' in the rice industry and wellestablished relationships with the large number of supplierstogether with firms' proximity to paddy cultivation regionsenabling easy procurement and sale of rice aiding businessstability. The ratings are however constrained by the strainedfinancial profile of the firm characterized by thin margins, weakcapital structure and modest coverage indicators. With highworking capital intensive nature of operations (attributable tothe upfront payments required to be made to the suppliers and highinventory requirements owing to trading nature of its operations)coupled with its recent debt funded capital expenditure, thefirms' debt levels remain high as on March 31, 2014.This togetherwith low equity base has stretched its capital structure withgearing of 3.2x as on March 31, 2014. Further, NE's small scale ofoperations, high vulnerability of the industry to agro-climaticconditions and increasing competitive intensity in rice industryrestrict its operational and financial flexibility. Going forward,the firm's ability to quickly ramp up the operations and improvethe overall credit profile will remain key rating sensitivities.Nagesh Enterprises has been promoted by Mr. S Anil who is thecurrently managing the firm. The firm started its operations in1992 at Bangarpet in Kolar district of Karnataka, with businessinitially engaged only into trading of food grains. Over lasttwenty years the firm has slowly scaled up its operations andpresently the Firm is engaged in rice processing and trading withfinished rice, broken rice, bran, husk and cattle feed being themajor products of the firm. The firm deals in variety of rice likeIR-64, Sona Musoorie rice, etc. The firm's processing plant isspread over 14000 sq ft of land completely owned by the proprietorand is equipped with a de-stoner, silky polishing equipment, ricewhitener, grader, sortex and an elevator.Recent ResultsFor 2013-14, Nagesh Enterprisies reported net profit of INR0.4crore on operating income of INR25.5 crore during 2013-14 asagainst net profit of INR0.3 crore on operating income of INR19.5crore during 2012-13.NAMRATA DEVELOPERS: CRISIL Rates INR80MM Bank Loan at 'B'---------------------------------------------------------CRISIL has assigned its 'CRISIL B/ Stable' rating to the long-termbank facilities of Namrata Developers Pvt Ltd (NDPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term Bank Loan Facility 80 CRISIL B/StableThe rating reflects NDPL's high project risk, given that itsproject is in the nascent stage and has not yet been launched. Therating also factors in the company's exposure to intensecompetition and to risks and cyclicality inherent in Indian realestate industry. These rating weaknesses are partially offset bythe promoters' extensive experience in the real estate sector,their funding support and established brand presence in Pune andsurrounding areas.Outlook: StableCRISIL believes that NDPL will benefit over the medium term fromthe promoters' extensive industry experience, and their fundingsupport. The outlook may be revised to 'Positive' if the companyimproves its cash inflows with timely project completion, andenhanced customer bookings. Conversely, the outlook may be revisedto 'Negative' if NDPL's liquidity is constrained by project timeor cost overruns, or significantly low customer advances,resulting in lower cash inflows, or if the company simultaneouslyundertakes large debt funded projects.NDPL is a part of the Pune-based Namrata group. The company is areal estate developer, and has recently completed the Sakar aproject in Talagaon Maharashtra. NDPL will commence its NamrataWeekender project in Kamshet (Maharashtra).NEWGEN AGRO: ICRA Assigns 'B' Rating to INR10cr Loans-----------------------------------------------------ICRA has assigned a long term rating of [ICRA]B to the INR8.88crore term loan facilities, INR1.07 fund based facilities andINR0.05 crore proposed facilities of Newgen Agro ProcessorsPrivate Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term-Term Loan 8.88 [ICRA]B/assigned Long term-Fund based 1.07 [ICRA]B/assigned Long term-Proposed 0.05 [ICRA]B/assignedThe assigned rating reflects the stretched financial profile ofthe company characterized by high debt levels and negative networth on account of the recent debt funded capital expenditure inestablishing the processing facility and subsequent weak earningsfrom operations resulting in net losses. The operational andfinancial performance is expected to improve going forwardsupported by the growing order book position of Newgen Agro aidedby its reputed client base which would result in low ordervolatility and recurring source of revenues, its strategiclocation near the mango growing areas aiding raw materialavailability and reducing logistics costs, the continuous productand market diversification initiatives undertaken and the expectedsteady growth in demand for mango pulp and other processed fruitsand vegetables in India and export markets. The improvement incredit profile of the company would depend on the ability of themanagement in improving the scale of operations / earnings of thecompany and also on the timeliness of the envisaged equityinfusion owing to the high debt levels and repayment obligationsand would remain key rating sensitivities, with the pastdemonstrated support providing some comfort. The rating alsoconsiders the small scale of operations of the company amidstintense competition in a highly fragmented industry limiting scaleeconomics, threat of raw material availability which is exposed toagro climatic conditions impacting costs and the seasonal natureof operations owing to the raw material availability resulting inhigh working capital intensity during portion of the year and lowcapacity utilization levels and earnings during the remainingperiod.Incorporated in 2010, Newgen Agro Processors Private Limited isengaged in processing and exporting fruit pulp (with focus mainlyon products such as Totapuri Mango pulp, Alphanso Mango Pulp,Guava Pulp). With its processing facility located at Krishnagiri,Tamil Nadu, the company is close to the mango growing belt ofSouth India. The company has installed capacity to process~6500mt/year. The Company is equipped with aseptic processingfacilities. The company undertakes both direct sale of processedpulp (domestic and exports) as well as job work processing for itsclients.Recent ResultsAs per the unaudited results, the company recorded net loss ofINR2.6 crore on an operating income of INR7.8 crore for the year2013-14, as against a net loss of INR2.9 crore on an operatingincome of INR1.9 crore for the year 2012-13R.K. COTTON: CRISIL Ups Rating on INR40MM Loans to 'B+'-------------------------------------------------------CRISIL has upgraded its rating on the long-term bank facilities ofR.K. Cotton's to 'CRISIL B+/Stable' from 'CRISIL B/Stable', andreaffirmed its rating on the firm's short-term loan facilities at'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Foreign Bill Discounting 30 CRISIL A4 (Reaffirmed) Packing Credit 80 CRISIL A4 (Reaffirmed) Proposed Long Term 38.6 CRISIL B+/Stable (Upgraded Bank Loan Facility from 'CRISIL B/Stable') Rupee Term Loan 1.4 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable')The upgrade reflects CRISIL's belief that RKC will maintain itsimproved liquidity over the medium term, with enhanced cashaccruals of around INR11 million in 2013-14 (refers to financialyear, April 1 to March 31), as compared to INR4 million in 2012-13, supported by healthy revenue growth and stable profitability.The firm registered year-on-year revenue growth of around 130 percent in 2013-14, with a significant increase in orders. Therevenue could increase by around 20 per cent over the medium term,commensurate with its healthy order book and established customersrelationships. Consequently, the firm is likely to generate cashaccruals of around INR15 million over the medium term.The ratings reflect RKC's modest scale of operations with highcustomer concentration in its revenue profile, and large workingcapital requirements. These rating weaknesses are partially offsetby the extensive experience of the promoter in the garmentsindustry, and the average financial risk profile, commensuratewith the firm's gearing and debt protection metrics.Outlook: StableCRISIL believes that RKC will benefit over the medium term fromits promoter's extensive experience in the garment exportindustry. The outlook may be revised to 'Positive' if the firmbooks sizeable cash accruals, driven by enhanced revenue andprofitability, and improves its working capital management.Conversely, the outlook may be revised to 'Negative' if thefinancial risk profile deteriorates with large debt-funded capitalexpenditure or working capital requirements or capital withdrawalsby the promoter.RKC is a proprietorship firm established by Mr. Raj Kumar in 1997.The firm manufactures and exports knitted garments.RATAN ALUMINUM: CRISIL Raises Rating on INR75MM Cash Credit to B+-----------------------------------------------------------------CRISIL has upgraded its long-term rating on the bank facilities ofRatan Aluminum Recycling Pvt Ltd to 'CRISIL B+/Stable' from'CRISIL B/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 75 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable')The rating upgrade reflects the company's enhanced operations,driven by growth in its top line, and the expected improvement inliquidity over the medium term, marked by moderate cash accrualsand the promoters' equity infusion in the past. Furthermore, theliquidity will improve over the medium term, supported byincreasing cash accruals, the absence of capital expenditure(capex), and growing revenue.RAPL's operating income grew to INR1.03 billion in 2013-14 (refersto financial year, April 1 to March 31) from INR0.7 billion in theprevious year, at an estimated 43 per cent growth following thehealthy ramp up of operations. The key customer, Oswal CastingsPvt Ltd, constituted 70 per cent of the total revenue in 2013-14.The company could report moderate growth in turnover, with 85 to90 per cent utilisation of its available capacity of 9000 metrictonnes (MT). Nevertheless, the operating margin is likely toimprove in 2014-15, driven by low foreign exchange (forex)fluctuations.Additionally, RAPL's liquidity has improved with an equityinfusion of around INR5 million, for 2013-14; and healthy cashaccruals expected at around INR10 million in 2014-15. The companyhas low debt obligations of around INR1.14 million for 2014-15,resulting in a healthy cushion between cash accruals and its debtobligations.The rating reflects RAPL's modest scale of operations in afragmented aluminium ingots industry along with high customerconcentration in the revenue profile. The rating also factors inits weak financial risk profile, marked by high gearing and below-average debt protection metrics. These rating weaknesses arepartially offset by RAPL's ramp up of operations despite itslimited track record.Outlook: StableCRISIL believes that RAPL's business risk profile will remainconstrained by its limited track record of operations, and highcustomer concentration in revenue profile. The outlook may berevised to 'Positive' if the company's financial risk profileimproves with a sustained improvement in its scale of operationsand operating profitability; or with the promoters' fundinfusions. Conversely, the outlook may be revised to 'Negative' ifRAPL's financial risk profile deteriorates with significantly lowprofitability, or sizeable working capital requirements.RAPL was incorporated in 2011 and has a manufacturing facility inFaridabad (Haryana). The company manufactures aluminium ingots,mainly for supplies in the automotive sector, and is promoted byMr. O P Paliwal, Ms. Rajni Paliwal, Mr. Vijay Paliwal and Mr.Puneet Paliwal.RAPL reported a profit after tax (PAT) of INR9.1 million on netsales of INR696.5 million for 2012-13, as against a PAT of INR1.7million on net sales of INR225.9 million for 2011-12. The netsales were estimated at INR1.03 billion in 2013-14.SARWATI POLYMERS: CRISIL Assigns 'B' Rating to INR70MM Loans------------------------------------------------------------CRISIL has assigned its 'CRISIL B/Stable' rating to the bankfacilities of Sarwati Polymers Pvt Ltd.. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 38.2 CRISIL B/Stable Cash Credit 20 CRISIL B/Stable Proposed Long Term Bank Loan Facility 11.8 CRISIL B/StableThe rating reflects the company's modest scale of operations inthe fragmented packaging industry. The rating also factors in thecompany's below-average financial risk profile marked by highgearing and weak debt protection metrics. These rating weaknessesare partially offset by the promoter's extensive experience in theplastic-packaging industry.Outlook: StableCRISIL expects SPPL to maintain its stable business risk profileover the medium term, backed by its promoter's extensiveexperience and established relationships with its customers andsuppliers. The outlook may be revised to 'Positive' if the companyreports higher than expected growth in revenues and profitability,while improving its capital structure. Conversely the outlook maybe revised to 'Negative' if SPPL's financial risk profiledeteriorates, because of sharp decline in profitability orrevenues, a higher-than- expected debt-funded capital expenditure,or deterioration in its working capital cycle.SPPL was incorporated in 2002 by Mr. Jain and is engaged inmanufacturing of plastic bags and allied products which find theirapplication in diversified industries. SPPL's manufacturingfacility is located at Panipat, Haryana.SPPL reported a profit after tax (PAT) of INR0.7 million on anoperating income of INR84.2 million for 2012-13, against a PAT ofINR0.2 million on an operating income of INR51.5 million for 2011-12.SATNAM GLOBAL: CRISIL Reaffirms 'B' Rating on INR160MM Loan-----------------------------------------------------------CRISIL's rating on the bank facilities of Satnam GlobalInfraprojects Ltd continues to reflect its weak liquidity, drivenby large working capital requirements; and a constrained businessrisk profile, because of its fixed-price contracts with customers.These rating weaknesses are partially offset by the promoters'extensive experience in providing engineering services todiversified end-user industries. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 500 CRISIL A4 (Reaffirmed) Cash Credit 160 CRISIL B/Stable (Reaffirmed) Letter of Credit 50 CRISIL A4 (Reaffirmed)Outlook: StableCRISIL believes that SGIL will continue to benefit over the mediumterm from its promoter's extensive industry experience. Theoutlook may be revised to 'Positive' if the company enhances itsliquidity by realising its overdue receivables without any delaysand improves its collection cycle, or receives sizeable equityfrom the promoters. Conversely, the outlook may be revised to'Negative' if SGIL's liquidity weakens, with continually stretchedreceivables without equity infusion; or its financial risk profileis impacted with a decline in its cash accruals because of lowrevenue or profitability.UpdateSGIL recorded revenue in the range of INR820 to INR-900 millionfor 2013-14 (refers to financial year, April 1 to March 31). Thecompany executes orders for various industries, including oil andgas, iron and steel, and fertilisers. The operating profitabilityremained in line with that of the past two years.SGIL's operations remain working capital intensive, largelybecause of stretched realisations of receivables, between 230 and250 days as on March 31, 2014. Consequently, the companyextensively utilised its bank limit at 95 to 100 per cent in 2013-14.SGIL's financial risk profile is marked by low gearing of around0.6 times as on March 31, 2014. The debt protection metrics werealso average, with interest coverage and net cash accruals tototal debt (NCATD) ratios at around 1.7 times and 0.10 times,respectively, for 2013-14. SGIL's overall financial risk profileis, however, constrained by weak liquidity resulting in high limitutilisation of bank lines.SGIL was established by Mr. Satnam Singh Sandhu and Mr. B K Jainas a private limited company in 1987, and reconstituted as apublic limited company in 2008. SGIL undertakes engineeringcontracts entailing erection, commissioning, and installation ofmachines. The company also undertakes erection and commissioningof high-capacity diesel generator sets.SATVA INFRATECH: CRISIL Suspends 'B' Rating on INR45MM Loans------------------------------------------------------------CRISIL has suspended its ratings on the bank facilities of SatvaInfratech Pvt Ltd. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 30 CRISIL A4 Suspended Overdraft Facility 25 CRISIL B/Stable Suspended Proposed Bank Guarantee 24 CRISIL A4 Suspended Proposed Overdraft 20 CRISIL B/Stable Suspended FacilityThe suspension of ratings is on account of non-cooperation by SIPLwith CRISIL's efforts to undertake a review of the ratingsoutstanding. Despite repeated requests by CRISIL, SIPLis yet toprovide adequate information to enable CRISIL to assess SIPL'sability to service its debt. The suspension reflects CRISIL'sinability to maintain a valid rating in the absence of adequateinformation. CRISIL considers information availability risk as akey credit factor in its rating process and non-sharing ofinformation as a first signal of possible credit distress, asoutlined in its criteria 'Information Availability Risk in CreditRatings'SIPL was set up in December 2007 by Mr. P Krishna Murthy and hiswife, Mrs. P. Hemlatha, in Hyderabad (Andhra Pradesh). Their son,Mr. Mohan Pathalapati oversees the execution of all the projects.The company undertakes civil construction work, especiallybridges.SHIBSATI COLD: CRISIL Suspends 'D' Rating on INR97MM Loans----------------------------------------------------------CRISIL has suspended its ratings on the bank facilities ofShibsati Cold Storage Pvt Ltd (SCSPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 2 CRISIL D Suspended Cash Credit 38 CRISIL D Suspended Term Loan 50 CRISIL D Suspended Cash Credit 7 CRISIL D SuspendedThe suspension of ratings is on account of non-cooperation bySCSPL with CRISIL's efforts to undertake a review of the ratingsoutstanding. Despite repeated requests by CRISIL, SCSPL is yet toprovide adequate information to enable CRISIL to assess SCSPL'sability to service its debt. The suspension reflects CRISIL'sinability to maintain a valid rating in the absence of adequateinformation. CRISIL considers information availability risk as akey credit factor in its rating process and non-sharing ofinformation as a first signal of possible credit distress, asoutlined in its criteria 'Information Availability Risk in CreditRatings'SCSPL was set up in December 2010 by Mr. Debkalyan Roy and Mr.Debabrata Roy of Kolkata (West Bengal). The company has a coldstorage facility in Paschim Mednipur (West Bengal), with capacityof 17,000 tonnes per annum (tpa) (two chambers of 8500 tpa each)for storing potatoes. It also trades in potatoes. The utilisationfor storage facility between January 2012 and March 2012 was about50 per cent. The rest of the facility was used for storage ofpotatoes for trading activities. The promoter family has beentrading in potatoes for more than three decades.SHREE RAM: CRISIL Upgrades Rating on INR250MM Loan to 'B+'----------------------------------------------------------CRISIL has upgraded its rating on the bank facility of Shree RamDass Rice & Gen. Mills (SRDR) to 'CRISIL B+/Stable' from 'CRISILB/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 250 CRISIL B+/Stable (Upgraded from 'CRISIL B/Stable')The rating upgrade reflects improvement in SRDR's financial riskprofile, marked by improvement in its capital structure on accountof equity infusion of around INR49.6 million in 2013-14 (refers tofinancial year, April 1 to March 31); as a result, its gearingdeclined to 2.76 times as on March 31, 2014, from 5.01 times as onMarch 31, 2013. The upgrade also underscores CRISIL's belief thatSRDR's credit risk profile will improve over the medium term,driven by increasing scale of operations and moderate operatingprofitability, which will lead to higher cash accruals, andconsequently, improvement in debt protection metrics, net worth,and liquidity; the firm's cash accruals will be adequate to meetits term debt obligations over the medium term.The rating reflects SRDR's weak financial risk profile marked byweak interest coverage ratio and high, albeit improving, totaloutside liabilities to tangible net worth ratio, and itssusceptibility to fluctuations in rainfall. These ratingweaknesses are partially offset by the extensive experience of thefirm's promoters in the rice business, and its increasing scale ofoperations supported by healthy growth prospects for the basmatirice industry.Outlook: StableCRISIL believes that SRDR's credit risk profile will improve overthe medium term, driven by its increasing scale of operations andmoderate operating profitability. The outlook may be revised to'Positive' in case of substantial and sustained improvement in thefirm's revenue or significant improvement in its working capitalcycle. Conversely, the outlook may be revised to 'Negative' ifSRDR's financial risk profile, particularly its liquidity, weakenssignificantly, most likely because of large, debt-funded capitalexpenditure or substantial incremental working capitalrequirements.SRDR, a partnership firm set up by Mr. Vijay Sood and Mr. AnilSood in 1982, is engaged in milling and processing of paddy. SRDRis based in Machhiwara (Punjab). It has installed milling capacityof 13 tonnes per hour.STYLISH PRECAST: ICRA Cuts Rating on INR15cr Loans to 'D'---------------------------------------------------------ICRA has revised the long term rating assigned to the INR5.10crore cash credit, INR9.00 crore term loan, INR0.70 crore bankguarantee, and INR0.20 crore unallocated facilities of StylishPrecast Private Limited from [ICRA]B) to [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits- Cash Credit 5.10 [ICRA]D; revised from [ICRA]B Fund Based Limits- Term Loan 9.00 [ICRA]D; revised from [ICRA]B Non Fund Based 0.70 [ICRA]D; revised Limits-Bank Guarantee from [ICRA]B Unallocated 0.20 [ICRA]D; revised from [ICRA]BThe rating revision takes into account the current delays inSPPL's debt servicing on account of the weak performance of thecement grinding unit, coupled with the company's tight liquidityposition, as indicated by high utilization of working capitalfacilities. ICRA notes that between FY 2011-12 and 9M FY 2013-14,SPPL's grinding unit operated at sub-optimal utilization levels,ranging between 16% and 23%. Cement sales were impacted on accountof multiple factors ranging from high competition, leading to aslower than expected cement off-take, the overall slowdown in thereal estate construction activity, and an extended monsoon in FY2013-14. With SPPL having significant debt repayments in the nextfew years, ability to scale up the cement business remainscrucial. The rating also takes into account SPPL's small scale ofoperations at present, and its weak financial profile, asindicated by an adverse capital structure and stressed debtprotection metrics. The rating, however, factors in theestablished track record of the company in the manufacturing ofpre-cast concrete products, and its integrated operations, withcement being a key raw material in the manufacturing of pre-castconcrete products.Stylish Precast Private Limited is a Kolkata based company, andhas been engaged in the manufacturing of pre-cast concreteproducts since 1999. In FY 2011-12, the company has set up a66,000 tonne per annum (TPA) cement grinding unit, and has alsoset up facilities for the manufacturing of fly-ash bricks(installed capacity of 36,00,000 pieces per annum) and hollow andsolid blocks (installed capacity of 36,00,000 pieces per annum).Recent ResultsIn 9M FY 2013-14, SPPL reported a profit before tax (PBT) ofINR0.19 crore (provisional) on the back of an operating income ofINR19.39 crore (provisional), as against a profit after tax (PAT)of INR0.16 crore on the back of an operating income of INR26.99crore during FY 2012-13.SURYA OIL: ICRA Reaffirms 'B+' Rating on INR11.09cr Loans---------------------------------------------------------ICRA has reaffirmed the [ICRA]B+ rating to the INR1.09 crore(reduced from INR1.38 crore) term loan and INR10.00 crore cashcredit facility of Surya Oil and Agro Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Fund 1.09 [ICRA]B+ reaffirmed Based-Term Loan Long Term Fund Based- 10.00 [ICRA]B+ reaffirmed Cash Credit FacilityThe rating continues to remain constrained by the firm's limitedtrack record of operations with commercial production commencingfrom May 2012, and its relatively modest scale of operations withonly limited scope for growth given the high capacity utilizationin the absence of any capacity expansion plans in the near future.The rating also considers the weak financial risk profilereflected by low profitability, weak coverage indicators andvulnerability of firm's profitability to adverse movements in rawmaterial prices which are subject to seasonality and crop harvest;however, order backed purchases mitigates the risk to a largeextent. The ratings also take into account the firm's limitedbrand presence in the retail edible oil market which is highlyfragmented due to the presence of a large number of players. Therating also considers the potential adverse impact on net worthand gearing levels in case of any substantial withdrawal fromcapital account given the entity's constitution as a partnershipfirm.The rating, however, continues to favourably factor in the longstanding experience of SOAI's promoters in the edible oil refiningindustry and its reputed clientele base which includes establishededible oil manufacturing as well as marketing companies. Therating also factors in the favourable outlook for edible oilsector, the firm's plans to add refined sunflower oil to itsproduct mix which is expected to improve the revenues of the firmand the favourable location of the firm's plant in proximity to alarge number of oil mills located near Wankaner and Morbi in thecotton growing belt of Saurashtra, Gujarat.Surya Oil and Agro Industries (SOAI) is a partnership firm engagedin edible cottonseed oil and maize oil refining. SOAI is promotedby Mr. Sanket Zalaria, Mr. Narottam Patel and Mr. Jateen Adrojawho set up the entity in August 2011. The firm markets itsproducts, refined cottonseed oil and refined maize oil, in looseform to bulk dealers as well as in packed form (under the 'Satvik'brand name). SOAI operates from its plant located in Wankaner,Rajkot with a total installed capacity of refining 100 MT ofedible oil per day.Recent ResultsFor the year ended March 31, 2013, Surya Oil and Agro Industries(SOAI) reported an operating income of INR64.28 crore and a profitafter tax of INR0.02 crore. Further, during FY 2014 the firmreported an operating income of INR104.59 crore and profit aftertax of INR0.08 crore (as per unaudited provisional numbers).SURYA WORLD: CRISIL Suspends 'D' Rating on INR1.50BB Loans----------------------------------------------------------CRISIL has suspended its ratings on the bank facilities of SuryaWorld Educational Research and Charitable Initiative (SWERCI). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term 721.5 CRISIL D Suspended Bank Loan Facility Term Loan 778.5 CRISIL D SuspendedThe suspension of ratings is on account of non-cooperation bySWERCI with CRISIL's efforts to undertake a review of the ratingsoutstanding. Despite repeated requests by CRISIL, SWERCI is yet toprovide adequate information to enable CRISIL to assess SWERCI'sability to service its debt. The suspension reflects CRISIL'sinability to maintain a valid rating in the absence of adequateinformation. CRISIL considers information availability risk as akey credit factor in its rating process and non-sharing ofinformation as a first signal of possible credit distress, asoutlined in its criteria 'Information Availability Risk in CreditRatings'SWERCI was set up by Mr. Rajiv Goel (founder and president) onAugust 11, 2008. The trust offers various graduate and post-graduate courses in engineering, management, and computerapplications. SWERCI runs seven educational institutes; it startedoffering courses from 2009-10 (refers to academic year, July 2009to March 2010). SWERCI's institutes are approved by the All IndiaCouncil for Technical Education and the courses offered areaffiliated to the Punjab Technical University.SWASTIK TRADERS: CRISIL Reaffirms 'B+' Rating on INR80MM Loans--------------------------------------------------------------CRISIL's rating on the long-term bank facilities of SwastikTraders (Delhi) continues to reflect ST's modest scale ofoperations in the highly fragmented textile industry, its lowoperating margin owing to the trading nature of its operations,and its weak financial risk profile, marked by weak debtprotection metrics and a high total outside liabilities totangible net worth (TOLTNW) ratio. These rating weaknesses arepartially offset by the extensive experience of the firm'sproprietor in the textile industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 30 CRISIL B+/Stable (Reaffirmed)Outlook: StableCRISIL believes that ST will continue to benefit over the mediumterm from its proprietor's extensive industry experience. Theoutlook may be revised to 'Positive' in case of a significantlyhigher-than-expected increase in the firm's cash accruals, leadingto a better financial risk profile. Conversely, the outlook may berevised to 'Negative' if ST's financial risk profile deterioratesfurther, most likely because of lengthening of its working capitalcycle or lower-than-expected cash accruals.UpdateST's business risk profile remained stable in 2013-14 (refers tofinancial year, April 1 to March 31). Its revenue, at aroundINR758 million for the year, was about the same as in the previousyear; however, its operating margin improved to 1.87 per cent in2013-14 from around 1.41 per cent in 2012-13. The firm's revenueis expected to grow by 10 to 12 per cent per annum over the mediumterm supported by its proprietor's extensive industry experience,coupled with healthy orders from its existing clients. However,given the trading nature of its operations, ST's operating marginis expected to remain low at 1.0 to 1.5 per cent over this period.ST's operations are working capital intensive, as reflected in thelong credit period of 40 to 50 days offered to its customers inorder to withstand the intense industry completion. Moreover, itmaintains an inventory of 10 to 15 days against which it avails acredit period of 15 to 20 days from its suppliers. As a result,its average bank limit utilisation was high at an average of 100per cent during the 12 months through March 2014. CRISIL believesthat the firm's working capital requirements will remain high overthe medium term.ST's net worth is estimated to have been small at around INR33.2million as on March 31, 2014, thereby limiting its financialflexibility to meet any exigency. The firm has a high reliance onborrowed funds for meeting its working capital requirements;this, coupled with its small net worth, is estimated to haveresulted in a high total outside liabilities to tangible net worthratio of 4.67 times as on March 31, 2014.ST, based in Delhi, was set up as a proprietorship firm in 2010 byMr. Rajesh Attri. The firm trades in grey fabrics. Mr. Attri andhis family have an experience of over 22 years in the fabrictrading business through group companies.TECHOPS INFRASTRUCTURE: CRISIL Ups Rating on INR55MM Loans to B---------------------------------------------------------------CRISIL has upgraded its rating on the long-term bank facilities ofTechops Infrastructure Pvt Ltd to 'CRISIL B/Stable' from 'CRISILB-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term 5 CRISIL B/Stable (Upgraded Bank Loan Facility from 'CRISIL B-/Stable') Term Loan 50 CRISIL B/Stable (Upgraded from 'CRISIL B-/Stable')The upgrade reflects CRISIL's belief that TIPL will generatesizeable cash flows from the sale of residential properties overthe medium term, supported by healthy bookings for its projects.The surplus cash inflows could be sufficient to meet its debtobligations over the medium term. The upgrade also factors in thegradual reduction in TIPL's exposure to project-related risks,given that Phase 1 is complete. The company has commenced bookingsand work on Phase 2, which is in an advanced stage ofconstruction.The rating reflects TIPL's exposure to risks associated with theongoing residential project and exposure to cyclical demandinherent to the Indian real estate sector. The rating also factorsin the below-average financial risk profile, with small net worth,high gearing and subdued debt protection metrics. These ratingweaknesses are partially offset by the promoters' extensiveexperience in the real estate sector.Outlook: StableCRISIL believes that TIPL will continue to benefit over the mediumterm from the promoters' extensive experience in the real estatesector. The outlook may be revised to 'Positive' if the companygenerates sizeable cash flows from operations, with itsaccelerated project execution and improved inflows of advances.Conversely, the outlook may be revised to 'Negative' if TIPLreports significantly low cash flows from operations, eitherbecause of a subdued response to its project or a limited flow ofadvances, impacting its debt servicing ability.TIPL was founded by Mr. Rajendra Nakade, Mr. Vilas Harde, Mr.Jeevan Ghime, Mr. Narendra Dakhale and Mr. Anil Kale in Nagpur(Maharashtra) in 2007. The company is a real estate developer.TIPL's profit after tax (PAT) was estimated at INR2.3 million onnet sales of INR63 million for 2013-14 (refers to financial year,April 1 to March 31), as against a PAT of INR2.2 million on netsales of INR48 million for 2012-13.TRADE INDIA: CRISIL Assigns 'B-' Rating to INR65MM Loans--------------------------------------------------------CRISIL has revoked the suspension of its ratings on the bankfacilities of Trade India Corporation (TIC) and has assigned its 'CRISIL B-/Stable/CRISIL A4' ratings to the bank facilities of TIC.The ratings were previously 'Suspended' by CRISIL vide the RatingRationale dated April 22nd 2014, since TIC had not providednecessary information required for a rating review. TIC has nowshared the requisite information enabling CRISIL to assign ratingsto its bank facilities. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 15 CRISIL A4 (Assigned; Suspension revoked) Cash Credit 49.2 CRISIL B-/Stable (Assigned; Suspension revoked) Channel Financing 15.8 CRISIL B-/Stable (Assigned; Suspension revoked)The ratings reflect TIC's weak financial risk profile, marked bylow net worth and high gearing, and its working-capital-intensiveoperations. These rating weaknesses are partially offset by theextensive experience of the firm's partners in the capital goodstrading industry.Outlook: StableCRISIL believes that TIC will continue to benefit over the mediumterm from its promoters' extensive industry experience. Itsfinancial flexibility, though, is expected to remain constrainedover this period by its weak capital structure and highly working-capital-intensive operations. The outlook may be revised to'Positive' if the firm's financial risk profile improves, led bybetter working capital management and fresh equity infusion, orbetter-than-expected cash accruals. Conversely, the outlook may berevised to 'Negative' if TIC's financial risk profiledeteriorates, most likely due to increasing working capitalrequirements, lower-than-expected profitability and revenues, orsignificant debt-funded capital expenditure.TIC, a Kolkata (West Bengal)-based partnership firm set up in1968, is an authorised distributor of bearings of The TimkenCompany, USA (Timken). The firm trades in seven to eight varietiesof bearings produced by Timken, including ball, thrust, needleroller, and tapered roller bearings. Its current partners are Mr.S L Dugar and Mr. J P Goyal.TRIPATHI HOSPITAL: CRISIL Reaffirms 'B' Rating on INR90MM Loan--------------------------------------------------------------CRISIL's ratings on the bank facilities of Tripathi HospitalPrivate Limited continue to reflect THPL's small scale ofoperations and risks related to implementation of its ongoingmulti-specialty hospital project. The rating also factors in risksattached to successful stabilisation of operations and hence,achievement of revenues and cash accruals. These rating weaknessesare partially offset by the benefits that the company derives fromthe extensive industry experience of the promoters. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 90 CRISIL B/Stable (Reaffirmed)Outlook: StableCRISIL expects THPL to maintain its stable business risk profileover the medium term, backed by its promoter's extensive industryexperience and established market position. The outlook may berevised to 'Positive' if the company significantly expands itsscale of operations aided by timely implementation andstabilisation of the proposed hospital along with an improvementin operating profitability, resulting in higher than expected cashaccruals and hence, improvement in the financial risk profile.Conversely, the outlook may be revised to 'Negative' if thecompany's scale of operations remain stagnant and financial andliquidity risk profile deteriorate due to time and cost overrunsin the proposed project or larger than expected debt fundedcapital expenditure.Incorporated in November 2001, THPL is engaged in the business ofproviding medical services in the fields of Orthopedics andGynecology/Obstetrics. The hospital first established as apartnership firm in 2000 was later converted into a privatecompany in 2001. The husband and wife duo of Mr. B.K. Tripathi andMrs. Nidhi Tripathi actively manage the hospital. The company isin the process of setting up a 100 bedded hospital in Noida.VIRAJ INTERNATIONAL: ICRA Suspends B+ Rating on INR16.5cr Loan--------------------------------------------------------------ICRA has suspended the long-term rating of [ICRA]B+ assigned toINR16.50 crore fund based limits Viraj International. Thesuspension follows ICRA's inability to carry out a ratingsurveillance in the absence of the requisite information from thecompany.Viraj International (VI) is undertaking a 17 room 4 star hotelproject at 29/7, Rana Pratap Marg, Lucknow. The project isproposed to comprise of two basement, ground-floor and 3 upperfloors for rooms. The total number of rooms would be 17 thatinclude 2 suite and 15 deluxe/executive rooms. Other proposedfacilities in the hotel include food and beverage (F&B) facilitiessuch as Coffee shop and Restaurant Pub & Bar, 2 Banquet which havea total capacity of 950 persons and a conference room with a totalcapacity of 100 people. The hotel would be operational by December2013 and the total cost of the project is INR24.92 crore, which isfunded by a DER of 2.10 times.VIRAT ALLOYS: CRISIL Reaffirms 'B+' Rating on INR93.4MM Loans-------------------------------------------------------------CRISIL's ratings on the bank facilities of Virat Alloys Pvt Ltd(VAPL) continue to reflect its below-average financial riskprofile marked by high gearing, modest scale of operations, andsusceptibility to intense market competition and to volatility inraw material prices. These rating weaknesses are partially offsetby the benefits that VAPL derives from its promoters' extensiveexperience in the steel industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 9.5 CRISIL A4 (Reaffirmed) Cash Credit 50 CRISIL B+/Stable (Reaffirmed) Term Loan 43.4 CRISIL B+/Stable (Reaffirmed)Outlook: StableCRISIL believes that VAPL will continue to benefit over the mediumterm from its promoters' support and their extensive industryexperience. The outlook may be revised to 'Positive' if thecompany significantly improves its liquidity, led by higher-than-expected growth in its revenues and profitability, along withimprovement in capital structure. Conversely, the outlook may berevised to 'Negative' if VAPL's liquidity deteriorates, mostlikely driven by a decline in cash accruals as a result of less-than-expected offtake or decline in operating margin, or itundertakes any larger-than-expected, debt-funded capitalexpenditure (capex) programme.UpdateFor 2012-13 (refers to financial year, April 1 to March 31),VAPL's turnover grew marginally to INR391 million, supported byits efforts to improve its product mix through a INR52 millionprocess improvement capex, thereby improving its averagerealisation. The effects of the same are witnessed in theimprovement in its gross margin by 200 basis points (bps; 100 bpsequals one percentage point) in 2012-13. The capex, which spreadacross two years, was funded majorly through internal accruals.CRISIL expects the margins at operating levels will be in therange of 6.0 to 6.5 per cent over the medium term. Its financialrisk profile continues to be pressurised by weak liquidity, highleverage and below-average debt protection metrics. The cashaccruals for 2013-14 and 2014-15 are expected to be close toINR7.5 million and INR10.2 million, respectively, which will beinsufficient to service its debt obligations of INR13 million perannum. However, the term debt obligations are serviced in a timelymanner with fund infusion by promoters in the form of eitherunsecured loans or capital. Over the medium term, VAPL's financialrisk profile is expected to be constrained by its modest networth, high gearing, weak debt protection metrics and poorliquidity.For 2012-13, VAPL reported a profit after tax (PAT) of INR2.4million on net sales of INR 390.8 million, against a PAT of INR1.1 million on sales of INR368.8 million for 2011-12.Incorporated in 2008, VAPL is a semi-integrated company thatmanufactures stainless steel (SS) ingots and flats. It startedwith SS ingots manufacturing in 2009; the company's manufacturingfacilities are located at Kalol (Gujarat). The promoters have twodecades of experience in the steel industry through other groupcompanies.YASHWANT ENTERPRISES: CRISIL Puts 'B' Rating on INR120MM Loans--------------------------------------------------------------CRISIL has assigned its 'CRISIL B/Stable' rating to the long-termbank facilities of Yashwant Enterprises (Yashwant). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL B/Stable Proposed Long Term Bank Loan Facility 70 CRISIL B/StableThe rating reflects Yashwant's below-average financial riskprofile, marked by a modest net worth, high gearing, and sub-pardebt protection metrics. The rating also factors in its modestscale of operations with high geographical and end-user industryconcentration in its revenue profile. These rating weaknesses arepartially offset by the funding support that the firm receivesfrom its proprietor, and the benefits it derives from itsassociation with the Kale group of companies.Outlook: StableCRISIL believes that Yashwant will continue to benefit over themedium term from its proprietor's funding support and itsassociation with the Kale group of companies. The outlook may berevised to 'Positive' in case of significantly better-than-expected cash accruals, primarily driven by increasing sales tothird parties along with efficient working capital management.Conversely, the outlook may be revised to 'Negative' if the firm'scash accruals are lower than expected, or its working capitalrequirements are higher than expected, or it provides anyunanticipated funding support to its group entities, adverselyimpacting its liquidity.Yashwant has been trading in various types of building materialsuch as cement, flooring, and bricks, since 2013. It was set up asproprietorship firm in 2009 and is owned and managed by Mr. VinodPatil. The firm is a part of the Baramati (Maharashtra)-based Kalegroup, which is primarily engaged in real estate development.Yashwant's clientele comprises of group entities and externalcustomers.ZURI HOSPITALITY: ICRA Reaffirms 'D' Rating on INR50.73cr Loans---------------------------------------------------------------ICRA has has reaffirmed the long-term rating of [ICRA]Doutstanding on the INR46.73 crore term loan facilities of ZuriHospitality Private Limited. ICRA has also reaffirmed the short-term rating of [ICRA]D outstanding on the INR4.00 crore fund basedlimits and assigned a short-term rating of [ICRA] D to the INR0.75crore non-fund based limits of the company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 46.73 [ICRA]D/reaffirmed Short-Term Fund Based Limits 4.00 [ICRA]D/reaffirmed Short-Term Non- Fund Based Limits 0.75 [ICRA]D/assignedThe reaffirmation in ratings continues to factor in delays in debtservicing by the company owing to its tight liquidity position.The company has a stretched financial profile marked byconsiderable net losses over the last few years, low cash accrualsand weak coverage indicators. The operating metrics of the Companyhave been constrained by demand slowdown and competition fromother established properties in Whitefield, where the company hasits property.Part of the Zuri group, which also has properties in Kumarakom andGoa, the company enjoys financial support from the promoters whohave periodically infused funds in the company by way of unsecuredloans. Going forward, the company's ability to improve itsoperational performance and profitability in order to regularizeits debt servicing will be critical for improvement in creditprofile.Part of the Zuri Group, ZHPL is primarily engaged in hospitalitybusiness with a 162-room 5-star hotel property located atWhitefield, Bangalore. The company operates the hotel propertyunder its own brand name "Zuri". Prior to 2012, ZHPL owned twoother properties namely Zuri Varca White Sands Resort & Casino,Goa and Zuri Kumarakom Resorts & Spa, Kerala in addition to ZuriWhitefield, Bengaluru. In 2012, the other two properties weredemerged from ZHPL and incorporated as separate entities.The Zuri group was founded by Mr. Chamanlal Kamani, an NRI fromRajkot in Gujarat who had migrated to Kenya in the late 1940s.Thegroup has presence in furniture, real estate, floriculture andhospitality in several countries. In India, the group is mainlypresent in hospitality business with two 5-star deluxe hotels andone 5-Star hotel. The Indian operations are being looked after Mr.Chamanlal's grand-sons Mr. Aditya Deepak Kamani and Mr. AbhishekRashmi Kamani. The promoters also own around 300 acres of land inGoa on which they have plans to develop high end villas.Recent ResultsAs per provisional results, the Company reported a net loss ofINR11.5 crore on operating income of INR32.7 crore during 2013-14against a net loss of INR15.7 crore on operating income of INR35.5crore during 2012-13.=================I N D O N E S I A=================BERAU COAL: Moody's Affirms B1 Corporate Family Rating------------------------------------------------------Moody's Investors Service has affirmed the B1 corporate familyrating of PT Berau Coal Energy Tbk (BCE) as well as the B1 seniorsecured ratings on the bonds issued by BCE and Berau CapitalResources Pte Ltd, which are guaranteed by BCE. The rating outlookremains negative.Ratings Rationale"The negative outlook reflects the continued pressure on BCE'scredit metrics as a result of the persistent weakness in thermalcoal prices and Moody's expectation that coal prices will remainunder pressure over the next 12 months," says Brian Grieser, aMoody's Vice President and Senior Analyst.Driven by the global oversupply situation, the Newcastle thermalcoal price index, a benchmark for Asia, has fallen to $72 per tonin 2014 from an average of $84 per ton in 2013.Moody's has revised its Newcastle coal prices to average between$75-80 per ton in 2014 from $80-85 back in December last year.Moody's does not anticipate a meaningful rebound in prices in 2015reflecting increasing production by Indonesian and Australianthermal coal producers."We estimate that the low coal prices will drive BCE's financialleverage towards 4.5x in 2014 from 3.8x in March 2014, which isconsidered high for its B1 rating," adds Grieser, who is also LeadAnalyst for BCE."We expect management to continue implementing cost reductionmeasures and preserve cash at the company in 2014-15. Given thepressure on BCE's credit quality, there is limited headroom at itscurrent rating level to accommodate any further deterioration ofits credit metrics and/or liquidity position," says Grieser.BCE faces an upcoming maturity in July 2015 when its $450 millionsenior secured notes come due."The B1 rating also assumes that BCE will refinance the maturingnotes before the end of July 2014. The inability to execute arefinancing in this timeframe would materially weaken itsliquidity profile and would likely result in a ratings downgrade,"says Grieser.BCE's rating is supported by its good liquidity position which iskey in providing financial flexibility during a period whendepressed coal prices are pressuring margins and cash flows. Ithad a healthy cash balance of $373 million as of 31 March 2014.At the same time, Moody's expects corporate governance andaccountability at BCE to improve following the recently-completedseparation between BCE's parent, Asia Resource Minerals plc (ARM,unrated) and the Bakrie Group (unrated) since no singleshareholder will have a controlling interest in ARM.Moody's have revised Moody's downgrade triggers to reflectMoody's current view on BCE's credit profile. A rating downgradewould occur if 1) BCE is unable to refinance its $450 millionsenior secured notes before the end of July 2014; 2) Coal pricesfail to stabilize and thus fall short of Moody's $75-80 per tontarget in the next twelve months; 3) BCE undertakes largeexpansionary capex projects or makes any large debt-fundedacquisitions such that there is a material decline in BCE's cashbalances.Specific indicators Moody's would look for include adjusteddebt/EBITDA exceeding 4.0-4.5x while net debt/EBITDA exceeds 3.0x-3.5x.Other negative rating triggers include: 1) any adverse decisionsregarding the off-setting of payments for VAT; or 2) any change inlaws and regulations, particularly in relation to miningconcessions that would adversely affect BCE's business.Upward rating pressure is limited given the negative outlook andMoody's view that deleveraging will be challenging in the currentenvironment for coal prices. Nonetheless, the rating outlook maybe changed to stable if BCE improves its financial leverage suchthat its adjusted debt/EBITDA falls below 3.5x and EBIT/interestexceeds 3.5x. Any positive action would require BCE to maintainthe current strength of its liquidity profile in concert with animprovement in realized coal prices.The principal methodology used in this rating was the GlobalMining Industry published in May 2009.BCE is an investment holding company listed on the IndonesianStock Exchange. It has a 90% interest in PT Berau Coal (unrated),Indonesia's fifth-largest producer and exporter of thermal coal.Berau operates three active mines -- Lati, Sambarata and Binungan-- at a single site in East Kalimantan. It has estimated resourcesof about 2.2 billion tons, with probable and proven reservesestimated at 509 million tons (mt).PAKUWON JATI: Fitch Gives Final 'B+' Rating to $168MM Sr. Notes---------------------------------------------------------------Fitch Ratings has assigned PT Pakuwon Jati Tbk's (Pakuwon,B+/Stable) USD168m 7.125% senior unsecured notes due 2019 a final'B+' rating, with a Recovery Rating of 'RR4'. The new notes areissued by Pakuwon Prima Pte Ltd and guaranteed by Pakuwon andcertain subsidiaries.The notes are rated at the same level as Pakuwon's seniorunsecured debt rating as they represent direct, unconditional,unsecured and unsubordinated obligations of the company. Therating action follows the receipt of documents conforming toinformation already received. The final rating is in line with theexpected rating assigned on 19 June 2014.Key Rating DriversSupport from Investment Property Portfolio: Pakuwon is adiversified real estate developer based in Indonesia. Thecompany's property portfolio includes retail, residential,commercial and hospitality developments. Its ratings reflect itssolid investment properties, which contributed 48% of totalrevenue in 2013. Furthermore, 42% of the revenue was derived fromits shopping mall and office leasing operations which have a long-term lease profile.These investment properties generated solid recurring EBITDA ofIDR778bn (USD67m) and recurring EBITDA/interest coverage of 3.8x,which along with the company's strong liquidity position will helpit manage any cyclicality and volatility of property development.Quality Assets: The company's investment portfolio is spreadacross four well established and strategically located primelocations in Jakarta and Surabaya. The main projects comprise ofmixed use high rise developments (apartments, office, retail, andsometimes hotel). Pakuwon's malls, while providing stablerecurring revenue, anchor each of its land banks in Jakarta andSurabaya, thereby attracting residents and office tenants whileservicing as focal points for local communities. The company has astrong track record of managing its lease retail occupancy, andconsistently achieves above industry average occupancy.Higher Margin than Peers: Fitch expects Pakuwon to generate EBITDAmargin above 50% in the medium term, supported by a low cost landbank and the company's ability to create value in its superblocks.Pakuwon posted EBITDA margin of 56% in 2013 (2012: 55.6%), higherthan other rated developers such as PT Alam Sutera Realty Tbk(B+/Stable) with 42% and PT Lippo Karawaci Tbk (BB-/Stable) with27%. Fitch believes that such a high margin will provide somepricing flexibility during a downturn in the property cycle.Limited Scale and Diversification: Pakuwon's rating is constrainedby its limited scale and project diversification. Fitch expectsthe company to generate most of its cash flows from its currentestablished super blocks in the medium term. Based on the currentrate of development, the company's land bank of 394 hectares wouldbe sufficient for more than 10 years of development. Although thecompany will launch a new residential project in West Surabaya in2H2014, Fitch notes that its projects and cash flows are lessdiversified than higher rated peers.Rating SensitivitiesPositive rating action is not anticipated in the medium-term giventhe company's limited scale, projects, and cash flowdiversification.Negative: Future developments that may, individually orcollectively, lead to negative rating action include: - Sustained deterioration of recurring EBITDA from investment properties (IP) /interest below 2.5x - net debt/net inventory (net inventory defined as IP + Inventory + Property and Equipment - Advances) rises above 50% on a sustained basis - weakening of business profile as evidenced by significant rise in vacancy rates or a sustain fall in rentals - any evidence of weakening in liquidityPERUSAHAAN LISTRIK: Moody's Lowers BCA to ba2; Outlook Stable-------------------------------------------------------------Moody's Investors Service has affirmed Perusahaan Listrik Negara's(PLN) Baa3 issuer and senior unsecured ratings, as well as its(P)Baa3 senior unsecured MTN rating.At the same time, Moody's has also affirmed the Baa3 seniorunsecured rating of Majapahit Holding BV, PLN's wholly ownedsubsidiary, which has issued debt guaranteed by PLN.Moody's also lowered PLN's baseline credit assessment (BCA) to ba2from baa3, reflecting the standalone credit quality of PLNindependent of any extraordinary support from the sovereign.The ratings outlook is stable.Ratings RationalePLN's Baa3 rating reflects the application of Moody's ratingmethodology for GRIs (updated in July 2010) that combines: (1) thecompany's standalone credit quality, or BCA of ba2; and (2)Moody's assessment of the credit support that the government ofIndonesia (Baa3 stable) is likely to provide in a distressedsituation.The ba2 BCA reflects the company's strategically importantposition as Indonesia's only vertically integrated electricutility, including its dominant position in generation andtransmission and distribution (T&D), as well as its close linkagewith the government. Longstanding subsidies from the governmentsupport its financial viability and operational soundness. Thesepositive factors are balanced against a regulatory environmentthat has historically lacked transparency and allowed returns thatare low in comparison to global peers, leading to financialmetrics that are inconsistent with an investment grade BCA. PLN'saggressive capital spending programme, while consistent withnational strategic objectives to reduce its oil-fired generation,provide minimal leeway for metrics to improve in the medium term."Under the rating methodology for GRIs, Moody's assessment ofgovernment support for the company is very high. Specifically, thegovernment has 100% ownership and therefore closely directs theactivities of PLN. The government also has a strong track recordof support, as manifested in its provision of unconditional andirrevocable guarantees on PLN debt related to Fast Track Programme1; its provision of comfort letters to sponsors of Fast TrackProgramme 2; and its provision of two-step loans to PLN," says RayTay, a Moody's Assistant Vice President and Analyst."The government also has a strong incentive to support PLN in caseof need, because a default on PLN's non-government debtobligations could lead in turn to a cross-default on thegovernment-guaranteed bank financing for the company," says Tay."The lowering of the BCA reflects removal of consideration forextraordinary sovereign support from the standalone view of PLN'scredit fundamentals. Although we continue to view the regularsubsidies as ordinary support, the benefit of extraordinarysovereign support is now wholly reflected in the uplift as perMoody's approach to rating GRIs," adds Tay.Moody's notes that Indonesia has embarked on two major programmesfor electrical capacity additions totaling 28GW, and PLN has beentasked with the majority of this expansion.As such, for PLN, the associated capex requirements aresubstantial, and will -- until the programmes are complete --pressure its key credit metrics over the next 5-8 years.However, Moody's notes that PLN has a track record of managingexecution risks and has so far commissioned 6.4GW of capacity, andexpects it to continue to competently manage these risks.The ratings outlook is stable, in line with the outlook for thesovereign rating of Indonesia.Given the close link between PLN's rating and the sovereignrating, an upgrade of the latter may trigger an upgrade of PLN.PLN's BCA could be raised if capex efficiency or debt reductionresults in debt/capitalization improving to 75% or lower.Similarly, a downgrade of the sovereign will almost certainlytrigger a downgrade for PLN. Furthermore, a partial privatizationof PLN or a meaningful reduction to government subsidies -- ascenario that Moody's considers unlikely in the near to mediumterm -- will negatively impact the rating. PLN's BCA could belowered if a greater than expected proportion of planned capitalexpenditures were funded with debt, such that debt/capitalizationincreases beyond 85%-90% or retained cash flow/debt falls below 4%to 4.5% on a sustained basis.The methodologies used in these ratings were Regulated Electricand Gas Utilities published in December 2013, and Government-Related Issuers: Methodology Update published in July 2010.Perusahaan Listrik Negara (PLN) is the only vertically integratedelectricity utility in Indonesia. It is the dominant operator ofgeneration plants, transmission and distribution (T&D) networks .Its transmission network covered around 39,581 km and itsdistribution network covered 809,980 km at end-2013.PLN is also the country's largest electricity producer, with acapacity of around 39GW, which accounted for 83% of the market atend-2013. It is the sole off-taker for Indonesia's independentpower producers. For the 12 months ended 31December 2013, thecompany reported revenue of IDR257 trillion ($21.1 billion). Thegovernment -- through the Ministry of State-Owned Enterprises --has full ownership.====================N E W Z E A L A N D====================DERIVATEK NEW ZEALAND: Mark Whelan Pleads Guilty------------------------------------------------Mark James Whelan pleaded guilty in the Auckland District Court onJuly 1 after giving evidence at his trial. The trial related to asecond Serious Fraud Office (SFO) investigation againstMr. Whelan.The SFO's charges against Mr. Whelan related to his involvementwith options trading company Derivatek New Zealand Limited and hisown company Global Futures Trading Limited. Mr. Whelan faced 10Crimes Act charges, comprising of three of theft by person in aspecial relationship and seven charges of false statement bypromoter.Mr. Whelan incorporated Global Futures Trading Limited in November2006. From mid-2007 until February 2009, Mr. Whelan used GlobalFutures to obtain funds from high net worth individuals to betraded through Derivatek.Mr. Whelan used investors' funds to fund an advance fee for aUS$20 million loan, for personal use and to repay other investors.To conceal this activity, Mr. Whelan issued false statements tothe investors.SFO Director, Julie Read said, "This investigation uncovered amulti-layered fraud, with the need to fund one fraud drivingfurther offending. Where the return on investment is significantlyhigher than market rates investors should be aware that they maylose their money, because very high returns generally equal veryhigh risk or, in some cases, fraud."Mr Whelan has been remanded in custody until July 3, 2014, for asentencing date to be fixed.POSTIE PLUS: Sale Completion Extended For Three Weeks-----------------------------------------------------David Bridgman and Colin McCloy, as Administrators of Postie Plus,on June 30 announced that they expect it will be another two tothree weeks before the current conditional agreement concerningthe sale of the Postie Plus business becomes unconditional and canbe completed. The intended purchaser, an international retailgroup, is continuing its due diligence.David Bridgman said: "As Administrators we remain keen to concludea sale of the business as a going concern, as we believe this tobe in the best interests of all creditors and Postie Plus staff.In the meantime, the Company will continue to trade through 68stores nationwide following the pending closure of 12 stores aspreviously announced".The Administrators also record their continued appreciation forthe patience and forbearance shown by the Company's creditors andPostie Plus staff.Postie Plus Group Limited (NZE:PPG) -- http://www.ppgl.co.nz/-- comprises the retail businesses of Postie+, Baby City andArbuckles. The company offers a range of products for all agegroups. Postie+ sells casual family clothing through a chain of79 stores.Colin McCloy and David Bridgman, Partners fromPricewaterhouseCoopers, were appointed Administrators to PostiePlus Group Limited on June 3, 2014. The business is now involuntary administration.WAITAKERE BEARS: Ex-Chairman Gets 10 Months Home Detention----------------------------------------------------------APNZ reports that the former chairman of a west Auckland sportsorganisation has been sentenced to ten months home detention afterstealing more than NZ$150,000 from the organisation.APNZ relates that a victim impact statement said Wayne Reeves hasput the future of the Waitakere Bears Softball Club and RanuiSwanson Football Club at risk of insolvency and liquidation.APNZ says Mr. Reeves has since raised NZ$50,000 from the sale ofhis partner's house to repay some of what he stole, and isoffering to pay off the rest through reparation from his builder'swages.=====================P H I L I P P I N E S=====================ASIAN CONSUMERS: Placed Under PDIC Receivership-----------------------------------------------The Monetary Board (MB) placed the Asian Consumers Bank under thereceivership of the Philippine Deposit Insurance Corporation(PDIC) by virtue of MB Resolution No. 981 dated June 26, 2014. AsReceiver, PDIC took over the bank on June 27, 2014.Asian Consumers Bank is a four-unit rural bank with Head Officelocated along Magsaysay Ave., Poblacion, Basista, Pangasinan. Itsthree branches are located in Calasiao, San Carlos City andUrdaneta, all in Pangasinan. Latest available records show that asof March 31, 2014, Asian Consumers Bank had 2,774 accounts withtotal deposit liabilities of PHP119.5 million. A total of 2,756deposit accounts or 99.35% of the accounts have balances ofPHP500,000 or less and are fully covered by deposit insurance.Total insured deposits amounted to PHP112.72 million or 94.33% ofthe total deposits.PDIC said that upon takeover, all bank records shall be gathered,verified and validated. The state deposit insurer assureddepositors that all valid deposits shall be paid up to the maximumdeposit insurance coverage of PHP500,000.00.The PDIC also announced that it will conduct Depositors-BorrowersForums on July 7 and 8, 2014 to inform depositors of therequirements and procedures for filing deposit insurance claims.Claim forms will be distributed during the Forum. The schedulesand venues of the Forums will be posted on the bank premises andin the PDIC website, www.pdic.gov.ph. The claim forms and therequirements and procedures for filing are likewise available fordownloading from the PDIC website.Depositors may update their addresses with the PDICrepresentatives at the bank premises using the Mailing AddressUpdate Forms to be furnished by PDIC representatives. Dulyaccomplished Mailing Address Update Forms should be submitted toPDIC representatives accompanied by a photo-bearing ID withsignature of the depositor. Depositors may update their addressesuntil July 2, 2014.====================S O U T H K O R E A====================KYONGNAM BANK: Moody's Affirms D+ Bank Financial Strength Rating----------------------------------------------------------------Moody's Investors Service has affirmed all of Busan Bank's ratingswith a stable outlook. Moody's has also affirmed all of KyongnamBank's ratings and changed its outlook to positive from stable.These rating actions follow the announced acquisition of KyongnamBank by BS Financial Group (BS FG; unrated), the parent of BusanBank.The ratings of Busan Bank which have been affirmed are: - Global local currency (GLC) deposit of A2; - Foreign currency long-term senior debt and deposit of A2; - Foreign currency long-term senior unsecured MTN of (P)A2; - Foreign currency subordinated MTN of (P)Baa1; - Short-term deposit ratings of P-1; and - Bank financial strength rating (BFSR) of C-, mapping to abaseline credit assessment (BCA) of baa1.The ratings of Kyongnam Bank which have been affirmed are: - Global local currency (GLC) deposit of A3; - Foreign currency long-term deposit of A3; - Short-term deposit ratings of P-2; - Bank financial strength rating (BFSR) of D+ mapping to abaseline credit assessment (BCA) of baa3.Ratings RationaleOn 30 June 2014, BS FG signed a sale and purchase agreement withKorea Deposit Insurance Corporation (KDIC) to acquire a 56.97%stake in Kyongnam Bank.The purchase price is KRW1,226.9 billion (approximately USD1.2billion), which will be funded by an equity offering of aroundKRW500 billion; a dividend upstream of KRW400-500 billion fromBusan Bank; KRW80 billion of debt financing; and repayment of debtfrom BS Capital for the remaining balance."Although the acquisition would negatively impact Busan Bank'sBCA, owing to its substantial role in supporting the burden of itsparent's acquisition, the negative impact will be somewhat offsetby its strong capital-generation ability, based on its solidrecurring earnings and gains from credit-positive synergies," saysHyun Hee Park, a Moody's Analyst."The acquisition precludes the risk that the two banks wouldeventually aggressively expand into the other's respectivemarkets, which would negatively affect their own franchises, costsand margins," adds Park.Busan Bank will provide KRW400-500 billion through dividends tothe parent for the acquisition. These dividends will result in asubstantial fall in Busan Bank's own core Tier 1 ratio to slightlybelow 9% from 10.31% at end-March 2014.However, Moody's estimates its core Tier 1 ratio can recover tothe mid to high 9% level on internally generated capital over theyear. In addition, BS FG has the capacity to support Busan Bankthrough the issuance of hybrid capital, if needed.BS FG's pro forma double leverage ratio is expected to rise to120% from 119.0% at end-March 2014, which would position its belowthat of Woori Finance Holdings' (WFH) 125.7% (unrated), ShinhanFinancial Group's 123.4% (unrated), and Hana Financial Group's125.4% (unrated).However, after the acquisition, Busan Bank will need to build upmore capital capacity to provide support -- via its parent -- toKyongnam Bank as both banks are growing faster than the system.A single-digit capital ratio is not compatible with its currentBCA of baa1, but Moody's expectation is that Busan Bank willimprove its core Tier 1 ratio to a double-digit level within ayear of the acquisition's completion."We assess the prospective change in ownership of Kyongnam Bank aspotentially positive, as WFH, its previous owner, was reluctant toprovide capital support as it has been trying to divest the banksince 2010, making three previous attempts -- in July-December2010, May-August 2011, and April-August 2012," says Park.In addition, Moody's believe that Kyongnam Bank's franchise andfinancial fundamentals have good prospects for improvement withthe presence of a strategic shareholder with a strong creditprofile, which is a main reason for the change in outlook topositive.Busan Bank is among the stronger banks in the system in terms ofasset performance, whereas Kyongnam Bank is the weakest amongregional banks.The acquisition will allow Kyongnam Bank to benefit from thetechnical transfers that would improve its loan underwriting andthus asset quality.However, Moody's believe potential synergies and knowledgetransfers from the transaction will not likely materialize untilthe medium term. As the integration progresses, Moody's expects toequalize the adjusted BCA of the two banks at either baa1 or baa2.Busan BankWhat Could Change the Rating - UpThere is limited likelihood that the bank's long-term deposit ordebt ratings will be upgraded in the foreseeable future becauseits A2 long-term senior debt or deposit ratings alreadyincorporate a two-notch rating uplift, based on Moody'sassessment of the high probability of support from the Koreangovernment in a stress situation.Moody's would consider raising the BCA if (1) there issignificant improvement in asset quality, with nonperforming loans(NPLs) falling below 1%; (2) there is further improvement inliquidity indicators, such as its loans-to-deposits ratio,liquidity coverage ratio and net funding ratio; and (3) the banksubstantially improves its franchise without compromising itsoverall financial profile.What Could Change the Rating - DownFactors that could exert negative pressure on the ratings include:(1) its NPL ratio exceeding 4.5% (1.16% at end-March 2014); (2) acore Tier 1 capital ratio below 10% one year after the acquisition(10.31% at end-March 2014); (3) a major reduction in its share ofthe local bank market; or (4) mergers and acquisitions of othersubsidiaries that increase its risk profile and financialleverage.Kyongnam BankWhat Could Change the Rating - UpOver the next 12-18 months, the development of certain factorswill be assessed to decide whether the bank's long-term depositratings should be upgraded to the same level as that of BusanBank. These factors include BS FG's progress in transferring bestpractices to Kyongnam Bank, and whether BS FG will acquire theremaining stake in Kyongnam Bank.What Could Change the Rating - DownFactors that could exert negative pressure on the ratings include:(1) its NPL ratio rises to 5% or above (1.77% at end-March 2014);(2) its core Tier 1 capital ratio drops below 7.5% (8.38% at end-March 2014); and (3) its share of the local banking marketdeclines.Other considerations for a downgrade would include unfavorablechanges in Moody's systemic support assumption. Moody's willcontinue to assess the appropriateness of the systemic supportassumption incorporated in the bank's A3 long-term deposit ratingrelative to other domestic banks and some of Kyongnam Bank'sglobal peers.The principal methodology used in these ratings was Global Bankspublished in May 2013.Busan Bank, headquartered in Korea, had consolidated assets ofKRW43.3 trillion (US$42.3 billion) as of 31 March 2014. KyongnamBank, headquartered in Korea, had consolidated assets of KRW31.8trillion (US$31.0 billion) as of March 2014.PANTECH CO: SK Telecom May End Financial Help---------------------------------------------Kim Yoo-chul at The Korea Times reports that SK Telecom, KT and LGUplus are considering ending their financial support to Pantech,officials said."SK Telecom has serious questions about the future of Pantech,"the report quotes an SK Telecom official, as saying. SK's move islikely to be followed by the other two carriers, the reportrelates.SK Telecom owns the largest amount of Pantech's debt atKRW90 billion in accounts receivable, followed by KT and LG Upluswith KRW45 billion each, The Korea Times notes.According to the report, Pantech creditors will make their finaldecision on whether to continue a court receivership program orterminate it July 4.The Korea Times says the company is facing either completebankruptcy or acquisition unless the three mobile carriers offerfinancial support.An official at KT admitted that its senior marketing executivesare being approached by senior officials at the creditor's banksas the banks want to save Pantech from a complete failure, thereport relates."Our view isn't much different to that of SK. If the carriers jointhe capital-increase plan, then Pantech will be saved. But the keyquestion is that the future of Pantech is being questioned," anunnamed KT executive told The Korea Times.The report adds that officials at LG Uplus said they are closelymonitoring moves by SK Telecom as Uplus' decision will be subjectto decisions by the top mobile carrier. "For Pantech, thesituation is not good," said an Uplus official, the report relays.Pantech officials said a departure from the capital-increase planled by its creditors will "limit consumer choice" as Korea'shandset market will be divided into Samsung Electronics and LGElectronics if any emergency measures aren't taken, according toThe Korea Times.Samsung Electronics and Qualcomm, which also both have a stake inPantech, are preparing for an "exit strategy" and the two are"closely monitoring the situation," the report adds.Qualcomm and Samsung each have a 10 percent stake in Pantechvalued at some KRW53 billion, the report discloses. About PantechHeadquartered in Seoul, Korea, Pantech Co., Ltd. --http://www.pantech.co.kr/-- manufactures mobile phones. Pantech's products are mainly global system for mobilecommunication and code division multiple access phones. Thecompany markets its products internationally, and suppliesMotorola as an original equipment manufacturer and originaldesign manufacturer. It has seven subsidiaries involved in theinformation technology and telecommunication sectors, andoperates in Argentina and Russia, among other countries.Pantech and affiliate Pantech&Curitel CommunicationsInc. sought creditors' bailout due to increasing debts andmounting losses. On Dec. 15, 2006, the creditors rescued thecompanies by approving a debt-work out scheme, giving thecompanies a grace period on their matured debts.STX GROUP: KDB Suspected of Raising Insolvent Loans to STX----------------------------------------------------------BusinessKorea reports that in the middle of the recent chaos offinancial accidents, KDB is suspected to be raising insolventloans to STX.Accordingly, KDB executives will inevitably be held liable, thereport says. KDB, however, claimed that they, as a financialpolicy institution, lent legitimate funds to STX Offshore andShipbuilding, answering to demands from the financial authorities,the report relates.On June 23, the Financial Supervisory Service (FSS) found problemsin KDB loans to STX after comprehensive investigation into KBD, amain creditor of STX, and recent additional investigation as well,according to BusinessKorea.As a result, relevant disciplinary actions will be taken to KDBnext month, the report notes. BusinessKorea relates that anofficial in the financial authorities said they found insolvencyevidence regarding KDB loans to STX, and the personnel in chargewill be punished. He also mentioned that the punishment level isnot determined yet, the report notes.According to the report, KDB said that the FSS re-investigated allthe loans to STX and its ex-Chairman Kang Duk-soo, but their loanswere raised legitimately following demands from the financialauthorities, which should not be a problem.BusinessKorea, citing Supreme Prosecutors' Office, saysex-Chairman Kang is suspected of misappropriation of KRW284.1billion (US$278.9 million) and embezzlement of KRW55.7 billion(US$54.7 million). He is also charged of borrowing KRW900 billion(US$883.6 million) via fraudulent accounting worth of KRW2.3264trillion (US$2.284 billion), and issuing KRW1.750 trillion(US$1.719 billion) worth of corporate bonds. STX Offshore andShipbuilding is accused of KRW326.4 billion (US$320.6 million) infraudulent accounting since 2009, when the recession in theshipping industry hit the group.STX Offshore and Shipbuilding borrowed KRW900 billion (US$883.6million) from banks through fraudulent financial statements, thereport notes. Their main creditor KDB is alleged to have donecareless loan screening by the financial authorities,BusinessKorea adds.BusinessKorea reports that KDB recorded the very first loss in 13years due to the insolvency of STX, and the loss amount reachedKRW1.400 trillion (US$1.375 billion). As STX Group, once the 13thbiggest conglomerate in Korea, and its affiliate companies facefinancial difficulties, KDB had to provide them financial supportas well as save allowances for bad debt, the report notes. Lastyear's allowances for bad debts of KDB were KRW1.7731 trillion(US$1.7415 billion), but with bad debt expenses of KRW2.200trillion (US$2.161 billion), a KRW990.6 billion (US$972.9 million)increase from 2012. About STX GroupSTX Group, once South Korea's 13th-biggest conglomerate, isstruggling to deal with a liquidity shortage and mounting debts ofits major affiliates from a downturn in the shipbuilding andshipping sectors.STX Offshore and two other units of the STX Group had voluntarilysought debt rescheduling with their creditors, Bloomberg Newsreported.STX Pan Ocean sought court receivership after Korea DevelopmentBank, the main creditor and Pan Ocean's second-biggestshareholder, decided against buying the company from STX Group,Bloomberg News reported.In June 2014, six subsidiaries of STX Dalian Group, STXCorp.'s China unit, filed for bankruptcy court protection inthe country's northeastern Liaoning province.STX Group has 10 affiliates, including STX Pan Ocean and STXOffshore & Shipbuilding, under its wing.=============V I E T N A M=============VIETNAM BANK: Fitch Affirms 'B' Long-Term IDR; Outlook Positive---------------------------------------------------------------Fitch Ratings has affirmed four Vietnamese banks' Long-Term IssuerDefault Ratings (IDRs) at 'B'. The Outlook is Positive forVietnam Bank for Agriculture and Rural Development (Agribank) andVietnam Joint Stock Commercial Bank for Industry and Trade(Vietinbank). Fitch has also withdrawn the Viability Rating (VR)on Agribank.The Outlook for Asia Commercial Bank (Vietnam) (ACB) has beenrevised to Stable from Negative. The Outlook is Stable for SaigonThuong Tin Commercial Joint Stock Bank (Sacombank). The ratings ofSacombank are simultaneously withdrawn as they are no longerconsidered relevant to the agency's rating coverage. Fitch will nolonger provide ratings or analytical coverage for the companyfollowing the withdrawal. A full list of rating actions isprovided at the end of this rating action commentary.Key Rating Drivers - IDRs, Senior Debt, Support Ratings (SRs) andSupport Rating Floors (SRFs) of Agribank and VietinbankThe Long-Term IDRs of the two state-owned banks, Agribank andVietinbank, are driven by state support. Their SRs and SRFsreflect Fitch's expectation of likely extraordinary state supportas both banks are majority owned by the government and among thosemost systemically important to the domestic economy. Nonetheless,timeliness of extraordinary support from the government may belimited by its own finances as reflected in the 'B+' sovereignrating. As a result, the banks' ratings are one notch lower thanthe sovereign rating.Vietinbank's senior notes are rated at the same level as its Long-Term IDR, given that the notes constitute direct, unsubordinatedand senior unsecured obligations of the bank, and rank equallywith all its other unsecured and unsubordinated obligations. TheRecovery Rating on the notes is affirmed at 'RR4'. Fitch assignsRecovery Ratings to issues from entities with IDR of 'B+' orbelow.The Positive Outlooks on Agribank and Vietinbank reflect thePositive Outlook on Vietnam's sovereign ratings.Key Rating Drivers - VRs of Agribank and VietinbankAgribank's VR of 'ccc' reflects Fitch's view that the bank'sbuffers may not be sufficient to absorb loan losses consideringits very weak loan quality, thin net profitability and weakcapitalisation. The bank's capitalisation will be even weaker ifit is adjusted for 'true' asset quality or prudent level ofprovision according to the international standards.Simultaneously, Agribank's VR has been withdrawn given that thebank has a government policy function in the agriculture industryand insufficient information was provided, which implies that thebank's transparency has worsened. In addition, Agribank, unlikeother state-owned banks, is unlikely in the near to medium term tosell a stake to private (usually foreign) investors, a processknown as equitisation in Vietnam.Vietinbank's VR reflects its weak credit matrix, includingcontinued weakness in its true loan quality, a loan book that isconcentrated in SOEs and declining profitability. Meanwhile, itsimproved capitalisation thanks to equitisation may support itsloss-absorption buffer to some extent. Fitch does not expect thefinancial profile of Vietnamese banks to improve in the near term,given that the government's restructuring of the banking and SOEsector is still in progress and any improvements would take awhile to be reflected in the banks' performances.Key Rating Drivers - IDRs, VRs, SRs and SRFs of ACB and SacombankThe Long-Term IDRs of ACB and Sacombank are driven by their VRs.The ratings reflect their reasonable standalone credit profilesand risk exposures, including loans to state-owned entities.However, they are constrained by the negative banking industryoutlook due to the lingering loan quality risks and decliningprofitability. Sacombank's ratings do not take into account itsplan to acquire Southern Bank, given that the transaction has notbeen confirmed.ACB's Outlook has been revised to Stable from Negative, reflectingFitch's view that downward pressures on the bank's financialprofile have reduced, including significant impairment risksarising from the bank's exposure to companies related to one ofACB's shareholders, Mr. Nguyen Duc Kien. The bank has made effortsand will continue to resolve these problems. Profits increasedslightly in 2013 as the bank consolidated its balance sheet andstreamlined operations to cut costs. Deposits grew by 10% from ayear ago. ACB has also been disciplined in maintaining a liquidbalance sheet with loans/deposits ratio of 78%.The '5' SRs and 'No Floor' SRFs of ACB and Sacombank reflectFitch's view that state support may be possible but cannot berelied upon.Rating Sensitivities - IDRs, SRs and SRFs of Agribank, Vietinbank,ACB and SacombankThe SRs and SRFs are sensitive to shifts in the sovereign'screditworthiness and ratings, which at present have a PositiveOutlook.These ratings may be hurt by any perceived weakening in thegovernment's propensity to support the banks, although suchprospect is remote for the systemically important state-ownedbanks, including Agribank and Vietinbank. In contrast, ACB's SRand SRF are already at the lowest end of the ratings scale.Rating sensitivities for Sacombank are no longer relevant giventhe rating has been withdrawn.Rating Sensitivities - VRs of Agribank, Vietinbank, ACB andSacombankVietnamese banks' VRs might be pressured if asset quality risksbecome bigger threats to banks' capitalisation than the currentratings factor in. Negative rating action may also result fromincreasing risk appetite, which may be demonstrated in excessiveasset growth, or event risks such as M&A or operational lapsesthat could affect the banks' credit profile.VRs may be upgraded if the restructuring process in the bankingindustry (including increased transparency and bad debtresolution) and SOE sector along with sustainable asset qualityimprovement bring noticeable improvements in banks' financialperformance. However, such improvements are unlikely in the nearterm.Rating sensitivities for Agribank and Sacombank are no longerrelevant given their ratings have been withdrawn.The full list of rating actions follows:Agribank- Long-Term IDR affirmed at 'B'; Outlook Positive- Short-Term IDR affirmed at 'B'- Viability Rating affirmed at 'ccc' and withdrawn- Support Rating Floor affirmed at 'B'- Support Rating affirmed at '4'Vietinbank- Long-Term IDR affirmed at 'B'; Outlook Positive- Short-Term IDR affirmed at 'B'- Viability Rating affirmed at 'b-'- Support Rating Floor affirmed at 'B'- Support Rating affirmed at '4'- USD250m 8% notes due 2017 affirmed at 'B'; Recovery Ratingaffirmed at 'RR4'ACB- Long-Term IDR affirmed at 'B'; Outlook revised to Stable fromNegative- Short-Term IDR affirmed at 'B'- Viability Rating affirmed at 'b'- Support Rating Floor affirmed at 'No Floor'- Support Rating affirmed at '5'Sacombank- Long-Term IDR affirmed at 'B' and withdrawn; Outlook Stable- Short-Term IDR affirmed at 'B' and withdrawn- Viability Rating affirmed at 'b' and withdrawn- Support Rating Floor affirmed at 'No Floor' and withdrawn- Support Rating affirmed at '5' and withdrawn *********Tuesday's edition of the TCR-AP delivers a list of indicativeprices for bond issues that reportedly trade well below par.Prices are obtained by TCR-AP editors from a variety of outsidesources during the prior week we think are reliable. Thosesources may not, however, be complete or accurate. The TuesdayBond Pricing table is compiled on the Friday prior topublication. Prices reported are not intended to reflect actualtrades. Prices for actual trades are probably different. Ourobjective is to share information, not make markets in publiclytraded securities. Nothing in the TCR-AP constitutes an offeror solicitation to buy or sell any security of any kind. It islikely that some entity affiliated with a TCR-AP editor holdssome position in the issuers' public debt and equity securitiesabout which we report.A list of Meetings, Conferences and Seminars appears in eachWednesday's edition of the TCR-AP. Submissions about insolvency-related conferences are encouraged. Send announcements email@example.com's edition of the TCR-AP features a list of companies withinsolvent balance sheets obtained by our editors based on thelatest balance sheets publicly available a day prior topublication. At first glance, this list may look like thedefinitive compilation of stocks that are ideal to sell short.Don't be fooled. Assets, for example, reported at historicalcost net of depreciation may understate the true value of afirm's assets. A company may establish reserves on its balancesheet for liabilities that may never materialize. The prices atwhich equity securities trade in public market are determined bymore than a balance sheet solvency test. *********S U B S C R I P T I O N I N F O R M A T I O NTroubled 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.Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, RouselElaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman,Editors.Copyright 2014. All rights reserved. ISSN: 1520-9482.This material is copyrighted and any commercial use, resale orpublication in any form (including e-mail forwarding,electronic re-mailing and photocopying) is strictly prohibitedwithout prior written permission of the publishers.Information contained herein is obtained from sources believedto 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 samefirm for the term of the initial subscription or balancethereof are US$25 each. For subscription information, contactPeter Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***