/raid1/www/Hosts/bankrupt/TCRAP_Public/190220.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, February 20, 2019, Vol. 22, No. 37
Headlines
A U S T R A L I A
8 ON THE POINT: Second Creditors' Meeting Set for Feb. 26
COUNTRY WELLNESS - PALMERSTON : 2nd Creditors Mtg. Set for Feb. 28
ELYARD & STREVENS: First Creditors' Meeting Set for Feb. 28
PEPPER RESIDENTIAL 23: S&P Gives Prelim. B Rating on AUD8MM F Notes
RCR TOMLINSON: AvidSys Buys RCR Businesses; 150 Jobs Saved
TELERON: EscapeNet Acquires Company's Customer Base
VBFORM PTY: First Creditors' Meeting Set for March 1
C H I N A
361 DEGREES: Fitch Puts 'BB' Long-Term IDR on Watch Negative
LOGAN PROPERTY: S&P Assigns B+ Rating on New USD Unsecured Notes
SHANDONG HI-TECH: Fitch Affirms BB' LT Issuer Default Ratings
TIANJIN SHUNHANG: Court Accepts Application for Liquidation
TIBET FINANCIAL: Moody's Assigns First-Time Ba2 CFR, Outlook Stable
TUNGHSU GROUP: S&P Cuts ICR to 'B-' on Ongoing Liquidity Pressure
I N D I A
BAREILLY HIGHWAY: CARE Moves D on INR1,400cr Debt to NonCooperating
DEHRADUN HIGHWAYS: CARE Reaffirms 'D' Rating on INR528.45cr Loan
ESSAR STEEL: ArcelorMittal Offers INR48BB for Mahan Power Plant
FACOR POWER: CARE Reaffirms 'D' Rating on INR15cr LT Loan
G.R. ENGINEERING: Ind-Ra Assigns BB+ Issuer Rating, Outlook Stable
HANSRAJ MEMORIAL: CARE Migrates D Rating to Not Cooperating
HARIDWAR HIGHWAYS: CARE Reaffirms 'D' Rating on INR981.09cr Loan
INDICON CONSTRUCTION: CRISIL Lowers Rating on INR7cr Loans to D
JAYPEE HEALTHCARE: CARE Reaffirms 'D' Rating on INR650cr Loan
JAYPEE INFRATECH: CARE Reaffirms 'D' Rating on INR6,761.95cr Loans
K.R.C. CONSTRUCTIONS: Ind-Ra Affirms 'BB-' LT Rating on INR60 Loan
PARSVNATH LANDMARK: NCLT Closes Insolvency Proceedings
PAVAN AGRO: CARE Moves B on INR5.48cr Debt to Non-Cooperating
RAMA KRISHNA: CARE Migrates D Rating to Not Cooperating Category
RESURGENT POWER: CARE Migrates 'D' Ratings to Not Cooperating
REWA AGROTECH: CARE Reaffirms 'D' Rating on INR12.24cr Loans
S. A. PLYWOOD: CRISIL Lowers Ratings on INR19cr Loans to D
SAMBHAV GEMS: CARE Lowers Rating on INR12.30cr Loan to D
SARNA MARBLES: CARE Lowers Rating on INR25cr LT Loan to D
SATKAR INDUSTRIES: Ind-Ra Moves BB Issuer Rating to Non-Cooperating
SATYAM AGRO: CARE Lowers Rating on INR9.01cr LT Loan to B+
SATYAMEV COT: Ind-Ra Migrates BB Issuer Rating to Non-Cooperating
SEAWOOD MULTIPLE: CRISIL Lowers Rating on INR2cr Loan to D
SHEELU EXPORTS: CRISIL Reaffirms B- Rating on INR0.75cr Loan
SHIVA SHREE: CRISIL Lowers Ratings on INR16cr Loans to D
SHREE MANGAL: CARE Lowers Rating on INR15cr LT Loan to 'B'
SOVA ELECTROCASTING: CRISIL Assigns 'B' Rating to INR25cr Loan
T. R. CHEMICALS: CARE Assigns 'D' Rating to INR16.40cr LT Loan
T. R. POLY PET: CARE Lowers Rating on INR4.86cr LT Loan to 'D'
URBAN TRANSIT: CARE Lowers Rating on INR152cr LT Loan to D
WHITEFIELD SPINTEX: CARE Migrates D Ratings to Not Cooperating
N E W Z E A L A N D
PRECISION FOUNDRY: Owes Creditors NZ$10.2MM, Receivers Report
P H I L I P P I N E S
BAGONG BANGKO: Creditors Claims Deadline Set for April 17
S I N G A P O R E
GLOBAL A&T: Fitch Affirms 'B-' LT Issuer Default Ratings
JES INTERNATIONAL: Judicial Management Application Filed
NK INGREDIENTS: To be Placed Under Judicial Management
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A U S T R A L I A
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8 ON THE POINT: Second Creditors' Meeting Set for Feb. 26
---------------------------------------------------------
A second meeting of creditors in the proceedings of 8 On The Point
Pty Ltd has been set for Feb. 26, 2019, at 2:00 p.m. at BGC Centre,
Conference Suite,PLaza Level, 28 The Esplanade, in
Perth, WA.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 25, 2019, at 4:00 p.m.
Clifford Stuart Rocke and Jeremy Joseph Nipps of Cor Cordis were
appointed as administrators of 8 On The Point on Nov. 14, 2018.
COUNTRY WELLNESS - PALMERSTON : 2nd Creditors Mtg. Set for Feb. 28
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A second meeting of creditors in the proceedings of Country
Wellness Pharmacy Palmerston No. 2 Pty Ltd, formerly trading as
"TerryWhite Chemmart Palmerston Gateway" has been set for
Feb. 28, 2019, at 10:00 a.m. at the offices of BRI Ferrier, at
Level 4, 307 Queen Street, in Brisbane, Queensland.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 27, 2019, at 5:00 p.m.
Ian Alexander Currie and Stefan Dopking of BRI Ferrier were
appointed as administrators of Country Wellness on Aug. 27, 2018.
ELYARD & STREVENS: First Creditors' Meeting Set for Feb. 28
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of Elyard &
Strevens Pty Ltd, trading as Table Toppers By Co-Ordinated
Colour/Co-Ordinated Colour Nursery, will be held on Feb. 28, 2019,
at 10:00 a.m. at the offices of Shaw Gidley, at Level 1, 160
Pacific Highway, in Charlestown, NSW.
Paul William Gidley of Shaw Gidley was appointed as administrator
of Elyard & Strevens on Feb. 18, 2019.
PEPPER RESIDENTIAL 23: S&P Gives Prelim. B Rating on AUD8MM F Notes
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S&P Global Ratings assigned its preliminary ratings to nine classes
of nonconforming and prime residential mortgage-backed securities
(RMBS) to be issued by Permanent Custodians Ltd. as trustee of
Pepper Residential Securities Trust No. 23. Pepper Residential
Securities Trust No. 23 is a securitization of nonconforming and
prime residential mortgages originated by Pepper HomeLoans Pty
Ltd.
The preliminary ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including its view that the credit support is sufficient
to withstand the stresses it applies. The credit support for the
rated notes comprises note subordination. Subordination provided to
the 'AAA (sf)' rated notes is in excess in our opinion of the
minimum 'AAA (sf)' level of credit support."
-- The underwriting standard and centralized approval process of
the seller, Pepper Homeloans.
-- The availability of a retention amount, amortization amount,
and yield reserve, which will all be funded by excess spread, but
at various stages of the transaction's term. They will have
separate functions and timeframes, including reducing the balance
of senior notes, reducing the balance of the most subordinated
notes, and paying senior expenses and interest shortfalls on the
class A notes.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including a liquidity facility
equal to 2.5% of the outstanding balance of the notes, and
principal draws, are sufficient under our stress assumptions to
ensure timely payment of interest.
-- The condition that a minimum margin will be maintained on the
assets.
-- The benefit of a cross-currency swap to hedge the mismatch
between the Australian dollar receipts from the underlying assets
and the U.S. dollar payments on the class A1-u notes and the euro
dollar payments on the class A1-GEUR notes.
PRELIMINARY RATINGS ASSIGNED
Pepper Residential Securities Trust No.23
Class Rating Amount (mil.)
A1-u AAA (sf) US$190.00
A1-a AAA (sf) A$100.00
A1-GEUR AAA (sf) EUR100.00
A2 AAA (sf) A$109.00
B AA (sf) A$52.00
C A (sf) A$22.00
D BBB (sf) A$16.00
E BB (sf) A$9.00
F B (sf) A$8.00
G NR A$9.00
NR--Not rated.
The exchange rate applicable to the class A1-u notes is US$0.71698
per Australian dollar. The exchange rate applicable to the class
A1-GEUR notes is EUR0.625 per Australian dollar. The class A1-a and
class A1-GEUR note sizes are to be determined. Based on the launch
pool the total combined size of these tranches will be A$425
million.
RCR TOMLINSON: AvidSys Buys RCR Businesses; 150 Jobs Saved
----------------------------------------------------------
Vanessa Zhou at Australian Mining reports that Indian-owned company
AvidSys Group has purchased the remaining parts of RCR Tomlinson -
RCR Resources, RCR Power and RCR Water West - following the
recently announced sale of RCR Mining and RCR Heat Treatment to NRW
Holdings.
This final sale has saved the jobs and entitlements of a further
150 employees, less than three months after RCR Tomlinson's
voluntary administration in November 2018, Australian Mining says.
AvidSys, owned by parent company Sanrachna Group, is an
international group of businesses operating across metals and
mining, media, construction and infrastructure development,
industrial automation and other sectors, the report discloses.
According to the report, the RCR businesses will be an addition to
AvidSys' Australian portfolio that includes Remsafe, a remote
isolation technology provider which serves mining majors Rio Tinto,
BHP and Anglo American.
"This transaction represents a strategic extension of our global
strategy to provide vertically integrated end-to-end businesses as
part of our wider group," the report quotes chairman of AvidSys
Resources division Ansh Gautam as saying. "The RCR team is well
regarded in Western Australia - we respect and want to build on
RCR's 120-year history for many years to come.
"We look forward to welcoming the RCR employees into the AvidSys
family."
The transaction concludes the sale process of collapsed engineering
company RCR Tomlinson in Western Australia, with transactions
achieved for all business units securing around 500 jobs, according
to Rob Brauer, partner of RCR Tomlinson's voluntary administrator
McGrathNicol, Australian Mining relays.
"AvidSys' investment in RCR's assets in Western Australia ensures
the local management team led by Andy Griffin will continue to
deliver for its longstanding customer base," Mr. Brauer said.
As reported in the Troubled Company Reporter-Asia Pacific on Nov.
26, 2018, SmartCompany said one of Australia's largest publically
listed construction companies RCR Tomlinson has collapsed just a
few months after raising over AUD100 million from investors, with
the company blaming an inability to secure additional funding as
the reason for the business' collapse.
RCR, based in Perth, is the company behind a number of major
infrastructure projects across the nation, specifically in the
mining and energy sectors. It was most recently working on two
solar farms in Queensland, for which it was required to secure
the additional AUD100 million of capital after the costs for the
projects ballooned to over AUD50 million.
TELERON: EscapeNet Acquires Company's Customer Base
---------------------------------------------------
Nico Arboleda at CRN reports that internet provider EscapeNet has
acquired the customer base of Teleron, after it was placed in
receivership late last month.
EscapeNet managing director Stavros Patiniotis announced the
acquisition on Whirlpool, saying there would be no interruption to
services, CRN says.
"EscapeNet has acquired the Teleron customer base," the report
quotes Mr. Patiniotis as saying. "This will ensure top-notch
performance an enhanced customer support experience and offer
increased value with higher speeds and lower monthly spend."
Mr. Patiniotis told CRN that customers would be notified in the
coming days with more details on the transition, including those
who may be eligible for upgrades at no extra cost. He added that
Teleron customers shouldn't expect any changes to their services,
and that the usual online and phone support contacts would remain
in operation, CRN relays.
A dedicated webpage for Teleron customers on EscapeNet's site is
also in the works, aiming to assist customers in the transition.
According to CRN, Mr. Patiniotis also noted that the prices for
Teleron customers would remain the same and would not be adopting
EscapeNet's prices during the transition.
All payments made while Teleron was in receivership will be
honoured, he added.
Teleron was placed in receivership on January 24 with Worrells
appointed as liquidators.
Sydney-based Teleron was founded in September 2016, formed from "a
group of telecommunications engineers" with experience working at
NBN, Telstra and Optus.
VBFORM PTY: First Creditors' Meeting Set for March 1
----------------------------------------------------
A first meeting of the creditors in the proceedings of Vbform Pty
Ltd will be held on March 1, 2019, at 10:00 a.m. at the offices of
McLeod & Partners, at Level 9, 300 Adelaide Street, in Brisbane,
Queensland.
Jonathan McLeod and Bill Karageozis of McLeod & Partners were
appointed as administrators of Vbform Pty on Feb. 19, 2019.
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C H I N A
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361 DEGREES: Fitch Puts 'BB' Long-Term IDR on Watch Negative
------------------------------------------------------------
Fitch Ratings has placed 361 Degrees International Limited's 'BB'
Long-Term Issuer Default Rating (IDR) and senior unsecured rating
on Rating Watch Negative. The 'BB' rating on the company's USD400
million 7.25% senior notes due 2021 has also been placed on Rating
Watch Negative.
The action follows 361 Degrees' profit warning on February 14,
2019. The China-based sportswear maker said net profit after tax
for 2018 decreased due to weaker revenue and increased investments
in its core brand, an exchange loss on the depreciation of the yuan
against the US dollar, and a substantial loss in its e-commerce
business.
Fitch is unable to determine the extent of the decline in
profitability nor the cash flow impact based on the financial and
operational details in the announcement. The agency will conduct a
review of the ratings after the company announces its results in
March 2019.
KEY RATING DRIVERS
Slowing Revenue Growth: The company's disclosure of a decrease in
its order book for 2018 as part of the profit warning is worse than
Fitch's expectations. Fitch had previously expected growth to
moderate to a single-digit range over the next few years on a
higher basis of comparison. The overall retail sales environment in
China slowed in 2H18 but Fitch would need to determine if other
industry peers saw a similar trend or the weakness is an indication
of a loss in market share. Fitch would also need to assess if the
company's brand rebuilding programme started in 2H18 can be
effective in supporting renewed revenue growth in 2019 and beyond.
Impact on Profitability: 361 Degrees' profitability rating headroom
had become increasingly limited with a lower EBITDA margin in 2017
and its advertising and promotional (A&P) expenses may have risen
by more than Fitch had expected in 2018. The profit warning
included mention of the impact from the brand rebuilding programme
started in 2H18 and higher A&P expenses specifically for the
e-commerce business. The A&P-to-sales ratio was only 9% in 1H18,
compared with 10%-13% in 2015-2017 and while Fitch expects the
company to have some flexibility in these investments, it would
need to determine the balance between growth and investments to
forecast the future trend of profitability.
Fitch has maintained its previous assumptions for the forecast
period to 2020 for the time being and has not incorporated the
information disclosed in the profit warning as the data is limited.
Fitch expects to resolve the Rating Watch following the release of
2018 results in March 2019 and will review its assumptions after
gaining further visibility on the profitability and cash flow
expected in the short term.
Uncertainty over Cash Flow: Fitch would need to assess the cash
flow impact in 2018 following the profit warning. Working capital
is also an important consideration for the credit profile. The
company's working capital had improved over the past few years,
with trade and bills receivable turnover days declining to 155 in
2017 from a peak of 205 in 2013, and previously Fitch did not
expect further significant deterioration with a stable operating
performance. The company had taken measures to strengthen its
operational control, such as accepting replenishment orders and
delivering products closer to the season launch date, which may
partly offset the impact of weaker revenue.
DERIVATION SUMMARY
361 Degrees has a smaller scale of operation and is less
diversified in terms of geography and product portfolio compared
with global peers. However, 361 Degrees has a strong financial
profile, with a sustained net cash position and generally positive
free cash flow (FCF). 361 Degrees has a smaller scale than branded
apparel company Levi Strauss & Co. (BB+/Stable) as its EBITDA is
approximately 21% of the US-based company's, but it benefits from
better profitability, a higher coverage ratio, and is in a net cash
position compared with Levi Strauss, which has an FFO adjusted net
leverage ratio of over 3x.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
- Mid-single-digit revenue growth in 2018-2020
- EBITDA margin of 16%-17% in 2018-2020
- Capital expenditure of CNY100 million annually
- Receivable and inventory days similar to 2017 levels
- Dividend payout of 40%
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- Significantly slower revenue growth compared with industry
peers
- EBITDA margin below 15% for a sustained period (2017: 17%)
- Negative FCF for a sustained period
- Failure to sustain a net cash position
- Deteriorating working capital, such as worsening trade
receivables (including bill receivables) days or a significant
increase in channel inventory
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- The rating is on Watch Negative; the likelihood of positive
action is low.
LIQUIDITY
Ample Liquidity: 361 Degrees had sufficient capital and liquidity
resources at end-June 2018, reflected in the total debt balance of
CNY2.7 billion - of which CNY112 million was current borrowing -
and a readily available cash balance of CNY6.0 billion. The company
also had unutilised banking facilities of more than CNY3 billion.
FCF turned positive starting 2016 and Fitch expects 361 Degrees to
continue its strong cash flow generation thanks to working capital
management and limited capex requirements.
LOGAN PROPERTY: S&P Assigns B+ Rating on New USD Unsecured Notes
----------------------------------------------------------------
S&P Global Ratings assigned its 'B+' long-term issue rating to a
proposed issue of U.S.-dollar-denominated senior unsecured notes by
Logan Property Holdings Co. Ltd. (BB-/Positive/--). The China-based
developer intends to use the proceeds to refinance its existing
debt. The issue rating is subject to S&P's review of the final
issuance documentation.
S&P said, "We rate the notes one notch below the issuer credit
rating on Logan to reflect structural subordination risk. As of
June 30, 2018, Logan's capital structure of Chinese renminbi (RMB)
60 billion consists of RMB12.7 billion secured debt and about RMB32
billion unsecured debt at subsidiaries. As such, Logan's priority
debt ratio is about 74%, which is significantly above our
notching-down threshold of 50%.
"In our view, Logan will improve its financial leverage over the
next 12 months, given that the company's sales execution in 2018
exceeded our expectation. We anticipate Logan's operating
performance to continue to strengthen. In addition, we expect the
company to replenish its land bank in a disciplined manner.
Therefore, our positive outlook on Logan reflects our expectation
that its leverage, as measured by debt-to-EBITDA ratio, may improve
close to 4.0x over the next 12 months from 5.4x as of Dec. 31,
2017."
SHANDONG HI-TECH: Fitch Affirms BB' LT Issuer Default Ratings
-------------------------------------------------------------
Fitch Ratings has affirmed Shandong Hi-tech Innovation Construction
Investment Group Co., Ltd.'s (SDHIC) Long-Term Foreign- and
Local-Currency Issuer Default Ratings of 'BB'. The Outlook is
Stable. Fitch has also affirmed the expected rating on SDHIC's
proposed senior unsecured US dollar at 'BB(EXP)'.
SDHIC ratings are assessed under the top-down approach set out in
Fitch's Government-Related Entities (GRE) Rating Criteria,
reflecting the entity's control and ownership by Weifang Hi-Tech
Industrial Development Zone (Weifang HTIDZ), the government of
Weifang HTIDZ's support track record as well as the socio-political
and financial impact on the government from a default by SDHIC.
KEY RATING DRIVERS
Weifang HTIDZ's Creditworthiness: Weifang HTIDZ is located in
Weifang municipality of China's Shandong province. The local
economy is backed by a strong secondary segment, which accounted
for around 57% of total gross regional product (GRP) in 2017.
Weifang HTIDZ's GRP has expanded robustly and grew by 13.5% in
2017, faster than national and municipal economic growth.
'Very Strong' Status, Ownership and Control: SDHIC is directly
owned by the Weifang HTIDZ government via Weifang HTIDZ State-owned
Asset Administration Bureau. The bureau holds 100% of SDHIC after
acquiring a stake from Citic Trust Co., Ltd at end-2018. The
government supervises SDHIC's operations and appoints board members
and senior management. All major decisions and projects, financing
and investment plans require government approval. SDHIC is required
to regularly report its operational and financial results to the
government, which also sets audit criteria and conducts annual
assessments of SDHIC's performance.
'Strong' Support Track Record and Expectations: SDHIC has received
support via capital and asset injections, project funds, subsidies
and share transfers from the Weifang HTIDZ government to partly
finance its capital expenditure. Transfers and grants increased by
122% in 2017 mainly to support SDHIC's urban infrastructure
development projects. Government support of all forms totalled
CNY0.9 billion in 2017 and CNY0.5 billion in 2018, of which CNY 0.7
billion and CNY 0.47 billion, respectively, were government cash
injections. The government has injected cash to the company since
2015.
'Moderate' Socio-Political Implications of Default: SDHIC is
Weifang HTIDZ's major urban developer and is responsible for urban
infrastructure development and shanty-town renovation, as well as
centralised heating facility construction and real-estate
development. The company's failure could jeopardise Weifang HTIDZ's
policy duties and services, although SDHIC may be substituted by a
competing GRE outside the zone.
'Very Strong' Financial Implications of Default: Weifang HTIDZ is a
major engine of Weifang municipality's economic development,
accounting for about 7.7% of the municipality's GRP in 2017. SDHIC
acts like a proxy funding vehicle for Weifang HTIDZ and a failure
of timely government support leading to a default could limit the
government's financing options.
'B' Category Standalone Credit Profile: The company's total debt,
including perpetual bonds, rose by 22% to CNY10.4 billion in 2017.
SDHIC's capex has caused a relatively high net debt to
Fitch-calculated EBITDA ratio, which averaged around 30x from 2014
to 2017. Cash flow from operations improved in 2017 due to an
increase in revenue collection as well as advance payments.
However, cash flow from operations to debt and interest coverage
continued to be below 1x. Fitch expects the company to continue to
have a large capex, high leverage and low debt and interest
servicing ability in the medium term.
RATING SENSITIVITIES
A revision in Fitch's perception of Weifang HTIDZ's ability to
provide subsidies, grants or other legitimate resources allowed
under China's policies and regulations to SDHIC would lead to a
change in the ratings. Positive rating action may be triggered by a
revised assessment of the socio-political implications of a
default, enhancing the government's incentive to provide legitimate
support.
A downgrade may result from a weakening of the socio-political
and/or financial implications of a default, or the assessment of
the government's support record, or a dilution of the government's
ownership.
A change in SDHIC's standalone credit profile or liquidity position
could also result in a rating change.
Rating action on SDHIC would lead to similar action on the proposed
US dollar notes.
TIANJIN SHUNHANG: Court Accepts Application for Liquidation
-----------------------------------------------------------
splash247.com reports that Chinese dry bulk operator CSC Phoenix
has announced that Tianjin Intermediate People's Court has accepted
its controlling shareholder Tianjin Shunhang Shipping's application
for liquidation.
Tianjin Shunhang Shipping filed for bankruptcy earlier this month
due to its inability to solve its debt issues, the report
discloses.
splash247.com relates that the court will appoint an administrator
to oversee the bankruptcy process of the company soon.
According to the report, CSC Phoenix said the liquidation of
Tianjin Shunhang Shipping will not affect the company's operation
temporarily but may result in an ownership change of the company.
Currently Tianjin Shunhang's shareholding in CSC Phoenix has been
frozen by courts, the report adds.
Based in Tianjin, China, Tianjin Shunhang Shipping Co., Ltd.
operates domestic coastal shipping and Yangtze River shipping
ports.
TIBET FINANCIAL: Moody's Assigns First-Time Ba2 CFR, Outlook Stable
-------------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 long-term issuer
rating and corporate family rating (CFR) to Tibet Financial Leasing
Co., Ltd.
This is the first time that Moody's has assigned ratings to Tibet
Financial Leasing.
The outlook is stable.
RATINGS RATIONALE
Tibet Financial Leasing's Ba2 issuer rating and CFR incorporate the
company's 1) Baseline Credit Assessment (BCA) of b1, and 2) a
two-notch uplift based on Moody's assumption that the company will
receive — in times of need — a moderate level of indirect
support from and high level of dependence on the Government of
China (A1 stable) via the Government of the Tibet Autonomous Region
through some of its shareholders, under Moody's joint-default
analysis for government-related issuers.
The b1 BCA takes into account Tibet Financial Leasing's sound
financial metrics, specifically, its good profitability and asset
quality. Moreover, the company has a sustained level of solid
capital due to the capital injections from its shareholders in
2016-2018.
However, the BCA is constrained by the company's (1) short
operating history and unseasoned asset quality, (2) rapid asset
growth which puts pressure on its risk management, and (3) high
liquidity risk due to asset and liability mismatches.
Established in May 2015, Tibet Financial Leasing is one of the
financial leasing companies regulated by the China Banking and
Insurance Regulatory Commission (CBIRC) and provides leasing
services mainly to public utilities, the leasing and business
services industry, as well as manufacturing and agricultural
sectors.
Tibet Financial Leasing reported RMB736 million unaudited net
profit in 2018, up from RMB671 million in 2017 and RMB183 million
in 2016 because of increasing business opportunity and improving
efficiency. Over the past few years, the company has had no
overdue, special mention or nonperforming loans. It has also
received capital injections from its shareholders to support its
business growth.
However, the company has a short operating history. It will take
time for Tibet Financial Leasing to build up its franchise in the
leasing industry and a track record on credit risk management and
asset quality control.
The company reported substantial growth in the past few years.
Specifically, the unaudited total assets increased to around
RMB48.7 billion at the end of 2018 from only RMB18.5 billion at the
end of 2016. Such rapid asset growth could bring operating
challenges and put pressure on its risk management, resulting in a
deterioration in asset quality as the portfolio seasons. Such risk
is partly mitigated by the company's high provision ratio of 2.5%.
Tibet Financial Leasing relies on short-term wholesale funding,
including borrowing from banks and other financial leasing
companies to support its long-term leasing business. Consequently,
it is exposed to interest rate risk and refinancing risk, due to
the mismatch in the tenor of its assets and liabilities. Such risks
are partially mitigated by its increasing funding sources from
long-term payables and corporate debt.
Tibet Financial Leasing is 48.5% owned by a private company in
China, Tunghsu Group Co., Ltd, and 29.3% owned by the Government of
the Tibet Autonomous Region via the Tibet Autonomous Region
Investment Co Ltd, Bank of Tibet Co., Ltd, and Tibet Autonomous
Region State-owned Assets Management Company.
Since Tunghsu Group is only a financial investor, Moody's has not
incorporated any assumption of affiliate support from Tunghsu Group
in Tibet Financial Leasing's ratings.
The moderate level of indirect support from the Government of China
via the Government of the Tibet Autonomous Region, if needed,
considers the Government of the Tibet Autonomous Region as an
originator in setting up Tibet Financial Leasing.
Furthermore, as the sole financial leasing company in the region,
Tibet Financial Leasing supports the development of financial
services in the Tibet Autonomous Region and helps attract
investments from other provinces. Nonetheless, currently, the
majority of the company's leasing business is in other provinces in
China and outside of the Tibet Autonomous Region.
The moderate level of support assumption is reinforced by CBIRC's
regulation on financial leasing companies, which requires the
originators and major shareholders to include a commitment in Tibet
Financial Leasing's Article of Association to provide liquidity and
capital support in times of stress.
What Could Change the Rating -- Up
Tibet Financial Leasing's ratings could be upgraded if the company
(1) establishes a good operating track record and maintains its
existing good financial metrics, including strong profitability and
a low nonperforming loan ratio, and (2) reduces the tenor mismatch
between its assets and liabilities.
Moody's could also upgrade the company's ratings if Moody's
observes a stronger connection between the company and the
Government of the Tibet Autonomous Region, including increasing the
government's shareholding to over 50% and more explicit support
from the central government via the Government of the Tibet
Autonomous Region.
What Could Change the Rating -- Down
Tibet Financial Leasing's ratings could be downgraded if Moody's
observes (1) a weakening of support from the Chinese government via
the Government of the Tibet Autonomous Region, (2) a significant
reduction in shareholding by the Government of the Tibet Autonomous
Region, (3) a significant deterioration in the company's asset
quality, due to weak risk management, and/or (4) a decline of
tangible common equity/tangible managed assets to below 11% due to
higher than expected asset growth.
The methodologies used in these ratings were Finance Companies
published in December 2018 and Government-Related Issuers published
in June 2018.
Headquartered in Beijing, Tibet Financial Leasing Co., Ltd.
reported unaudited assets of RMB48.7 billion at the end of 2018.
TUNGHSU GROUP: S&P Cuts ICR to 'B-' on Ongoing Liquidity Pressure
-----------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
the China-based technology conglomerate Tunghsu Group Co. Ltd. to
'B-' from 'B'. S&P also lowered the issue level rating on the
guaranteed senior unsecured notes to 'CCC+' from 'B-'.
S&P lowered its ratings on Tunghsu Group Co. Ltd. and its
guaranteed U.S.-dollar notes because it believes the China-based
technology conglomerate's liquidity is deteriorating. This is due
to the company's high refinancing needs amid tight funding
conditions in China. Moreover, the newer businesses of constructing
solar farms and manufacturing new-energy buses have increased the
company's working capital needs.
Tunghsu faces significant debt maturities over the next 12 months.
By our estimates, the company has Chinese renminbi (RMB) 34.6
billion of debt maturities over the 12 months ending Dec. 31, 2019.
These include bank loans of RMB14.7 billion, bonds (including
exercisable puts) of RMB14 billion, and shadow banking financing of
RMB6 billion. Short-term maturities stand at similar level to six
months ago, but the bond portion has increased to around 40% from
30%. S&P believes bonds carry less flexibility than bilateral loans
in terms of refinancing in the current funding environment.
Moreover, Tunghsu pledged most of its listed arms' shares for debt
financing. If the share prices weaken further, the company could
face incremental liquidity pressure due to margin top-up
requirements.
Tunghsu will likely face more difficulty to refinance its debt
maturities at favorable rates. Central-bank liquidity injections
and various government support measures in recent months may have
benefited higher-grade companies in China, but the funding
environment remains tight for most privately held speculative-grade
companies, including Tunghsu. However, Tunghsu has maintained good
relationships with banks. The company should be able to further
build and expand this funding channel.
In S&P's view, the rapid expansion in the renewable energy and
new-energy bus segments in the past two years has increased
Tunghsu's exposure to policy and working capital risks. The
company's cash conversion cycle significantly lengthened in 2018,
leading to minimal cash flow from operation, due to delays in
receivables and government subsidy collection. S&P expects
Tunghsu's cash flow to marginally improve over the next 12 months
but remain a small source of liquidity compared with the company's
significant near-term debt maturities.
The heightened working capital needs will likely slow the pace of
Tunghsu's debt reduction, in S&P's view. S&P estimates that EBITDA
interest coverage remains weak at about 1.5x in 2018, same as in
2017. As of Dec. 31, 2018, Tunghsu has gross debt of around RMB85
billion and a total cash balance of RMB57 billion, of which RMB51
billion of debt and RMB47 billion of cash are held at the parent
level.
S&P said, "The negative outlook reflects our view that Tunghsu will
continue to face meaningful refinancing risk over the next 12
months, and that the refinancing environment in China will remain
challenging for private companies. We expect Tunghsu's EBITDA
interest coverage to stay below 2x and free operating cash flows to
remain negative over the next 12 months.
"We could lower the rating on Tunghsu if the company's refinancing
and liquidity risk escalates. We will closely follow the company's
upcoming maturities and funding environment.
"We may revise the outlook to stable if the company improves its
access to capital market, such that additional refinancing sources
become more available to the company."
=========
I N D I A
=========
BAREILLY HIGHWAY: CARE Moves D on INR1,400cr Debt to NonCooperating
-------------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Bareilly
Highway Projects Ltd. (BHPL) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 1,400 CARE D; Issuer not cooperating;
Facilities Revised from CARE D on the basis
of best information available
Detailed Rationale & Key Rating Drivers
BHPL has not paid the surveillance fees for the rating exercise
agreed to in its Rating Agreement. In line with the extant SEBI
guidelines, CARE's rating on Bareilly Highways Project Ltd.'s bank
facilities will now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating assigned to the bank facilities of Bareilly Highways
Project Limited (BHPL) continues to factor in delays in debt
servicing by the company.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delay in Debt servicing obligation: The liquidity position of the
company continues to remain weak on account of significant delays
in completion of the project, leading to delays in debt servicing.
BHPL is a special purpose vehicle (SPV) promoted by Era Infra
Engineering Ltd (EIEL) and OJSC- Sibmost (Sibmost) to undertake
4-laning of the existing 2-lane road from Km 262.0 to Km 413.2
(total project length of 156.57 km) on NH-24 from Bareilly to
Sitapur in state of Uttar Pradesh under National Highways
Development Programme (NHDP) Phase III of NHAI (rated 'CARE AAA')
on Design, Build, Finance, Operate & Transfer (Toll) basis. As per
the concession agreement (CA) signed between NHAI & BHPL in June
2010, the concession period is for 20 years (including a
construction period of 2.5 years) from the Appointed Date (March
01, 2011). The original scheduled project completion date (SPCD)
was August 28, 2013, which had been earlier revised to December 31,
2016, by NHAI (subject to certain conditions). The IE has further
extended the SCOD till June 30, 2017. The total project cost was
originally envisaged at INR1951 crore to be funded through promoter
contribution of INR296 crore, grant of INR255 crore from NHAI, term
loans of INR1,350 crore and subordinate debt (from banks) of INR50
crore. The project cost was revised to INR2,601.89 crore, to be
funded through promoter contribution of INR550.75 crore, grant of
INR255 crore from NHAI, term loans of INR1,746.14 crore and
subordinate debt (from banks) of INR50 crore.
DEHRADUN HIGHWAYS: CARE Reaffirms 'D' Rating on INR528.45cr Loan
----------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Dehradun Highways Project Limited (DHPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 528.45 CARE D Reaffirmed
Facilities
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of DHPL continues to
factor in delays in debt servicing by the company.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delay in Debt servicing obligation: The liquidity position of the
company continues to remain weak on account of significant delays
in completion of the project, leading to ongoing delays in debt
servicing.
DHPL is a Special Purpose Vehicle promoted by Era Infra Engineering
Ltd (EIEL) and OJSC- SIBMOST (Sibmost) to undertake 4-laning of
Haridwar-Dehradun section from km 211.00 to km 218.20 of NH 58 and
from km 165.00 to km 196.825 of NH 72 (approximately 39.03 km) in
the state of Uttarakhand on BOT-Annuity basis on Design, Build,
Finance, Operate & Transfer (DBFOT) pattern under National Highways
Development Programme Phase III of National Highways Authority of
India (NHAI). DHPL entered into a Concession Agreement (CA) with
NHAI on February 24, 2010 for the project with a concession period
of 20 years (including construction period of two years) from the
appointed date (November 1, 2011, revised from the original
appointed date of August 23, 2010 due to delays in land acquisition
on part of NHAI).
The original scheduled commercial operations date (SCOD) was
November 01, 2013, which was revised to September 30, 2016 by NHAI
(subject to certain conditions). The total project cost was
originally envisaged at INR691.41 crore to be funded through term
loan of INR528.45 crore, equity of INR107.75 crore and subordinate
debt of INR55.21 crore from the promoters. The project had
witnessed time over-run due to various reasons leading to increase
in the project cost, which is INR1,020.91 crore now. Further due to
delay, NHAI has terminated the agreement in May 2018.
ESSAR STEEL: ArcelorMittal Offers INR48BB for Mahan Power Plant
---------------------------------------------------------------
Reuters reports that ArcelorMittal SA, the world's biggest
steelmaker, has bid INR48 billion (US$673 million) to acquire Essar
Steel's 1,200 megawatt power plant in central India, one of the
most prized assets in the debt-ridden group's power portfolio.
Reuters says the bid for the power plant once again pits
ArcelorMittal chief Lakshmi Mittal against the Ruia family, who are
already fighting to prevent their flagship steel asset from falling
into the hands of the global steel giant.
According to Reuters, Essar's creditors are selling many of the
group's assets to recover billions of dollars of loans, leaving
Essar Group with little say over who buys the assets.
Government-owned Power Finance Corp Ltd (PFC) is the lead creditor
of the power plant and PFC's Chairman Rajeev Sharma disclosed
ArcelorMittal's bid on Feb. 18, Reuters relates.
He said that the Essar family had also made a INR35 billion bid for
the power plant, but ArcelorMittal's bid was 37 percent higher, the
report adds.
"Now we have received an offer from ArcelorMittal at 4 crore per
megawatt, so INR4,800 crore (INR48 billion)," Sharma told a press
conference, Reuters relays.
According to the report, Sharma said PFC has yet to decide on
either offer for the asset, known as the Mahan power plant, which
has debt worth INR74 billion.
If the steel giant manages to clinch the deal for the Mahan plant,
it would be yet another blow to the Ruia family's attempt to
renegotiate debt settlements and retain control of their assets,
the report states.
ArcelorMittal has already been picked as the preferred bidder for
Essar Group's flagship 10 million ton steel plant in the western
Indian state of Gujarat and is also the sole bidder for Essar's
infrastructure arm EPC Constructions, formerly called Essar
Projects, Reuters discloses.
Reuters notes that the Ruias and ArcelorMittal are still locked in
a legal wrangle over the fate of the steel asset. A final court
decision in that matter is expected soon.
Essar Power, a subsidiary of the Essar Group, spent INR80 billion
to build the plant, which began operation early last year and
currently accounts for 50 percent of Essar Group's power
generation, adds Reuters.
About Essar Steel
Incorporated in 1976, Essar Steel India Ltd. is a part of the Essar
Group and is having 10 MTPA integrated steel manufacturing
facilities at Hazira, Gujarat and iron ore beneficiation and
pelletisation facilities in Paradeep, Odisha (12 mtpa) and Vizag,
Andhra Pradesh (8 mtpa). The company also owns and operates two
iron ore slurry pipelines -- one each in Odisha (Dabuna to Paradip)
and Andhra Pradesh (Kirandul-Vizag), which transport the iron ore
slurry from the beneficiation plant (located near the iron ore
mines in Dabuna and Kirandul) to the pellet plant (located near the
Paradip and Vizag ports). A large portion of the iron ore pellets
produced are intended for captive consumption by ESIL's steel plant
at Hazira for cost optimization.
The National Company Law Tribunal (NCLT) - Ahmedabad Bench admitted
Essar Steel's insolvency case on Aug. 2, 2017.
Satish Kumar Gupta of Alvarez and Marsal India has been appointed
as interim resolution professional upon the suggestion of State
Bank of India (SBI).
Essar Steel owes more than INR45,000 crore to lenders, of which
INR31,671 crore had already been declared as non-performing as of
March 31, 2016, The Economic Times disclosed. The SBI-led
consortium of 22 creditors accounts for 93% of this amount. Essar
Steel owes $450.67 million to Standard Chartered Bank (SCB).
FACOR POWER: CARE Reaffirms 'D' Rating on INR15cr LT Loan
---------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Facor Power Limited (FPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 15.00 CARE D Reaffirmed
Facilities
Long/Short term 15.00 CARE D/CARE D Reaffirmed
Bank Facilities
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of FPL continues to
take into account ongoing delays in debt servicing of term loans
besides erosion of net worth due to continuous losses on account of
underutilized capacity.
Detailed description of key rating drivers
Key rating weakness
Continued delays in debt servicing of term loan: The first
installment of the term loan by REC was due on November, 2015.
However, no installment has been paid till March 31, 2018 and the
total amount due was INR510.97 crore. REC has classified account as
Nonperforming asset. Pursuant to the takeover of the management of
the company and possession of the plant by REC on 7th November,
2017 by way of exercising the powers conferred under SARFAESI Act,
REC nominated their three officials on the board as directors of
the company with the existing directors vacating their offices.
Underutilized capacity leading to continuous losses: Due to lower
power off-take agreement, FPL is operating at 37.5 MW (total
capacity- 100MW) with only one boiler.
During FY18 (refers to period from April 1 to March 31), FPL
reported net loss of INR133.31 crore (PY: loss of INR87.79 crore)
on account of weak operational performance owing to absence of PPA,
leading to erosion of net-worth.
Facor Power Ltd (FPL), promoted by Ferro Alloy Corporation Ltd
(FACOR) was incorporated on August 24, 2005. FPL has
set up coal based thermal power plant of 100 MW capacity at village
Randia, District Bhadrak, Orissa which was successfully
commissioned in March 2015. The total outlay on project was
INR747.55cr funded by a debt of INR517.90 cr sanctioned by Rural
Electrification Corporation (REC) and equity contribution of
INR229.65cr.
G.R. ENGINEERING: Ind-Ra Assigns BB+ Issuer Rating, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned G. R. Engineering
Private Limited (GRPL) a Long-Term Issuer Rating of 'IND BB+'. The
Outlook is Stable.
The instrument-wise rating actions are:
-- INR100 mil. Fund-based working capital facilities assigned
with IND BB+/Stable/IND A4+ rating;
-- INR100 mil. Non-fund-based working capital facilities assigned
with IND A4+ rating;
-- INR25 mil. Proposed fund-based working capital facilities*
assigned with Provisional IND BB+/Stable/Provisional IND A4+
rating; and
-- INR25 mil. Proposed non-fund-based working capital facilities*
assigned with Provisional IND A4+ rating.
* The ratings are provisional and shall be confirmed upon the
sanction and execution of loan documents for the above facility by
GRPL to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The ratings reflect GRPL's modest scale of operations as indicated
by revenue of INR1,100.69 million in FY18 (FY17: INR1,274.61
million). The revenue declined at a CAGR of 22.29% during FY15-FY18
on account of lower receipt of new orders. The company's growth is
dependent upon the capital spending by end-users in the
petrochemical, fertilizers and refineries sectors. During FY19, the
company secured orders worth INR6,938.1 million from various
petrochemical and fertilizer companies, which it expects to execute
in FY19-FY20. The company executed 10.23% of the orders and booked
revenue of INR806.7 million as of 19 October 2018. As of December
2018, GRPL had INR6,037.51 million of unexecuted orders; thus, the
management expects to achieve 50%-60% yoy revenue growth in FY19.
The company suffered operating losses during FY16-FY17 due to high
fixed operating costs, attributable to small orders. However,
EBITDA turned positive to INR58.77 million in FY18 (FY17: negative
INR274.92 million) with an EBITDA margin of 5.34%, owing to a
reduction in operating expenses. In 1HFY19, the EBITDA margin
improved further to 13.42%. Ind-Ra expects the EBITDA to increase
further with the increase in revenue. However, the margin will
remain susceptible to volatility in raw material prices owing to
fixed cost-based contracts.
The ratings are further constrained by GRPL's elongated net working
capital cycle of 363 days in FY18 (FY17: 242 days, FY16: 369 days),
mainly due long inventory holding period and receivable days,
inherent to the industry. Receivables also include pending payments
from projects executed by GRPL in the past. However, the management
expects the net working capital cycle to improve owing to a likely
reduction in the receivable days.
The ratings also factor in the company's weak credit metrics as
reflected by net leverage (total adjusted net debt/operating
EBITDAR) and gross interest coverage (operating EBITDA/gross
interest expense) of 26.23x and 0.74x in FY18, respectively, owing
to the low EBITDA. Excluding interest-free unsecured loans from
shareholders (FY18: INR755.77 million, FY17: INR725.43 million),
the net leverage was 13.37x in FY18. However, during 1HFY19, the
gross interest coverage improved to 2.27x on account of the
improvement in EBITDA to INR101.71 million. Ind-Ra expects the
credit metrics to improve with the likely growth in EBITDA and an
absence of major debt-led CapEx plan in the near-to-medium term.
The ratings, however, are supported by GRPL's comfortable liquidity
position as reflected by 25% and 62% average peak utilization of
its fund-based and non-fund-based limits, respectively, during the
12 months ended December 2018. The company had unrestricted cash
and cash equivalents of INR53.89 million at FYE18 and unutilized
credit lines, against scheduled debt repayment of INR67.82 million
in FY19. It also had retention money of INR51.53 million at FYE18
and 5%-10% of mobilization advances from the newly awarded projects
during FY19. The company's promoters will continue to provide
financial support in case of any financial distress. In FY18,
GRPL's debt obligations were met through unsecured promoter loans.
The ratings also benefit from GRPL's promoters' over four decades
of experience in the fabrication business, leading to longstanding
relationships with its key customers such as Bharat Petroleum
Corporation Limited, Hindustan Petroleum Corporation Limited ('IND
AAA'/Stable), Indian Oil Corporation Ltd ('IND AAA'/Stable) and Oil
and Natural Gas Corporation, among others, ensuring steady order
inflow.
RATING SENSITIVITIES
Positive: A substantial growth in the revenue and EBITDA margin,
along with an improvement in the net working capital cycle, leading
to an improvement in the overall credit metrics on a sustained
basis, would lead to a positive rating action.
Negative: Lower revenue visibility leading to a decline in the
revenue and EBITDA margin, along with the further elongation of the
net working capital cycle, leading to weakening of the credit
metrics on a sustained basis, would be negative for the ratings.
COMPANY PROFILE
Incorporated in 1966 by Mr. D.P. Hariani, Mumbai-based GRPL
supplies fabricated equipment for gas or liquid storage facilities
on an engineering, procurement and construction basis. Its
production unit is based in Tarapur.
HANSRAJ MEMORIAL: CARE Migrates D Rating to Not Cooperating
-----------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Hansraj
Memorial Educational Society (HMES) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 19.90 CARE D; Issuer not cooperating
Facilities on the basis of best available
information
Short-term Bank 13.00 CARE D; Issuer not cooperating
Facilities on the basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from HMES to monitor the rating
vide e-mail communications/letter dated January 7, 2019,
January 8, 2019, January 9, 2019, January 12, 2019, January 16,
2019 and numerous phone calls. However, despite CARE's repeated
requests, the society has not provided the requisite information
for monitoring the ratings. In line with the extant SEBI
guidelines, CARE has reviewed the ratings on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. The ratings on Hansraj
Memorial Educational Society's bank facilities will now be denoted
as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings assigned to the bank facilities of Hansraj Memorial
Educational Society (HMES) takes into account ongoing delays in the
servicing of the debt obligation.
Detailed description of the key rating drivers
At the time of last rating on December 25, 2018, the following were
the rating strengths and weaknesses.
Key rating weaknesses
Ongoing delays in debt servicing: There are ongoing delays in the
servicing of the debt obligation for the term loan and the
overdraft facilities availed by the society.
Hansraj Memorial Educational Society (HMES) is a part of Jalandhar
(Punjab) based Airwings Services group which is engaged in the
business of tours & travels and HR management. HMES was founded by
Late Mr. Hans Raj Bhatia under the Societies Registration Act of
India on February 1, 2000. Mr. Ajay Bhatia is the President of the
society and his brother, Mr. Deepak Bhatia, is the General
Secretary. HMES is currently operating three schools in the
Jalandhar city- Cambridge International school for girls (CISFG;
established in 2005), Cambridge International School Co-ed (CISC;
established in 2008) and Cambridge International (CISFG;
established in 2005), Cambridge International School Co-ed (CISC;
established in 2008) and Cambridge International Foundation School
(CIFS; established in 2012) and is setting up a new school in
Mohali (Punjab). The schools are affiliated to CBSE (Central Board
of Secondary Education) and are ISO-9001:2008 accredited.
HARIDWAR HIGHWAYS: CARE Reaffirms 'D' Rating on INR981.09cr Loan
----------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Haridwar Highways Project Limited (HHPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 981.09 CARE D Reaffirmed
Facilities
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of HHPL factors in delay
in the debt servicing obligations.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delay in debt service obligation: The company has delayed the
interest payment on term loans and the account has been classified
as Non- Performing Assets (NPA) due to its stretched liquidity
profile.
HHPL is a special purpose vehicle (SPV) promoted by Era Infra
Engineering Ltd (EIEL, rated 'CARE D') and OJSC Sibmost (Sibmost)
for augmentation of 2-lane carriageway of the existing section of
NH-58 from km 131.0 to km 211.0 to a 4-lane dual carriageway from
Muzaffarnagar to Haridwar in the state of Uttar Pradesh &
Uttarakhand under National Highways Development Programme (NHDP)
Phase III of NHAI on Design, Build, Finance, Operate & Transfer
(Toll) basis. As per the concession agreement (CA) signed between
NHAI and HHPL in February 2010, the concession period is 25 years
(including a construction period of 2.5 years) from the Appointed
Date (September 3, 2010). The original SPCD was March 1, 2013.
The total project cost was originally envisaged at INR1,100.60
crore to be funded through promoter contribution of INR200 crore,
grant of INR210 crore from NHAI, and term loans of INR690.60 crore.
The project cost has been revised to INR1563.55 crore to be funded
through promoter contribution of INR372.46 crore, grant of INR210
crore from NHAI, and term loans of INR981.09 crore.
INDICON CONSTRUCTION: CRISIL Lowers Rating on INR7cr Loans to D
---------------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of Indicon
Construction Private Limited (ICPL) to 'CRISIL D/CRISIL D' from
'CRISIL B+/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.4 CRISIL D (Downgraded
from 'CRISIL A4')
Cash Credit 3.9 CRISIL D (Downgraded
from 'CRISIL B+/Stable')
Cash Credit/ 0.68 CRISIL D (Downgraded
Overdraft from 'CRISIL B+/Stable')
facility
Proposed Cash 1.00 CRISIL D (Downgraded
Credit Limit from 'CRISIL B+/Stable')
Proposed Long Term 1.02 CRISIL D (Downgraded
Bank Loan Facility from 'CRISIL B+/Stable')
The downgrade reflects delay in repayment of term loan.The delay is
mainly due to weak liquidity driven by stretched debtors.
Further rating is also constrained by working capital-intensive and
a small scale of operations, and is exposed to intense competition
in the civil construction industry. However, it benefits from the
extensive industry experience of the promoters.
Key Rating Drivers & Detailed Description
Weakness
* Delay in debt servicing: The downgrade reflects delay in debt
servicing by ICPL due to stretched liquidity.
* Working capital-intensive operations: Gross current assets were
high at 249 days, driven by inventory and debtors of 45 days and
119 days, respectively, as on March 31, 2018.
* Modest scale of operations in a competitive industry: Revenue was
modest at INR29.63 crore in fiscal 2018. The company faces intense
competition from established and regional players in the fragmented
construction industry.
* Geographical concentration in revenue: The Company undertakes
civil construction contracts mainly for the Government of
Maharashtra, leading to high geographical and customer
concentration in revenue. This makes revenue growth dependent on
regional impetus on infrastructure development
Strength
* Extensive industry experience of the promoters: The promoters
have more than a decade of experience in the civil construction
business and have executed various projects for the government in
the past.
Liquidity
Due to delay in receipt of payment from government department,
overall debtors are stretched leading to fully utilised bank limits
and delay in term loan repayment. CRISIL expected liquidity to
remain stretched over the medium term.
ICPL was established in 2003 by Mr Pradeep Kadam and Mr Ashok
Dhamdhere in Pune, Maharashtra. The company, which is registered as
a Class 1-A contractor with the Government of Maharashtra,
undertakes civil construction for the Public Works Department and
Pradhan Mantri Gram Gadak Yojana. Work comprises construction of
roads mainly in western Maharashtra.
JAYPEE HEALTHCARE: CARE Reaffirms 'D' Rating on INR650cr Loan
-------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Jaypee Healthcare Ltd (JHL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 650.00 CARE D Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of JHL continues to
factor in delays in debt servicing by the company.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delay in Debt servicing obligation: The liquidity position of the
company continues to remain weak on account of weak financial
performance leading to delay in debt servicing. Nevertheless, the
scale of operations has improved from INR198 cr in FY17 to INR266
cr in FY18 on account of improved occupancy levels.
Jaypee Healthcare Ltd (JHL), a 100% subsidiary of Jaypee Infratech
Ltd (JIL, rated CARE D), has a multi-specialty tertiary hospital
located at Jaypee Wish Town, Noida. The hospital is 504 bedded (300
operational beds) multi super Speciality hospital with 18 operation
theatres and 35 specialities including Liver Transplant and
Radiation Oncology. Currently, the occupancy levels remain in the
range of 65-70%.
JAYPEE INFRATECH: CARE Reaffirms 'D' Rating on INR6,761.95cr Loans
------------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Jaypee Infratech Limited (JIL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 6,550 CARE D Reaffirmed
Non-Convertible
Debentures 211.95 CARE D Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities and instruments of JIL
continue to factor in delays in debt servicing by the company due
to its weak financial performance and stretched liquidity
position.
Detailed description of the key rating drivers
Key Rating Weaknesses
Weak financial performance and stretched liquidity position: The
liquidity position of the company continues to remain weak on
account of weak financial performance, leading to ongoing delays in
debt servicing.
JIL is a special purpose vehicle promoted by Jaiprakash Associates
Ltd (JAL, rated 'CARE D'), holding 60.98% stake as on September 30,
2018, to develop and operate a 165-km six-lane (extendable to eight
lanes) access-controlled toll expressway between Noida and Agra in
Uttar Pradesh (E'way project). The E'way project achieved
Commercial Operations Date (COD) and commenced toll collection in
August 2012, post receipt of substantial completion certificate.
Also, JIL has been granted rights by Yamuna Expressway Development
Authority (YEA), a state government undertaking, for the
development of approximately 6,175 acres of land (443.30 mn sq ft
of real estate) along expressway in five different parcels in Uttar
Pradesh for residential, commercial, amusement, industrial and
institutional development. The land for real estate development is
provided on 90-year lease. On account slowdown in real estate sales
and high debt levels, the company's financial performance in FY18
(refers to the period April 01 to March 31) was weak, resulting in
weak liquidity position and ongoing delays in debt servicing as
discussed with the company and confirmed with bankers.
The company is currently under the Corporate Insolvency Resolution
Process by virtue of the order dated August 9, 2017 of National
Company Law Tribunal (NCLT), Allahabad Bench and the adjudicating
authority of the Bench of the Tribunal has appointed Mr Anuj Jain
as Interim Resolution Professional (IRP) to carry the functions as
mentioned under the Code and manage JIL's affairs, business and
assets.
K.R.C. CONSTRUCTIONS: Ind-Ra Affirms 'BB-' LT Rating on INR60 Loan
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed K.R.C.
Constructions Private Limited's (KRCCPL) Long-Term Issuer Rating at
'IND BB-'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR60 mil. Fund-based working capital limits affirmed with IND
BB-/Stable rating; and
-- INR185 mil. Non-fund-based working capital limits affirmed
with IND A4+ rating.
KEY RATING DRIVERS
The affirmation reflects KRCPL's continued tight liquidity, as
indicated by the full utilization of the working capital limits
during the 12 months ended in January 2019. Also, the company's
cash flow from operations declined to a negative INR4.05 million in
FY18 (FY17: INR19.87 million) due to a change in the working
capital to a negative INR42.28 million (INR13.97 million). At
FYE18, the company's cash and cash equivalents stood at INR0.13
million.
Moreover, the scale of operations continued to be medium. The
revenue increased to INR749.75 million in FY18 (FY17: INR428.68
million) due to increased execution of work orders.
However, the credit metrics improved to comfortable levels in FY18,
as the absolute EBITDA increased to INR55.9 million (FY17: INR15.0
million) due to higher revenue. The gross interest coverage
(operating EBITDA/net interest expenses) improved to 6.5x (FY17:
1.8x), and the net leverage (total adjusted net debt/operating
EBITDA) improved to 0.6x (2.19x).
Additionally, the RoCE was 61% in FY18 (FY17: 22%) and the EBITDA
margin stood at a healthy 7.5% (3.5%). The margin increased because
of a decline in employee benefit expenses.
The ratings are also supported by the promoters' experience of more
than a decade in the electrical construction business.
RATING SENSITIVITIES
Positive: Revenue growth, along with an improvement in credit
metrics and the liquidity profile, all on a sustained basis, will
be positive for the ratings.
Negative: Sustained deterioration in the liquidity profile could be
negative for the ratings.
COMPANY PROFILE
Incorporated in August 2016, KCPL acquired a partnership firm, KR
Constructions, during the same month and commenced commercial
operations thereafter. KCPL is engaged in the installation and
construction of new lines and substations in Chhattisgarh.
PARSVNATH LANDMARK: NCLT Closes Insolvency Proceedings
------------------------------------------------------
The Hindu BusinesssLine reports that the National Company Law
Tribunal (NCLT) has closed the insolvency resolution process
against Parsvnath Landmark, a subsidiary of Parsvnath Developers,
after home buyers "amicably settled" their dispute with the realty
firm.
Parsvnath Landmark is constructing a 500-unit housing project at
Civil Lines in the national capital.
BusinesssLine relates that in its order dated January 11, the NCLT
had allowed insolvency proceedings against Parsvnath Landmark after
three home buyers approached the tribunal complaining about a delay
in the completion of the project.
However, a two-member Bench of the NCLT stopped the insolvency
proceeding in an order dated February 1, after the financial
creditors of the company (home buyers) informed it about the
settlement with Parsvnath Landmark, the report relays.
According to BusinesssLine, the three flat buyers along with the
company filed their affidavits before the tribunal informing the
decision.
The tribunal has also directed the interim resolution professional
(IRP) appointed for Parsvnath Landmark to "not conduct any
proceedings," BusinesssLine notes.
According to the agreement executed between the parties on October
1, 2009, Parsvnath Landmark was to hand over the possession within
36 months from the date of commencement of construction, with a
grace period of six months, BusinesssLine adds.
Parsvnath Landmark Developers Private Limited develops and promotes
integrated townships, residential buildings, flats, houses, and
apartments. It develops commercial and residential properties. The
company was incorporated in 2003 and is based in Delhi, India.
Parsvnath Landmark Developers Private Limited operates as a
subsidiary of Parsvnath Developers Limited.
PAVAN AGRO: CARE Moves B on INR5.48cr Debt to Non-Cooperating
-------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Pavan
Agro Foods (PAF) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.48 CARE B; Stable, ISSUER NOT
Facilities COOPERATING
Detailed Rationale& Key Rating Drivers
CARE has been seeking information from PAF to monitor the rating
vide e-mail communications/ letters dated October 11, 2018, January
21, 2019, January 23, 2019 and numerous phone calls. However,
despite CARE's repeated requests, the firm has not provided the
requisite information for monitoring the rating. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of best available information which however, in CARE's opinion is
not sufficient to arrive at fair rating. The rating on Pavan Agro
Foods's bank facilities will now be denoted as CARE B; Stable;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on January 15, 2018, the following were
the rating strengths and weaknesses:
Key Rating Weakness
Seasonal nature of availability of Bengal gram seeds & Toor dal
seeds resulting in working capital intensive nature of the
Business: Bengal gram seeds and Toordal seeds in India is harvested
mainly at the end of three major agricultural seasons Early Kharif
(August to October), Kharif (June to September) and Rabi (October
to January). Adverse weather conditions directly affect the supply
and availability of seeds and raw material price fluctuations. Dal
milling is also a working capital intensive business as the millers
have to stock enough seeds by the end of the each season as the
price and quality of seeds is better during the harvesting season.
Moreover, the seeds are procured generally against immediate
payments while the millers have to extend
credit to the wholesalers and distributors resulting in high
working capital intensity.
Financial closure not achieved along with project implementation
risk: The financial closure of the firm has not been achieved and
the commercial operations of the firm are likely to start from
December 2018. The firm has received all the necessary statutory
clearances from the regulatory authorities from all the departments
like pollution control board, local municipality, fire
extinguishers etc. As on December 05, 2017, the total cost incurred
by the firm is INR0.45crore, which was funded through partners'
fund. The above cost has been incurred towards land development of
PAF. Furthermore, the construction of facility is at nascent stage
with majority of project cost remains to be incurred. Any delay in
achieving financial closure and project implementation might lead
to delay in start of commercial operations as on prescribed date.
Limited experience of promoters in managing pulses milling
business: The promoters have only two years of experience in
managing pulses milling business. However, Mr. Prabakar & Mr.
Naresh spouses of Mrs. G. Subhadaramma & Mrs. K. Sri Lakshmi
respectively will be assisting in managing PAF. Both have
experience in the similar line of business through their Group
entities viz. Pavan Dal Mill (PDM) & Sri Pavan Traders (SPT).
Through group entities, they have established good relations with
the dealers and also with the agents facilitating the business
sales within the state which further facilitates revenue visibility
for PAF.
Key Rating Strengths
Favorable demand for pulses and support from government to increase
production levels: There is increasing demand for pulses
domestically and internationally. The government of India (GoI)
promotes production of pulses in the country through National Food
Security Mission (NFSM) which covers 622 districts in 27 states.
Around 50% of total allocation of NFSM is made for pulses for
various interventions like demonstration of improved technology,
distribution of quality seeds of new varieties, integrated pest
management, water saving devices and capacity building of farmers.
The government expects pulse production to come in at 20 million
tonnes in 2017-18, 18% higher than the 17.06 million tonnes
estimated for 2016-17. Overall sowing of crops has also picked up
pace with ample rains. The data released recently shows that kharif
crops like rice, pulses, coarse grains, oilseeds, sugarcane and
cotton have been planted in 69.3 million hectares so far, 3.3%
higher than the 67.1 million hectares sown by this time last year.
The normal area sown under kharif crops is 106 million hectares and
sowing continues till mid to end-July. India receives about 80% of
its annual rainfall during the June to September south-west
monsoon, which irrigates more than half of its farm land. The
latest data on planting shows that so far the area under the main
kharif crop of rice stands at 18.3 million hectares, marginally
higher than last year's 18.2 million hectares. The seasonal area
under rice is 39.3 million hectares. However, farmers have cut down
the area under cotton in states like Gujarat, Punjab and Telangana
due to better prices of pulses, and damage to the cotton crop due
to pest attacks last year.
Pavan Agro Foods (PAF) was established on April 24, 2017 by Mrs. K.
Sri Lakshmi & Mrs. G. Subhadramma as a Partnership firm. The firm
has proposed to set up Dal Mill with capacity of 2000 tonne per
annum. The total cost of setting up facility (decorticating pulses)
is INR6.46 core which is being funded through bank term loan to the
extent of Rs 4.48 crore and remaining through partners' fund of
around INR1.98 crore. The firm has also applied for the working
capital facility of INR1 crore with the bank which is under
appraisal. The firm is expected to decorticate (de-hull) pulses
such as Bengal gram & Toor dal in the proposed facility which is
under construction. The firm proposes to install machineries that
will cater the end to end process right from stripping the skin,
cleaning, grading, splitting, grinding & packing of pulses. The end
product will be packed in bags upto 50 kgs and will be supplied to
local wholesale dealers. The commercial operations of the firm are
expected to start from December 2018.
As on November 30, 2017, the total cost incurred by the firm was
INR0.45 crore which is approximately 7% of the total project cost
funded by promoters' capital. Bengal gram seeds & Toor dal seeds
are the main raw material which would be procured from the farmers
in and around Guntakal, Andhra Pradesh.
RAMA KRISHNA: CARE Migrates D Rating to Not Cooperating Category
----------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Rama
Krishna Spintex Private Limited (RKS) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 77.02 CARE D; Issuer not cooperating
Facilities on the basis of best available
information
Short-term Bank 0.70 CARE D; Issuer not cooperating
Facilities on the basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from RKS to monitor the rating
vide e-mail communications/letter dated January 7, 2019,
January 8, 2019, January 9, 2019, January 16, 2019 and numerous
phone calls. However, despite CARE's repeated requests, the company
has not provided the requisite information for monitoring the
ratings. In line with the extant SEBI guidelines, CARE has reviewed
the ratings on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating. The ratings on Rama Krishna Spintex Private Limited's bank
facilities will now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings assigned to the bank facilities of Rama Krishna Spintex
Private Limited (RKS) takes into account ongoing delays
in the servicing of the debt obligation.
Detailed description of the key rating drivers
At the time of last rating on November 19, 2018, the following were
the rating strengths and weaknesses (Updated for the information
available from Registrar of Companies).
Key rating weaknesses
Ongoing delays in debt servicing: There are ongoing delays in the
servicing of the interest and principle repayments for the term
loans availed. Furthermore, the cash credit limit has remained
overdrawn for more than 30 days. The delay in debt servicing is on
account of tight liquidity position of the company.
Weak financial risk profile: The PBILDT margin of the company
declined to 4.47% in FY18 from 10.33%, in FY17. Further the company
incurred losses at net level in FY18. The capital structure of the
company remained leveraged as marked by
long-term debt equity and overall gearing ratios of 1.30x and
2.59x, respectively, as on March 31, 2018 which deteriorated from
1.19x and 2.44x, respectively, as on March 31, 2017. The interest
coverage ratio remained weak at 0.71x in FY18 (PY: 1.69x).
Rama Krishna Spintex Private Limited (RKS), based in Bathinda
(Punjab), was set up in Feb-2007 as a private limited company. It
commenced operations in Jan-2008. The company is currently being
managed by Mr. Makhan Lal Mangla, Mr. Mahavir Kumar, Mr. Siddharth
Mangla and Mr. Parvesh Mangla. RKS is engaged in the business of
manufacturing of cotton yarn such as stubbed cotton yarn, grey
cotton yarn and waxed cotton yarn. The plant is located in
Bathinda, Punjab, with total installed capacity of 28 MT of cotton
yarn per day, as on March 31, 2017. The company manufactures yarn
of different counts ranging from 6's to 30's depending upon the
customer requirement. The yarn supplied by the company is used as
raw material for manufacturing denim, terry towel, suiting cloth,
shirting and home furnishing. RKS procures raw material in the form
of raw cotton and cotton waste from suppliers situated in Punjab,
Maharashtra and Gujrat and sells final products to various
manufacturers of fabric and traders located throughout India
through its extensive network of 20 dealers.
RESURGENT POWER: CARE Migrates 'D' Ratings to Not Cooperating
-------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of
Resurgent Power Projects Limited (RPPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 24.00 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Short term Bank 7.00 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Long-term/Short- 5.00 CARE D/CARE D; Issuer not
Term Bank cooperating; Based on best
Facilities available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from RPPL formerly Enmas GB Power
Systems Projects Limited (EGPL) to monitor the rating vide e-mail
communications dated August 16, 2018; August 28, 2018 and September
7, 2018. However, despite CARE's repeated requests, the company has
not provided the requisite information for monitoring the ratings.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating. Further, RPPL has not paid the surveillance fees for the
rating exercise as agreed to in its Rating Agreement. The rating on
RPPL's bank facilities will now be denoted as CARE D/CARE D; ISSUER
NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The ratings take into account the instances of delays in servicing
debt obligations.
Detailed description of the key rating drivers
At the time of last rating on September 6, 2017, the following were
the rating weaknesses
Key Rating Weaknesses
Delays in debt servicing: On account of tight liquidity position
due to delay in realisation of receivables, there has been
instances of delays in debt servicing. For the year ended March
2017, as per provisional results, EGPL has registered net profit of
INR0.2 crore on a total operating income of INR192 crore as against
net profit of INR0.2 crore on a total operating income of INR221
crore in the year ended March 2016.
RPPL was incorporated in 1995 in the name of Enmas Engenius
Projects Limited (EEPL). During its initial stages the company was
involved mainly in erection and commissioning of Chemical recovery
boilers. Subsequently in 2008 the name of the company was changed
to EGPL and the company started catering to power industry. During
FY12, the promoters of the Chennai-based Bhandari group had
indirectly acquired 49.7% stake from Resurgent Investments Private
Limited.
REWA AGROTECH: CARE Reaffirms 'D' Rating on INR12.24cr Loans
------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Rewa Agrotech (RA), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 11.74 CARE D Reaffirmed
Short-term Bank
Facilities 0.50 CARE D Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of RA continue to
remain constrained on account of delays in debt servicing owing to
stressed liquidity position.
Detailed description of the key rating drivers
Key Rating Weakness
Ongoing delays in debt servicing owing to stress liquidity
position: The firm had taken term loan for funding of its project
for construction of warehouse. As per original repayment terms,
the repayment of term loan has started from April 2014 in monthly
installment. However, there are instances of delay in debt
servicing. The delay in debt servicing is due to non-receipt of
rental income from the Madhya Pradesh Warehousing and Logistics
Corporation (MPWLC) due to dispute regarding non construction of
warehouse within time permitted in terms of contract.
Rewa Agrotech (RA) was formed in February 2011 as a partnership
concern by Mr. Arun Kumar Bansal, Ms. Sushma Shukla and Ms. Meena
Bansal with an objective to set up a warehouse. The firm has
constructed warehouse under the Private Entrepreneur Guarantee
Scheme (PEG) of Food Corporation of India (FCI). In this scheme, RA
has constructed two warehouse at Rewa and Niwas (Madhya Pradesh)
with capacity of 25000 MTPA each and after construction, RA is
receiving monthly rental of INR13 lakhs for each warehouse.
S. A. PLYWOOD: CRISIL Lowers Ratings on INR19cr Loans to D
----------------------------------------------------------
CRISIL has downgraded its rating on the bank facilities of S. A.
Plywood Industry Private Limited (SAPIPL) to 'CRISIL D' from
'CRISIL B/A4 Stable; Issuer non-cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 13.5 CRISIL D (ISSUER NOT
COOPERATING; Downgraded
from 'CRISIL B/Stable')
Long Term Loan 2.16 CRISIL D (ISSUER NOT
COOPERATING; Downgraded
from 'CRISIL B/Stable')
Proposed Cash 1.50 CRISIL D (ISSUER NOT
Credit Limit COOPERATING; Downgraded
from 'CRISIL B/Stable')
Proposed Fund- 1.59 CRISIL D (ISSUER NOT
Based Bank Limits COOPERATING; Downgraded
from 'CRISIL B/Stable')
Proposed Non Fund 0.25 CRISIL D (ISSUER NOT
based limits COOPERATING; Downgraded
from 'CRISIL A4')
CRISIL has been consistently following up with SAPIPL through
letters and emails dated December 16, 2018 to January 28, 2019,
among others, apart from telephonic communication, for obtaining
information. However, the issuer has remained non-cooperative.
Investors, lenders, and all other market participants should
exercise due caution while using ratings assigned/reviewed with the
suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as they are arrived at without any management
interaction and are based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL has
not received any information on either the financial performance or
strategic intent of SAPIPL, which restricts CRISIL's ability to
take a forward looking view on the entity's credit quality. CRISIL
believes information available on the company is consistent with
'Scenario 1' outlined in the 'Framework for Assessing Consistency
of Information with 'CRISIL B' rating category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation coupled with adverse banker feedback, CRISIL
has downgraded its rating on the long-term bank facilities of RER
to 'CRISIL D/CRISIL D; Issuer not cooperating' from 'CRISIL
B/Stable/CRISIL A4'.
The rating downgrade reflects delay in servicing debt obligation
since December, 2018 along with interest. This has been as there
was a fire outbreak in factory premises on 28.1.2018 that led to
complete operational instability during the period and loss of
inventory and property to the tune of INR1.5-2 crore (as reported
by management)
The rating reflects a modest scale, and working capital intensive
nature, of operations. These rating weaknesses are partially offset
by the extensive experience of the promoters in the plywood
industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Working capital-intensive operations: Sizeable gross current
assets (333 days as on March 31, 2017) continue to keep working
capital under pressure.
* Modest scale of operations amid intense competition: Intense
competition in the plywood industry constrains scalability, and led
to modest revenue of around INR25 crore in fiscal 2017.
Strengths
* Extensive industry experience of the promoters: The promoters
have an experience of more than 35 years in the plywood industry.
This has helped them to gain good insight into the industry and
establish a market position in West Bengal, Bihar, and Odisha.
There is also a marginal presence in Andhra Pradesh and Rajasthan.
Products are marketed under the brands Globe, Glider, and Grand,
which are widely known, especially in eastern India. The company
has a network of around 200 dealers across various states.
Liquidity
Liquidity profile of the company is weak as indicated by almost nil
cushion in bank lines and delay in servicing debt obligation.
SAPIPL, formed in 1979 as a partnership concern by Mr Arun Saha and
Mr Salil Shah, was reconstituted as a private limited company in
2009. The company manufactures plywood, block boards, and flush
doors at its facility in Mathabhanga in Coochbehar, West Bengal.
SAMBHAV GEMS: CARE Lowers Rating on INR12.30cr Loan to D
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Sambhav Gems Limited (SGL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short Term Bank
Facilities 12.30 CARE D Revised from CARE A4
Detailed Rationale & Key rating Drivers
The revision in the rating of SGL takes into account delay in the
debt obligation.
Detailed description of the key rating drivers
Key Rating Weakness
Delay in debt servicing: As per auditor's report, the company has
defaulted in repayment of foreign bill discounting on due date.
Jaipur (Rajasthan) based Sambhav Gems Limited (SGL) was
incorporated in 2001 and is engaged in the business of
manufacturing and export of coloured polished stones and diamond
studded gold and silver jewellery. SGL is also engaged in the
trading of loose coloured polished stones. The company is involved
in the entire cycle of the jewellery manufacturing process right
from procurement of raw gem stones to setting up of the same on the
jewellery piece and selling it through its agents in the overseas
markets. SGL has the capacity to manufacture about 90,000 jewellery
pieces per annum. The company's sales are concentrated in the
overseas markets of USA, Hongkong, Germany with 50 percent of
export sales coming from the USA market and remaining from other
markets. The company has also incorporated two subsidiaries by the
name of Sambhav Jewels Inc. (Hong Kong) and Sambhav Jewels Inc
(USA). SGL has been promoted by Mr. Rajiv Jain who has more than
two decades of experience in the coloured gem stones jewellery
business.
SARNA MARBLES: CARE Lowers Rating on INR25cr LT Loan to D
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Sarna Marbles Private Limited (SMPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 25.00 CARE D; Issuer Not Cooperating;
Facilities Revised from CARE BB-; Stable
on the basis of best available
information
Detailed Rating Rationale & Key Rating Drivers
CARE has been seeking information from SMPL to monitor the
rating(s) vide e-mail communications/letters dated November 13,
2018, November 20, 2018 and January 16, 2019 and numerous phone
calls. However, despite CARE's repeated requests, the company has
not provided the requisite information for monitoring the ratings.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating. Further, SMPL has not paid the surveillance fees for the
rating exercise as agreed to in its Rating Agreement. SMPL's bank
facilities will now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The revision in the rating of SMPL (SMPL) takes into account
continuous overdrawing in its cash credit account for more than 30
days.
Detailed description of the key rating drivers
Key Rating Weakness
Ongoing delays in debt servicing: There is continuous overdrawing
in its cash credit account for more than 30 days.
Jaipur (Rajasthan) based, SMPL was established in 2006 as a private
limited company by Khaitan family. The company is
engaged in the business of manufacturing of High Density
Polyethylene (HDPE) and Rigid PVC pipes and sells its product in
the brand name of "Khetan".
SATKAR INDUSTRIES: Ind-Ra Moves BB Issuer Rating to Non-Cooperating
-------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated M/s Satkar
Industries Private Limited's Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR95 mil. Fund-based limits migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) rating; and
-- INR1.3 mil. Long-term loan due on August 2018 migrated to non-
cooperating category with IND BB (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 19, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2008, M/s Satkar Industries is a private limited
company engaged in the ginning and pressing of cotton at its plant
in Anjad and Singhana (MP), with a combined annual installed
capacity of 50,000 cotton bales. SIPL is also engaged in trading of
soybean, occasionally.
SATYAM AGRO: CARE Lowers Rating on INR9.01cr LT Loan to B+
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Satyam Agro Industries (SAI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 9.01 CARE B+; Stable Revised from
Facilities CARE BB-; Stable
Detailed Rationale& Key Rating Drivers
The revision in the rating of Satyam Agro Industries (SAI) takes
into account registering of net loss in FY18 (FY refers to the
period from April 1, to March 31) and deterioration of solvency
position.
The rating, further, continues to remain constrained on account of
its modest scale of operations, its working capital intensive
nature of operations and operating margins susceptible to cotton
price fluctuations. The rating, further, continues to remain
constrained on account of its presence in the lowest segment of the
textile value chain and in a highly fragmented cotton ginning
industry, seasonality associated with cotton industry and
constitution as a partnership concern.
The rating, however, continues to remain favorable on account of
experienced management with strong group support and strategically
located in the cotton growing industry.
Improvement in the scale of operations while improving its
profitability and better management of working capital would be the
key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Modest scale of operations of the group with net loss in FY18:
The scale of operations of the group has shown increasing trend in
past three financial years ended FY18. During FY18, Total Operating
Income (TOI) has increased marginally and stood modest at INR108.60
crore.
During FY18, PBILDT margin of the group has dipped by 88 bps and
remained thin at 2.67% owing to less cultivation of cotton seeds
resulting in higher cost of cotton bales where the prices are
market driven and also the group was engaged in higher trading
where margins were comparatively low. Further, with decline in
PBILDT margin and high interest and finance expenses, the group
registered net loss of INR0.89 crore in FY18 against net profit of
INR0.03 crore. Furthermore, the group registered cash loss in
FY18.
Leveraged capital structure along with deterioration of debt
coverage indicators: The capital structure of the group remained
highly leveraged with an overall gearing of 4.38 times as on March
31, 2018, improved significantly from 7.84 times as on March 31,
2017 owing to lower utilization of working capital bank borrowings
and repayment of its unsecured loans along with infusion of capital
by the partner in the group amounting to INR1.93 crore. Out of
total debt of INR24.49 crore, INR11.09 crore relates to working
capital bank borrowings, INR9.90 is of unsecured loans and balance
relates to term loan. Further, the debt service coverage indicators
of the group stood weak with negative total debt to GCA as on March
31, 2018 due to cash losses during the year and interest coverage
ratio stood below unity at 0.98 times as on March 31 2018.
Working Capital intensive nature of operations: The group is
engaged in cotton ginning and pressing, where working capital limit
are generally utilized during the season i.e. from October to March
and reduces during off-season. The business of the firm is working
capital intensive in nature with high collection period and
inventory days. Further, operating cycle remained moderate at 83
days in FY18 as against 86 days in FY17 due to increase in creditor
period. The current ratio stood moderate at 1.80 times, however
quick ratio stood below unity at 0.64 times as on March 31, 2018.
Further, SAI has utilizes 90-95% of its working capital bank
borrowings in last twelve month ended December 2018.
Operating margins susceptible to cotton price fluctuation and
seasonality associated with the cotton industry: Operations of
cotton business are seasonal in nature, as sowing season is done
during March to July and harvesting cycle (peak season) is spread
from November to February every year. Prices of raw material i.e.
raw cotton are highly volatile in nature and depend upon factors
like monsoon condition, area under production, yield for the year,
international demand supply scenario, export policy decided by
government and inventory carried forward of the last year.
Furthermore, cotton being a seasonal crop, the inventory levels of
the entity generally remains high at the end of the financial
year.
Presence in the lowest segment of the textile value chain and in a
highly fragmented cotton ginning industry and constitution as a
partnership concern: High proportion of small scale units operating
in cotton ginning and pressing industry has resulted in fragmented
nature of industry leading to intense competition amongst the
players. As SI operates in this highly fragmented industry wherein
large numbers of un-organized players are also present, it has very
low bargaining power against both its customers as well as its
suppliers. This coupled with limited value addition in cotton
ginning process results in the firm operating at very thin
profitability (PAT) margins. Its constitution as a partnership
concern with moderate net worth base restricts its overall
financial flexibility in terms of limited access to external fund
for any future expansion plans. Furthermore, there is an inherent
risk of possibility of withdrawal of capital and dissolution of the
concern in case of death/insolvency of partner.
Key Rating Strengths
Experienced management with group support: Mr. Deepak Agrawal,
partner, post graduate by qualification, has four decades of
experience in the industry and looks after the overall affairs of
the group. Mr. Sunil Agrawal has three decade of experience and
looks after sales & marketing function of the firm. Further, both
are supported by their sons, Mr. Harshvardhan Agrawal and Mr
Yashwardhan Agrawal along with a team of qualified managerial
personnel having long standing experience in the industry.
Strategically located in the cotton growing region: Gujarat,
Maharashtra, Andhra Pradesh, Haryana, Madhya Pradesh and Tamil Nadu
are the major cotton producers in India. The plant of SAI is
located in one of the cotton producing belt of Madhya Pradesh in
India. The presence of SI in cotton producing region results in
benefit derived from lower logistics expenditure (both on
transportation and storage), easy availability and procurement of
raw materials at effective price.
SAI and Shivam Cot Fibers Private Limited (SCFPL), both are engaged
in the business of cotton ginning and pressing activity along with
extraction of cotton oil and under the same management of Agrawal
family. Thus, we have undertaken a combined approach for assigning
the rating of SAI and SCFPL as both have operational and financial
linkages and are under the same promoters and management and in
same line of business.
Madhya Pradesh based SAI was formed in 2014 as a partnership
concern by Mr. Jay Vardhsan Agrawal, Mr Harshvardhan Agrawal, Mr
Yashwardhan Agrawal, Mr Sunil Agrawal and Mr Deepak Agrawal and
shares profit and loss in the ratio of 33:30:30:4:3 respectively.
The firm was formed to primarily undertake the business of cotton
ginning and pressing activity. SAI operates from its sole
manufacturing unit located at Ozar having production capacity of
300 bales per day as on March 31, 2017. The firm caters its product
in domestic and export market majorly South India and Madhya
Pradesh and exports its products through third party. It procures
raw cotton, key raw material, from the local market directly from
the farmers. The promoters have also promoted SCFPL and Sundaram
Industries (SI) which are formed in 2012 and 2007 respectively and
are engaged in same line of business.
SATYAMEV COT: Ind-Ra Migrates BB Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Satyamev Cot
Fibers Private Limited's Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using the rating. The rating will now
appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR60 mil. Fund-based working capital limits migrated to Non-
Cooperating Category with IND BB (ISSUER NOT COOPERATING)
rating; and
-- INR0.22 mil. Long-term loan due on May 2018 migrated to Non-
Cooperating Category with IND BB (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 19, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Satyamev Cot Fibers was established in 2012 in Anjad (Madhya
Pradesh). The company is engaged in the cotton ginning and pressing
business. The company has an annual production capacity of 25,000
cotton bales. It has a presence all over India. Its business
depends on raw cotton, a seasonal crop.
Satyamev Cot Fibers is managed by Vandan Patidar and Savitribai
Gole.
SEAWOOD MULTIPLE: CRISIL Lowers Rating on INR2cr Loan to D
----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
Seawood Multiple Services LLP (SMS) to 'CRISIL D' form 'CRISIL
B/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Term Loan 2 CRISIL D (Downgraded from
'CRISIL B/Stable')
The downgrade reflects delay in timely servicing of interest due on
the term loan, during the principal moratorium period, on back of
significant delay in project implementation.
The rating reflects exposure to significant implementation and
off-take risks related to on-going project, intense competition in
the industry and geographical concentration. These weaknesses are
partially offset by promoters' extensive understanding of the Navi
Mumbai micro market.
Key Rating Drivers & Detailed Description
Weakness:
* Significant implementation and off take risks related to ongoing
project: The firm is setting up restaurant and a microbrewery,
which is still at under-implementation stage. Timely completion of
the project, along with requisite approvals would be critical from
overall credit risk perspective.
* Intense competition in the industry: The restaurant industry in
India is highly fragmented with unorganized players having majority
market share. Thus, SMS faces intense competition and needs to
continuously innovate in terms of menu and decor to match fast
changing trends in customer preference.
* Geographical concentration of revenues: Geographical
concentration of a restaurant in a single location constrains the
firm's access to a wider customer base, and renders the firm
susceptible to the dynamics of operating in a single micro-market.
Strengths:
* Extensive understanding of the promoters of the Navi Mumbai micro
market and their fund support: The promoters have over 20 years of
experience in real estate development and have completed several
projects in Navi Mumbai leading to extensive understanding of the
local preferences of the micro- market.
Liquidity
The company's liquidity is stretched on account of significant
delay in project implementation. Accordingly, the firm's operations
have not yet commenced resulting in no cash flows available to
timely service monthly interest obligation of the term loan.
SMS was incorporated in July, 2017. It is setting up a restaurant
and a microbrewery at Seawoods Grand Central Mall, Navi Mumbai. The
firm is promoted by Mr. Naresh Patel and Mr. Sunil Baviskar. It was
expected to commence operations from end-December 2017.
SHEELU EXPORTS: CRISIL Reaffirms B- Rating on INR0.75cr Loan
------------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B-/Stable/CRISIL A4' ratings on
the bank facilities of Sheelu Exports (SE).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Export Packing 9.5 CRISIL A4 (Reaffirmed)
Credit
Proposed Long Term 0.75 CRISIL B-/Stable (Reaffirmed)
Bank Loan Facility
The ratings continue to reflect a below average financial risk
profile and modest scale of operation in the intensely competitive
human-hair export industry. These weaknesses are partially offset
by the extensive experience of the partners.
Key Rating Drivers & Detailed Description
Strengths:
* Below-average financial risk profile: Networth was small at
INR3.17 crore as on March 31, 2018, while gearing was high at 3.1
times. Debt protection metrics were weak with interest coverage and
net cash accrual to total debt ratios at 1.1 times and negative
0.06 time, respectively, for fiscal 2018.
* Modest scale of operation: Scale remains small with revenue of
INR9.83 crore for fiscal 2018. Topline is expected to improve in
fiscal 2019, but remain small due to the intense competition in the
export segment.
Strengths:
* Extensive experience of the partners: Benefits from the partners'
experience of more than a decade in the processing and conditioning
of human hair and established relations with customers should
continue to support the business.
Liquidity
Bank limit utilisation was high at 90% for the past twelve months
ended October 31, 2018. In the absence of maturing debt, expected
cash accrual of INR3-15 lakh supports liquidity.
Outlook: Stable
CRISIL believes that SE's credit risk profile will be under
pressure over the medium term. The outlook may be revised to
'Stable' if increase in revenue and stable profitability strengthen
business and financial risk profiles. The rating may be downgraded
in case of a steep decline in revenue or profitability, or if any
large, debt-funded capital expenditure or stretch in working
capital cycle weakens capital structure.
SE was established in 2001 as a proprietorship concern and was
reconstituted as a partnership firm in 2007. The firm exports
processed human hair. It currently has two partners, Mr K Srinivasa
Rao and Ms K Sita Devi.
SHIVA SHREE: CRISIL Lowers Ratings on INR16cr Loans to D
--------------------------------------------------------
CRISIL has downgraded its rating on the bank facilities of Shiva
Shree Builders (SSB) to 'CRISIL D' from 'CRISIL B-/Stable; Issuer
non-cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL D (Downgraded from
'CRISIL B-/Stable ISSUER NOT
COOPERATING')
Project Loan 1.9 CRISIL D (Downgraded from
'CRISIL B-/Stable ISSUER NOT
COOPERATING')
Proposed Long Term 2.93 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B-/Stable ISSUER NOT
COOPERATING')
Term Loan 3.17 CRISIL D (Downgraded from
'CRISIL B-/Stable ISSUER NOT
COOPERATING')
Due to inadequate information and in line with Securities and
Exchange Board of India guidelines, CRISIL had migrated its ratings
on the bank facilities of SSB to 'CRISIL B-/Stable; Issuer not
cooperating' vide rating rationale dated April 23, 2018. However,
management has started sharing information necessary for a
comprehensive review of the ratings. Consequently, CRISIL has
downgraded its rating to 'CRISIL D' from 'CRISIL B-/Stable; Issuer
non-cooperating'.
The ratings reflect delays in servicing its monthly interest
obligations on term loans, over the past three months. The firm
also has a modest scale of operations and exposure to risks
inherent in the real estate sector. However, SSB benefits from
promoter's extensive experience in the real estate sector.
Key Rating Drivers & Detailed Description
* Delay in servicing interest: The firm did not service its
interest payments by due date in the past three months, owing to
stretched liquidity.
Weakness
* Modest scale of operations and exposure to intense competition:
Scale remains subdued, reflected in revenue of INR14.4 crore in
fiscal 2018. This is compounded by intense competition the
residential real estate sector.
* Exposure to risks inherent in the real estate sector: The real
estate sector in India is cyclical and marked by volatile prices
and a highly fragmented market structure. The risk is compounded by
aggressive timelines for completion with shortage of manpower
(project engineers and skilled labour) in this sector.
Strengths
* Extensive experience of promoter: Promoter has sound
understanding of the real estate sector and has been associated
with other projects.
Liquidity
The firm was unable to service interest obligations on a timely
basis, towards its term loans, over the past 3 months, because of
cash flow mismatches.
SSB was set up in 1990, promoted by Mr V Shivarajan and his family
members. The firm is currently developing residential real estate
projects in Coimbatore, Tamil Nadu.
SHREE MANGAL: CARE Lowers Rating on INR15cr LT Loan to 'B'
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Shree Mangal Trading Company (SMTC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 15.00 CARE B; Issuer not Cooperating;
Facilities Revised from CARE B+; Issuer not
Cooperating on the basis of
best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated November 2, 2017, placed the
rating of SMTC under the 'issuer non-cooperating' category as SMTC
had failed to provide information for monitoring of the rating.
SMTC continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and email
dated January 15, 2019 and January 9, 2019. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been revised by taking into account non-availability
of requisite information and no due-diligence conducted due to
non-cooperation by SMTC with CARE'S efforts to undertake a review
of the rating outstanding.
The rating assigned to the company remained constrained by small
scale of operations coupled with low net worth base, leveraged
capital structure and elongated operating cycle. The rating
remained further constrained by fragmented and unorganized nature
of industry coupled with low entry barriers and proprietorship
nature of firm. The rating, however, continues to draw comfort from
experienced proprietor, moderate profitability margins and debt
service coverage indicators.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operations coupled with low net worth base: The
scale of operations remained small marked by a total operating
income and gross cash accruals stood at INR17.20 crore and INR1.08
crore respectively during FY16 (FY refers to the period
April 1 to March 31). Furthermore, the firm's net worth base was
relatively small at INR3.63 crore as on March 31, 2016. With the
low base of own funds, its operations are highly susceptible to any
business shock, thereby limiting its ability to absorb losses or
financial exigencies.
Leveraged capital structure: The capital structure of the firm
stood leveraged owing to high reliance on external borrowings to
meet the working capital requirements.
Elongated operating cycle: Being a trading firm, SMTC is required
to maintain adequate inventory of material and cater to immediate
demand of the customers, resulting into average inventory holding
period of around 67 days during FY16. The firm realizes payments
from its customers within 1-2 months and makes payments within
10-20 days to its suppliers.
Fragmented and unorganized nature of industry coupled with low
entry barriers: The company is operating in a competitive industry
wherein there is presence of a large number of players in the
unorganized and organized sectors. The company is comparative a
small players catering to the same market which has limited the
bargaining power of the company and has exerted pressure on its
margins.
Key Rating Strengths
Experienced proprietor in trading of building material coupled with
moderate profitability margin: The firm is promoted by Mr Ram Niwas
Yadav who has an overall experience of more than two and a half
decades in trading industry in his individual capacity. Further,
considering the trading nature of the business where the value
addition is low, the profitability margins as marked by PBILDT and
PAT margin stood moderate at 8.09% and 5.87% respectively in FY16.
Haryana based, SMTC is a proprietorship firm established in 2014 by
Mr Ram NiwasYadav. The firm is engaged in trading of scraps
(plastic scrap, metal scrap and paper scrap) and grit (crushed
stone). The firm has an associate concern, namely, K N D Real
Estate & Builders (proprietorship concern, established in 2004)
engaged in real estate activities.
SOVA ELECTROCASTING: CRISIL Assigns 'B' Rating to INR25cr Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings on the
bank facilities Sova Electrocasting Limited (SEPL)
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 25 CRISIL B/Stable (Assigned)
The rating reflects working capital intensive nature of operations
coupled with susceptibility to volatility in raw material prices
and intense competition. These weaknesses are partially offset by
extensive experience of the promoters.
Key Rating Drivers & Detailed Description
Weakness:
* Working capital intensive nature of operations: The company's
line of operations remained working capital intensive in nature as
reflected in the gross current asset days of 275 as on March 2018
the same was primarily on account of high inventory holding
period.
* Susceptibility of profitability to volatility in raw material
prices and exposure to intense competition: The steel industry is
highly fragmented, leading to low realisations and profitability.
Furthermore, since demand for steel is closely linked to economic
activity, players are susceptible to cyclicality in demand and
fluctuations in realisations.
Strengths:
* Extensive experience of the promoters: The promoters experience
in the said line of business for more than three decades is
expected to support the overall scale of operations over the medium
term.
Liquidity
The company's liquidity risk profile continues to remain stretched
on account of instances of overdrawals in its cash credit limit of
INR25 crore but the same is regularized within the timelines. The
net cash accruals are expected to remain around INR1.50 crore over
the medium term.
Outlook: Stable
CRISIL believes SEPL will benefit over the medium term from its
strong market position and integrated operations. The outlook may
be revised to 'Positive' in case of sustained improvement in
revenue and profitability or increased integration in operations.
The outlook may be revised to 'Negative' if low accrual, large
debt-funded capital expenditure, or stretched working capital cycle
weakens financial risk profile, particularly liquidity.
SEPL incorporated in fiscal 1997 was taken over by the present
management in July 2006 is primarily engaged in manufacturing of
TMT Bars.
T. R. CHEMICALS: CARE Assigns 'D' Rating to INR16.40cr LT Loan
--------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of T. R.
Chemicals Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 16.40 CARE D Assigned
Facilities
Short-term Bank Facilities 1.00
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of T. R. Chemicals
Limited is constrained by delays in the past. However, the account
was regularized from January 1, 2019.
The ability of the company to service its debt obligation on time
on a regular basis is the key rating sensitivity.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delays in the past: There were delays in the account in the past.
However, the same got regularized from January 01, 2019.
T. R. Chemicals Limited was incorporated in May 1993 as a Private
Limited Company. Subsequently, it was reconstituted as a closely
held Public Limited Company. Since its inception, the company is
engaged in manufacturing of sponge iron. The manufacturing unit of
the company is located at Rajgangpur, Sundargarh, Odisha. Company's
plant has an installed capacity of 45000 tons per annum (TPA). Mr.
Sanjeev Kumar Kapoor (Director), Mr. Gurdas Kapoor (Director), Mr.
Sunil Kumar Agarwal (Director) and Mr. Swapan Kumar Kapat
(Directors) who have 21 years, 21 years , 16 years and 11 years of
experiences, respectively, in the similar line of business, look
after the day to day operation of the company. They are further
supported by a team of experienced professionals.
T. R. POLY PET: CARE Lowers Rating on INR4.86cr LT Loan to 'D'
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
T. R. Poly Pet Industries (TRPP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 4.86 CARE D; Issuer not cooperating;
Facilities Revised from CARE BB-; Stable
on the basis of best available
information
Short-term Bank 0.40 CARE D; Issuer not cooperating;
Facilities Revised from CARE A4 on the
basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from TRPP to monitor the ratings
vide e-mail communications/letters dated January 22, 2019,
January 14, 2019, January 8, 2019, October 25, 2018, October 8,
2018, September 19, 2018 and numerous phone calls. However, despite
CARE's repeated requests, the firm has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. The rating on TRPP's bank
facilities will now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The ratings have been revised on account of ongoing delays in
meeting the debt obligations.
Detailed description of the key rating drivers
Delays in servicing of debt obligation: There are ongoing delays in
debt servicing due to stretched liquidity position.
Lucknow (Uttar Pradesh) based TRPP was established in 2009 by Mr
Chandra Shekhar Verma as a proprietorship concern. The firm is
engaged in manufacturing of pet preform and jar with an installed
capacity of 8 tonnes Pet preform per day at its manufacturing
facility located in Barabanki (Uttar Pradesh).
URBAN TRANSIT: CARE Lowers Rating on INR152cr LT Loan to D
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Urban Transit Private Limited (UTPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 152.00 CARE D Revised from
Facilities CARE B (SO); Stable
Short-term Bank 10.00 CARE D Revised from
Facilities CARE A4(SO)
Key Rating Drivers
The revision in the ratings assigned to the bank facilities of UTPL
is on account of ongoing delays/defaults in debt servicing on the
loans rated by CARE. Further SEB (guarantor) has also been served
notice of demand by lenders of UTPL and the same is pending to be
settled.
Urban Transit Pvt. Ltd. (UTPL) is a wholly owned subsidiary of
Scomi Engineering Bhd, Malaysia (SEB). UTPL is executing a
subcontract of Mumbai Monorail Project which entails supply of
Telecommunications, Signalling and Communication Equipment and
Installation, Testing and Commissioning (ITC) of these systems and
the rolling stock including Operation and Maintenance of Monorail
System in Mumbai Metropolitan Region, Mumbai. The subcontract has
been awarded to UTPL by the unincorporated consortium of Larsen &
Toubro Ltd. (L&T) and SEB, hereafter called LTSE, which is the
contractor for 19.7 km Mumbai Monorail appointed by Mumbai
Metropolitan Region Development Authority (MMRDA). SEB's portion of
the contract relates to provision of train cars and its related
electrical systems and L&T's part pertains to civil and structural
construction works. The original value of the contract for UTPL was
INR292 crore.
SEB, a subsidiary of the Scomi Group Bhd (SGB, holding 100% as on
March 31, 2018), is a leading company in logistics engineering in
Malaysia. SEB provides solutions for transportation industry in the
Middle-East and Asia-Pacific markets, Brazil which include monorail
systems, buses and special vehicles like petrol tankers, vacuum
tankers, commercial coaches etc. SEB has given an unconditional and
irrevocable corporate guarantee for the loans of UTPL.
WHITEFIELD SPINTEX: CARE Migrates D Ratings to Not Cooperating
--------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of
WhiteField Spintex (India) Private Limited (WSPL) to Issuer Not
Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 26.68 CARE D; Issuer not cooperating;
Facilities Based on Best Available
Information Revised from
CARE B+; Stable
Short Term Bank 1.35 CARE D; Issuer not cooperating;
Facilities Based on Best Available
Information Revised from
CARE A4
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from WSPL to monitor the
rating(s) vide email communications/letters dated September 12,
2018, October 25, 2018, December 28, 2018, January 16, 2019 and
numerous phone calls. However, despite CARE's repeated requests,
the company has not provided the requisite information for
monitoring the ratings. In line with the extant SEBI guidelines,
CARE has reviewed the ratings on the basis of best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. The ratings of SJP Construction Private
Limited's bank facilities will now be denoted as CARE D; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while
using the above ratings.
The ratings have been revised on account of on-going delays in debt
repayments in term loan account towards interest and principal
repayment and overdrawals in cash credit account for more than 30
days owing to weak liquidity position.
Detailed description of the key rating drivers
Key Rating Weaknesses
Ongoing delays in debt servicing: WSPL has been irregular in
servicing debt obligations due to weak liquidity position of the
company. There have been overdues in term loan account towards
interest and principal repayments and overdrawals in cash credit
account for more than 30 days.
Rajkot-based (Gujarat), WSPL was incorporated in September 2013 as
a private limited company primarily by Mr. Minesh Jagani, Mr.
Alvish Jagani, Mr. Deep Kalaria. WSPL is engaged in the
manufacturing of cotton yarn (having 20 to 30 counts) from cotton
bales, with an installed capacity of 7 tonnes of double yarn per
day from 12,960 spindles and 3.2 tonnes of twisted yarn per day
from 1,728 drums. The cotton bales and single cotton yarn will be
purchased locally, while the cotton yarn manufactured by WSPL will
be sold in various states of India as well as exported primarily to
China, Vietnam and Bangladesh. The associate concerns of WSPL; i.e.
ORB Ceramic Private Limited is engaged in ceramic industry, while
SRV Global Freight Private Limited is engaged in logistic
industry.
=====================
N E W Z E A L A N D
=====================
PRECISION FOUNDRY: Owes Creditors NZ$10.2MM, Receivers Report
-------------------------------------------------------------
Aimee Shaw at NZ Herald reports that failed Auckland manufacturer
Precision Foundry owes creditors a combined NZ$10.2 million.
The Herald, citing receiver's first report, says the company, which
up until December last year produced specialist metal components
for a range of industries, owes secured creditors NZ$3.39 million
and unsecured creditors NZ$5.5 million.
It also owes NZ$1.3 million to its former 80 staff in preferential
employee claims, the Herald relays.
Precision Foundry was placed into receivership on December 18.
Prior to that, the company was in discussions to sell its shares,
which were unsuccessful.
Precision Foundry, formerly Masport Foundries, was taken over in
October 2014 by private equity firm Challenge Partners.
According to the Herald, the receiver's report said the Mt
Wellington company had performed poorly since it was taken over due
to high New Zealand and Australian dollar exchange rates, a number
of "small value" customers not renewing their orders and ongoing
maintenance issues within the foundry it was not able to fix, due
to cashflow issues.
As of December 18, the company had a balance sheet of NZ$7.9
million, the Herald discloses.
The Herald notes that KordaMentha receivers Grant Graham and Neale
Jackson sought to sell the business as a going concern, however,
acknowledged this was unlikely due to the landlord's inability to
extend the lease of the foundry.
Mr. Jackson told the Herald he was not able to sell the business as
a going concern. Consequently, the businesses assets have been sold
by auction.
He said it was too early to say what creditors would receive, the
Herald relays.
"We do not expect the receivership will generate enough funds to
repay creditors in full," the Herald quotes Mr. Jackson as saying.
In December, former staff of Precision Foundry cried foul over the
events leading up to the company's receivership.
Some contacted the Herald to express dismay at the outcome and
questioned events leading up to the company's failure, with one
person alleging production had already moved to the Philippines.
Management said workers were paid three week's holiday pay before
the receivers were appointed, the Herald relates.
Precision Foundry had operated from the Panmure site since 1941.
=====================
P H I L I P P I N E S
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BAGONG BANGKO: Creditors Claims Deadline Set for April 17
---------------------------------------------------------
All creditors of the closed Bagong Bangko Rural ng Malabang (Lanao
del Sur), Inc. have until April 17, 2019 to file their claims
against the assets of the closed bank either personally or by mail.
Creditors refer to any individual or entity with a valid claim
against the assets of the closed Bagong Bangko Rural ng Malabang
and include depositors whose deposits exceed the maximum deposit
insurance coverage (MDIC) of PHP500,000.
The Philippine Deposit Insurance Corporation (PDIC) said that
creditors and depositors with uninsured deposits may file their
claims personally at the PDIC Public Assistance Center located at
the 3rd Floor, SSS Bldg., 6782 Ayala Avenue corner V.A. Rufino St.,
Makati City, Monday to Friday, 8:00 AM to 5:00 PM. Claims may also
be filed through mail addressed to the PDIC Public Assistance
Department, 6th Floor, SSS Bldg., 6782 Ayala Avenue corner V.A.
Rufino St., Makati City. Claims filed by mail must have a postmark
dated not later than April 17, 2019. The prescribed Claim Form
against the assets of the closed bank may be downloaded from the
PDIC website, www.pdic.gov.ph. PDIC reminds creditors to transact
only with authorized PDIC personnel.
Claims filed after April 17, 2019 shall be disallowed. PDIC, as
Receiver, shall notify creditors of denial of claims through mail.
Claims denied or disallowed by the PDIC may be filed with the
liquidation court within sixty (60) days from receipt of final
notice of denial of claim.
In addition, PDIC said that depositors with account balances of
more than the maximum deposit insurance coverage (MDIC) of
PhP500,000 who have already filed claims for the insured portion of
their deposits as of April 17, 2019 are deemed to have filed their
claims for the uninsured portion or the amount in excess of the
MDIC.
PDIC, as Receiver of closed banks, requires personal data from
creditors to be able to process their claims and protects these
data in compliance with the Data Privacy Act of 2012.
Bagong Bangko Rural ng Malabang was ordered closed by the Monetary
Board (MB) of the Bangko Sentral ng Pilipinas on January 24, 2019
and PDIC, as the designated Receiver, was directed by the MB to
proceed with the takeover and liquidation of the closed bank in
accordance with Section 12(a) of Republic Act No. 3591, as amended.
The bank is located at 593 Bayan St., Brgy. China Town (Pob.),
Malabang, Lanao del Sur.
All requests and inquiries relating to Bagong Bangko Rural ng
Malabang shall be addressed to the PDIC Public Assistance
Department through mail at the 6th Floor, SSS Bldg., 6782 Ayala
Avenue corner V.A. Rufino St., Makati City, through e-mail at
pad@pdic.gov.ph, or through telephone number (02) 841-4630.
Depositors and creditors outside Metro Manila may call the PDIC
Toll Free Hotline at 1-800-1-888-PDIC (7342), or mobile numbers
0917-1035421 and 0961-3663813. Walk-in clients may also visit the
PDIC Public Assistance Center at the 3rd Floor, SSS Bldg., 6782
Ayala Avenue corner V.A. Rufino St., Makati City, Monday to Friday,
8:00 AM to 5:00 PM. Inquiries may also be sent as private message
at Facebook through www.facebook.com/OfficialPDIC
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S I N G A P O R E
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GLOBAL A&T: Fitch Affirms 'B-' LT Issuer Default Ratings
--------------------------------------------------------
Fitch Ratings has affirmed Singapore-based Global A&T Electronics
Ltd's (GATE) Long-Term Foreign-Currency and Local-Currency Issuer
Default Ratings (IDR) at 'B-'. The Outlook is Stable.
Simultaneously, the agency has affirmed GATE's USD665 million of
8.5% senior secured notes due 2023 at 'B+', with Recovery Rating of
'RR2'.
Fitch believes that GATE's ratings headroom is relatively low due
to its expectations of soft demand from the communication sector in
2019. However, the Stable Outlook reflects its view that
medium-term FFO-adjusted leverage may remain at or below 4.5x and
the company will maintain its comfortable liquidity in the absence
of near-term maturities. Nevertheless, it could take negative
rating action should the company's financial performance be weaker
than its expectations or its cash balance decline significantly.
Fitch rates GATE's secured notes two notches above its IDR due to
the superior recovery prospects of the security package, which
covers all the assets of GATE and assets directly held by its 100%
parent - UTAC Holdings Limited. The notes are fully and
unconditionally guaranteed by UTAC and UTAC's subsidiaries outside
China, but are subordinated to existing and future trade payables
at non-guarantor subsidiary in the Chinese city of Dongguan. UTAC
does not have any debt outside of GATE and management intends to
keep the other entities within the group debt-free.
KEY RATING DRIVERS
Lower Ratings Headroom: Fitch expects GATE's ratings headroom to
decline due to lower cash generation in the next 12-18 months,
which could result in the group's FFO-adjusted leverage increasing
towards 4.5x - the threshold above which Fitch may take negative
rating action (Fitch estimate for end-2018: 4.0x). Fitch expects
the outsourced assembly and test services (OSAT) industry, which
mainly derives demand from the communications sector, to continue
to face pricing pressure, weaker demand and lower cash flow in 2019
due to slowing smartphone demand. Fitch expects these trends to
disproportionally affect smaller OSAT companies such as GATE.
Fitch believes that low-single-digit growth in the group's analog
segment may not be sufficient to offset the weakness at its
mixed-signal logic processing (MSLP) and memory segments. Revenue
for the MSLP and memory segments fell by 19% and 18%, respectively,
in the nine months ended 30 September 2018. The cash generation is
also likely to decline in the absence of fewer non-recurring
benefits under UTAC group from a key customer contract.
Softer Demand in 2019: Fitch forecasts low-single-digit revenue
growth for the USD25 billion-26 billion global OSAT industry. The
industry is highly cyclical and supply-demand mismatches are
common, which can result in excess capacity and lower utilisation
in down cycles. Integrated device manufactures may reduce their
outsourcing volume during industry downturns as they bring testing
activities in-house to fill capacity. Smaller OSAT companies, such
as GATE, are more vulnerable to industry slowdowns as they lack the
scale and technological capabilities of larger competitors.
Consolidated View on Guarantees: Fitch rates GATE based on the
consolidated credit profile of UTAC group under its Parent and
Subsidiary Rating Linkage criteria in light of the strong legal and
strategic linkages between GATE and UTAC. UTAC and the group's key
operating entities guarantee GATE's secured notes and UTAC controls
the boards of its subsidiaries, including GATE as well as their key
operating and financial decisions. Fitch expects GATE to generate
around 80%-90% of group revenue and EBITDA in the next two years,
with other UTAC subsidiaries contributing the remainder
Weak Business Profile: GATE's IDRs reflect its weak business
profile as it lacks scale, financial flexibility and technological
capability. It is not a leader in the competitive OSAT industry,
with around 4% revenue market share. The group is more highly
exposed to negative industry trends relative to larger industry
peers due to a high reliance on the supply chains of Apple Inc. and
Samsung Electronics Co., Ltd. (AA-/Stable), which are losing market
share to Chinese smartphone makers.
UTAC, similar to other OSAT companies, faces high customer
concentration risk, with about two-thirds of revenue coming from
its 10 largest customers, and it lacks key technology, such as
bumping and System in Package (SiP). Fitch does not believe UTAC
group will be able to bridge the technology gap with larger peers
in the medium term, as the top-three OSAT companies invest
significantly more and have advanced their technological
capabilities through acquisitions and in-house R&D.
Minimal Free Cash Flow: Fitch expects group revenue and operating
EBITDAR to decline by a low-single-digit percentage in 2019 due to
price cuts and weaker demand. UTAC group is also likely to generate
minimal free cash flow as it forecasts its cash flow from
operations (CFO) will just be sufficient to fund capex of USD90
million to maintain its OSAT equipment and invest in growth in
response to customer orders. Group capex in 2018 was mainly used to
expand capacity at its Thailand and Taiwan facilities and to
maintain equipment. However, management believes it has the
flexibility to control its operating costs and capex in the event
of a cyclical downturn, such that free cash flow (FCF) will not
turn negative and that it will able to maintain its cash balance.
Recovery Rating of 'RR2': To calculate the potential recovery for
the US dollar secured notes, Fitch estimates post-restructuring
cash flow of around USD140 million, assuming depletion of the
current position to reflect the distress that provoked a default
and a level of corrective action that it assumes would have
occurred during a future restructuring. Fitch applies a 4.5x
reorganisation multiple to produce an adjusted going-concern
enterprise value after 10% administrative claims of USD567 million.
The value is then applied to the secured notes and USD5 million of
undrawn revolving credit facility, resulting in an estimated
recovery of 85%, which corresponds to a Recovery Rating of 'RR2'.
DERIVATION SUMMARY
GATE's rating is based on the consolidated credit profile of UTAC
group, as UTAC and UTAC's subsidiaries fully and unconditionally
guarantee GATE's secured notes. UTAC group's credit profile is
constrained by its weaker business risk profile relative to larger
OSAT companies. UTAC group has a smaller scale, weaker
technological portfolio and limited financial flexibility to invest
in capex and R&D compared with STATS ChipPAC Pte. Ltd. (B+/Stable).
UTAC group's annual capex of USD90 million-100 million is
significantly lower than that of larger peers, including Amkor
Technology, Inc., and STATS' parent, Jiangsu Changjiang Electronics
Technology Co., Ltd. (JCET), both of which invest about USD500
million-600 million annually. UTAC's 2019 FFO adjusted leverage is
likely to be around 4.0x-4.5x, worse than JCET group's around
3.5x-4.0x.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- UTAC group's revenue to decline by low-single-digit percentage
in 2019 (2018 estimate: decline of around 9%).
- UTAC group's operating EBITDAR margin of around 21%-22% during
2019 (2018 estimate: 22%).
- UTAC's capex/revenue to stay around 11%-12% during 2019 (2018
estimate of 10%-11%).
- GATE will not distribute any dividends to UTAC and UTAC to not
pay dividends to its shareholders.
- UTAC group to face a price reduction of 15% on one of its major
customer around mid-2019.
- Effective tax rate of 25% at UTAC Holdings Limited.
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action, though unlikely in the near term:
- Substantial increase in market share in the OSAT industry
- FFO-adjusted leverage below 3.0x on a sustained basis.
Developments that May, Individually or Collectively, Lead to
Negative Rating Action:
- FFO-fixed charge cover below 2.0x (2018 estimate: 2.9x)
- FFO-adjusted leverage above 4.5x
- A material decline in the cash balance.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity, Long-Dated Maturity: UTAC's liquidity is
adequate, with an estimated cash balance of around USD200 million
at end-2018 and no short-term debt maturities. The only debt is the
secured USD665 million note due in 2023. Fitch expects the group to
have little capacity for additional debt as it has limited headroom
on its incurrence covenant of debt/EBITDA of 4.0x, under the
secured bond documents. Management does not intend to raise any
additional debt in the group.
JES INTERNATIONAL: Judicial Management Application Filed
--------------------------------------------------------
splash247.com reports that JES International Holdings, a
Singapore-listed defunct Chinese shipbuilder, has announced that an
application has been filed in the high court of Singapore to place
the company under judicial management.
This follows JES being declared bankrupt by a Chinese court in
Zhejiang in October last year, three years after it ceased
operations due to a major financial crisis, the report says.
According to splash247.com, JES said the Singapore Stock Exchange
may at any time suspend trading of the company's shares.
splash247.com relates that the board of the company has proposed
the appointment of Messrs Yit Chee Wah --
steven.yit@fticonsulting.com -- from FTI Consulting as judicial
manager to manage the affairs, business and property of the
company.
The date for the hearing of the application has yet to be fixed by
the court, the report notes.
In January, Singapore-based blockchain outfit PLMP Fintech
approached JES on the possibility of taking over the listing status
of the company on Singapore Stock Exchange by way of a scheme of
arrangement or judicial management, splash247.com recounts.
NK INGREDIENTS: To be Placed Under Judicial Management
------------------------------------------------------
Benzinga reports that Soilbuild Business Space REIT said on
Feb. 14 that it was informed that third party has filed an
application for tenant NK Ingredients, which is currently in
default of its lease agreement, to be placed under judicial
management with the High Court of Singapore.
NK Ingredients Pte Ltd produces a wide range of Lanolins, Lanolin
derivatives and Cholesterol.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2019. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
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Information contained herein is obtained from sources believed
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thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***