/raid1/www/Hosts/bankrupt/TCRAP_Public/190225.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, February 25, 2019, Vol. 22, No. 40
Headlines
A U S T R A L I A
AUSJET AVIATION: Second Creditors' Meeting Set for March 1
GUARDRIGHT INDUSTRIES: Second Creditors' Meeting Set for March 6
LAKECOAL PTY: Second Creditors' Meeting Set for March 5
NDD INTERNATIONAL: Second Creditors' Meeting Set for March 1
PROMIM AUSTRALIA: First Creditors' Meeting Set for March 4
RUGS QLD: Second Creditors' Meeting Set for March 5
SPEEDWALL HOLDINGS: Second Creditors' Meeting Set for March 1
C H I N A
ANTON OILFIELD: Moody's Hikes CFR & Sr. Unsecured Rating to 'B1'
CAR INC: S&P Lowers ICR to 'BB-' on Diminishing Liquidity Buffers
CHINA FORTUNE: Fitch Gives 'BB+(EXP)' Rating to New USD Notes
ENN ECOLOGICAL: Fitch Gives Final BB Rating on USD250MM Bonds
H O N G K O N G
GCL NEW: Moody's Cuts CFR to 'B2' & Alters Outlook to Negative
GUORUI PROPERTIES: Fitch Gives B(EXP) Rating on New USD Sr. Notes
I N D I A
AIM LAMINAR: CARE Lowers Rating on INR9.17cr LT Loan to C
AJAY LANDMARK: CARE Reaffirms 'B' Rating on INR11.29cr LT Loans
BLUE AUTOWORLD: CARE Assigns B+ Rating to INR5.50cr LT Loan
CKS MEDICARE: Insolvency Resolution Process Case Summary
CORE JEWELLERY: Ind-Ra Assigns 'BB' on INR110MM Loan Due 2022
EARTH WATER: Insolvency Resolution Process Case Summary
ENERGY DEVELOPMENT: CARE Hikes Rating on INR10cr Loan to B+
GANGA ADVISORY: Insolvency Resolution Process Case Summary
GARG ALUMINIO: CARE Lowers Ratings on INR9.14cr Loans to D
HAR AUTO: Ind-Ra Lowers Rating on INR180MM Loans to 'B+'
JALARAM GINNING: CARE Lowers Rating on INR6.41cr LT Loan to B+
JASON DEKOR: Insolvency Resolution Process Case Summary
JET AIRWAYS: Shareholders Approve Debt-For-Equity Swap
K&R RAIL: Ind-Ra Affirms Then Withdraws BB+ on INR30MM Loan
K. D. SINGH: CARE Migrates B+ Rating to Not Cooperating Category
KAMRUP HOUSING: Insolvency Resolution Process Case Summary
LAKSHMI KNIT: Ind-Ra Gives 'B+' LT Rating on INR50MM Loans
MURLI KRISHNA: CARE Migrates D Ratings to Not Cooperating Category
NARAYANADRI HOSPITALS: Ind-Ra Lowers LongTerm Issuer Rating to 'D'
PADMAJA POWER: Ind-Ra Withdraws B+ Issuer Rating on INR400MM Loan
PATNAZI POWER: Insolvency Resolution Process Case Summary
QUAD LIFESCIENCES: Ind-Ra Maintains BB+ Rating in Non-Cooperating
R. P. RESORTS: CARE Assigns 'B' Rating to INR8cr LT Loan
RAM AGRI-INFRA: Insolvency Resolution Process Case Summary
RATNAWALI DAIRY: CARE Assigns B Rating to INR5.75cr LT Loan
REETHU TOBACCO: CARE Lowers Rating on INR7.60cr Loan to D
REGEN INFRASTRUCTURE: CARE Migrates D Ratings to Not Cooperating
REGEN POWERTECH: CARE Migrates D Ratings to Not Cooperating
REGENT GRANITO: Insolvency Resolution Process Case Summary
SACHIN AGRO: CARE Migrates B+ Rating to Not Cooperating Category
SAGAR INDUSTRIES: Ind-Ra Affirms BB- on INR240MM Loans
SAI KRIPA: CARE Assigns B+ Rating to INR6.69cr LT Loan
SANTKRUPA MILK: CARE Migrates B+ Rating to Not Cooperating
SHREE LAXMI: CARE Migrates B+ Rating to Not Cooperating Category
SHRI SHAMRAO: CARE Migrates 'D' Rating to Not Cooperating
SIDDHARTH TUBES: Insolvency Resolution Process Case Summary
SIGNATURE AUTOMOBILES: CARE Cuts Rating on INR10.47cr Loan to B
SOLUTREAN BUILDING: CARE Lowers Rating on INR3.28cr Loan to D
SUBA PLASTICS: CARE Lowers Rating on INR6cr LT Loan to C
SURAKSHITA HEALTH: CARE Migrates B+ Rating to Not Cooperating
SWASTIK CERACON: Insolvency Resolution Process Case Summary
TAPL INTERNATIONAL: Insolvency Resolution Process Case Summary
TITAN ENERGY: Insolvency Resolution Process Case Summary
VAKSH STEELS: Insolvency Resolution Process Case Summary
VEDA BIOFUEL: Insolvency Resolution Process Case Summary
VIZAG REBARS: CARE Migrates D Rating to Not Cooperating Category
M A L A Y S I A
1MDB: Home of Ex-Goldman Sachs Banker Raided in Probe
P H I L I P P I N E S
RURAL BANK OF MABITAC: Placed Under PDIC Receivership
S I N G A P O R E
DESIGN STUDIO: Warns of "Significant Loss" for Q4 Ended Dec. 31
SEVAK LTD: To Remain in SGX Watch List Until June This Year
S O U T H K O R E A
DAEWOO SHIPBUILDING: HH Workers to Go on Strike Over Takeover
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A U S T R A L I A
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AUSJET AVIATION: Second Creditors' Meeting Set for March 1
----------------------------------------------------------
A second meeting of creditors in the proceedings of:
-- Ausjet Aviation Group Pty Ltd;
-- Australasian Jet Pty Ltd;
-- The Experiences Group Ltd;
-- Ausjet Helicopters Pty Ltd; and
-- Australasian Jet Aircraft Charter & Management Pty Ltd
has been set for March 1, 2019, at 10:00 a.m. at the offices of
Grant Thornton Australia Ltd, at Level 22, Tower 5, Collins Square,
727 Collins Street, in Docklands, Victoria.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 28, 2019, at 4:00 p.m.
Matthew Byrnes and Andrew Hewitt of Grant Thornton Australia were
appointed as administrators of Ausjet Aviation on Dec. 3, 2018.
GUARDRIGHT INDUSTRIES: Second Creditors' Meeting Set for March 6
----------------------------------------------------------------
A second meeting of creditors in the proceedings of Guardright
Industries Pty Ltd has been set for March 6, 2019, at 11:00 a.m. at
the offices of Nicols + Brien, at Level 2, 350 Kent Street, in
Sydney, NSW.
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 March 6, 2019, at 11:00 a.m.
Steven Nicols of Nicols + Brien was appointed as administrator of
Guardright Industries on Feb. 3, 2019.
LAKECOAL PTY: Second Creditors' Meeting Set for March 5
-------------------------------------------------------
A second meeting of creditors in the proceedings of LakeCoal Pty
Ltd, Fassi Coal Pty Ltd, and LDO Coal Pty Ltd has been set for
March 5, 2019, at 9:00 a.m. at Rydges Hotel Newcastle, Wharf Road &
Merewether Street, in Newcastle, NSW.
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 March 4, 2019, at 4:00 p.m.
Justin Denis Walsh and Samuel John Freeman of Ernst & Young were
appointed as administrators of LakeCoal Pty on Oct. 3, 2018.
NDD INTERNATIONAL: Second Creditors' Meeting Set for March 1
------------------------------------------------------------
A second meeting of creditors in the proceedings of NDD
International Pty. Ltd. has been set for March 1, 2019, at 11:00
a.m. at the offices of SV Partners, at Level 17, 200 Queen Street,
in Melbourne, Victoria.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 28, 2019, at 5:00 p.m.
Michael Carrafa and Fabian Kane Micheletto SVP were appointed as
administrators of NDD International on Jan. 24, 2019.
PROMIM AUSTRALIA: First Creditors' Meeting Set for March 4
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Promim
Australia Pty Ltd will be held on March 4, 2019, at 10:00 a.m. at
the Level 36, Riparian Plaza, 71 Eagle Street, in Brisbane,
Queensland.
Travis Pullen of B&T Advisory was appointed as administrator of
Promim Australia Pty Ltd on Feb. 20, 2019.
RUGS QLD: Second Creditors' Meeting Set for March 5
---------------------------------------------------
A second meeting of creditors in the proceedings of Rugs Qld Pty
Ltd, trading as Rugs A Million, Rugs W.A. Pty Ltd, and
Rugs-A-Million Pty Ltd, has been set for March 5, 2019, at 10:00
a.m., 10:30 a.m. and 11:00 a.m., respectively, at the offices of
Morton's Solvency Accountants, at Level 11, 410 Queen Street, in
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 March 4, 2019, at 4:00 p.m.
Gavin Charles Morton of Morton's Solvency Accountants was appointed
as administrators of Rugs Qld on Jan. 29, 2019.
SPEEDWALL HOLDINGS: Second Creditors' Meeting Set for March 1
-------------------------------------------------------------
A second meeting of creditors in the proceedings of Speedwall
Holdings Pty. Ltd. has been set for March 1, 2019, at 10:30 a.m. at
the offices of SV Partners, at Level 17, 200 Queen Street, in
Melbourne, Victoria.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 28, 2019, at 5:00 p.m.
Michael Carrafa and Fabian Kane Micheletto of SVP were appointed as
administrators of Speedwall Holdings on Jan. 24, 2019.
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C H I N A
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ANTON OILFIELD: Moody's Hikes CFR & Sr. Unsecured Rating to 'B1'
----------------------------------------------------------------
Moody's Investors Service has upgraded Anton Oilfield Services
Group's corporate family and senior unsecured ratings to B1 from
B2.
The ratings outlook is stable.
RATINGS RATIONALE
"The upgrade reflects our expectation that the company will be able
to maintain its improved credit profile over the next 12-18 months,
supported by higher earnings from a steady operating environment,
an enhanced cost structure, and prudent capital spending," says
Chenyi Lu, a Moody's Vice President and Senior Credit Officer.
The improved operating environment is the result of increased
capital spending by upstream oil and gas companies, and increased
natural gas and shale gas production activities in China (A1
stable) in turn underpinned by the government's target to increase
natural gas in its primary energy mix.
Moody's expects Anton's adjusted debt/EBITDA will improve to
2.5x-3.0x over the next two years from 3.6x for the 12 months ended
June 2018, supported by (1) higher earnings from revenue growth and
improved cost efficiencies; and (2) a limited increase in debt
driven by more prudent capital spending and working capital cycle
management. This level of leverage is appropriate for its B1
rating, and provides it with a buffer against potential oil price
volatility and its high short-term working capital needs.
"The upgrade also reflects our expectation that the company will
continue to build strong operating capabilities and further enhance
its track record of operating geographically diversified businesses
against the backdrop of oil price volatility, while carefully
managing emerging markets risks," adds Lu, who is also Moody's Lead
Analyst for Anton.
Anton's growing capabilities and more established operating track
record in its overseas businesses, reflected in its integrated
services offerings, expanding market shares and strategic
partnerships with Chinese oil majors and major global oil
companies, will support continued new order growth and partially
mitigate oil price volatility.
Anton's strong order book, mainly driven by growth traction in
overseas markets, will provide revenue visibility in the next two
years. Its order backlog grew 24% to RMB4.35 billion at the end of
2018 from a year prior, representing 1.74x of revenue in the 12
months ended June 2018, despite the oil price volatility in Q4
2018.
Moody's expects the company's revenue to grow by 31.3% in 2018 and
22.2% in 2019, driven by (1) a recovery in its domestic business,
as Anton is well positioned to benefit from the strong growth in
China's natural gas sector over the next two years; and (2)
continued growth traction in its overseas markets, in particular
Iraq. Anton reported solid revenue growth of 33.2% year-on-year to
RMB1.2 billion in 1H 2018.
Moody's expects Anton's adjusted EBITDA margin will decline
slightly to 32%-33% over the next two years from 33.6% for the 12
months ended June 2018, as intense pricing competition will be only
partially mitigated by sustained cost and expense control
measures.
Anton's liquidity position is weak. At the end of June of 2018,
Anton had cash and cash equivalents of RMB451 million and
restricted cash of RMB411 million. These liquidity sources and its
expected operating cash flows of around RMB185 million over the
next 12 months are insufficient to cover its short-term debt of
RMB940 million, bills payable of RMB140 million, and estimated
maintenance capital expenditure of about RMB150 million over the
next 12 months.
However, this weak liquidity position is mitigated by Anton's track
record of short-term debt refinancing, especially during the weak
oil price environment in 2015 and 2016, and its track record of
good access to the debt and equity capital markets.
Anton's B1 corporate family rating reflects the company's (1)
integrated business model; (2) strong market position in the
domestic oilfield services sector in China with strong technical
capabilities in providing key signature services; (3) growing
capabilities, improved customer mix and a more established track
record of operating geographically diversified businesses; and (4)
solid financial leverage.
At the same time, Anton's rating is constrained by (1) its exposure
to oil price volatility and risks related to its overseas
expansion; (2) the company's small scale and high customer
concentration; and (3) its weak liquidity.
The stable rating outlook reflects Moody's expectations that over
the next 12-18 months, Anton's credit and liquidity profile will
gradually improve on the back of earnings growth, prudent working
capital management and capital investments.
The ratings could be upgraded if the company (1) achieves strong
growth in its order backlog, revenue and earnings; (2) prudently
contains its debt growth and maintains its current credit profile
on a sustained basis; and (3) sustains positive free cash flow
generation and maintains an adequate liquidity position.
The ratings could be downgraded if (1) Anton's order book declines
materially; (2) its financial leverage weakens, such that adjusted
debt/EBITDA exceeds 5.5x on a sustained basis, due to from
declining profitability or higher debt arising from pressure on its
working capital; or (3) its liquidity position weakens.
The principal methodology used in these ratings was Global Oilfield
Services Industry Rating Methodology published in May 2017.
Listed on the Hong Kong Stock Exchange in December 2007, Anton
Oilfield Services Group was founded by its chairman, Mr. Luo Lin,
in 1999.
The company is a leading Chinese oilfield services provider, and
focuses on China's fast-growing natural gas sector. It offers
integrated oil/gas field services solutions covering various phases
of field development, including oil production operation services,
well completion technologies, and drilling technologies, globally.
CAR INC: S&P Lowers ICR to 'BB-' on Diminishing Liquidity Buffers
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on the CAR Inc.
to 'BB-' from 'BB'. At the same time, S&P lowered the issue rating
on the company's outstanding U.S.-dollar-denominated debt to 'BB-'
from 'BB'.
S&P Global ratings downgraded CAR Inc. because it expects the
company to face heightening liquidity pressure over the next 12-24
months due to rising debt maturities. These include bullet
maturities, in which principal and interest are repaid in one lump.
In S&P's view, the material bullet maturities in the company's debt
structure could test the company's refinancing management over the
next two years.
S&P said, "By our estimates, CAR Inc. has RMB4.7 billion in debt
maturing in 2019, including an RMB1.7 billion syndicated loan on
bullet terms. This compares with RMB2 billion-RMB3 billion of debt
due per annum in 2017 and 2018. The company also faces sizeable
debt repayments of RMB3.6 billion in 2020 and RMB4.0 billion in
2021. These estimates do not include RMB2.5 billion-RMB3.0 billion
in bank loans due in December 2018 which were likely rolled over,
with potential due dates in 2020 or 2021. We see potential
execution risks in CAR Inc.'s refinancing initiatives, including
the refinancing for the first time of an offshore bond, due in
2020.
"In our view, CAR Inc.'s planned use of operating lease
arrangements in 2019 could moderate its capital spending.
Therefore, we expect its gross capital expenditure to decrease from
our estimate of about RMB5 billion (for around 45,000 cars) in 2018
to RMB3.4 billion-RMB4.4 billion (for 40,000 cars) in 2019.
However, this "asset light" model may also lead to lower margins,
because the company gives up taking conventional asset risk under
self-procurement. Moreover, the new policy in vehicle acquisitions
indicates the company's strategy is somewhat fluid, which in our
view creates some uncertainty."
CAR Inc. will likely accelerate car disposals in 2019, which could
improve investing cash flow. Such disposals slowed last year as the
company expanded its car-sharing services. During the first nine
months of 2018, the company disposed of only 9,047 used vehicles,
much lower than 27,973 during the same period of 2017. This has
negatively affected cash flow, however the car-sharing fleet
investment nearly completed in 2018.
S&P said, "We expect interest coverage to improve slightly in 2019,
as the fleet expansion for car-sharing slows. For 2019, we forecast
EBIT interest coverage at 2.1x-2.2x, due to better fleet
efficiencies from less car-sharing contribution in terms of
business mix. This compares with EBIT interest coverage of
2.0x-2.1x in 2018, by our estimate, falling from 2.4x in 2017 as
gross debt increased to around RMB13 billion as of Dec. 31, 2018,
from RMB11.1 billion at end-December 2017. The increased debt,
which supported the fleet expansion for car sharing, results in
higher interest expenses. In our view, the investment return in car
sharing is not satisfactory. Overall, we expect to see limited
improvement in the company's credit metrics.
"The negative outlook reflects our view that CAR Inc. will continue
to face execution uncertainties around the company's refinancing
initiatives in 2019. We expect CAR Inc.'s EBIT interest coverage to
be between 2.1x and 2.2x during the same period, showing limited
improvement.
"We could lower the rating on CAR Inc. if the company resorts to
more short-term refinancing or continues to show a high level of
debt-maturity concentration.
"We could also lower the rating if CAR Inc.'s EBIT interest
coverage falls below 1.7x or its ratio of funds from operations
(FFO) to debt falls below 20%. This could happen if: (1) operating
efficiency of the car rental business deteriorates, which signals a
weakening competitive position and leads to significant erosion in
profitability; or (2) the company makes material debt-funded
expansions.
"We may revise the outlook to stable if CAR Inc. can maintain more
evenly spread debt maturities, while securing more long-term
funding for its upcoming debt. In such a scenario, the company
would keep a fair liquidity buffers against its fast growth on an
ongoing basis."
CAR Inc., established in 2007, is the largest car rental company in
China. Its services include car rentals, fleet rentals, and
leasing. The company is the market leader in China in terms of
fleet size, revenue, network coverage, and brand awareness.
CHINA FORTUNE: Fitch Gives 'BB+(EXP)' Rating to New USD Notes
-------------------------------------------------------------
Fitch Ratings has assigned China Fortune Land Development Co.,
Ltd.'s (CFLD, BB+/Stable) proposed US dollar notes an expected
rating of 'BB+(EXP)'. The proposed notes will be issued by CFLD's
wholly owned subsidiary CFLD (Cayman) Investment Ltd. and will be
unconditionally and irrevocably guaranteed by CFLD. The final
rating is subject to the receipt of final documentation conforming
to information already received.
CFLD's ratings are supported by its leading position in industrial
park development in key economic regions, particularly the
pan-Beijing region. The ratings are constrained by its high
geographical concentration and poor information disclosure on its
62 massive industrial parks, each covering 2 square kilometres to
200 square kilometres. CFLD's leverage also rose substantially as
of end-September 2018, although this was partly driven by temporary
factors. Fitch may consider negative rating action if Fitch
estimates that the leverage will be sustained above 50%.
KEY RATING DRIVERS
Stable Project Performance: CFLD's property contracted sales in
2018 increased by 8% to CNY129.2 billion with the average selling
price dropping to CNY8,600/sqm from CNY12,320/sqm a year earlier,
due to more sales in lower-tier cities in the Jingjinji region.
CFLD's revenue recognised from development of districts in
less-developed counties, which are mainly revenue due from local
governments, increased 5% yoy to CNY31 billion in 2018, compared
with a 67% increase in 2017.
Slower Cash Collection, Higher Leverage: Fitch estimates that
CFLD's leverage, as measured by net debt/district-related
inventory, increased to above 75% at end-September 2018 from 50% at
end 2017, mainly due to much slower cash collection from government
revenue due to a review on the validity of public-private
partnership projects across China in 2018. Fitch estimates that
CFLD's cash receipts from local governments may drop to around
CNY10 billion, or below 40% of government-related revenue in 2018,
which includes revenue from infrastructure construction, primary
land and industrial park development as well as service fees from
industrial park management. Cash collection from local governments
was CNY19 billion, or about 70% of government-related revenue, in
2017.
CFLD's housing sales collection was also particularly slow in 2017
and 2018 due to a more stringent definition of qualified buyers.
Fitch believes that the effect may gradually dissipate from 2019 as
sales proceeds for projects sold in 2016-2017 started to be
collected in the later part of this year. Fitch will consider
taking negative rating action if Fitch expects CFLD's leverage to
be sustained above 50%. CFLD's leverage averaged 39% between 2012
and 2016.
Business Partnerships Reduce Risks: Fitch believes CFLD's strategy
to seek more partnerships from 2018 will sustain its strong
business profile as the company would otherwise face rising
execution risk if it relied on its own development capacity to
expand operations. CFLD partnered CIFI Holdings (Group) Co. Ltd.
(BB/Stable) in February 2018 and China Vanke Co., Ltd.
(BBB+/Stable) in October 2018 to develop property projects within
its districts.
Ping An Insurance (Group) Co., is expected to increase its
shareholding in the company to 25.25% from below 20% in February
2019, according to the company's announcement. Ping An's increased
involvement in the company is evident from the appointment of two
of its representatives on CFLD's board and the strategic
cooperation agreement signed with CFLD in September 2018. Fitch
will monitor the business activities between the two companies over
and above their current co-investments in CFLD's projects to
consider the potential impact of the Ping An partnership on CFLD's
business and liquidity profiles.
High Geographical Concentration Risk: CFLD's dependence on housing
sales exposes it to the volatility of China's housing market, which
is subject to policy risk. This was demonstrated in CFLD's poor
cash collection in 2017. Revenue is concentrated in the pan-Beijing
region, which contributes 84% of total revenue. Contracted gross
floor area sold for the housing segment in the region fell to 55%
in 1H18, from 69% in 2017. However, most of CFLD's government
revenue still comes from this region and it will be years before a
more balanced regional business mix can be achieved.
Weak Information Disclosure: CFLD has weak information disclosure,
especially for its district park development, as it has devoted
greater disclosure to its property business in line with most
China-listed homebuilders. This means investors treat CFLD
similarly to other homebuilders and led to a Shanghai Stock
Exchange (SSE) request in April 2018 for an explanation of CFLD's
business operations and accounting treatment, which saw its bond
and share prices suffer. However, the company has provided Fitch
with sufficient information for Fitch's credit analysis and is
cooperative and responsive to its information requests. Fitch
believes CFLD can improve its disclosure, especially since its
district park development includes large project investments.
DERIVATION SUMMARY
CFLD's business model remains dependent on China's housing market
and its large pan-Beijing housing market exposure constrains its
ratings below investment grade. CFLD does have non-property income
from government contracts and is thus less subject to counterparty
credit risk, especially as its business model involves paying land
premiums and taxes to local government, which are in turn used to
pay CFLD. This significantly strengthens its business profile
relative to other homebuilders, as it does not need to lock up
capital in holding land reserves that it does not immediately need
for development.
CFLD's business is unique and there are no similar peers. However,
given the asset trading/liquidation nature of its business, Fitch
has compared CFLD to Chinese homebuilders. CFLD has higher leverage
than 'BB-' and 'BBB-' rated homebuilders and has strong earnings
from industry services, giving it an interest cover ratio that is
2x-3x higher than that of Shimao Property Holdings Limited's
(BBB-/Stable) recurring EBITDA/interest cover of 0.5x and
Sino-Ocean Group Holding Limited's (BBB-/Stable; standalone:
BB+/Stable) 0.3x. The recoverable value of CFLD's inventory is
highly assured, despite its higher leverage of 50% versus Shimao's
28% and Sino-Ocean's 36%.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Housing sales gross floor area to increase by 20% in 2018 and
10% per annum thereafter
- District-related inventory to increase by 25% in 2018 and 2019
- New investment commitments to rise by 15% per annum and
accumulated completed investments to increase to 30%, from 25%, of
accumulated commitments between 2018 and 2021
- Gross margin of 40% in 2018, dropping by 2 pp a year
thereafter
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Sustained neutral to positive cash flow from operation
- Greater geographical diversification of its businesses and cash
flow
- More detailed and publicly available disclosure of its
businesses and operational information
- Maintaining a healthy financial profile, with low leverage and
strong cash flow/debt ratios
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- Large decline of housing contracted sales
- Net debt/district-related inventory above 50% for a sustained
period
- District contracted sales/net debt below 2x for a sustained
period (2017: 2.2x; 1H18: 1.6x)
- Changes to government policies affecting CFLD's rights in its
projects
LIQUIDITY
Adequate Liquidity: CFLD's available cash of CNY36 billion at
end-September 2018 was sufficient to meet its short-term debt
obligations of less than CNY30 billion. Slower cash collection from
more restrictive home purchase policies in its key pan-Beijing area
housing market and lower cash receipts from the government due to
the review of public-private partnership projects likely led to
negative operating cash flow in 2018. CFLD issued USD920 million of
offshore senior notes due 2020, as well as USD940 million of
offshore senior notes due 2021 in 2018. Fitch thinks that CFLD has
successfully diversified its funding channels into the offshore
market and smoothed out its debt maturity profile.
ENN ECOLOGICAL: Fitch Gives Final BB Rating on USD250MM Bonds
-------------------------------------------------------------
Fitch Ratings has assigned China-based ENN Ecological Holdings Co.,
Ltd.'s (ENN EC, BB/Stable) USD250 million 7.5% bonds due 2021 a
final rating of 'BB'.
The US dollar notes are issued by ENN Clean Energy International
Investment Limited, which is wholly owned by Xinneng (Hong Kong)
Energy Investment Limited, which is in turn a wholly owned
subsidiary of ENN EC. The notes are guaranteed by ENN EC and are
the company's senior unsecured obligations and rank pari passu with
all its other unsecured, unsubordinated obligations.
Net proceeds will be used for general corporate purpose, including
but not limited to repayment of the existing indebtedness. The
final rating on the bonds is in line with the expected rating
assigned on January 8, 2019 and follows the receipt of final
documentation conforming to the information already received.
The 'BB' rating reflects ENN EC's moderate financial profile and
diversified, yet evolving, business profile, with operating
leverage realised from its controlling shareholder's other
businesses, including ENN Energy Holdings Limited (BBB/Stable),
which in aggregate, are referred to as ENN Group. A significant
proportion of ENN EC's operating profit will come from
commodity-related sectors, which have high earnings volatility -
including coal mining, chemical production and trading as well as
liquefied natural gas (LNG) processing and trading - if the company
completes its proposed acquisition of Toshiba America LNG
Corporation (TAL) and the disposal of its biopharmaceutical
business. Fitch expects the energy-engineering segment to increase
its order book from the continued gas-related infrastructure
buildout by ENN Group.
ENN EC's financial leverage, measured by FFO adjusted net leverage,
increased sharply to nearly 7.0x in 2016, from less than 2.0x in
2015, following the acquisition of a 10.07% stake in
Australia-based Santos Limited. ENN EC has been deleveraging since
2016 due to steady operating cash flow generation and an equity
placement; Fitch estimates net leverage fell to around 4.0x by
end-2018 with headroom for further declines supported by free cash
flow (FCF) generation after 2018. Fitch sees ENN EC's stake in
Santos as liquid since it is a publicly traded company, allowing it
to be partly monetised quickly to increase financial flexibility
and help in deleveraging, if needed.
The potential TAL acquisition would significantly lower ENN EC's
net leverage to around 1.5x in 2019 due to the upfront compensation
paid by the seller, but this would be offset by the higher business
risk of the acquired LNG operation and the uncertainty over the use
of the proceeds by the company.
The Stable Outlook reflects Fitch's expectation that ENN EC will
maintain a prudent financial policy in executing its growth
strategy by keeping FFO adjusted net leverage below 3.5x over the
medium term.
KEY RATING DRIVERS
Diversified, Evolving Business Model: ENN EC's coal, LNG and
chemical segments are highly exposed to commodity-price volatility.
However, its business diversification provides some profit
stability, with an EBITDA margin of 21%-29% between 2014-2017. Some
natural hedging exists between its coal and methanol businesses, as
coal is a key input cost for methanol production. A shift in the
business mix upon the proposed TAL acquisition would see the EBITDA
margin fall to around 15% in the medium term, but this would be
offset by a larger EBITDA scale.
The potential disposal of ENN EC's stable biopharmaceutical
business may increase business risk, but Fitch considers the impact
on the company's overall credit profile to be limited due to the
segment's moderate profit contribution.
Potential Acquisition: The proposed TAL acquisition, which is
scheduled to be completed by end-1Q19, will allow ENN EC to secure
LNG from the US to meet rising gas demand in China by utilising ENN
Group's midstream and downstream infrastructure. ENN EC will
receive an upfront net payment of USD806 million from the seller as
compensation for the higher-than-market processing fee on TAL's
four LNG take-or-pay contracts for the next 20 years. These
contracts include a pipeline-transportation agreement,
butane-injection, tugboat and LNG contracts with 2.2 million tonnes
of processing capacity signed with Freeport LNG Expansion, L.P.,
which Fitch expects to begin operations from 2H20.
Fitch considers the LNG supply and construction risk of the
processing facility to be low. However, ENN EC will be exposed to
global LNG-price volatility and could suffer losses if the
differential on the selling price of its imported LNG and the
procurement price is insufficient to cover the processing fee and
other related costs. This risk is partly mitigated by China's
strong demand for natural gas over the medium term, which could
provide some support for imported LNG prices.
Connected Transactions: ENN EC, as part of ENN Group's gas value
chain, focuses on upstream operations, while Mr. Wang Yusuo and his
wife Mrs. Zhao Baoju, the controlling shareholders with a 48.43%
direct and indirect stake in the company, also own the Zhoushan LNG
Terminal and downstream city-gas distribution assets via ENN
Energy. ENN EC's sales to related parties accounted for 22% of
total sales in 2017, including 80% of the energy engineering
revenue from ENN Energy and the Zhoushan LNG Terminal. The
percentage of related-party transactions will increase further upon
completion of the proposed TAL acquisition, as ENN Energy will be
the potential main buyer of LNG.
Fitch thinks the benefits of the relationship with ENN Group so far
outweigh the risks. ENN Energy has an investment-grade credit
profile and its continuing expansion of the city-gas business will
support ENN EC's engineering order book and LNG demand; the
Zhoushan LNG Terminal in eastern China has secured all necessary
funding. Fitch expects collaboration between ENN EC and ENN Group
to continue on an arms-length basis; however, any evidence of
significant corporate governance weaknesses or a deterioration of
ENN Group's financial position may be negative for ENN EC's rating.
Moderate Financial Profile: Fitch expects ENN EC's FFO adjusted net
leverage to decline to around 1.5x-1.8x in 2019-2021 (2017: 4.9x)
due to the upfront compensation received if the TAL acquisition
goes through. The cash deployment of the compensation remains
unclear, but Fitch expects the company to continue looking for
investment opportunities, especially in the LNG sector. However, it
expects capex to decline from 2019 after the company completes its
expansion in domestic LNG processing capacity, therefore,
generating FCF. ENN EC's financial leverage will be 2.2x-3.2x in
2019-2021 if the acquisition fails, which remains commensurate with
its 'BB' rating.
No Downward Notching on Bond: Fitch estimates ENN EC's ratio of
priority-ranking debt to EBITDA fell to around 2.5x in 2018 due to
improving earnings from 3.8x in 2017. Fitch has also carried out
bespoke recovery analysis for the senior unsecured debt at the
holding company level, based on a going-concern EBITDA of CNY1.8
billion (applying a 30% discount to estimated 2018 EBITDA of CNY2.5
billion), an enterprise value multiple of 4.5x, and a 50% discount
to the market value of its 10.07% stake in Santos. Assuming a
repayment of the existing CNY1.7 billion domestic bond in February
2019, Fitch's recovery analysis resulted in average recovery
prospects for the US dollar bond and therefore it has not notched
the bond rating below that of the company.
DERIVATION SUMMARY
ENN EC's rating is supported by its business diversification, with
operating leverage realised from being part of the ENN Group, and a
moderate financial profile. The rating is constrained by the
company's evolving business profile and a potential increase of
profit generation from cyclical sectors with higher business risks.
Fitch's rating case has factored in the potential TAL acquisition,
which would lower financial leverage sharply due to the seller's
compensation. Fitch expects ENN EC's net leverage to remain
moderate, at below 3.5x, over the medium term if the acquisition
fails.
ENN EC and Indonesia-based PT ABM Investama Tbk (BB-/Negative) have
comparable business profiles, with moderate segment diversification
and exposure to cyclical sectors. ENN EC is rated one notch higher
than ABM due to a larger operating scale and stronger financial
flexibility.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Fitch's thermal coal price deck of USD88.0/tonne in 2018,
USD79.0/tonne in 2019, USD77.0/tonne in 2020 and USD75.0/tonne
thereafter
- Fitch's Brent crude oil price of USD72.5/barrel in 2018,
USD65.0/barrel in 2019, USD62.5/barrel in 2020, USD60.0/barrel in
2021 and USD57.5/barrel thereafter
- Fitch's UK natural gas price deck of USD8.3/million cubic feet
(mcf) in 2018, USD7.0/mcf in 2019, USD6.8/mcf in 2020, USD6.8/mcf
in 2021 and USD6.5/mcf thereafter
- EBITDA margin to decline to 15% by 2021 due to potential TAL
acquisition
- Capex of around CNY1.8 billion in 2018, and falling to around
CNY300 million by 2020
- Acquisitions of CNY2 billion per year in 2020 and 2021
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- No positive rating action is envisaged in the medium term until
the company's business profile reaches a steady stage while
maintaining a prudent financial strategy.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- FFO adjusted net leverage above 3.5x for a sustained period
- Sustained EBITDA margin below 15% over the next three years
- Evidence of deterioration of the financing/liquidity position
of the controlling shareholders and their related businesses
LIQUIDITY
Sufficient Liquidity: The company's liquidity can cover short-term
debt maturities of around CNY2.8 billion as of end-3Q18, with cash
and cash equivalents on hand of around CNY1.8 billion and
unutilised credit facilities of around CNY1.5 billion. Fitch
expects the company to generate positive FCF from 2019 on lower
capex. The company's holdings in Santos, with a market value of
over USD5 billion as of now, also enhances its financial
flexibility.
=================
H O N G K O N G
=================
GCL NEW: Moody's Cuts CFR to 'B2' & Alters Outlook to Negative
--------------------------------------------------------------
Moody's Investors Service has downgraded GCL New Energy Holdings
Limited's corporate family rating to B2 from B1, and its senior
unsecured rating to B3 from B2.
At the same time, Moody's has changed the outlook to negative from
stable.
RATINGS RATIONALE
"The ratings downgrade reflects the combined effect of 1) GCL New
Energy's tightened liquidity and a high level refinancing risk with
sizable maturing debt in 2019, as well as 2020, and 2) continued
uncertainty regarding the ongoing business model of the company
under the asset light strategy," says Ivy Poon, a Moody's Vice
President and Senior Analyst.
Moody's estimates that GCL New Energy has RMB8.5 billion of debt
maturing in 2019 and a further RMB6 billion in 2020. Such amount
raises material challenges for GCL New Energy, when compared to
available sources of cash.
"Moody's acknowledges that GCL New Energy is pursuing several
alternatives to address its large refinancing task," Poon says,
adding "However, there is uncertainty that these alternatives will
materialize in a timely manner, amid tight credit conditions."
At the same time, the rating downgrade considers the uncertainty
associated with GCL New Energy's pursuit of an asset light strategy
with the aim of reducing debt and ease the pressure on liquidity.
The prolonged delays and uncertainty associated with the
transformation of GCL New Energy's business model, and the
refinancing risk facing the company, raise the credit risk to a
level that is more appropriate for the current lower rating.
Moody's notes that the previous rating level benefited from GCL New
Energy's market position as a major solar power generation company.
Strong operating profile underpinned by leading market position and
meaningful asset portfolio was one of the key credit considerations
supporting the previous B1 corporate family rating.
The negative ratings outlook reflects Moody's expectation that GCL
New Energy will continue to face high refinancing risk for its
sizable maturing debt in 2019, as well as 2020.
Upward rating pressure is unlikely, given the negative ratings
outlook.
However, the outlook on the ratings could return to stable if the
company successfully refinances its maturing debt, receives more
timely collections of subsidies receivable, and/or introduces other
countermeasures to ease the liquidity pressure.
Downward pressure on the ratings could emerge if: (1) GCL New
Energy is unable to refinance its maturing debt in a timely manner;
(2) it undertakes aggressive asset sales that significantly
jeopardize its business sustainability; (3) the credit profiles of
its parent, GCL-Poly Energy Holdings Limited, weaken materially;
(4) there are signs of cash leakage to GCL-Poly via dividend
distributions or other means; and/or (5) there are material adverse
changes in the regulatory environment for China's solar power
industry.
GCL New Energy Holdings Limited is a privately owned solar power
generation company in China. The company's installed capacity
totaled 7.1GW across 26 Chinese provinces and abroad at June 30,
2018.
GCL New Energy was 62.28% owned by GCL-Poly Energy Holdings Limited
at June 30, 2018. GCL New Energy is the sole downstream platform of
its parent company.
Founded in 1996, GCL-Poly Energy Holdings Limited is an integrated
solar photovoltaic company.
GUORUI PROPERTIES: Fitch Gives B(EXP) Rating on New USD Sr. Notes
-----------------------------------------------------------------
Fitch Ratings has assigned Guorui Properties Limited's (Guorui;
B/Rating Watch Negative (RWN)) proposed US dollar senior notes a
'B(EXP)' expected rating and a Recovery Rating of 'RR4' on RWN.
The proposed notes to be issued by Guorui are rated at the same
level as the company's senior unsecured rating because they
represent direct and senior unsecured obligations of the company.
The final rating is subject to the receipt of final documentation
conforming to information already received. Guorui intends to use
the net proceeds from the note issue to refinance offshore debt
maturing in March 2019.
Guorui's ratings were placed on RWN in February 2019 to reflect the
risk that the China-based homebuilder will not be able to refinance
its offshore debt of USD550 million (CNY3.6 billion) that it may
have to repay in March 2019, and the execution risk of its
refinancing plan. Successful issuance of the proposed notes with a
sufficient size can alleviate the refinancing risk and may lead to
the resolution of the RWN.
Guorui's credit profile is supported by Fitch's expectation that
its sales proceeds remain sufficient to meet its operational and
refinancing cash flow needs. Guorui's business performance has
improved with higher contracted sales of CNY21.9 billion in 2018,
stable investment-property rental income and a quality land bank
that is large enough to support sustained improvement in contracted
sales. Fitch also expects Guorui's leverage, measured by net
debt/adjusted inventory, to decrease to around 50%-55% by 2019-2020
from 59% at end-2017 as growth in contracted sales accelerated in
2H18.
KEY RATING DRIVERS
March Debt-Refinancing Risk: The offshore debt that needs to be
repaid in March 2019 consists of a USD250 million bond maturing 1
March and a USD300 million bond with a put option that may be
exercised on 20 March. Guorui's management says its current cash
position exceeds its end-June 2018 balance of CNY1.8 billion, but
the amount is insufficient to cover the maturing debt.
Improving Business, Onshore Bonds Repaid: Guorui's total contracted
sales rose 48% yoy to CNY21.9 billion in 2018, higher than Fitch's
expectation of CNY18 billion, driven by a 43% yoy increase in gross
floor area sold to 1.3 million square metres (sq m), and a 4% rise
in contracted average selling price (ASP) to CNY16,804 per sq m.
Guorui had land reserves of over 14.3 million sq m as of end-June
2018, of which over 50% in saleable value is in China's top-tier
cities, where housing demand is resilient. These should allow
Guorui to maintain annual contracted sales at CNY20 billion per
year in 2019-2020.
In November and December 2018, Guorui completed the repayment of
CNY3 billion of onshore bonds that were issued in 2015 after
investors exercised their option to sell these bonds to the issuer.
Guorui used internal funds, supported by its growing sales, to
repay the bonds.
Manageable Debt Profile After Refinancing: Fitch believes Guorui's
sales collection from its CNY12 billion of contracted sales in the
last quarter of 2018 will strengthen its liquidity position in
1H19. This, together with undrawn credit facilities of CNY10
billion as of end-December 2018, appear sufficient for Guorui to
repay another CNY5 billion-6 billion of capital-market and
project-financing debt due in the next six to 12 months, as well as
to meet its operating cash flow needs.
DERIVATION SUMMARY
Fitch has compared Guorui to several small- to mid-scale
homebuilding peers with similar contracted sales, size of land bank
and geographical diversification in the 'B-', 'B' and 'B+'
categories. The peers include Ronshine China Holdings Limited
(B+/Stable), Hong Yang Group Company Limited (B/Positive) and
Oceanwide Holdings Co. Ltd. (B-/Stable).
The factors that support Guorui's 'B' rating relative to its peers
are its improving recurring EBITDA/interest coverage due to the
ramp-up of its high-quality investment-property portfolio,
especially in Beijing. Its recurring EBITDA interest coverage ratio
is low, but compares favourably against that of other property
developers rated at the same level. At the same time, Guorui's 'B'
rating relative to its peers is constrained by its higher
leverage.
In terms of contracted sales and profitability, the closest peer is
Oceanwide. Both have large land banks to support future sales.
However, Oceanwide has a lower churn rate than Guorui. Both
companies have high leverage, but Guorui's leverage of 55% is lower
than Oceanwide's more than 80% at end-2017.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for Guorui Include:
- Contracted sales of CNY20 billion per year in 2019-2020 (2018:
CNY21.9 billion)
- EBITDA margin remains at over 30% in 2018-2019 (2017: 39%)
- Land premiums (net) of CNY11 billion per year in 2019-2020
Recovery Rating Assumptions (using end-December 2017 estimated
values)
- Guorui would be liquidated in a bankruptcy because it is an
asset-trading company
- 10% administrative claims
The liquidation estimate reflects Fitch's view of the value of
inventory and other assets that can be realised and distributed to
creditors.
- Fitch applied a haircut of 30% to accounts receivable
- Fitch applied a haircut of 25% on adjusted inventory, which is
higher than that applied to its domestic peers as its EBITDA margin
is higher than the industry norm and reflects the high quality and
low cost of its land reserves
- Fitch applied a haircut of 40% to investment properties
- Fitch applied a haircut of 50% to property, plant and
equipment
Based on Fitch's calculation of the Guorui's estimated liquidation
value after administrative claims of 10%, it estimates the recovery
rate of the offshore senior unsecured debt to be 100%, which
corresponds to a Recovery Rating of 'RR1'. However, Guorui operates
in China, which Fitch classifies as under Group D of jurisdictions
where the law is not supportive of creditor rights or there is
significant volatility in application of law and enforcement of
claims. As a result, the Recovery Rating for Guorui's senior debt
is capped at 'RR4'.
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Negative Rating Action Include:
- Failure to progress towards refinancing offshore debt maturing
in March as per plans communicated to Fitch
Developments that May, Individually or Collectively, Lead to
Positive Rating Action Include:
- Repayment of offshore debt maturing in March, resulting in a
better debt maturity profile without sacrificing onshore liquidity
position
LIQUIDITY
Tight Liquidity: Guorui had roughly CNY1.8 billion in cash on hand
at end-June 2018, which was insufficient to cover its short-term
debt of about CNY16.8 billion. Guorui is highly reliant on secured
bank borrowings (80% of total borrowings) and the assets pledged to
secure certain borrowings amounted to CNY35.4 billion (compared
with gross debt of roughly CNY30.2 billion) at end-June 2018.
According to Guorui, the company still has an approved undrawn
credit line of about CNY10 billion at end-December 2018.
=========
I N D I A
=========
AIM LAMINAR: CARE Lowers Rating on INR9.17cr LT Loan to C
---------------------------------------------------------
CARE has revised the rating on bank facilities of Aim Laminar
Private Limited (ALPL) from CARE B+; Stable; Issuer Not Cooperating
to CARE C; Stable; Issuer Not Cooperating based on
best available Information. Despite CARE's request via email dated
January 24, 2019 and numerous phone calls, the company has not
provided the requisite information for monitoring the ratings. In
the absence of minimum information required for the purpose of
rating, CARE is unable to express opinion on the ratings. In the
line, with the extant SEBI guidelines, CARE's rating on Aim Laminar
Private Limited (ALPL) will now be denoted as CARE C; Stable;
ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 9.17 CARE C; Stable, Issuer Not
Facilities Cooperating, Revised from
CARE B+; Stable; ISSUER NOT
COOPERATING on the basis of
best available information
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating assigned to the bank facilities of Aim Laminar Private
Limited (ALPL) are constrained on account of its small scale of
operations with thin profit margins, leveraged capital structure
and weak debt coverage indicators along with working capital
intensive nature of operations in FY17 (refers from April 2016 to
March 2017). The rating is also constrained due to susceptibility
of operating margins to variable input costs and foreign exchange
rates coupled with presence in the highly fragmented industry and
fortunes linked to demand from cyclical real estate industry. The
rating, however, derive benefits from more than decade of
experience of the promoters in the laminate industry. The ability
of ALPL to increase its scale of operations coupled with
improvement in financial risk profile in terms of increase in
profitability and improvement in capital structure along with the
efficient working capital management will be its key rating
sensitivity.
Detailed description of the key rating drivers
At the time of last rating on April 5, 2018, the following were the
rating strengths and weaknesses (updated for details available from
publically available information):
Key Rating Weaknesses
Small scale of operations and thin profit margins: The total
operating of the company has increased to INR12.19 crore in FY17 as
against INR7.63 crore in FY16. PBILDT margin declined and stood at
11.20% during FY17 as against INR31.38% in FY16. However, ALPL
reported thin PAT margin of 0.45% during FY17 as against 4.80% in
FY16.
Leveraged capital structure and weak debt coverage indicators:
Solvency position improved, but remain leveraged as indicated by an
overall gearing of 2.26 times as on March 31, 2017 as against 1.72
times as on March 31, 2016. Further, debt coverage indicators
declined substantially and remained weak as marked by total debt to
GCA (TDGCA) of 244.66 years as on March 31, 2017 as against 11.50
years as on March 31, 2016 and interest coverage stood at 1.04
times during FY17 as against 1.59 times during FY16.
Stretched liquidity position: The liquidity position deteriorated
as marked by current ratio of 1.35 times as on March 31, 2017 as
against 1.45 times as on March 31, 2016, while the operating cycle
remained elongated at 267 days during FY17 against 249 days during
FY16.
Susceptibility of operating margins to variable input costs coupled
with presence in the highly fragmented industry: The key raw
materials required for manufacturing laminates include phenol
resins and melamine resins which are petroleum products and
purchased domestically, while decorative laminate paper is mostly
imported. Furthermore, due to low entry barriers the competition
gets intensified, which might put pressure on profitability of the
existing as well as new players.
Fortunes linked to demand from the cyclical real estate industry:
ALPL supplies decorative laminates for furniture making, the demand
of which largely comes from the real estate sector which is
cyclical in nature and with fortunes dependent upon the overall
economic conditions in the country.
Key Rating Strengths
Experienced promoters: Key promoter Mr. Hitesh Patel has an
average experience of around a decade in the laminates industry
through its group entity Amit Laminates Private Limited. Mr.
Jignesh Patel looks after marketing and finance segment of the
company. Mr. Hari Patel has an experience of around three decades
in trading of timber and wooden pallets business and so he will
support in managerial aspects of the company.
Ahmedabad-based (Gujarat) ALPL was incorporated in October 2000.
However, ALPL commenced its full-fledged operations from December
2014 post erection and commissioning of plant and management take
over in 2013 by Mr. Hitesh Patel and Mr. Masukh Patel. The company
is engaged in the manufacturing of decorative laminates which is
used as an overlay over plywood or other wooden furniture. ALPL has
its sole manufacturing plant situated in Kheda (Gujarat) with an
installed capacity of 13.25 lakh sheets per annum. The company
purchases domestically as well as imports few raw materials like
base paper from China, Germany while phenol resins and melamine
resins for manufacturing laminates are mostly purchased
domestically. ALPL caters mainly to domestic demand and markets its
product under its brand "Raisin".
AJAY LANDMARK: CARE Reaffirms 'B' Rating on INR11.29cr LT Loans
---------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of Ajay
Landmark Private Limited (ALPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 11.29 CARE B; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating of ALPL is primarily constrained on account of its
presence in the highly competitive and fragmented food processing
industry and seasonality associated with agro industry leads to
fluctuations in the raw material prices and vulnerability to
margins. The rating is, further, constrained on account of modest
scale of operations with operational as well as net losses, weak
solvency position and stressed liquidity position.
The rating, however, derives strength from the long standing
experience of the directors along with its established marketing
network.
The ability of the company to increase its scale of operations and
cover up losses with efficient management of working capital would
be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weakness
Modest scale of operations with operational as well as net loss:
During FY18, TOI of the company has improved by 57.21% over FY17
mainly on account of flour mill division income started in FY18.
However, revenue of food processing division marginally declined by
3.75% in FY18.
PBILDT margin of the company has witnessed continuous declining
trend in last three financial years ended FY18. During FY18, the
company has registered operating loss of INR4.21 crore owing to
high cost of sales. Further, with operating loss, it has registered
continuous net losses in year ending March 2018.
Weak solvency position: The capital structure of the company stood
highly leveraged with an overall gearing of 12.67 times as on March
31, 2018, deteriorated from 8.58 times as on March 31, 2017 mainly
on account of low net-worth base due to higher net losses as well
as increase in unsecured loan from shareholders and relatives.
Further, Debt coverage indicators of the company also
stood weak with negative total debt to GCA and negative interest
coverage ratio in FY18.
Stressed Liquidity Position: ALPL operations are working capital
in nature as reflected by moderate operating cycle of 66 days in
FY18 improved from 135 days in FY17 mainly on account of
improvement in collection period. The liquidity position of the
company stood modest with almost full utilization of working
capital bank borrowings for last 12 months ended December 31, 2018.
Further, Current ratio and quick ratio of company stood below unity
level at 0.82 times and 0.47 times respectively as on
March 31, 2018. It has cash and bank balance of INR0.62 crore as on
March 31, 2018.
Key Rating Strengths
Experienced management: Mr. Ajay Kumar Singh, Director, is
Graduate by qualification and has around more than three decades of
experience in the industry. The long standing experience and
in-depth knowledge of the industry by the promoter has benefited
the
company and has able to establish customer and supplier base in the
market.
Jaipur (Rajasthan) based ALPL was incorporated in 2007 by Mr. Ajay
Kumar Singh and Mr. Atul Kumar Singh. ALPL is engaged in the
business of processing of spices and markets its products under the
brand name of 'Saptarshi' in domestic market mainly in Eastern
Rajasthan, Uttar Pradesh, Madhya Pradesh and Haryana. Further, in
FY17, the company undertook a project for setting up of flour mill
having an installed capacity of 400 tons per day for manufacturing
of flour, maida, Gram flour and porridge. Further, the promoters
of ALPL have promoted Ajay Petro Junction which is operating a
Reliance Petrol Pump and Jumbo Finvest Private Limited which is
Registered as Non deposit taking NBFC with RBI.
BLUE AUTOWORLD: CARE Assigns B+ Rating to INR5.50cr LT Loan
-----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Blue
Autoworld Private Limited (BAPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 5.50 CARE B+; Outlook:
Facilities Stable Assigned
Detailed description of the key rating drivers
The ratings assigned to the bank facilities of BAPL is constrained
by small scale of operation, moderate financial risk profile, thin
profitability margin due to trading nature of business, dependence
on fortunes of TVS Motor Company Limited with low bargaining power,
working capital intensive nature of operation and presence in
intensely competitive industry. The ratings however, draws comfort
from experienced promoter, exclusive authorized dealer of TVS Motor
Company Limited and improvement in financial performance during
FY16 (refers to period from April 1 to March 31) to FY18. Going
forward the ability of the company to increase scale of operation,
improve profitability margin and efficient management of working
capital will remain the key rating sensitivities.
Key Rating Weakness
Small scale of operation: The overall scale of operation of BAPL
continued to remain at low marked by total operating income of
INR33.31 crore. BAPL is a relatively small player in sale, service
and spares supply of two wheelers with total capital employed of
INR9.94 crore as on March 31, 2018 (as against INR7.19 crore in
FY16). The small size of the company restricts the financial
flexibility in times of stress.
Moderate financial risk profile: The capital structure of the
company remained moderate marked by Overall gearing and total debt/
GCA of 0.55x and 11.63x respectively as on March 31, 2018 as
against 0.28x and 12.03x respectively as on March 31, 2016.
Working capital intensive nature of operations and tight liquidity
position: BAPL receives inventory against immediate payments to the
principal. The dealers are required to hold an inventory of around
a month and the sales proceeds are collected within a week as part
of the customers are retail clients who opt for vehicle financing.
The working capital requirement of the company is mainly funded
through bank borrowings.
Dependency on fortunes of principal with low bargaining power:
Dealers lack bargaining power due to its dependence on such large
principal that set policies, targets and link incentive based
income to satisfactory compliance of such policies and the
financial risk profile of the company has a high degree of
correlation with the performance of OEM's vehicles in the market
and their ability to launch new products.
Presence in an intensely competitive industry: The automobiles
industry is very competitive on the back of the presence of a large
numbers of players dealing with similar products. Moreover, in
order to capture the market share, the auto dealers offer better
buying terms like providing credit period or allowing discounts on
the purchase. Such discounts offered to the customers create a
margin pressure and negatively impact the earning capacity of the
company.
Key Rating Strengths
Experienced promoters: BAPL was promoted by Malda based Mr.
Panchanan Misra in 2010. Mr. Panchanan Misra has around a decade of
experience in retailing of two wheeler and its spares spares. The
day to day affairs of the company is looked after by Mr. Panchanan
Misra along with the support from a team of experienced
professional.
Exclusive authorised dealer of TVS Motor Company: BAPL is
associated with TVS Motor Company Limited (TVS) since 2011 as a 3S
authorized dealer for entire Malda region in West Bengal. TVS is
one of the leading players in two wheelers automobile segment.
Currently, BAPL operates 8 showrooms spread across Malda region in
West Bengal. BAPL has also appointed 8 sub-dealers under it. The
segment wise revenue break up is provided below.
Renewable based dealership agreements: The dealership agreement
between BAPL and TVS is valid for one year, thereafter subject to
automatic renewal for one year. The latest agreement is renewed on
July 25, 2018 which is valid for a period of one year from October
1, 2018 to September 30, 2019. However, the agreements have been
renewed regularly in the past since 2011.
Improvement in financial performance during FY16 to FY18: The total
operating income of BAPL grew at a CAGR of 23.67% to INR33.31 crore
in FY18 as against INR21.78 crore in FY16. PBILDT margin improved
from 1.35% in FY16 to 2.49% in FY18. On absolute basis the company
reported PBILDT of INR0.83 crore in FY18 as against INR0.29 crore
in FY16. Interest coverage deteriorated from 2.50x in FY16 to 1.83x
in FY18. The company earned GCA of INR0.30 crore in FY18 as against
nil term debt repayment.
Liquidity
The liquidity position of the company continued to remain tight as
evident from the average Utiization of its fund based working
capital limit at ~97% during the past twelve months ending December
2018. BAPL had free cash and bank balance of INR0.31 crore as on
March 31, 2018. Current ratio of BAPL was comfortable at 1.74x as
on March 31, 2018
Blue Autoworld Private Limited (BAPL) was incorporated in March
2010, by Malda based Mr. Panchanan Misra for trading and servicing
of spare parts of two wheelers. In 2011, BAPL was appointed as an
exclusive 3S (Sale/ Service/ Spares) authorized dealer of TVS Motor
Company Limited. Currently the company has 1 showroom, 7 branches
and 8 sub-dealers appointed under it. The showrooms are housed with
the two wheeler vehicles of TVS Motor Company for sale.
The day to day affairs of the company is looked after by Mr.
Panchanan Misra along with the support from a team of experienced
professional.
CKS MEDICARE: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: CKS Medicare Private Limited
F-98-A, Road No. 6
V.K.I. Area
Jaipur 302013
Insolvency Commencement Date: January 25, 2019
Court: National Company Law Tribunal, Jaipur Bench
Estimated date of closure of
insolvency resolution process: July 24, 2019
Insolvency professional: Sandeep Kumar Jain
Interim Resolution
Professional: Sandeep Kumar Jain
24 Ka 1, Jyoti Nagar
Pankaj Singhvi Marg
Near New Vidhansabha
Jaipur 302005
Rajasthan
E-mail: sandeepjaincs@gmail.com
sandeepjainip@gmail.com
Last date for
submission of claims: February 8, 2019
CORE JEWELLERY: Ind-Ra Assigns 'BB' on INR110MM Loan Due 2022
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has rated Core Jewellery
Private Limited's (CJPL) additional bank facilities as follows:
-- INR110 mil. Term loan due on February 2022 assigned with IND
BB/Stable rating; and
-- INR250 mil. Fund-based working capital limits assigned with
IND BB/Stable/IND A4+ rating.
KEY RATING DRIVERS
CJPL's average working capital limit utilization was almost 93.5%
for the 12 months ended in January 2019.
RATING SENSITIVITIES
Negative: A decline in the revenue and/or EBITDA margin, leading to
deterioration in the credit metrics, all on a sustained basis, will
be negative for the ratings.
Positive: A substantial increase in the revenue, along with an
improvement in the credit metrics, all on a sustained basis, could
be positive for the ratings.
COMPANY PROFILE
Incorporated in 1999, Mumbai-based CJPL manufactures and exports
diamond-studded gold jewelry.
EARTH WATER: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: Earth Water Limited
Registered office as per ROC Company Master Data:
A-1/152 Ignou Road NEB Sarai New Delhi
DL 110068 India
Corporate office:
Eros City Square, 7th Floor
Sector-49 & 50, Rosewiid City
Near Golf Course Extn. Road
Gurugram, Haryana 122018
India
Insolvency Commencement Date: January 28, 2019
Court: National Company Law Tribunal, Court No. IV,
New Delhi Bench
Estimated date of closure of
insolvency resolution process: July 27, 2019
(180 days from commencement)
Insolvency professional: Mukesh Kumar Grover
Interim Resolution
Professional: Mukesh Kumar Grover
102, B-3 Prerna Complex Shubhash Chowk
Laxmi Nagar, Delhi 110092
E-mail: mukesh@mjra.co.in
mkgrover.ip@gmail.com
Last date for
submission of claims: February 14, 2019
ENERGY DEVELOPMENT: CARE Hikes Rating on INR10cr Loan to B+
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Energy Development Company Limited (EDCL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 10.00 CARE B+; Stable Revised
Facilities from CARE D
Short-term Bank 30.00 CARE A4 Revised from CARE D
Facilities
Detailed Rationale and Key Rating Drivers
The revision in the ratings assigned to the bank facilities of EDCL
takes into account the regularisation of delays in debt servicing
by the company since September 19, 2018. The ratings continue to be
constrained by the volatility in revenues, weak debt coverage
indicators, elongated operating cycle and high exposure in the form
of investment and loans & advances in subsidiary companies. The
ratings also take note of the discontinuance of trading division,
low orders in the contract division and decrease in scale of
operations in FY18 (refers to the period April 1 to March 31) and
H1FY19.
The ratings, however, derive strength from the experience of the
company is power generation and presence of power purchase
agreements for its hydro power and wind power capacity. Ability of
the company to garner and execute orders in contracts and services
division, timely realization of receivables, operating performance
of the power plants and exposure in group companies will be the key
rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Volatility in revenue streams: EDCL faces variability in hydro and
wind power generation as the same is subject to vagaries of nature.
The revenue from power hydel power division increased in FY18 due
to increase in units generated with higher rainfall. Also, business
in the contract division is tender based and has dependence on
release of orders by State Governments of north eastern India. In
FY18, the revenue from the contract division decreased
significantly with no major orders received during the year and
stalled projects. The company had ventured into trading of solar
photovoltaic modules and other power related equipment in FY16.
However, it discontinued the trading operations from Q4FY18
considering the volatility in prices and delays in realisation of
dues, which led to decline in revenue from the division in FY18.
Decrease in scale of operations in FY18 and H1FY19: The total
operating income declined significantly to INR40.23 crore in FY18
from INR103.21 crore in FY17 due to lower contribution from trading
division and contract division. Though PBILDT was low at INR2.09
crore in FY18 (Rs.1.28 crore in FY17), the PBILDT margin improved
from 1.24% in FY17 to 5.19% in FY18 due to increased contribution
in total revenue from higher margin generation division. The net
profit decreased from INR3.41 crore in FY17 to INR1.39 crore in
FY18 as the company had recorded extra-ordinary income of INR5.39
crore during FY17 on sale of investments in subsidiaries. During
H1FY19, the company reported net profit of INR1.52 crore on a total
income of INR12.86 crore vis-à-vis net profit of INR3.05 crore on
total income of INR28.82 crore in H1FY18. The decrease in total
income was on account of discontinuance of trading activity and
lower revenue from contract division. On a consolidated basis EDCL
incurred loss of INR13.11 crore on total income of INR61.9 crore in
FY18 vis-à-vis net profit of INR3.98 crore on total income of
INR116.28 crore in FY17.
Weak debt coverage indicators: Overall gearing remained stable at
0.15x as on March 31, 2018 as compared to 0.19x as on March 31,
2017 with relatively stable borrowings and networth. Though the
capital structure continues to remain comfortable, the debt
coverage indicators are weak due to low PBILDT and cash accruals.
The interest coverage was below unity at 0.68x in FY18 vis-à-vis
0.52x in FY17. Total debt to GCA deteriorated to 7.54x in FY18
vis-à-vis 5.02x in FY17.
Elongated operating cycle: The operating cycle of the company
increased to 137 days in FY18 vis-à-vis 44 days in FY17 on account
of increase in average collection period from 136 days in FY17 to
363 days in FY18. The payables period also increased from 96 days
in FY17 to 237 days in FY18. The increase in collection period was
primarily due to decrease in income and high receivables of
INR36.78 crore as on March 31, 2018 as against INR44.40 crore as on
March 31, 2017. Majority of the debtors pertain to the discontinued
trading division against which the company also has corresponding
payables.
Significant exposure to group companies: EDCL's exposure to its
subsidiary/associate companies by way of investments and loans &
advances as on March 31, 2018 was INR123.13 crore (Rs.133.08 crore
as on March 31, 2017), accounting for about 69% of its tangible net
worth, as on that date. Majority of the investment, INR86.57 crore
(out of INR123.13 crore), was in Ayyappa Hydro Power Ltd (AHPL)
which has completed a 15 MW Hydropower project in Kerala in May,
2017. Other than the fund-based exposure, EDCL has provided
corporate guarantee of INR90.39 crore for term loan availed by AHPL
for setting up the project. EDCL had entered into an agreement with
Essel Infraprojects Ltd (EIL) for divesting 76% of its stake in its
subsidiaries setting up projects in Uttarakhand and Arunachal
Pradesh. EIL would invest in these 15 Hydro power projects held by
EDCL through its various subsidiaries. The transaction has been
completed during FY18. The stake sale has reduced the investment
commitment of EDCL towards these projects.
Key Rating Strengths
Experience of the company in power generation: EDCL is engaged in
the power generation from renewable sources (hydro and wind) as
well as execution of construction contracts since 1996. The company
has experienced personnel on its board and has demonstrated a track
record in operating hydel power plants.
Presence of power purchase agreements: EDCL has in place long-term
power purchase agreements with the state utilities for the hydro
and wind power generation capacity which ensures steady revenue
from sale of power.
Liquidity
The liquidity profile of the company is weak with low cash balance,
stuck debtors and variability of cash flows from power
division. However, the company does not have any term loan
obligations and liquidity is supported through infusion of
unsecured loans as required.
EDCL, incorporated in 1995, is engaged in power generation from
renewable sources (hydro and wind), contract management in the
infrastructure sector (construction of bridges, roads, power
plants, operation & maintenance of power plants etc.) and providing
consultancy services in hydro power (engineering, designing,
project management services, etc in setting up hydro power plants).
It is currently operating hydro power plant of 15MW and wind power
plant of 3MW. In FY16, EDCL had ventured into trading of power
equipment (Hydraulic Hoist System and Solar Photovoltaic module),
which continued to form a major source of revenue during FY18.
However, the company has discontinued the trading activities from
Q4FY18.
GANGA ADVISORY: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Ganga Advisory Pvt Ltd
Registered office:
E-302, Ashawari Appartment
NR. Fun Republic
Satellite, Ahmedabad
Gujarat 380055
Insolvency Commencement Date: January 24, 2019
Court: National Company Law Tribunal, Pune Bench
Estimated date of closure of
insolvency resolution process: July 23, 2019
(180 days from commencement)
Insolvency professional: Haresh Babulal Shah
Interim Resolution
Professional: Haresh Babulal Shah
First Floor, Matruchaya Building
Plot No. 27, Mitramandal Colony Parvati
Pune, Maharashtra 411009
Tel.: 020-24420209
E-mail: haresh.mergersindia@gmail.com
cirpgapl@huconsultancy.com
Last date for
submission of claims: February 7, 2019
GARG ALUMINIO: CARE Lowers Ratings on INR9.14cr Loans to D
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Garg
Aluminio Private Limited (GAPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 6.14 CARE D; Issuer Not Co-operating;
Facilities Revised from CARE BB; Stable on
the basis of best available
information
Short term Bank 3.00 CARE D; Issuer Not Co-operating;
Facilities Revised from CARE A4 on the
basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from GAPL to monitor the ratings
vide emails dated January 22, 2019, January 18, 2019, January 16,
2019, December 20, 2018, November 20, 2018 and numerous phone
calls. However, despite CARE's repeated requests, the company has
not provided the requisite information for monitoring the ratings.
In-line with the SEBI guidelines, CARE has reviewed the rating on
the basis of publicly available information which however, in
care's opinion is not sufficient to arrive at fair rating. CARE's
rating on Garg Aluminio Private Limited's bank facilities will now
be denoted as CARE D; ISSUER NOT COOPERATING. The ratings have been
revised on account of account of ongoing delays in meeting the debt
obligations.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
The rating has been revised on account of ongoing delays in debt
servicing due to stretched liquidity position.
Delhi-based GAPL (erstwhile Yash Ceramics Private Limited Ltd, name
changed on April 25, 2013), incorporated in June 4, 1997, was
promoted by Mr Suresh Chand Garg and Mr Atul Chanana. Currently,
the company is engaged in the manufacturing of aluminum wires,
aluminum alloy wires and copper clad aluminum wires. The
manufacturing facility of the unit is located at Bahadurgarh,
Haryana. The company mainly caters to the domestic market .The
company has an associate concern "Garg Inox Limited" also engaged
in the business of manufacturing of stainless steel wires, bright
bars, zinc wires, aluminum wires, and copper clad aluminum wires.
HAR AUTO: Ind-Ra Lowers Rating on INR180MM Loans to 'B+'
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Har Auto Private
Limited's (HAPL) Long-Term Issuer Rating to 'IND B+' from 'IND BB
(ISSUER NOT COOPERATING)'. The Outlook is Stable.
The instrument-wise rating action is:
-- INR180.0 mil. Fund-based limits downgraded with IND B+ /
Stable / IND A4 rating.
KEY RATING DRIVERS
The downgrade reflects deterioration in HAPL's operating
performance and credit metrics in FY18. The scale of operations
remained medium while revenue declined to INR1,128 million in FY18
(FY17: INR1,266 million), owing to a dip in sales volume to 2,611
units (2,677 units). HAPL booked revenue of INR760 million in
9MFY19. As on January 31, 2019, the company had an order book of
INR1.85 million to be executed till February 2019. Ind-Ra however
expects the revenue to improve owing to the commencement of three
outlets in the medium term.
HAPL's absolute EBITDA fell to INR37 million in FY18 (FY17: INR44
million), leading to EBITDA margins dipping to 3.3% (3.5%), on
account of high direct expenses. Return on capital employed was 7%
in FY18 (FY17: 8%). Ind-Ra expects the company's EBITDA margin to
remain at modest levels of below 4% in the medium term.
Gross interest coverage (operating EBITDA/gross interest expense)
remained weak at 1.4x in FY18 (FY17: 1.4x) while net debt leverage
(adjusted net debt/operating EBITDA) continued to be at high levels
while increasing to 8x (6.2x) due to an additional term loan of
INR20 million availed to fund one of the three outlets. The company
expects credit metrics to further deteriorate as HAPL is planning a
debt-led-capex to introduce few more outlets in the coming years.
The ratings factor in HAPL's tight liquidity position, with cash
flow from operations worsening to negative INR9 million in FY18
(FY17: INR96 million) due to a stretch in net working capital cycle
to 43 days (32 days) as payable period reduced to 16 days (22
days), with available cash balance standing at INR49 million. The
company's average peak use of the fund-based limit for the 12
months ended December 2018 was 87.50%.
The ratings, however, are supported by HAPL's promoters' experience
of a decade in an automobile dealership.
RATING SENSITIVITIES
Negative: A decline in the top line and EBITDA margin, leading to
deterioration in the credit metrics, all on a sustained basis,
could lead to a negative rating action.
Positive: Sustained growth in the revenue and EBITDA margin leading
to an improvement in the overall credit metrics on a sustained
basis could lead to a positive rating action.
COMPANY PROFILE
Incorporated in 2000 in Kerala by Mr. P.V. Equbal and his brothers,
HAPL operates an automobile dealership business and nine showrooms
in Kerala. It is an authorized dealer of Maruti Suzuki India
Limited.
JALARAM GINNING: CARE Lowers Rating on INR6.41cr LT Loan to B+
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Jalaram Ginning and Pressing (JGP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 6.41 CARE B+; Stable; Issuer not
Facilities cooperating; Revised from
CARE BB-; Stable on the basis
of best available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from JGP to monitor the rating
vide e-mail communications dated October 31, 2018, December 5,
2018, December 12, 2018, January 9, 2019, January 10, 2019 and
numerous phone calls. However, despite CARE's repeated requests,
the firm has not provided the requisite information for monitoring
the ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating. The rating on JGP's bank facilities will now be
denoted as CARE B+; Stable/CARE A4; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been revised on account of non-availability of
information and due diligence couldn't be undertaken.
Detailed description of the key rating drivers
At the time of last rating on January 4, 2018, the following were
the rating strengths and weaknesses.
Key Rating Weaknesses
Low profitability margins owing to limited value addition and
fluctuation in raw material prices: Due to low value added nature
of the business and fluctuating raw material prices the operating
margins have remained low and in the range of 1.2-1.8% during past
three years ended FY17 while PAT margin was in the range of
0.2-0.3%.
Leverage capital structure and weak debt coverage indicators: The
capital structure is leveraged as marked owing to high dependence
on external borrowings. Furthermore, JGPs debt coverage indicators
were also weak due to high gearing level and low profitability
margins.
Presence in highly fragmented industry: There are large numbers of
units operating in cotton ginning business resulting in high
fragmentation and increased competition thereby restricting the
profitability. Thus, ginning players have very low bargaining power
against its customer as well as suppliers.
Working capital intensive nature of operations: Operation of cotton
business is highly seasonal in nature, as the sowing season is
during March to July and harvesting season is spread from November
to February. Hence, the working capital utilization is high in the
peak season. This results in moderately low financial flexibility
to shield against any adverse situation during peak period.
Partnership nature of constitution: Being a partnership firm, JGP
is exposed to the risk of withdrawal of capital by partners and
limited excess to financial market. This limits the financial
flexibility of the firm
Key Rating Strengths
Experienced promoters: The promoters are in the business of cotton
ginning and pressing and oil extraction since past one decade.
Being in the industry for so long has helped the promoters in
gaining adequate acumen about the business.
Comfortable capacity utilization resulting in growing scale of
operations: In FY17, the income from operations of the firm grew by
approximately 55% owing to increase in order intake and sales
volume. The growth was supported by comfortable capacity
utilization of around 85% during the year.
Location advantage emanating from proximity to raw material: JGP's
facility is located at Wardha which falls under the Vidarbha region
of Maharashtra and is known for the highest cotton producing area
of Maharashtra. This ensures easy raw material access and smooth
supply of raw materials at competitive prices and lower logistic
expenditure for JGP.
JASON DEKOR: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: M/s. Jason Dekor Private Limited
G-9 Mahaveer Towers
Nr Mahalaxmi Cross Raods Paldi
Ahmedabad GJ 380007 IN
Insolvency Commencement Date: January 16, 2019
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: July 27, 2019
Insolvency professional: Mr. Pinakin Surendra Shah
Interim Resolution
Professional: Mr. Pinakin Surendra Shah
A/201 Siddhi Vinayak Towers
B/h DCP Office
Next to Kataria House
Off S.G. Highway, Makaraba
Ahmedabad 380051, Gujarat
E-mail: pinakincs@yahoo.com
Last date for
submission of claims: February 11, 2019
JET AIRWAYS: Shareholders Approve Debt-For-Equity Swap
------------------------------------------------------
Reuters reports Jet Airways Ltd said on Feb. 22 that its
shareholders approved a plan to convert existing debt to equity,
paving the way for the troubled company's lenders to infuse funds
and nominate directors to its board.
Jet's board last week approved a plan by lenders, led by State Bank
of India, for an equity infusion, debt restructuring and the sale
or sale-and-lease-back of aircraft, Reuters says.
According to Reuters, the plan will mean the lenders will have a
bigger holding than any other shareholder.
Currently, Chairman Naresh Goyal owns a 51 percent stake in the
company and Abu Dhabi's Etihad Airways owns 24 percent.
Jet, which had net debt of INR72.99 billion ($1.03 billion) as of
end-December, has debt payments looming next month, Reuters
discloses citing rating agency ICRA. It has been unable to pay
pilots' salaries and has outstanding bills to aircraft lessors, the
report notes.
Reuters says the company, India's biggest full-service carrier, is
struggling with competition from budget rivals, high oil prices and
a weaker rupee. The share price took a beating in 2018, losing
nearly 70 percent of its value, the report states.
In a regulatory filing, Jet said on Feb. 22 that 98 percent of its
shareholders voted to increase the share capital to INR22 billion
($309.8 million) from INR2 billion at a special meeting, according
to Reuters.
Jet, whose financial woes are set against the backdrop of wider
aviation industry problems, has been in the red for four straight
quarters, Reuters discloses.
About Jet Airways
Based in Mumbai, India, Jet Airways (India) Limited --
https://www.jetairways.com/EN/PH/Home.aspx -- provides passenger
and cargo air transportation services. It operates through two
segments, Air Transportation and Leasing of Aircraft. The company
also leases aircrafts. It operates flights to 64 destinations in
India and international countries, including Abu Dhabi, Amsterdam,
Bahrain, Bangkok, Colombo, Dammam, Dhaka, Doha, Dubai, Hong Kong,
Jeddah, Kathmandu, Kuwait, London Heathrow, Muscat, Paris, Riyadh,
Sharjah, Singapore, and Toronto. As of August 31, 2017, the company
had a fleet of 113 aircraft, which includes a mix of Boeing 777-300
ERs, Airbus A330-200/300 aircraft, Next Generation Boeing 737s, and
ATR 72-500/600s.
As reported in the Troubled Company Reporter-Asia Pacific on Dec.
28, 2018, ICRA revised the ratings on certain bank facilities of
Jet Airways (India) Limited to [ICRA]C from [ICRA]B. The rating
downgrade considers delays in the implementation of the proposed
liquidity initiatives by the management, further aggravating its
liquidity, as reflected in the delays in employee salary payments
and lease rental payments to the aircraft lessors. Moreover, the
company has large debt repayments due over the next four months
(December-March) of FY2019 (INR1,700 crore), FY2020 (INR2,444.5
crore) and FY2021 (INR2,167.9 crore). The company is undertaking
various liquidity initiatives, which includes, among others, equity
infusion and a stake sale in Jet Privilege Private Limited (JPPL),
and the timely implementation of these initiatives is a key rating
sensitivity. Moreover, the company continues to witness a stress
in its operating and financial performance.
K&R RAIL: Ind-Ra Affirms Then Withdraws BB+ on INR30MM Loan
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed and withdrawn K&R
Rail Engineering Limited's (KREL) Long-Term Issuer Rating of 'IND
BB+'. The Outlook was Stable.
The instrument-wise rating actions are:
-- The 'IND BB+' rating on the INR30 mil. Fund-based facilities*
affirmed & withdrawn; and
-- The 'IND A4+' on the INR415 mil. Non-fund-based facilities#
affirmed & withdrawn.
*Affirmed at 'IND BB+'/Stable/'IND A4+' before being withdrawn
#Affirmed at 'IND A4+' before being withdrawn
KEY RATING DRIVERS
While affirming the ratings Ind-Ra has factored in the likely fall
in KREL's already weak credit profile in FY19 because of a
continuous fall in its revenue since late FY18, owing to slower
execution of orders in 1HFY19. The company had an order book of
INR1,244 million to be executed by 1QFY19; of this, it was able to
execute only INR626.9 million till end-1HFY19. As a result, the
revenue fell to INR308 million in 1HFY19 (1HFY18: INR591.5 million;
FY18: INR807 million; FY17: INR1,083 million).
The company's interest coverage was 1.7x in FY18 (FY17: 3.9x) and
net leverage was negative 7.3x (FY17: 0.2x). The EBITDA margins
declined to 1.4% in FY18 (FY17: 1.6%) due to an increase in
overheads. Return on capital employed fell to negative 1% in FY18
(FY17: 5%).
The ratings also reflect the company's tight liquidity position
with cash flow from operations turning negative INR144 million in
FY18 (FY17: INR101 million) due to a stretched net cash conversion
cycle of 169 days (45 days). However, the cycle improved to 152
days in 1HFY19.
The ratings continue to be supported by KREL's promoters over three
decades of experience in executing engineering, procurement and
construction contracts for the railways.
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no objection certificate from the company's lenders.
This is consistent with the Securities and Exchange Board of
India's circular dated 31 March 2017 for credit rating agencies.
COMPANY PROFILE
Incorporated in July 2010, KREL constructs railway sidings for
private companies.
K. D. SINGH: CARE Migrates B+ Rating to Not Cooperating Category
----------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of K. D.
Singh Poultries Private Limited (KPPl) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 15.00 CARE B+; Stable; Issuer Not
Facilities Cooperating; Based on best
Available information.
Detailed Rationale and key rating drivers
CARE has been seeking information from KPPL to monitor the rating
vide e-mail communications/letters dated October 9, 2018,
December 29, 2018, January 2, 2019 and numerous phone calls.
However, despite CARE's repeated requests, the company has not
provided the requisite information for monitoring the rating. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the publicly available information which however,
in CARE's opinion is not sufficient to arrive at a fair rating.
The rating on KPPL's bank facilities will now be denoted as CARE
B+; Stable; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating in December 15, 2017 the following were
the rating strengths and weaknesses: (Updated the information
available from Ministry of Corporate Affairs).
Key Rating Weaknesses
Small scale of operations with low profit margins: KPPL is a small
player in trading of eggs with a total operating income of
INR102.03 crore with a PAT of INR0.52 crore in FY18. Moreover the
total capital employed was also low at INR24.61 crore as on March
31, 2018. The small size restricts the financial flexibility of the
company in times of stress and deprives it from benefits of
economies of scale. The profit margins of the company also remained
low marked by operating margin of 2.74% and PAT margin of 0.51% in
FY18.
Susceptibility of profitability to volatility in egg prices: KPPL
trades eggs, prices of which have been volatile in nature. Egg
prices are sensitive to market dynamics and controlled by NECC
(National Egg Co-ordination Committee). So the company has low
pricing power. The average price as per NECC during FY16 was at
INR3.39 per egg and INR3.69 per egg during FY 17.
Vulnerability to outbreaks of flu and other diseases: Intermittent
outbreaks of bird flu have affected poultry and poultry products
export since 2006. These avian flu outbreaks in the past have led
to a drastic fall in demand followed by crash in poultry and egg
prices. A ban on exports could lead to products being piled up
leading to an excess supply situation thereby causing a sharp fall
in end product prices. Such scenario is expected to have an impact
on the company's revenues as well as profitability. In the past,
during such bird flu outbreaks, the company's sale of egg has also
been affected to an extent. However, the high level of safety
standards like high temperature pasteurisation and high quality
processing at the company's unit reduces any major impact on the
company's revenues during such outbreaks.
Moderate capital structure with weak debt coverage indicators: The
capital structure of KPPL remained moderate marked by overall
gearing of 1.76x as on March 31, 2018. Furthermore, debt coverage
indicators also remained weak marked by interest coverage of 1.37x
(FY17: 1.59x) and total debt to GCA of 27.08x (FY17: 88.53x) in
FY18.
Inherent risk associated with poultry industry coupled with high
competition from local players: Poultry industry is driven by
regional demand and supply because of transportation constraints
and perishable nature of the products. Low capital intensity and
low entry barriers facilitate easy entry of players leading to a
large unorganized sector. Poultry industry is also vulnerable to
outbreaks of diseases, like bird flu, extreme weather conditions
and contamination by pathogens. The outbreak of bird flu leads to a
fall in demand and consequent sharp crash in the egg prices.
Diseases can also impact production of healthy chicks. The inherent
industry risk will, however, continue to be a constraint for
players in the poultry industry.
Key Rating Strengths
Experienced promoters & satisfactory track record of operations:
KPPL has commenced operations since 2007 and thus has satisfactory
track record of operations of around 10 years. The key promoter Mr.
Kapil Deo Singh has more than three decades of experience in the
same line of business through his family business, looks after the
day to day operations of the company. He is supported by the other
promoter Mr. Rajesh Kumar Singh who also has over two decades of
experience in the same industry. The promoters are well assisted by
a team of experienced professionals.
Satisfactory demand outlook for the poultry sector: As per
Agricultural and Processed Food Products Export Development
Authority (APEDA), poultry is one of the fastest growing segments
of the agricultural sector in India. Currently, India is the
world's fifth largest egg producer and the eighteenth largest
producer of broilers. The potential in the poultry sector is
increasing due to a combination of factors - growth in per capita
income, growing urban population and falling poultry prices. Also
poultry meat is the fastest growing component of global meat
demand, and India, one of the world's fastest growing countries is
experiencing a rapid growth in its poultry sector.
Ranchi-based, K. D. Singh Poultries Private Limited (KPPL)
incorporated in September 2007, was promoted by the Singh family of
Ranchi, Jharkhand with Mr. Kapil Deo Singh being the main promoter.
KPPL is engaged in trading of eggs. Liqudity Position: The
liquidity position of the company was moderate marked by its
current ratio of 1.16x as on March 31, 2018. The company has free
cash and bank balance of INR1.89 crore as on March 31, 2018. The
company has generated cross cash accrual of INR0.58 crore during
FY18. The average utilisation of fund based limit was around 96%
during last 12 months ended on December 31, 2018.
KAMRUP HOUSING: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Kamrup Housing Projects Private Limited
Level 1 & 2, Crescent Building
Lado Sarai, Mehrauli New Delhi
South West Delhi DL 110030
Address other than R/o where all or any books of account
and papers are maintained:
403, DLF South Court Saket
New Delhi 110017 DL
Insolvency Commencement Date: February 13, 2019
Court: National Company Law Tribunal, Ghaziabad Bench
Estimated date of closure of
insolvency resolution process: August 12, 2019
Insolvency professional: Sumit Shukla
Interim Resolution
Professional: Sumit Shukla
B-4/702, Krishna Apra Garden
Plot-7, Vaibhav Khand
Indirapuram, Ghaziabad
Uttar Pradesh
E-mail: sumit_shukla@rediffmail.com
- and -
83, National Media Centre
Shanker Chowk, Nr. Ambiance Mall/
DLF Cyber City
Gurugram 122022
E-mail: cirpkamrup@gmail.com
Classes of creditors: Home buyers of real estate project of
corporate debtor company
Insolvency
Professionals
Representative of
Creditors in a class: Sh. Vijay Kumar
Sh. Shyam Arora
Sh. Ranjan Chakraborti
Last date for
submission of claims: March 2, 2019
LAKSHMI KNIT: Ind-Ra Gives 'B+' LT Rating on INR50MM Loans
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Lakshmi Knit Wear
(LKW) a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR50.0 mil. Fund-based working capital limit assigned with
IND B+/Stable/IND A4 rating; and
-- INR6.96 mil. Term loan due on March 2024 assigned with IND
B+/Stable rating.
KEY RATING DRIVERS
The ratings reflect LKW's small scale of operations as indicated by
revenue of INR106.6 million in FY18 (FY17: INR119.7 million). The
decline in revenue was because of a decrease in work orders. Its
return on capital employed was 4% and EBITDA margin was modest at
6.1% in FY18 (FY17: 5.8%). Despite the revenue decline, the margins
increased as the firm passed on the increase in raw material cost
to customers. The margins were volatile and ranged between 6.1% and
8.7% over FY15-FY18, due to fluctuations in raw material prices.
The ratings also factor in the firm's modest credit metrics as
reflected by net leverage (adjusted net debt/operating EBITDA) of
8.7x in FY18 (FY17: 8.1x) and interest coverage (operating
EBITDA/gross interest expenses) of 1.3x (1.4x). The deterioration
in the credit metrics was on account of a decrease in the absolute
EBITDA to INR6.5 million in FY18 (FY17: INR7.0 million).
The ratings are also constrained by LKW's presence in a highly
fragmented garments industry, leading to intense competition from
both organized and unorganized players. It also faces foreign
exchange risk, given its exports accounted for 98% of its revenue
over FY16-FY18. The ratings also reflect the partnership nature of
the business.
LKW had a modest liquidity position as indicated by 90% utilization
of its fund-based limits during the 12 months ended January 2019.
It had an elongated working capital cycle of 273 days in FY18
(FY17: 229 days), due to a long inventory holding period of 232
days (182 days). Its cash and cash equivalent stood at INR0.7
million at FYE18 (FYE17: INR1.9 million).
However, the ratings are supported by the locational advantage of
its facility located in Tirupur, Tamil Nadu, owing to proximity to
raw material enabling it to procure raw materials at a competitive
price.
The ratings are also supported by LKW's partners' experience of
over two decades in the knitted garments business.
RATING SENSITIVITIES
Negative: Any decline in the revenue and/or the operating
profitability, leading to deterioration in the credit metrics,
liquidity and /or working capital cycle, all on a sustained basis,
will be negative for the ratings.
Positive: Any rise in the revenue, along with an increase in the
profitability, leading to an improvement in the credit metrics on a
sustained basis, will lead to a positive rating action.
COMPANY PROFILE
Incorporated in 2000 by A. Jayaprakesh and Ayyaswasmy, LKW
manufactures and exports knitted garments.
MURLI KRISHNA: CARE Migrates D Ratings to Not Cooperating Category
------------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Murli
Krishna Pharma Private Limited (MKPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 2.10 CARE D, Issuer Not Cooperating;
Facilities Based on best available
information
Short term Bank 9.90 CARE D, Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
MKPL 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 MPPL'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 take into account the continuous delays in debt
servicing obligations.
Detailed description of the key rating drivers
At the time of last rating on March 30, 2018, the following were
the rating strengths and weaknesses.
Key Rating Weaknesses
Delay in debt servicing obligations: There have been continuous
delays in debt servicing obligations. The delays were on account of
weak liquidity position.
MKPL was established in the year 2004 and is engaged in the
manufacturing of pre-finished formulations like pellets using
aqueous based technology. Furthermore, the company is also engaged
in the contract research and manufacturing (CRAMS) segment at its
manufacturing facility located at MIDC Ranjangaon, Pune
Maharashtra.
NARAYANADRI HOSPITALS: Ind-Ra Lowers LongTerm Issuer Rating to 'D'
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Narayanadri
Hospitals and Research Institute Private Limited's (NHRIPL)
Long-Term Issuer Rating to 'IND D' from 'IND BB- (ISSUER NOT
COOPERATING)'.
The instrument-wise rating actions are:
-- INR104.1 mil. Term loan (Long term) due on March 2022
Downgraded with IND D rating; and
-- INR19.5 mil. Fund-based working capital limits (Long
term/Short term) downgraded with IND D rating.
KEY RATING DRIVERS
The downgrade reflects delays in debt servicing by NHRIPL up to 30
days owing to tight liquidity.
RATING SENSITIVITIES
Positive: Timely debt service for at least three consecutive months
could result in a positive rating action.
COMPANY PROFILE
Incorporated in 2010, NHRIPL is a 250-bed multi-specialty hospital,
located in Tirupati, Andhra Pradesh.
PADMAJA POWER: Ind-Ra Withdraws B+ Issuer Rating on INR400MM Loan
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Padmaja Power &
Infra Private Limited's Long-Term Issuer Rating of 'IND B+'. The
Outlook was Stable.
The instrument-wise rating action is:
-- The 'IND B+' on the INR400 mil. Proposed fund-based working
capital limit is withdrawn.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the ratings as the company
did not proceed with the instruments as envisaged.
COMPANY PROFILE
Incorporated in 2010, Padmaja Power & Infra undertakes civil and
infrastructure construction projects, primarily in the irrigation,
bridges and roads segments. The company was renamed in October
2016.
PATNAZI POWER: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Patnazi Power Limited
Flat No. 709, Eros Apartment 56
Nehru Place South Delhi
New Delhi 110019
Insolvency Commencement Date: January 28, 2019
Court: National Company Law Tribunal,
New Delhi (Court No. IV) Bench
Estimated date of closure of
insolvency resolution process: July 27, 2019
Insolvency professional: Ankit Kishore Sinha
Interim Resolution
Professional: Ankit Kishore Sinha
A 11 Prop No. 150 D, Khasra No. 150
Bhavishya Apartment
Deoli Nai Basti Road, Deoli
New Delhi 110062
E-mail: ankitkishoresinha90@gmail.com
- and -
301-301A, Patel House
Ranjit Nagar Complex
Ranjit Nagar (Behind Satyam Cineplex)
New Delhi 110008
E-mail: cirp.patnazi@gmail.com
Last date for
submission of claims: February 11, 2019
QUAD LIFESCIENCES: Ind-Ra Maintains BB+ Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Quad
Lifesciences Private Limited's (QLPL) Long-Term Issuer Rating of
'IND BB+ (ISSUER NOT COOPERATING)' in the non-cooperating category
and has simultaneously withdrawn it.
The instrument-wise rating action is:
-- INR220 mil. Fund-based working capital limits* maintained in
the non-cooperating category and withdrawn;
* Maintained in 'IND BB+ (ISSUER NOT COOPERATING)' / 'IND A4+
(ISSUER NOT COOPERATING)' before being withdrawn
KEY RATING DRIVERS
QLPL did not participate in the rating exercise despite continuous
requests and follow-ups by the agency. Ind-Ra is no longer required
to maintain the ratings as the agency has received a no-objection
certificate from the rated facility's lender.
COMPANY PROFILE
QLPL manufactures active pharmaceutical ingredients from herbs,
seeds, and plants at its site in Derabassi, Punjab.
R. P. RESORTS: CARE Assigns 'B' Rating to INR8cr LT Loan
--------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of R. P.
Resorts and Hotels (RPRH), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 8.00 CARE B; Stable Assigned
Detailed Rationale & Key rating Drivers
The rating assigned to the bank facilities of RPRH is primarily
constrained on account of project implementation risks associated
with proposed debt funded project and its presence in cyclical and
competitive nature of the industry with dependence on tourist
arrivals. The rating, however, favorably take into account
experienced management through group companies and location
advantage of hotel. The ability of the firm to complete the project
within envisaged time and without cost overrun and stabilization of
operations within short period of time would be the key rating
sensitivity.
Detailed description of the key rating drivers
Key Rating Weakness
Project implementation risk associated with the hotel: The firm
envisaged total cost of the project of INR11.50 crore to be funded
through promoter fund of INR1.75 crore, term loan of INR8.00 crore
and remaining through unsecured loan of INR1.75 crore. The firm has
been granted all necessary approval and has undertaken site
development till date. The project has envisaged to be completed
till October 2020. Hence, being in initial stage of implementation,
the risk is high.
Cyclical and Competitive nature of the industry with dependence on
tourist' arrivals: The hospitality industry is highly sensitive to
the untoward events such as slowdown in the economy. Rajasthan
hotel industry is primarily dependent on tourist arrivals which in
turn are dependent on the global economy. Further, the resort
is located at Pushkar which is famous religious place of Rajasthan.
Hence the occupancy of the hotel is mainly dependent
on the pilgrims. Further, the resorts will have to face stiff
competition from well established brand name like Aaram Bagh,
Anata Resort, Dera Masuda, Westin Pushkar Resort and Spa etc.
Key Rating Strengths
Experienced partners through sister concerns: The overall affairs
of the firm will be managed by Mr. Rajesh Bhati and Mr. Pawan
Bhati. Further, they will be assisted by their father Mr. Anandi
Lal Bhati who is running a marriage garden in Ajmer City since past
5 years.
Location advantage: The resort will be located near main bus stand
of Pushkar. The city of Pushkar is the only temple dedicated to
Lord Brahma in the whole world. Apart from the Brahma Temple, the
city is famous for Pushkar Lake, Old Rangji Temple Pushkar Mela and
livestock fair. Further, the city is 37 K.M. from Ajmer City which
is famous for Ajmer Sharif Dargah and Dhai Din ka Jhopda.
R. P. Resorts & Hotels (RPRH) was formed in July 2018 as a
partnership firm by two brothers Mr.Rajesh Bhati and Mr. Pawan
Bhati with an objective to establish a resort at Pushkar
(Rajasthan) which is around half km away from bus stand. The
project consist total 36 rooms and other amenities like restaurant,
banquet hall, swimming pool, marriage garden etc.
RAM AGRI-INFRA: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Ram Agri-Infra India Private Limited
Registered office:
Ground Floor, 23-24, Indraprasth
Near Drive In, Ahmedabad
Gujarat 380052
Corporate office:
3A/B, Vaishanv Villa
Opp Mahindra & Mahindra
Thakur Complex, Kandivali (E)
Mumbai 400101
Also address at:
C-2/17, Meera Co-Op Hsg Soc.
Behind Amar Palace, Mira Village
Mira Road, Maharashtra 401104
Insolvency Commencement Date: December 28, 2018
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: June 29, 2019
(180 days from commencement)
Insolvency professional: Manishkumar Patel
Interim Resolution
Professional: Manishkumar Patel
Flat no. 1, Vishram Apartment
L.B.S. Marg
Thane Maharashtra 400602
E-mail: manipatel@outlook.com
manish@ipmanish.com
Last date for
submission of claims: January 14, 2019
RATNAWALI DAIRY: CARE Assigns B Rating to INR5.75cr LT Loan
-----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Ratnawali Dairy Products LLP (RDP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 5.75 CARE B; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of RDP is primarily
constrained on account of stabilization risk associated with
debt-funded project and seasonality associated with milk processing
industry. The rating, further, constrained on account of
competition from the organized and un-organized sector,
environmental risk and constitution as a partnership concern.
The rating, however, favourably takes into account experienced
partners, location advantage with easy availability of raw-material
and labour along with available moratorium period.
The ability of the firm to achieve envisaged scale of operations
and profitability with better management of working capital would
be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weakness
Implementation and stabilization risk associated with debt-funded
project: The firm had undertaken a project for setting up of plant
for manufacturing and processing of dairy products with an
installed capacity of 1 lakh litre per day. It incurred total
project cost of INR9.04 crore towards the project which was funded
through term loan of INR4.25 crore, INR1.38 crore through partner's
capital and balance through unsecured loans by the promoters and
subsidy from Ministry of Food Processing Industries. RDP commenced
its commercial operations from September 12, 2018.
Seasonal nature of the milk processing industry: The dairy
industry is characterized by the short supply of milk during peak
of summers. The firm procures the milk during the winter season
when the milk is available in abundance and at low price which
leads to build up of inventory/finished goods mostly ghee.
Correspondingly, there is high requirement of funds during the peak
season i.e. winter months from September-May. It is mitigate to
some extent as the partners own seven Gaushala in Rajasthan which
is will help the firm in its raw-material requirement.
Competition from the organized and un-organized sector and
environmental risk and constitution as a partnership concern: The
firm faces competition in the dairy segment from other established
brands in the organized market. The competition gets fiercer with
presence of unorganized players leading to pricing pressures. Other
major dairy companies are also entering into the manufacturing of
value added milk products on account of increasing demand in the
domestic market. The group is exposed to environmental risk related
to epidemic, since its entire milk collection is from the milk
producers in Rajasthan.
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 firm in case of death/insolvency
of partner.
Key Rating Strength
Experienced partners: Mr. Sunil Kumar Tiwari, partner, is graduate
by qualification and has two decade of experience in the industry.
He looks after overall affairs of the firm and is assisted by other
partners, Mr. Vikas Choudhary, who is also graduate by
qualification and has a decade of experience in the industry and Mr
Shiv Shankar Gupta who also has 20 years of experience in the dairy
industry. Further, they are supported by a team of sales persons
and C and F agents having an experience in the field of marketing.
Location advantage with ease of availability of raw material and
labour: RDP's processing facility of dairy products is situated in
Rajasthan which has the second largest milk producing state in
India. In India major production of milk comes from Uttar Pradesh
followed by Rajasthan, Madhya Pardesh, Gujarat and Andhra Pradesh.
Further, skilled labor is also easily available by virtue of it
being situated in the Rajasthan belt of India. Also the partners
own seven Gaushala in Rajasthan which is will help the firm in its
raw-material requirement.
Available moratorium period with eligibility for subsidy under the
government scheme: Though the commercial operation of the firm
started from September,2018 the term loan repayment is scheduled to
commence from December 2018. The firm has received the moratorium
period of 3-4 months from the commencement date of its production.
Hence, RDP has sufficient time in order to stabilize its operations
and generate enough cash accruals to service its debt obligations.
Further the firm is eligible for grant from Ministry for Food
processing Industry as the firm did a capital investment amounting
to INR2.40 crore. Further in short span of time, the firm
registered a turnover of INR2.00 crore till November 30, 2018.
Jaipur-based (Rajasthan), RDP was formed in July, 2017 as a Limited
liability partnership with an objective to set up a plant for
manufacturing and processing of dairy products with an installed
capacity of 1 lakh litre per day. RDP commenced its commercial
operations from September 12, 2018 and currently dealing in sale of
Milk and Ghee under the brand name of "DHENURAS" in Rajasthan and
Hyderabad. Further the firm will also start manufacturing of other
dairy products including Paneer and Buttermilk etc.
REETHU TOBACCO: CARE Lowers Rating on INR7.60cr Loan to D
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Reethu Tobacco Traders (RTT), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 7.60 CARE D; Issuer not cooperating;
Facilities Based on best available
information. Revised from
CARE B+; stable
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from RTT to monitor the rating
vide e-mail communications/ letters dated January 16, 2019, January
23, 2019, January 25, 2019 and January 29, 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
Reethu Tobacco Traders's bank facilities will now be denoted as
CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The ratings have been revised on account of ongoing delays in
meeting its debt obligation.
Detailed description of the key rating drivers
Key Rating weakness
Delay in debt servicing: The firm has delays in servicing of debt
obligations owing to the stretched liquidity position of the firm.
Key rating strengths
Experience of the proprietor for more than two decades in tobacco
industry: RTT was established in the year 2010 and promoted by Mr.
Gogineni Venkateswara Rao. The proprietor is an undergraduate and
has more than two decades of experience in tobacco industry as he
had worked in same line of business i.e., Gogineni Tobaccos.
Business operations are supported by key managerial personnel i.e.
Mr. Sri Hari. Due to long experience of the proprietor, he is able
to establish long term relationship with clientele which has helped
in developing business.
Andhra Pradesh based, Reethu Tobacco Traders (RTT) was established
in the year 2010 as a proprietorship concern by Mr. Gogineni
Venkateswara Rao. Mr. Gogineni Venkateswara Rao is an authorized
licensed holder from Government of Andhra Pradesh for processing
and selling of Virginia tobacco. RTT is mainly engaged in
processing and selling of Virginia tobacco. The firm purchases the
raw material i.e., Wet Virginia tobacco through the competitive
bidding process conducted by Tobacco Board (TB) at Andhra Pradesh
location. The TB collects the tobaccos from farmers, who are
licensed holder to grow any particular tobacco.
Further, these tobaccos are put in tender process. After
successfully winning the tender, the firm processes the Virginia
tobacco manually by separating the tobacco leaves, with the help of
local contractual workers. After separation of tobacco leaves, the
firm outsources the process like threshing to B K Threshers Private
Limited located at Tangutur, Prakasam District, Andhra Pradesh.
Threshing process involves conditioning of tobacco with heat and
moisture, and finally re-drying the Virginia tobacco. BKTPL further
pack these threshed tobaccos and delivers to RTT for selling to
various clients. The processing unit for separation of tobacco
leaves is located at Tangutur (Andhra Pradesh) which is 25 km away
from Ongole (Andhra Pradesh) where tobacco is one of the major
crops.
The firm has reputed client base like Godfrey Phillips India
Limited and Premier Tobacco Packers Private Limited who contributed
40% and 45% of total sales respectively in FY17.
REGEN INFRASTRUCTURE: CARE Migrates D Ratings to Not Cooperating
----------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Regen
Infrastructure and Services Private Limited (RISPL) to Issuer Not
Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 20.00 CARE D; Issuer not cooperating;
Facilities- Based on best available
Fund Based Information
Long/Short Term 15.00 CARE D; Issuer not cooperating;
Bank Facilities- Based on best available
Non-Fund Based Information
Detailed Rationale
CARE has been seeking information from RISPL to monitor the rating
vide e-mail communications dated July 16, 2018, October 22, 2018,
November 12, 2018, November 20, 2018, December 10, 2018,
December 21, 2018, December 28, 2018, January 2, 2019, January 8,
2019 and January 16, 2019 and numerous phone calls. However,
despite CARE's repeated requests, RISPL 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 RISPL'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 reaffirmation of ratings reflects on going delays in servicing
debt obligations.
Detailed Rationale and Key Rating Drivers
Key Rating Weaknesses
On account of delays in realising receivables, the company's
liquidity position has deteriorated which led to delays in
servicing its debt obligations.
Analytical approach: Standalone
Regen Infrastructure and Services Private Limited (RISPL) was
incorporated in January 2008 to provide wind power solutions on
turnkey basis. The company is a wholly owned subsidiary of Regen
Power Tech Private Ltd. (RPPL) (CARE D). Till FY17, RISPL was
engaged in the business of erection, installation and commissioning
of Wind Energy Generators (WEGs), providing O&M services for WEGs
installed by RPPL only, creating infrastructure such as site
development and providing power evacuation facility for wind power
projects. Post FY17, EPC activities of the company will be taken
over by RPPL and RISPL will focus only on providing O&M services to
clients of RPPL.
REGEN POWERTECH: CARE Migrates D Ratings to Not Cooperating
-----------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Regen
Powertech Private Limited (RPPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 25.00 CARE D; Issuer not
Facilities- cooperating; Based
Term Loan on best available
information
Long Term Bank 350.00 CARE D; Issuer not
Facilities cooperating; Based
(Fund Based)- on best available
Cash Credit information
Long Term Bank 37.64 CARE D; Issuer not
Facilities cooperating; Based
(Fund Based)- on best available
ECB information
Long/Short Term 905.00 CARE D; Issuer not
Bank Facilities cooperating; Based
(Non-Fund Based)- on best available
BG information
Long/Short Term 310.00 CARE D; Issuer not
Bank Facilities cooperating; Based
(Non-Fund Based)- on best available
LC/BG information
Long/Short Term 315.00 CARE D; Issuer not
Bank Facilities cooperating; Based
(Non-Fund Based)- on best available
LC information
Short Term Bank 50.00 CARE D; Issuer not
Facilities cooperating; Based
(Fund Based)- on best available
EPC/PSC information
Detailed Rationale
CARE has been seeking information from RPPL to monitor the rating
vide e-mail communications dated July 16, 2018, October 22, 2018,
November 12, 2018, November 20, 2018, December 10, 2018,
December 21, 2018, December 28, 2018, January 2, 2019, January 8,
2019 and January 16, 2019 and numerous phone calls. and numerous
phone calls. However, despite CARE's repeated requests, RPPL 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 RPPL'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 ratings reflects on going delays in regularisation
of bank guarantee invoked by counterparty in November 2017.
Detailed Rationale and Key Rating Drivers
Key Rating Weaknesses
During the month of November 2017, a counter party had invoked and
encashed the bank guarantee which is yet not regularised on account
of stretched liquidity position of the company.
Regen Powertech Private Limited (Regen) was incorporated in
December 2006 to provide wind power solutions on turnkey basis and
commissioned its first Wind Energy Converter (WEC) project in
August 2008. The company is promoted by Mr Madhusudan Khemka, Mr.
R.Sundaresh and Mr. M. Prabhakar Rao through his company Mandava
Holdings (P) Ltd (formerly Nuziveedu Seeds Ltd). The entire
promoter shareholding of 59.36% is held through a holding company
NSL Power Equipment Trading Pvt. Ltd (NSLPET). The balance
shareholding is with private equity funds.
REGENT GRANITO: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Regent Granito (India) Limited
C-304, Ganesh Meridian
Opp. Amiraj Farm
Near New Gujarat High Court, S.G. Highway
Ahmedabad 380061
Insolvency Commencement Date: January 15, 2019
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: July 13, 2019
Insolvency professional: Mr. Ashish Shah
Interim Resolution
Professional: Mr. Ashish Shah
402, Sahival Plaza
Near Gujarat College
Ellisbridge
Ahmedabad 380006
E-mail: ashish@ravics.com
Last date for
submission of claims: February 12, 2019
SACHIN AGRO: CARE Migrates B+ Rating to Not Cooperating Category
----------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Sachin
Agro Foods LLP (SAF) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 15.00 CARE B+; Stable; Issuer Not
Facilities Cooperating; Based on best
Available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SAF to monitor the ratings
vide e-mail communications dated September 21, 2018, October 2,
2018, December 5, 2018, December 12, 2018, January 7, 2019 and
numerous phone calls. However, despite CARE's repeated requests,
the firm has not provided the requisite information for monitoring
the ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating. The rating on SAF's bank facilities will now be
denoted as CARE B+; Stable; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating takes into account the project execution and
stabilization risk, susceptibility of margins to fluctuation in raw
material prices and presence of the firm in highly fragmented and
highly regulated industry and partnership nature of constitution.
The above weaknesses derive strength from the satisfactory
experience of the promoters and location advantage
emanating from proximity to raw material.
Detailed description of the key rating drivers
At the time of last rating on October 10, 2017 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Project execution and stabilization risk: SAF proposes to set up a
pulse milling unit with a total cost of INR 17.25 crore, which is
proposed to be funded at a debt to equity ratio of 1.38x. The
entity faces risk of timely completion of the project within
envisaged cost in light of fluctuation in input prices.
Furthermore, achieving envisaged sales and profitability would be
crucial.
Susceptibility of profitability margins to volatility in raw
material prices: Agro-based industry is characterized by its
seasonality, as it is dependent on the availability of raw
materials, which further varies with different harvesting periods.
Availability and prices of agro commodities are highly dependent on
the climatic conditions. Adverse climatic conditions can affect
their availability and lead to volatility in raw material prices.
Presence of company in highly fragmented and regulated industry:
The competitive nature of agro-product processing is due to low
entry barriers, high fragmentation and the presence of a large
number of players in the organized and unorganized sector. SAF
being in the agro processing industry faces competition from
existing as well as new players. Furthermore, the raw material
(whole grain) prices are regulated by government to safeguard the
interest of farmers, which in turn limits the bargaining power of
the pulse millers.
Partnership nature of constitution: Being partnership nature of
constitution, the firm is exposed to the risk of withdrawal
of capital due to personal exigencies, dissolution of firm due to
retirement or death of promoter and restricted financial
flexibility due to inability to explore cheaper sources of finance
leading to limited growth potential.
Key Rating Strengths
Experienced partners: SAF is currently managed by Mr Shivajirao
Hude and he is well-versed with the intricacies of the business on
the back of more than four and a half decades of experience in agro
based industries through its group entities engaged in same line of
business. He looks after the overall function of the firm and is
ably supported by his son Mr Sandeep Hude who has an experience of
about six years in this industry and a team of qualified
professionals. Long experience of the promoter has supported the
business risk profile of the entity to a large extent.
Locational advantage emanating from proximity to raw material:
SAF's unit has close proximity to local grain markets of Latur,
major raw material procurement destinations for the entity.
Furthermore, the plant is having good transportation facilities and
other requirements like good supply of power, water etc.
Accordingly, SAF has locational advantage in terms of proximity to
raw material and connectivity.
SAF based out of Latur, Maharashtra, is a limited liability
partnership concern, established in the year 2017 is promoted by Mr
Shivajirao Hude and Mr Sandeep Hude. SAF proposes to set up a pulse
milling unit with a total cost of INR 17.25 crore, which is
proposed to be funded at a debt to equity ratio of 1.38x. The plant
is expected to commence its operations by October 2018.
SAGAR INDUSTRIES: Ind-Ra Affirms BB- on INR240MM Loans
------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Sagar Industries &
Distilleries Private Limited's (Sagar) Long-Term Issuer Rating at
'IND BB-'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR240 mil. (increased from INR200 mil.) Fund-based facilities
affirmed with IND BB-/Stable rating; and
-- INR50 mil. (reduced from INR90 mil.) Non-fund-based facilities
affirmed with IND A4+ rating.
KEY RATING DRIVERS
The affirmation reflects Sagar's continued small scale of
operations, as indicated by revenue of INR462 million in FY18
(FY17: INR386 million). The revenue rose due to an increase in the
production volume. As per the management, the company achieved
revenue of around INR394.1 million in 9MFY19.
The ratings are constrained by the company's weak credit metrics.
The interest coverage (operating EBITDA/gross interest expense)
improved to 2.7x in FY18 (FY17: 2.4x) as the absolute EBITDA
increased to INR48 million (INR42 million). The net leverage (total
adjusted net debt/operating EBITDAR) improved to 11.0x (FY17:
13.7x) on account of a decline in the total debt.
Furthermore, Sagar's return on capital employed was 3% in FY18
(FY17: 2%) and its EBITDA margins stood at a modest 10.3% (10.9%).
The margin fell because of fluctuations in raw material prices, as
the main input is a seasonal product.
The ratings factor in the company's moderate liquidity, with an
average 91.0% utilization of fund-based limits and an average 20.7%
utilization of the non-fund-based limits during the 12 months ended
January 2019. The net cash conversion cycle shortened to 239 days
in FY18 (FY17: 289 days) due to a reduction in the inventory
holding period to 208 days (FY17: 305 days).
The ratings, however, are supported by the promoters' experience of
over two decades in the alcohol business.
RATING SENSITIVITIES
Negative: A decline in the profitability, resulting in
deterioration in the overall credit metrics, on a sustained basis,
would lead to a negative rating action.
Positive: A substantial growth in the top-line and profitability,
leading to an improvement in the overall credit metrics, on a
sustained basis, would result in a positive rating action.
COMPANY PROFILE
Incorporated in 1999, Sagar manufactures portable and non-portable
alcohol at its facility in Nashik, Maharashtra.
SAI KRIPA: CARE Assigns B+ Rating to INR6.69cr LT Loan
------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Sai
Kripa Industries (SKI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 6.69 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of SKI is primarily
constrained on account of its modest scale of operations with low
profitability, moderate capital structure and debt protection
metrics along with modest liquidity position during FY18 (FY refers
to the period April 1 to March 31). The rating also factors in
SKI's proprietorship nature of constitution, susceptibility of its
profit margins to volatility in raw material prices along with its
presence in highly fragmented and competitive industry subject to
government regulations.
The rating, however, derives strength from vast experience of
proprietor with long track record in agro-processing business.
The ability of SKI to increase its scale of operations along with
improvement in overall financial risk profile by improving its
profit margins, capital structure and debt coverage indicators
along with efficient working capital management are the key rating
sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Modest albeit increasing scale of operations along with low
profitability: The scale of operations of SKI as marked by total
operating income (TOI) remained modest at INR14.30 crore in FY18,
however it has increased by 36% y-o-y during FY18 against INR10.49
crore in FY17. Further, SKI also undertakes job work for government
entities for manufacturing of rice. The profit margins of the firm
have remained low as marked by PBILDT of INR0.44 crore (3.05%),
while the PAT also remained thin at INR0.13 crore (0.88%) in FY18
as against INR0.11 crore (1.05%) in FY17 owing to a proportionate
increase in finance costs.
Moderate capital structure and debt coverage indicators: The
capital structure of SKI remained moderate as marked by an overall
gearing ratio at 2.83 times as on March 31, 2018 as against 2.62
times as on March 31, 2017 on account of increase in total debt
level led by higher utilization of working capital limit as on
balance date coupled with low tangible net worth base. The debt
protection metrics as marked by total debt to GCA also remained
moderate at 7.62 years as on March 31, 2018 as against 6.62 years
as on March 31, 2017.Further, interest coverage ratio also remained
moderate at 2.38 times in FY18 as against 2.51 times in FY17 on
account of increasing albeit moderate finance cost during FY18.
Modest liquidity position: The liquidity position of SKI remained
modest marked by current ratio of 1.14 times as on March 31, 2018.
Further, operating cycle of SKI remained moderate at 34 days during
FY18 against 28 days during FY17. The average utilization of
working capital borrowings for the past 12 months ended December
31, 2018 remained at 37% for cash credit limit availed during FY18.
The cash and bank balance of SKI remained low at INR0.01 crore as
on March 31, 2018 while net cash flow from operating activities in
FY18 remained negative at INR0.10 crore.
Constitution as a proprietorship firm: SKI being a proprietorship
firm is exposed to inherent risk of the proprietor's capital being
withdrawn at the time of contingency and also limits the ability to
raise the capital. The proprietor may withdraw capital from the
business as when it is required, which may put pressure on the
capital structure of the firm which may restrict the financial
flexibility to a certain extent.
Susceptibility of its profit margins to volatility in raw material
prices along with its presence in seasonal and fragmented nature of
industry which is subject to government regulations: Monsoons have
a huge bearing on crop availability which determines the prevailing
paddy prices. Since, there is a long time lag between raw material
procurement and liquidation of inventory, the firm is exposed to
the risk of adverse price movement, resulting in lower realization
than expected. Also, the commodity nature of the rice makes the
industry highly fragmented with numerous players operating in the
unorganized sector with very less product differentiation.
Moreover, the raw material (paddy) prices are regulated by the
government mainly through Minimum Support Price (MSP), which in
turn limits the bargaining power of the paddy processors.
Key Rating Strengths
Vast experience of proprietor in rice processing industry with long
track record in agro-processing business: The proprietor of SKI,
Mr. Narendra kumar Bulani aged 48 years looks after the overall
management of SKI and has a vast experience of over three decades
in the same line of business. Thus, SKI is able to bag good orders
from various commodity dealers, traders, retailers, shopkeepers and
other small establishments via brokers, primarily set up within the
state of Gujarat along with the help of its own established
marketing network.
Jabalpur-based (Madhya Pradesh (M.P.)) SKI was established as
proprietorship firm in March 2015 by Mr. Narendrakumar Bulani, aged
48 years having more than three decades of experience in rice
processing industry. SKI commenced its manufacturing operations for
sorting and polishing operations of non- basmati rice from March
2015 onwards, with two rice sortex machineries located at Katni,
M.P., having combined installed capacity of 900 Metric tons per
annum (MTPA) as on March 31, 2018. It sells the sorted and polished
rice domestically, majorly in the state of Gujarat and Rajasthan
via brokers as well as direct sales under the brand names 'Royal
Gold', 'Royal Kesarbhog' and 'Majedaar'. Further, it also trades in
rice and paddy according to market opportunities. Waste and
by-product during manufacturing of rice are sold as a cattle-feed.
SKI also sells broken rice, ponnia, kanki, and rice bran in local
market.
SANTKRUPA MILK: CARE Migrates B+ Rating to Not Cooperating
----------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of
Santkrupa Milk and Milk Products (SMMP) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 5.61 CARE B+; Stable, Issuer Not
Facilities Cooperating; Based on best
available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SMMP to monitor the ratings
vide e-mail communications/letters dated October 4, 2018, October
11, 2018, January 8, 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, firm has not
paid the surveillance fees for the rating exercise as agreed to in
its Rating Agreement. The rating on SMMP's bank facility and will
now be denoted as CARE B+; Stable, ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating takes into account the modest scale of operations with
low profit margins, leveraged capital structure and moderate debt
coverage indicators. The rating is further constrained by working
capital intensive nature of operation, risks associated with raw
milk procurement, price volatility and seasonality associated and
proprietorship nature of constitution. The rating however, derives
strength from the long track record of the firm with experienced
proprietor, and growing demand for milk and milk products.
Detailed description of the key rating drivers
At the time of last rating on March 15, 2018, the following were
the rating strengths and weaknesses (updated for FY18 audited
results).
Key Rating Weaknesses
Modest scale of operations with low profitability: The income from
operations of the firm though improved significantly remained
modest at INR56.19 crore in FY18 with total capital employed of
INR10.84 crore as on March 31, 2018. Modest scale of operations
limits the financial flexibility of the firm. Furthermore, the
PBILDT margin of the firm decline marginally in FY18 and remained
low in the range of 3.36%-2.77% in the last three years ended FY18.
Moreover, the PAT margin of the firm remained low in range of at
0.70%-0.72% in the last three years.
Leveraged capital structure and moderate debt coverage indicators:
The capital structure is leveraged owing to high dependence on
external borrowings. Furthermore, SMMP's debt coverage indicators
were also moderate due to high gearing level and low profitability
Working capital intensive nature of operation: The operations of
the firm are working capital intensive in nature with gross current
asset days of 35 days during FY18 with funds majorly blocked in
receivables. The working capital requirements are met by cash
credit facility, the average utilization of the CC limit is fully
utilized during peak season (December-February) and ~50% utilized
during non-peak season (March-November).
Risks associated with raw milk procurement, price volatility and
seasonality associated: SMMP procures milk primarily from local
farmers and hence is exposed to the risk of quality of milk being
procured. Furthermore, supply of milk is exposed to external risks
like cattle diseases, and seasonality which results in volatile
prices.
Proprietorship nature of constitution: SMMP, being a proprietorship
concern, is closely held and is subject to limited disclosure
norms, it is exposed to the risk of withdrawal of capital as well
as long-term existence of business operations
under the entity.
Key Rating Strengths
Experienced proprietor with long and long track record of
operations: The proprietor has an experience of around three and
half decade in the business of milk processing. Being in the
industry for so long has helped the proprietor to gain adequate
acumen about the business which aids in the smooth operations of
SMML.
Growing demand for milk and milk products: In recent years, with
the increasing consumer needs, the uses of milk have been expanding
from traditional dairy products to new products with high added
value. It is expected that this trend will lead to further growth
in milk consumption.
SMMP is a Satara (Maharashtra) based firm, incorporated in May 16,
2006. The firm is engaged in processing of milk and milk based
products viz. flavored milk, paneer, butter, ghee, curd and lassi
at its facilities located at Aljapur in Satara.
SHREE LAXMI: CARE Migrates B+ Rating to Not Cooperating Category
----------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Shree
Laxmi Timber Traders & Saw Mill (SLTSM) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 5.50 CARE B+; Stable; Issuer Not
Facilities Cooperating; Based on best
Available information.
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SLTSM to monitor the rating
vide email communications/letters dated October 9, 2018,
January 28, 2019, January 29, 2019 and numerous phone calls.
However, despite CARE's repeated requests, the firm has not
provided the requisite information for monitoring the ratings. In
line with the extant SEBI guidelines CARE's rating on SLTSM's bank
facilities will now be denoted as CARE B+; Stable; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating in December 18, 2017 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Modest scale of operations with low profit margins: The scale of
operations of the firm remained modest marked by total operating
income of INR55.38 crore (Rs.53.88 crore in FY16) and PAT of
INR0.73 crore (Rs.0.65 crore in FY16) in FY17. Furthermore, the net
worth base and total capital employed was also low INR 7.77 crore
(Rs. 6.36 crore as on March 31, 2016) and INR 27.73 crore (Rs.
26.00 crore as on March 31, 2016) respectively as on
March 31, 2017. Moreover, the total operating income witnessed a
continuous growth during FY15-FY17 and the same has grown at a
compounded annual growth rate (CAGR) of 50.87% during the aforesaid
period. The profitability margins of the firm remained low marked
by PBILDT margin at 3.84% and PAT margin at 1.31% in FY17. However
the PBILDT margin improved in FY17 over FY16 due to better
management of cost of operations. The PAT margin moved in line with
the PBILDT margin during last three years and the same improved in
FY17 on account of higher increase in PBILDT vis-à-vis increase in
capital charges. The firm has achieved a turnover of INR26.00 crore
during H1FY18.
Volatility in raw material prices and working capital intensive
nature of operations: The major raw materials required for the firm
are steel straps, wood, etc. the prices of which are highly
volatile. Thus there remains a risk of increase in the prices
of the raw materials thereby putting a pressure on the margins of
the firm. The operations of the firm remained highly working
capital intensive marked by its high operating cycle at 104 days in
FY17. This is mainly due to the high average inventory days and
high collection period. The firm maintains adequate inventory of
raw materials for smooth flow of its manufacturing processes.
Further it allows around two to three months credit to its
customers due to its low bargaining power as compared to its
clients like Tata Steels Ltd., SAIL etc. Accordingly the average
utilization of the fund based limits of the firm remained at 99%
during the last 12 months ended December 31, 2018.
Moderately leveraged capital structure with moderate debt coverage
indicators: The capital structure of the firm remained moderately
leveraged marked by debt equity ratio of 0.83x and overall gearing
ratio of 2.57x as on March 31, 2017. However, the leveraged ratios
were improved as on March 31, 2017 due to repayment of term loans
and accumulation of profit into capital. The debt coverage
indicators remained moderate marked by interest coverage ratio of
1.99x and total debt to GCA at 18.83x in FY17.
Partnership nature of constitution: SLTSM, being a partnership
firm, is exposed to inherent risk of the capital being withdrawn at
time of personal contingency and entity being dissolved upon the
death/insolvency of the partners. Further, partnership firm has
restricted access to external borrowing as credit worthiness of the
partners would be the key factors affecting credit decision for the
lenders.
Presence in an intensely competitive industry: The industrial
packaging is highly competitive in nature due to the presence of
many small players. Furthermore, low entry barriers and low capital
& technology requirement is also making the industry highly
competitive. Due to high competition in the industry, the margins
of the firm would be under pressure going forward.
Key Rating Strengths
Long track record of operations and experienced partners: SLTSM is
into the manufacturing of industrial packaging products since 2001
and thus has a long operational track record of 16 years. The
partners also have around one and a half decade of business
experience in the same line of business and the firm is deriving
benefits out of the wide experience of the partners. The key
partner Mr. Jawahar Lal Vig looks after the day-to-day operations
of the firm with adequate support from the other partners.
Reputed clientele and satisfactory outlook of demand of the
products: SLTSM leverages the advantage of catering to the
requirements of reputed companies like TATA Steel Limited, Steel
Authority of India Limited etc. Considering the client profile of
the firm, the risk of default is very minimal. The demand outlook
of the industrial packaging products seems to be satisfactory due
to increasing industrialization. Further industrial packaging is a
very important part without which industrial equipment cannot be
moved from one place to another.
Shree Laxmi Timber Traders & Saw Mill (SLTSM) was constituted as a
partnership firm in 2001. However it was reconstituted in 2014 via
partnership deed dated April 1, 2014 and currently it is managed by
Mr. Jawahar Lal Vig, Mr. Harish Kumar Vig, Mr. Om Prakash Jaggi,
Mrs. Deepa Vig and Mrs. Monika Vig. Since its inception, the firm
is into manufacturing of industrial packaging items made of wooden
and steels. The manufacturing facility of the firm is located at
TATA Nagar, Jamshedpur. The firm caters to the requirements of
reputed clients like TATA Steel Limited, Steel Authority of India
Limited (SAIL) etc.
SHRI SHAMRAO: CARE Migrates 'D' Rating to Not Cooperating
---------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Shri
Shamrao Patil Yadravkar Educational and Charitable Trust (SPCT) to
Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 7.49 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SPCT to monitor the ratings
vide e-mail communications dated October 4, 2018, November 15,
2018, December 12, 2018, January 7, 2019 and numerous phone calls.
However, despite CARE's repeated requests, the firm has not
provided the requisite information for monitoring the ratings. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
rating on SPCT'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 takes into account irregularity in repayment of
installments and interest of term loan.
Detailed description of the key rating drivers
At the time of last rating on December 26, 2017 the following were
the weaknesses:
Key rating Weaknesses
Irregularity in repayment of installments and interest of term
loan: There are continuous delays in the repayment of principal or
interest of term loan due to stretched liquidity position.
Established in the year 1986, SPCT is engaged in managing education
institutes. The trust is registered under Bombay Public Trust Act
1950. The trust was established by Patil family of Kolhapur.
Currently, the trust is managing four colleges and three schools.
SIDDHARTH TUBES: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Siddharth Tubes Limited
Taraganj Industrial Estate
A.B. Road, Sarangpur
MP 465697 India
Insolvency Commencement Date: January 24, 2019
Court: National Company Law Tribunal, Bhopal Bench
Estimated date of closure of
insolvency resolution process: July 28, 2019
Insolvency professional: Amresh Shukla
Interim Resolution
Professional: Amresh Shukla
F-05, Jaideep Complex
112, Zone-II, M.P. Nagar
Bhopal-M.P. 462011
E-mail: insolvencyprofessionalsindia@
gmail.com
cirp.stl@gmail.com
Last date for
submission of claims: February 12, 2019
SIGNATURE AUTOMOBILES: CARE Cuts Rating on INR10.47cr Loan to B
---------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Signature Automobiles India Private Limited (SAIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 10.47 CARE B; Stable Revised from
Facilities CARE B+; Stable
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of SAIPL takes into
account decline in total operating income during FY18 and
significant decline in cash accruals coupled with net losses in
FY18 (refers to period April 1 to March 31). The ratings continue
to be tempered by limited track record of operations of the
company,
modest scale of operations, geographical concentration risk and
highly competitive business leading to low profitability,
working capital intensive nature of operations along with leveraged
capital structure and weak debt protection metrics.
The rating, however, continue to derive strength from technically
qualified promoters albeit limited experience in dealership
business, promoters support in the form of unsecured loans,
organized after-sales services during FY18 (FY refers from
April 1 to March 31).
Going forward, the ability of the company to improve its scale of
operations, improve profitability margins and capital structure
along with effective management of working capital requirements
remains the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weakness
Limited track record of operations of the company: SAIPL was
incorporated in the year 2010 and operating for a period less than
ten years however the promoters have started Signature Motors India
Pvt Ltd in 2006 which is an authorized dealers of Suzuki bikes. As
a result, the promoters have an experience of 8 years in dealership
business.
Modest scale of operations concentrated in Kerala: The scale of
operations of the company marked by total operating income (TOI),
remained modest at INR72.12 crore in FY18 coupled with negative net
worth base of INR4.56 crore as on March 31, 2018. However, TOI had
declined marginally, by 5.75%, on back of decrease in the sale of
cars.
Declining scale of operations during FY18: The total operating
income of the company had declined, by 5.75%, to INR72.12 crore in
FY18 from INR76.52 crore in FY17 due to reduced sales and servicing
during the year as there was an ambiguity regarding the input
credit facility with respect to introduction of GST during FY18
which was further triggered by rumors that the automobiles would
become cheaper post GST implementation.
Significant decline in cash accruals coupled with net losses in
FY18: The PBILDT margin, remained low at 1.55x in FY18 as against
3.11x in FY17 due to decline in TOI coupled with an increase
in selling expenses like display expenses, sales promotion
expenditure, advertising, discount allowed etc. The total discount
allowed for FY18 amounted to INR0.72 crore as against INR0.43 crore
in FY17, these discounts were in line with the Honda manufacturers
which was passed on to the ultimate customers. The PAT margin stood
negative on back of a reduction in PBILDT in absolute terms during
the year, due to the above reason and an increase in the interest
expense during the year as there was an enhancement in the
facilities availed by the company.
Geographical concentration risk and highly competitive business
leading to low profitability: SAIPL's operation is restricted to
the state of Kerala. As such, it is exposed to the geographical
concentration risk. To capture the market, the auto dealers offer
better buying terms like allowing discounts on purchases. Such
discounts offered to the customers result in pressure on the PBILDT
margin. Further, the competition is intense with number of
passenger car makers and new models being launched to meet the
customers taste and budget. With several dealers in the region, the
pressure on pricing and the need to provide lucrative offers, the
consequent pressure on margins, are expected to continue.
Working capital intensive nature of operations: The company
normally receives orders for 70-90 cars monthly. To meet the
growing demand and customer needs the entity keeps inventory of
10-20 cars. Therefore, the average inventory period stood at 26
days in FY18 which is similar to 27 days in FY17. SAIPL allows a
credit period of 12 days to its customers and avails 3-5 days'
credit from its suppliers. All these factors led to moderate
operating cycle of 34 days in FY18. The company uses Electronic
Dealer Financing Scheme (e-DFS) to manage working capital
requirements. The average utilization of the above facility stood
at 85% for the period ended December 31, 2018.
Leveraged capital structure and weak debt protection metrics: The
company has weak capital structure due to negative net worth on
back of accumulated losses from the previous financial years. Total
debt/GCA deteriorated from 10.54x in FY17 and stood at 723.50x in
FY18 due to net losses resulting in a decline in the cash accruals.
Interest coverage ratio also declined and stood at 0.91x in FY18 as
against 1.91x in FY17 due to decrease in PBILDT in absolute terms
on back of decline in total operating income. Total debt/Cash flow
from operations also stood negative as the company had made
payments with respect to the current liabilities while was unable
to realize the receivables during the year leading to negative cash
flow from operations.
Key Rating Strengths
Technically qualified promoters albeit limited experience in
dealership business: The promoter Mr. Naziruddin is a diploma
holder in automobile engineering, and has an experience of 20 years
having worked as General Manager in Eagle international, Dubai
which was into Electrical Power Projects. Mr. Shaad Naziruddin,
(s/o. Mr. Naziruddin) MBA worked with Regional Sales Manager -
Titan as Southern Region head in the sales department
for 2.5 years. The promoters have started Signature Motors India
Pvt Ltd in 2006 which is an authorized dealers of Suzuki
bikes. Thus, the promoters have an experience of 8 years in
dealership business.
Promoters support in the form of unsecured loans: The debt profile
of the company significantly comprised of unsecured loans from
promoters and working capital bank borrowings. The unsecured loans
from partners have been infused based on requirement and are
interest free.
Liquidity Analysis: The current ratio of the company stood at 0.63x
as on March 31, 2018 as compared to 0.68x as on March 31, 2107 due
to relatively high account receivable and inventory compared to
account payable and working capital bank borrowings. The company
had a cash and bank balance of INR0.26 crore as on March 31, 2018.
The liquidity position of the company is stressed considering high
account receivable and low cash balance. The unutilized portion of
cash credit facility remains almost ~15% on an average for the
period ending December 31, 2018.
Signature Automobiles India Private Limited (SAIPL) is a Kerala
based company incorporated in 2010 by Mr. P. Naziruddin and his
wife Mrs. Sujatha Naziruddin. SAIPL is engaged in the business of
exclusive automobile dealership for Honda Cars India Limited (HCIL)
for selling passenger cars in the Kannur region. Besides this, it
has a service centre which provides after-sales services, spare
parts and accessories for Honda cars. SAIPL's showroom covers an
area of about 6,357 sq. ft. in Kannur, wherein it has space for 10
passenger cars for display apart from 10 cars in its back yard.
SOLUTREAN BUILDING: CARE Lowers Rating on INR3.28cr Loan to D
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Solutrean Building Technologies Limited (SBTL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Bank Facilities- 19.51 CARE B+; Stable Revised
Fund-based-LT from CARE BB-; Stable
Bank Facilities- 3.28 CARE D Revised from
Fund Based-LT CARE BB-; Stable
Term Loan
Detailed Rationale & Key Rating Drivers
The revision in the rating assigned to the bank facility of SBTL
takes into account the delays in servicing of term loan due to
SIDBI, small scale of operations, slow sales and customer
collection leading to stretched liquidity position, debt funded
investment in other group companies along with subdued industry
scenario. However, the ratings continue to derive strength from the
experience of the promoters and satisfactory construction status of
the ongoing project.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delays in servicing of term loan: The company has taken loan from
SIDBI for which there have been delays in repayment by 1-3 days in
period of Oct'18 to Jan'19. Other than SIDBI debt, there are no
delays in any other debt repayment due to efficient escrow
mechanism in place for cash collection and repayment.
Low level of collections: The project "Caladium" has a total
saleable area of 4.07 lsf, which includes residential area of 4 lsf
and commercial area of 0.07 lsf out of which the company has sold
3.09 lsf of area till Nov 30, 2018, that is 76% (PY: 70%) of the
total saleable area for ~Rs. 121 cr. Out of the sale value of the
sold area, SBTL has realized INR 107 cr that is ~88% of the sale
value. However, the company has been able to sell 0.29 lsf in CY18
which is higher than the last year but still lower due to slow down
in the real estate market and higher cancellations. Further, the
collections of the company has increased to INR 17 cr~ (PY: 10.46
cr) in CY18, however continue to remain low.
Investment in other group companies with weak financial position
SBTL has taken a debt of INR 20 cr for further investment in its
group company involved in the implementation of project namely,
'RST Galleria'. Given the initial stages of project implementation
of RST Galleria, there is stress on the existing cash flow of SBTL
to service the debt obligation. Apart from this SBTL is also
engaged in civil construction contracts and its operating income
during FY18 comprise of INR 43.66 cr received from the civil work
done as a contractor (FY17: INR 20.16 cr). However despite of the
increase in income, the profitability remained low at INR0.9cr
during FY18 as compared to INR0.31cr during FY17.
Subdued industry scenario: The real estate sector has been
grappling with issues such as unsold inventory, delayed delivery
and financial stress on the developers for quite some years now and
post demonetisation; due to higher liquidity the buyers have
deferred their purchases as they are expecting the borrowing rates
to come down. However, with the introduction of Real Estate
(regulation and Development) Act (RERA) and GST (Goods and Services
Tax), the residential real estate sector is on the path of
transformation with modified rules and mandatory approvals which
will enhance the transparency and customers' trust in the sector
but also add additional burden on the developers which might hamper
the sentiments of the market.
Key Rating Strengths
Experienced promoters: SBTL has been promoted by Mr. Sandeep Sahni
(Chairman) and his family members. Mr. Sahni has an experience of
more than 20 years in the line of construction. Through other group
companies, the promoter group has been involved as a contractor in
construction and designing of more than 10 residential/commercial
projects in and around Delhi/NCR. However, the experience of the
promoters in real estate development has been limited with only one
Commercial Project "The Correnthum" developed so far with saleable
area of 5.35 lsf at Sector-62, Noida and has been completed in
September 2007. Mr Sahni has hands-on involvement in the
functioning of the SBTL's
business supported by an experienced professional management team
with vast experience from diverse fields led by Mr Raman Kumar,
Managing Director. Mr Kumar has a business experience of more than
38 years and has served as an executive director of SAIL.
Satisfactory construction status of the project: The company is
currently involved in 9 construction orders and development of a
residential project namely "Caladium". The total cost of the
project Caladium is INR 161.31 cr. Till Nov 30, 2018; the company
had incurred cost of INR 154.66 cr out of the total INR 161.28 cr
that is 95.90% (PY: 95.13%) of the total cost. Moreover, the
company has incurred INR 113 cr on construction out of the total
INR 119.6 cr that is 95% (PY: 94%) of the total construction cost
with cost of 7 Cr is left to be incurred for development of
commercial area. The occupancy certificate for the residential
project is received in Nov 2017.
Apart from this the company has order book of INR209cr as on Nov
30, 2018 for its civil construction division providing some revenue
visibility for the future revenue.
Incorporated in 2009, Solutrean Buildings Technologies Limited
(SBTL) has been primarily engaged in the designing and construction
of residential/group housing project. The company has been promoted
by Mr. Sandeep Sahni and his family members, all having vast
experience in this line of activity. In the past, the promoter
group has been involved in designing, engineering and construction
of more than 10 projects, mainly located in and around Delhi/NCR.
The promoters have also executed a Commercial Project - "The
Correnthum" with saleable area of 5.35 lakh sq. ft. (lsf) in
September 2007. SBTL has also been involved in civil construction
of various projects.
SUBA PLASTICS: CARE Lowers Rating on INR6cr LT Loan to C
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Suba Plastics Private Limited (SPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.00 CARE C; ISSUER NOT COOPERATING
Facilities Revised from CARE BB-; Stable
Issuer Not Cooperating based
On best available information
Detailed Rationale & Key Rating Drivers
CARE has conducted the review on the basis of best available
information and had classified SPPL as 'Non Cooperating' vide its
press release dated April 4, 2018 furthermore, CARE's rating on
Suba Plastics Private Limited bank facilities will now be denoted
as CARE C; Issuer Not Cooperating* on the basis of best available
information.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last review April 4, 2018 the following were the
rating strengths and weaknesses:
Key Rating weakness
Small scale of operations in spite of growth in total operating
income: The company continues to operate in modest scale of
operations marked by total operating income which grew marginally
by 14% and stood at INR32.47 crore in FY17 as against INR28.52
crore in FY16.
Deteriorated capital structure and working capital intensive nature
of operations: The capital structure of the company deteriorated
marked by debt equity ratio of 2.31x as of March 31, 2017 as
compared to 1.02x as of March 31, 2016 on back of increase in the
long term debt associated with additional loan availed
from SIDBI in FY17. The overall gearing ratio also deteriorated
from 2.00x as of March 31, 2016 to 3.28x as of March 31, 2017 on
back of increase in the total debt. The operations of the company
are working capital intensive. With the moderate collection period
of 71 days and the inventory period of 76 days, the operating cycle
marginally declined in FY17 at 75 days (against 78 days in FY16).
Declined Profitability: The PBILDT margin of the company declined
by 171 bps at 10.41% in FY17 as compared to last year 12.21% in
FY16. The debt coverage declined in FY17 marked by TD/GCA at 11.65x
in FY17 as compared to 5.88x in FY16 due to decline in the
cash accruals. Interest coverage ratio also declined from 2.59x in
FY16 to 2.12x in FY17 on the back of decline in PBILDT.
Key Rating Strengths
Experience of the promoters with long track record of operations
and reputed clientele base: SPPL started its operation of
manufacturing of plastic injection molded components in 1983 and
therefore, SPPL has more than three decades of operational track
record in this industry. The promoters of the company also have
more than three decades of experience in the same industry.
SPPL has reputed clientele base which includes Pricol Ltd, Lucas
TVS, Johnson Electric Co. etc. SPPL has established good
relationship over the years with these clients by executing orders
in time and matching contracted specifications and quality.
Coimbatore based, SPPL, incorporated on July 13, 2005 was promoted
by Mr V Baskaran, Mrs Geetha Baskaran (Spouse of Mr Baskaran) and
Mr V Sudhakaran (Brother of Mr Baskaran). Initially, the company
was established as a proprietorship concern in the name of "Suba
Plastics" in 1983. Subsequently, it was reconstituted as a private
limited company in 2006 with its name changed to SPPL. Since its
inception, the company has been engaged in manufacturing of plastic
injection moulded components which finds application in automotive
and textile industries. Apart from molding SPPL also provides post
mounding services with a complete range of in-house assembly,
testing and packaging services. The manufacturing facility of the
company is located at Coimbatore, Tamil Nadu. In FY17, SPPL
reported a PAT of INR0.00 crore on a total operating income of
INR32.47 crore, as against a net profit and TOI of INR0.30 crore
and INR28.52 crore respectively in FY16.
SURAKSHITA HEALTH: CARE Migrates B+ Rating to Not Cooperating
-------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of
Surakshita Health Care Private Limited (SHCPL) to Issuer Not
Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 20.00 CARE B+; Stable, Issuer not
Facilities cooperating, based on best
available information
CARE has been seeking information from SHCPL to monitor the rating
vide e-mail communications/letters dated January 14, 2019,
January 16, 2019, January 17, 2019, January 19, 2019 and numerous
phone calls. However, despite CARE's repeated requests, the company
has not provided the requisite information for monitoring the
rating. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of best available information which
however, in CARE's opinion is not sufficient to arrive at fair
rating. The rating on Surakshita Health Care Private Limited's bank
facilities will now be denoted as CARE B+; Stable; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while
using the above rating.
Detailed description of the key rating drivers
At the time of last rating on March 20, 2018 the following were the
rating strengths and weaknesses:
Key Rating Weakness
Project implementation risk: SHCPL has proposed to set up a
hospital with a land area of about 15,683 sq. ft. The project was
started in December 2015 on their own land. The total proposed cost
of project is INR67.33 crore which is proposed to be funded through
debt (Term loan) of INR 20.00 crore, promoter equity of INR16.83,
unsecured loans from Promoters of INR10.10 crore, NBFCs Term loan
of INR 14.24 crore and remaining through SBI (or Others) working
capital loan of INR6.16 crore. As on January 28, 2018 the firm has
incurred expenses of INR18 crore (around 26.73% of total project
cost) and the same is funded by the promoter's capital
(Rs.12 crore) and term loan (Rs.6 crore). About 29.94% of project
completion depends on the bank loan yet to be disbursed. Therefore,
the ability of the firm to complete the project without any cost or
time over run will remain critical from credit perspective.
Highly regulated nature of healthcare industry: The healthcare
industry is regulated by several policies and bodies in terms of
pricing, quality control, safety and health standards, and several
other certifications and control standards. The company has to
undergone for the necessary approvals and certifications, further
the same has to be regularly upgraded for smooth functioning of
their business. Any changes or regulations by the regulatory bodies
may hamper the business of the companies prevailing in the
industry.
Competition from upcoming and existing hospitals: The healthcare
sector is highly fragmented with few large players in the organized
sector and numerous small players in the unorganized sector leading
to high level of competition. However, the competition in
Vishakhapatnam remains a challenge. In light of intense
competition, Q1 prospects would depend upon its ability to
profitably scale up the operations and success rate in treatment of
complex cases, to attract patients and increase occupancy.
High vulnerability to treatment-related risks: Healthcare is a
highly sensitive sector where any mishandling of a case or
negligence on the part of any doctor and/or staff of the unit can
lead to distrust among the masses. Thus, all the healthcare
providers need to monitor each case diligently and maintain high
operating standard to avoid the occurrence of any unforeseen
incident which can damage the reputation of the hospital to a large
extent.
Key Rating Strengths
Experienced and qualified promoters for more than one decade in
healthcare industry: SHCPL was incorporated in the year 2015 as
Private Limited Company by Mr.C.Lakshmi Prasad and Mrs.
B.Parvatamma. Mr.C.Lakshmi Prasad is MD in general medicine by
qualification and has more than one decade of experience in
healthcare industry. Mrs. B.Parvatamma is graduate by
qualification. The firm has appointed 8 doctors and proposed to
appoint another 4 doctors and all have more than one decade of
experience in healthcare industry. The firm is likely to get
benefitted by its qualified and experienced promoters and doctors.
Satisfactory infrastructure with modern equipment and services with
location advantage: SHCPL has satisfactory infrastructure with
moderate equipment's and services. SHCPL is a 200 bedded
comprehensive super specialty hospital with state of the
Ultrasound, X ray, Laboratory, ICU, Medical store and C.T. Scan.
SHCPL is operating 24 hours Pharmacy, Laboratory and Ambulance
services as well. The entity's hospital has a total built-up area
of 15,683 Sq.ft. (Basement + Cellar + 6 floors). Ground floor of
the hospital will have operation theatre and diagnosis center,2nd
floor will have Gynecology wards and NICU,3rdfloor will have 14
rooms and 4 general wards,4thfloor will have 14 rooms, ICU and
dialysis ward and 5thfloor has operation theater complex. The
hospital provides services related to Oncology, Neurology,
Cardiology, Nephrology, CTVs, Plastic Surgery etc. Further the
hospital is located in one of the prime locations in the city of
Kurnool facilitating visibility and mobility of the customers with
easy reach to the hospital.
Part financial closure of the project achieved with 26.73% of the
project completed: The total proposed cost of project is INR67.33
crore which is proposed to be funded through debt (Term loan) of
INR 20.00 crore, promoter equity of INR16.83, unsecured loans from
Promoters of INR10.10,NBFCs Term loan of INR14.24 crore and
remaining through SBI (or Others) working capital loan of INR6.16
crore. The company has its term loan sanctioned from State Bank of
India with INR 6.00 crore disbursed till date. As on January 28,
2018, the company has incurred expenses of INR18 crore (around
26.73% of total project cost) towards the building and plant
&machinery. The said expenses are funded by the promoters' capital
(Rs. 12 crore) and term loan (Rs. 6 crore).
Significant amount of fund infused by the promoters: For
establishment of the hospital and to cater to the working capital
requirements, the promoters of the firm have infused significant
amount of funds INR12.00 crore by a way of share capital out of
proposed equity of INR16.83 crore as on January 28,2018.
Stable outlook of Healthcare sector: Indian healthcare industry
operates in both of the private and public sectors. In the years to
come, the healthcare industry in India is reckoned to be the engine
of the Indian economy. Today, the healthcare industry in India is
worth $17 billion and there are anticipation & expectation of it to
grow by 13% every year.
Kurnool based, Surakshitha Health Care Private Limited (SHCPL) was
set up in 2015 by Mr. C.Lakshmiprasad (Managing Director) and
Mrs.B.Parvatamma (Director). SHCPL had proposed to setup a super
specialty hospital with 200 beds (General Wards 72, Double Sharing
Beds 28, Single Bedded Rooms 11, Delux Single Bedded Rooms 6,ICCU
(Cardiac) 11,Intensive care unit 39,AMC 13 and NICU with 20 beds)
capacity in Kurnool, Andhra Pradesh. The company started
establishing their project for setting up of the hospital in
December 2015. The hospital has a proposed panel of specialists in
the field of Oncology, Neurology, Cardiology, Nephrology and
related health disorders.
SWASTIK CERACON: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Swastik Ceracon Limited
Registered office:
S.No. 1071-74, At Nandasan-Mehsana Road
N.H. 8, Tal. Kadi, Nandasan
Mehsana 380706
Insolvency Commencement Date: January 15, 2019
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: July 13, 2019
Insolvency professional: Mr. Ravi Kapoor
Interim Resolution
Professional: Mr. Ravi Kapoor
402, Shaival Plaza
Near Gujarat College
Ellisbridge
Ahmedabad 380006
E-mail: ravi@ravics.com
Last date for
submission of claims: February 12, 2019
TAPL INTERNATIONAL: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: Tapl International Private Limited
212 Martin Burn, 2nd Floor 1 R. N.
Mukherjee Road Kolkata
Kolkata WB 700001 IN
Insolvency Commencement Date: February 1, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: July 31, 2019
(180 days from commencement)
Insolvency professional: Sanjai Kumar Gupta
Interim Resolution
Professional: Sanjai Kumar Gupta
153A, A.P. C Road
Kolkata 700006
E-mail: casanjaigupta@gmail.com
- and -
C/o, LSI Resolution Pvt. Ltd.
104, S.P. Mukherjee Road
Sagar Trade Cube, 2nd Floor
Kolkata 700026, West Bengal
India
E-mail: lsi.taplint@gmail.com
cirp.tapl@gmail.com
Last date for
submission of claims: February 15, 2019
TITAN ENERGY: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: M/s. Titan Energy Systems Limited
16, Aruna Enclave
Tirumalghery, Secunderabad
Telangana, India
Insolvency Commencement Date: January 9, 2019
Court: National Company Law Tribunal, Hyderabad Bench
Estimated date of closure of
insolvency resolution process: July 7, 2019
(180 days from commencement)
Insolvency professional: Madhusudhan Rao Gonugunta
Interim Resolution
Professional: Madhusudhan Rao Gonugunta
7-1-285, Flat No. 103
Sri Sai Swapnasampada Apartments
Balkampet, Sanjeev Reddy Nagar
Hyderabad, Telangana 500038
E-mail: Madhucs1@gmail.com
titanirp@gmail.com
Last date for
submission of claims: February 28, 2019
VAKSH STEELS: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: M/s. Vaksh Steels Private Ltd.
Krupa Ashirvad Complex, 5-2-394 to 398
Flat No. 102, Mega City No. 650
Hyderbasti, RP Road, Secunderabad
Hyderabad 500003
Insolvency Commencement Date: February 14, 2019
Court: National Company Law Tribunal, Hyderabad Bench
Estimated date of closure of
insolvency resolution process: August 13, 2019
Insolvency professional: Kalvakolanu Murali Krishna Prasad
Interim Resolution
Professional: Kalvakolanu Murali Krishna Prasad
8-27, Mythripuram Colony
Jillelguda, Karmanghat
Vyshalinagar Post
Hyderbad 500079
E-mail: kmk123ip@gmail.com
Last date for
submission of claims: February 28, 2019
VEDA BIOFUEL: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Veda Biofuel Limited
Registered office:
At H.No. 50-50-15/2, Seethammadara
Behind Gurudwara, Visakhapatnam
AP 530013 IN
Factory address:
Nadipalli Village
Pusapati Rega Mandal
Vizianagaram District, AP
Insolvency Commencement Date: February 12, 2019
Court: National Company Law Tribunal, Hyderabad Bench
Estimated date of closure of
insolvency resolution process: August 11, 2019
Insolvency professional: Gonugunta Murali
Interim Resolution
Professional: Gonugunta Murali
H.No. 16-11-19/4, G-1
Sri LaxmiNilayam, Salem Nagar Colony
Malakpet, Hyderabad
Telangana 500036
E-mail: gmurali34@gmail.com
vedabioip@gmail.com
Last date for
submission of claims: February 27, 2019
VIZAG REBARS: CARE Migrates D Rating to Not Cooperating Category
----------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Vizag
Rebars Pvt Ltd (VRPL) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 95.00 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Short term Bank 5.00 CARE D; Issuer not cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
VRPL 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 Vizag Rebars 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.
Detailed description of the key rating drivers
At the time of last rating on April 23, 2018 the following were the
rating strengths and weaknesses:
Key Rating Weaknesses
Stretched liquidity position leading to delays in meeting the debt
obligations: There have been continuous overdrawals in cash credit
account along with interest overdue and devolvement in letter of
credit due to stretched liquidity position consequently leading to
delays in meeting the debt obligations.
Incorporated on November 28, 1995, Vizag Rebars Pvt Ltd (VRPL) is
primarily engaged in the trading of steel and steel products at
Vijayawada, Andhra Pradesh. The company is promoted by Mr. T
Srinivasa Rao, Mr. Kilaru Shiva Kumar and Mr. Mallikarjuna Rao.
During November 2012, the company has forayed into manufacturing
activity by taking a re-rolling mill (with an installed capacity of
45,000 TPA) from Steel Exchange India Limited (rated CARE D/CARE
D).
===============
M A L A Y S I A
===============
1MDB: Home of Ex-Goldman Sachs Banker Raided in Probe
-----------------------------------------------------
The Business Times reports that the house of former Goldman Sachs
banker Roger Ng has been raided by the police.
It is learnt that the raid was conducted on Feb. 19, and that the
police seized three cars and around MYR49,000 (SGD16,255) in cash,
the report says.
When contacted, Bukit Aman CID Anti-Money Laundering division chief
Senior Asst Comm Khalil Azlan Chik confirmed the raid and the fact
that it was connected to 1Malaysia Development Bhd (1MDB)
investigations, according to BT.
"Yes, I can confirm the matter," he said via text message, BT
relays.
BT relates that previously, Home Minister Muhyiddin Yassin had said
that Mr. Ng would be extradited to the United States after his case
in the Malaysian court had been cleared.
According to BT, Mr. Ng's lawyer Tan Hock Chuan previously told the
court that his client had agreed to face criminal charges relating
to 1MDB in the United States and had asked for the extradition
proceedings to be waived.
Mr. Ng claimed trial to abetting Goldman Sachs over the sale of
1MDB bonds totalling US$6.5 billion by leaving out material facts
and making false statements, BT notes.
About 1MDB
Kuala Lumpur-based 1Malaysia Development Bhd (1MDB) operates as a
government agency. The Company offers financial assistance,
analysis, and advice through investors, corporations, and
consultants to startups and growth companies. 1MDB focuses on
investments with strategic value and high multiplier effects on the
economy, particularly in energy, real estate, tourism, and
agribusiness.
As reported in the Troubled Company Reporter-Asia Pacific in June
2015, Reuters relayed that Singapore Police Force has frozen two
bank accounts to help with an investigation in to Malaysia's
troubled state-owned investment fund 1Malaysia Development Bhd
(1MDB), which is being probed by authorities in Malaysia for
financial mismanagement and graft. Reuters said the freezing of
the Singapore bank accounts follows a similar move in Malaysia
where a task force investigating 1MDB said earlier in July that it
had frozen half a dozen bank accounts following a media report that
nearly $700 million had been transferred to an account of
Malaysia's Prime Minister Najib Razak.
The Wall Street Journal reported in July 2015 that investigators
looking into 1MDB had traced close to US$700 million of deposits
moving through Falcon Bank in Singapore into personal bank accounts
in Malaysia belonging to Najib.
The TCR-AP, citing Bloomberg News, reported in November 2015, that
1MDB agreed to sell its power assets to China General Nuclear Power
Corp. for MYR9.83 billion (US$2.3 billion) as the state investment
company moved one step closer to winding down operations after its
mounting debt raised investor concern.
Bloomberg, citing President Arul Kanda in October 2015, related
that the company faced cash-flow problems after a planned initial
public offering of Edra faced delays amid unfavorable market
conditions. The listing plan was later canceled as the company
opted for a sale of the assets, Bloomberg noted.
The TCR-AP, citing The Wall Street Journal, reported in April 2016,
that the company defaulted on a $1.75 billion bond issue,
triggering cross defaults on two other Islamic notes totaling
MYR7.4 billion ($1.9 billion).
Asian Nikkei Review reported in June 2016 that Malaysia has
replaced the board of 1Malaysia Development Berhad with treasury
officials, paving the way for the dissolution of the troubled state
investment fund.
=====================
P H I L I P P I N E S
=====================
RURAL BANK OF MABITAC: Placed Under PDIC Receivership
-----------------------------------------------------
The Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP)
prohibited Rural Bank of Mabitac (Laguna), Inc. from doing business
in the Philippines. Under Resolution No. 270.A dated February 21,
2019, the MB directed the Philippine Deposit Insurance Corporation
(PDIC) as Receiver to proceed with the takeover and liquidation of
the bank. PDIC took over the bank on February 22, 2019.
Rural Bank of Mabitac is a 17-unit rural bank with Head Office
located at 17 J. Rizal St., Brgy. Sinagtala (Pob.), Mabitac,
Laguna. It has two branches located in Candelaria and Infanta,
Quezon; six extension offices in Laguna (Cabuyao, Calamba, Los
Baños, Paete, Siniloan and Sta. Maria); five micro banking offices
in Laguna (Cabuyao, Los Baños, Paete), Batangas (Tanauan) and
Rizal (Tanay); and three other banking offices located in
Nagcarlan, Sta. Cruz and Sta. Rosa, all in Laguna.
Latest available records show that as of December 31, 2018, Rural
Bank of Mabitac had 45,807 deposit accounts with total deposit
liabilities of PHP367.1 million. Total insured deposits amounted to
PHP288.3 million equivalent to 78.52% of total deposits.
PDIC assured depositors that all valid deposits and claims shall be
paid up to the maximum deposit insurance coverage of PHP500,000.00.
Individual depositors with valid deposit accounts with balances of
PHP100,000.00 and below shall be eligible for early payment and
need not file deposit insurance claims, provided they have no
outstanding obligations with Rural Bank of Mabitac or have not
acted as co-makers of these obligations. These individual
depositors must ensure that they have complete and updated
addresses with the bank. They may update their addresses until
March 12, 2019 using the Mailing Address Update Forms to be
distributed by PDIC representatives at the bank premises.
For business entities and all other depositors who are required to
file claims for deposit insurance, the schedule for filing of
claims will be announced as soon as possible through posters in the
bank premises and in other public places, the PDIC website,
www.pdic.gov.ph, and PDIC’s official Facebook account.
PDIC also reminded borrowers to continue paying their loan
obligations with the closed Rural Bank of Mabitac and to transact
only with designated PDIC representatives at the bank premises.
For more information on the requirements and procedures for filing
claims for deposit insurance and settlement of loan obligations,
all depositors and borrowers of the bank are enjoined to attend the
Depositors-Borrowers' Forum which will be held in venues near the
premises of the bank by the third week of March 2019. Details will
be posted in the bank premises and in other public places.
Depositors and borrowers may communicate with PDIC Public
Assistance personnel stationed at the bank premises or call the
PDIC Public Assistance Hotlines at (02) 841-4630 to (02) 841-4631
or the Toll Free Hotline at 1-800-1-888-PDIC (7342) for those
outside Metro Manila. Inquiries may also be sent by e-mail to
pad@pdic.gov.ph or via private message to the official PDIC
Facebook account at www.facebook.com/OfficialPDIC
=================
S I N G A P O R E
=================
DESIGN STUDIO: Warns of "Significant Loss" for Q4 Ended Dec. 31
---------------------------------------------------------------
The Strait Times reports that Design Studio Group expects to report
a "significant loss" for the fourth quarter and full year ended
Dec. 31, 2018, based on a preliminary review of its unaudited
financial results, the interior fit-out and panelling products
provider said in a regulatory filing on Feb. 22.
The Strait Times relates that the losses were mainly due to
restructuring costs incurred and additional provisions for
consolidating manufacturing operations for the fourth quarter. It
also incurred manufacturing losses from lower production, costs of
closure of underused showrooms in Malaysia and China, and
additional cost overruns due to a delay in a project for the
quarter.
The group will furnish more details when it announces its results
on or before Feb. 25, the report says.
Separately, Design Studio has appointed Adelle Howse as an
independent non-executive director with effect from Feb 1. She is a
management consultant and executive contractor, the Strait Times
reports.
Design Studio Group Ltd, an investment holding company, provides
joinery manufacturing and interior fit-out solutions to the
hospitality, commercial, retail, and residential sectors. The
company operates through three segments: Residential Property
Projects, Hospitality and Commercial Projects, and Distribution
Projects. Design Studio Group Ltd is a subsidiary of Depa
Interiors LLC.
SEVAK LTD: To Remain in SGX Watch List Until June This Year
-----------------------------------------------------------
The Strait Times reports that Sevak Ltd will remain on the
Singapore Exchange's (SGX) watch list until at least June 2019,
after the market regulator deferred its review of the company's
application to exit the list.
In the meantime, SGX has granted Sevak a three-month extension on
the original March 31, 2019 deadline for Sevak to cure its
watch-list status, Sevak said in an announcement on Feb. 22 before
the market opened. This means that Sevak will not be forced to
delist while the review is being deferred, the Strait Times
relates.
According to the Strait Times, Sevak appears to have already met
the conditions to cure its watch-list status. After posting three
straight years of pre-tax losses to trigger its entry onto the
watch list, the company is once again profitable with a net profit
of SGD3.7 million for fiscal 2018. The company's latest market
capitalisation is about $44 million based on data from SGX
StockFacts, which is above the $40 million threshold, the report
discloses.
But SGX's regulatory arm has recently raised concerns about the
trading activity in Sevak's stock that drove its share price - and
market cap - above the watch list's requirement, the report says.
On Jan. 31, Singapore Exchange Regulation (SGX RegCo) urged
investors and potential investors to exercise caution when trading
Sevak shares, the Strait Times recalls. SGX RegCo noted that the
share price of Sevak had climbed steadily from $2.51 on Sept. 17,
2018 to $4.05 on Oct. 19, 2018 - a 61 per cent ascent - despite a
general decline in the broad market, the Strait Times discloses.
SGX Regco said that the company's share buyback programme accounted
for more than 70 per cent of the stock's traded volume during that
time.
The Strait Times relates that after the share buyback programme
ended, SGX Regco also observed the stock holding steady around
$3.80 despite volatility in the broader market, with a group of
traders that appeared to be connected to one another accounting for
more than 70 per cent of the buy volume in Sevak shares during that
period.
One day after SGX issued its "trade with caution" notice, Sevak
announced that its controlling shareholder, Smart Co Holding,
intends to make a partial offer for the shares of the company
directly or through its concert parties. This will result in Smart
Co Holding and its concert parties holding about 51 per cent of the
shares of Sevak, the report says.
Sevak added at the time that Smart Co Holding emphasised there is
no assurance any transaction will eventually materialise, and no
definitive or binding agreements have been reached in relation to
the possible transaction, the report relates.
Sevak was placed on the watch list on March 4, 2015, and had
previously been granted two 12-month extensions to cure its
watch-list status, the Strait Times notes.
The stock last traded at $3.71 on Feb. 20.
SEVAK Limited provides telecommunication services primarily in
Southeast Asia and South Asia. It operates in Distribution of
Operator Products and Services, ICT Distribution and Managed
Services, Mobile Device Distribution and Retail, and Battery
Electric Vehicles segments. The company distributes mobile prepaid
cards of telecom operators in Indonesia. It operates a distribution
network of approximately 30,000 resellers, and 150 dealers and
sub-dealers, as well as a network of various branch offices and
sub-branch offices in Indonesia.
=====================
S O U T H K O R E A
=====================
DAEWOO SHIPBUILDING: HH Workers to Go on Strike Over Takeover
-------------------------------------------------------------
Yonhap News Agency reports that unionized workers at Hyundai Heavy
Industries Co., the world's largest shipyard by sales, voted on
Feb. 20 to strike in opposition to the planned takeover of Daewoo
Shipbuilding & Marine Engineering Co., heralding a bumpy road for
the mega deal between the two shipyards.
Earlier last week, workers at Daewoo Shipbuilding also OK'd a
strike against the proposed deal, though its union did not say when
they will walk out, Yonhap recounts.
Yonhap relates that Hyundai Heavy's labor union said over half of
those that took part in the vote approved the proposed strike.
Early this month, the state-run Korea Development Bank (KDB) said
it would sign a formal deal with Hyundai Heavy early next month to
sell its controlling stake in Daewoo Shipbuilding. The KDB is
Daewoo Shipbuilding's main creditor and has a 55.7 percent stake in
the company.
According to the report, the labor unions at Hyundai Heavy and
Daewoo Shipbuilding fiercely oppose the deal, claiming it could
lead to massive layoffs.
Yonhap says the passage of the vote by Hyundai union may result in
workers from the two shipyards joining forces to thwart the
purchase.
If the takeover goes ahead as planned, the South Korean
shipbuilding industry is expected to be dominated by two major
shipbuilders -- Hyundai Heavy and Samsung Heavy, the report notes.
According to Yonhap, South Korean shipbuilders, once a cornerstone
of the country's economic growth and job creation, have been
reeling from mounting losses in the past few years, caused by an
industrywide slump and a glut of vessels amid tough competition
from Chinese rivals.
Yonhap adds that the government has been hoping that the local
shipbuilding industry can be overhauled in such a way that two
major players can dominate the sector to better compete against
Chinese rivals and tackle sectoral ups and downs.
Headquartered in Seoul, South Korea, Daewoo Shipbuilding & Marine
Engineering Co. -- http://www.dsme.co.kr/-- is engaged in building
ships and offshore structures. Its product portfolio includes
commercial ships, such as liquefied natural gas (LNG) carriers, oil
tankers, containerships, liquefied petroleum gas (LPG) carriers,
pure car carriers; offshore structures, such as FPSO vessels,
drilling rigs, drillships and fixed platforms, and naval vessels,
including submarines, destroyers, rescue ships and patrol boats.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2019. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***