/raid1/www/Hosts/bankrupt/TCRAP_Public/190325.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, March 25, 2019, Vol. 22, No. 60
Headlines
A U S T R A L I A
CROCKETS PTY: Second Creditors' Meeting Set for April 1
ENDEAVOUR SECURITIES: Put Into Liquidation After ASIC Court Action
HYDETECH ELECTRICAL: First Creditors' Meeting Set for April 2
KASBAH MOROCCAN: Second Creditors' Meeting Set for April 2
LEMPRIERE GRAIN: First Creditors' Meeting Set for April 2
PROSPA TRUST 2018-1: Moody's Keeps Notes Ratings Amid Amendment
SAPPHIRE TRUST XXI 2019-1: Moody's Rates Class F Notes (P)B2
SCORDO TRANSPORT: Second Creditors' Meeting Set for March 29
TRITON TRUST 2019-2: S&P Assigns Prelim BB Rating on E Notes
C H I N A
CIFI HOLDINGS: Fitch Gives 'BB(EXP)' Rating to New USD Sr. Notes
CIFI HOLDINGS: S&P Rates New USD Sr. Unsecured Notes 'BB-'
FUTURE LAND: S&P Affirms 'BB' Long-Term ICR, Outlook Stable
HUAYUAN PROPERTY: Moody's Rates USD Unsecured Notes 'B2'
HUAYUAN PROPERTY: S&P Rates New USD Sr. Unsecured Notes 'B+'
TAHOE GROUP: Tries to Offload Dozen Projects Amid Mounting Debts
I N D I A
AJEET AND COMPANY: CARE Cuts Ratings on INR17cr Loans to D
ALPINE REALTECH: Insolvency Resolution Process Case Summary
AMIYA STEEL: Ind-Ra Migrates B LT Issuer Rating to Non-Cooperating
ASK HOME: Ind-Ra Migrates 'D' LT Issuer Rating to Non-Cooperating
AVANI PROJECTS: Insolvency Resolution Process Case Summary
BHARAT NRE: Insolvency Resolution Process Case Summary
BHUVEE STENOVATE: Insolvency Resolution Process Case Summary
CARD PRO: CARE Lowers Ratings on INR7.14cr Loans to D
CMAX METALS: CRISIL Withdraws 'B+' Rating on INR5cr Loans
DEEPSEA DEVELOPERS: Insolvency Resolution Process Case Summary
ENERGYWIN TECHNOLOGIES: CRISIL Assigns B+ Ratings to INR2.5cr Loan
EZRA SBL: Ind-Ra Affirms BB+ on INR3.26-Mil. Series A2 PTCs
GMR HYDERABAD: S&P Affirms 'BB+' ICR on Resilient Cash Flows
GREATVALUE PROJECTS: CRISIL Withdraws B+ Rating on INR25cr Loan
GSCO INFRASTRUCTURE: Ind-Ra Lowers Long Term Issuer Rating to 'D'
GUMAN FURNITURE: Insolvency Resolution Process Case Summary
HIMALAYAN ROAD: Ind-Ra Migrates 'BB' LT Rating to Non-Cooperating
HIMATSINGKA RESORTS: Insolvency Resolution Process Case Summary
INDIAN TRADING: CRISIL Reaffirms B- Rating on INR12.55cr Loan
JET AIRWAYS: India State Banks Want Goyal to Reduce Stake to 10%
JSK CORP: Ind-Ra Affirms BB LongTerm Issuer Rating, Outlook Stable
K. REMASH: CRISIL Reaffirms B+ Rating on INR3cr Cash Loan
KULKARNI POWER: CRISIL Maintains B- Ratings in Not Cooperating
LUPIN TELEPOWER: Insolvency Resolution Process Case Summary
MS BIOTECH: Insolvency Resolution Process Case Summary
NATARAJ GINNING: CARE Reaffirms B+ Rating on INR5.60cr Loan
NEHA INTERNATIONAL: CARE Migrates D Rating to Not Cooperating
NIPMAN FASTENER: CARE Lowers Ratings on INR184.77cr Loans to D
NITIN FIRE: CRISIL Maintains 'D' Ratings in Not Cooperating
POWERMAX RUBBER: CRISIL Withdraws 'D' Rating on INR10cr Loans
PRAG DISTILLERY: CARE Migrates 'D' Ratings to Not Cooperating
PRATIKSHA GEMS: CARE Assigns B+ Rating to INR4.82cr LT Loan
PUNJ LLOYD: Insolvency Resolution Process Case Summary
ROSELABS LIMITED: CRISIL Maintains D Ratings in Not Cooperating
RRAS TRADERS: CRISIL Assigns 'B+' Ratings to INR3cr Loans
SAISANJ RETAIL: CARE Lowers Rating on INR15cr LT Loan to B
SHIVA COTTON: Ind-Ra Lowers Long Term Issuer Rating to 'D'
SHREE SAI: CRISIL Reaffirms B+ Ratings on INR5.9cr Loans
SRI PADMAVATI: CRISIL Withdraws B+ Ratings on INR20cr Loans
STAR REALCON: CRISIL Lowers Ratings on INR9cr Loans to 'D'
TANTIA CONSTRUCTIONS: Insolvency Resolution Process Case Summary
TRANSPARENT ENERGY: Insolvency Resolution Process Case Summary
TRISHA TRENDS: CRISIL Reaffirms B+ Ratings on INR10cr Loans
UNITED ENGINEERS: CRISIL Assigns B+ Rating to INR4cr Cash Loan
VAISHNODEVI OIL: Ind-Ra Migrates 'BB' LT Rating to Non-Cooperating
VASTU LAND: Insolvency Resolution Process Case Summary
VIKRANT FORGE: Ind-Ra Lowers Long Term Issuer Rating to 'D'
VISHAL CONSTRUCTION: CRISIL Reaffirms B Ratings on INR6.55cr Loans
S I N G A P O R E
HYFLUX LTD: MAS and SGX Keeping Close Tabs on Water Firm
X X X X X X X X
HOUSING DEVELOPMENT: Fitch Assigns 'B+' LongTerm IDRs
- - - - -
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A U S T R A L I A
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CROCKETS PTY: Second Creditors' Meeting Set for April 1
-------------------------------------------------------
A second meeting of creditors in the proceedings of Crockets Pty.
Ltd. has been set for April 1, 2019, at 11:00 a.m. at the offices
of Deloitte Financial Advisory Pty Ltd, Riverside Centre, Level 23,
at 123 Eagle Street, in Brisbane, Queensland.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by March 29, 2019, at 4:00 p.m.
David Ian Mansfield and Timothy Joseph Heenan of Deloitte Financial
Advisory were appointed as administrators of Crockets Pty on March
5, 2019.
ENDEAVOUR SECURITIES: Put Into Liquidation After ASIC Court Action
------------------------------------------------------------------
The Australian Securities and Investments Commission's action
against operators of managed investment schemes has led to the
Federal Court of Australia making orders that Endeavour Securities
(Australia) Ltd (Endeavour) and Linchpin Capital Group Ltd
(Linchpin) contravened multiple provisions of the Corporations Act
and that Endeavour and Linchpin be placed into liquidation.
The Court also ordered that the registered scheme operated by
Endeavour and the unregistered scheme operated by Linchpin, both
called 'Investport Income Opportunity Fund', be placed into
liquidation.
At the closing of ASIC's evidence in court, Endeavour and Linchpin
agreed to the declarations of contravention and the liquidation of
both companies and both funds.
The findings of contraventions include:
That Endeavour in its role as responsible entity:
* did not act in the best interests of the members of the
registered scheme known as the Investport Income Opportunity
Fund;
* failed to ensure that the financial services it provided
were provided efficiently and fairly;
* failed to exercise reasonable care and skill as responsible
entity;
* engaged in related party transactions without member
approval and
* failed to identify to Investport Income Opportunity Fund
investors, the nature and extent of the related party
transactions that were entered into.
That Linchpin:
* operated an unlawful managed investment scheme;
* operated without an Australian Financial Services Licence;
And
* engaged in conduct that was likely to mislead or deceive.
In making the orders, Justice Derrington stated:
'Given the length and breadth of the non-compliances with the Act,
there is more than sufficient justification for the winding up of
both companies.'
Mr. Jason Tracy and Mr. David Orr from Deloitte have been appointed
as liquidators of Endeavour, Linchpin and the two Investport Income
Opportunity Funds. Investors and creditors should direct their
enquiries to: linchpin@deloitte.com.au.
ASIC obtained interim orders against Endeavour and Linchpin in
August 2018, appointing receivers and restraining Endeavour and
Linchpin from dealing with assets and investor funds.
HYDETECH ELECTRICAL: First Creditors' Meeting Set for April 2
-------------------------------------------------------------
A first meeting of the creditors in the proceedings of Hydetech
Electrical Services Pty Ltd, trading as Greenstate Electrical, will
be held on April 2, 2019, at 11:00 a.m. at the offices of HLB Mann
Judd Insolvency WA, at Level 3, 35 Outram Street, in West Perth,
WA.
Kimberley Stuart Wallman of HLB Mann Judd were appointed as
administrators of Hydetech Electrical on March 21, 2019.
KASBAH MOROCCAN: Second Creditors' Meeting Set for April 2
----------------------------------------------------------
A second meeting of creditors in the proceedings of Kasbah Moroccan
Imports (VIC) Pty Ltd has been set for April 2, 2019, at 3:00 p.m.
at Level 2, 106 Hardware Street, Melbourne VIC
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 April 1, 2019, at 5:00 p.m.
Anthony Robert Cant and Renee Sarah Di Carlo of Romanis Cant were
appointed as administrators of Kasbah Moroccan on Feb. 26, 2019.
LEMPRIERE GRAIN: First Creditors' Meeting Set for April 2
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Lempriere
Grain Pty Ltd will be held on April 2, 2019, at 10:30 a.m.
Chartered Accountants Australian and New Zealand, Training Room 4,
Level 18, 600 Bourke Street, Melbourne Victoria
Andrew John Spring and Trent Andrew Devine of Jirsch Sutherland
were appointed as administrators of Lempriere Grain on March 21,
2019.
PROSPA TRUST 2018-1: Moody's Keeps Notes Ratings Amid Amendment
---------------------------------------------------------------
Moody's Investors Service says that the execution of the Amending
Deed - Prospa Trust Series 2018-1 on March 20, 2019 (the Amendment)
will not, in and of itself and as of this time, result in the
downgrade or withdrawal of the ratings of the Class A, Class B and
Class C Notes issued by the above mentioned trust.
However, Moody's opinion addresses only the credit impact
associated with the Amendment, and does not express any opinion as
to whether the Amendment has, or could have, other
non-credit-related effects that may have a detrimental impact on
the interests of noteholders and/or counterparties.
The Class A, Class B and Class C Notes are rated A3 (sf), Ba2 (sf)
and B3 (sf), respectively.
The main changes of the Amendment include: (1) extending the
Substitution Period Expiry Date by 12 months, (2) converting the
Class C Notes to a fixed rate note and (3) amendments to the
hedging arrangements.
The transaction is supported by a liquidity reserve in the amount
of 2.00% of the note balance, funded from note issuance.
The transaction is a revolving securitisation of a portfolio of
Australian commercial loans originated and serviced by Prospa
Advance Pty Limited.
SAPPHIRE TRUST XXI 2019-1: Moody's Rates Class F Notes (P)B2
------------------------------------------------------------
Moody's Investors Service has assigned the following provisional
ratings to the notes to be issued by Permanent Custodians Limited
as trustee of Sapphire XXI Series 2019-1 Trust.
Issuer: Sapphire XXI Series 2019-1 Trust
AUD80.00 million Class A1S Notes, Assigned (P)Aaa (sf)
AUD180.00 million Class A1L Notes, Assigned (P)Aaa (sf)
AUD83.60 million Class A2 Notes, Assigned (P)Aaa (sf)
AUD30.00 million Class B Notes, Assigned (P)Aa2 (sf)
AUD5.60 million Class C Notes, Assigned (P)A2 (sf)
AUD7.20 million Class D Notes, Assigned (P)Baa2 (sf)
AUD4.40 million Class E Notes, Assigned (P)Ba2 (sf)
AUD4.80 million Class F Notes, Assigned (P)B2 (sf)
The AUD4.40 million Class G Notes are not rated by Moody's.
The transaction is an Australian residential mortgage-backed
securities (RMBS) transaction secured by a portfolio of residential
mortgage loans. All receivables were originated by Bluestone Group
Pty Limited or Bluestone Mortgages Pty Limited (Bluestone), and are
serviced by Bluestone Servicing Pty Limited (Bluestone Servicing).
Bluestone is an experienced securitiser in the Australian RMBS
market, having completed 27 term RMBS transactions since 2000.
Bluestone also has extensive securitisation experience through its
various warehouse funding arrangements. This is Bluestone's first
transaction for 2019.
RATINGS RATIONALE
The provisional ratings take into account, among other factors, the
evaluation of the underlying receivables and their expected
performance, the evaluation of the capital structure and credit
enhancement provided to the notes, the availability of excess
spread over the life of the transaction, the liquidity facility in
the amount of 2.0% of the note balance, the legal structure, and
the credit strength and experience of Bluestone Servicing as the
servicer.
Moody's MILAN CE — representing the loss that Moody's expects the
portfolio to suffer in the event of a severe recession scenario —
is 14.0%. Moody's expected loss for this transaction is 2.0%.
Key transactional features are as follows:
- Whilst the Class A1L and Class A2 Notes rank sequentially in
relation to interest and charge-offs, they rank pari passu in
relation to principal throughout the life of the transaction.
Principal repayments will be allocated pro-rata, based on the
stated amount of the notes. This feature reduces the absolute
amount of credit enhancement available to the Class A1L Notes.
- The servicer is required to maintain the weighted-average
interest rates on the mortgage loans at least at 3.80% above
one-month BBSW, which is within the current portfolio yield of
5.8%. This generates a high level of excess spread available to
cover losses in the pool.
- The yield enhancement reserve is available to meet senior
expenses and the required payments for Class A Notes only, while
any Class A Notes are outstanding and before the call option
trigger date. The reserve account is funded by trapping excess
spread at an annual rate of 0.40% of the outstanding principal
balance of the portfolio up to a maximum amount of AUD1,200,000.
After the Class A Notes have fully amortised, the yield enhancement
reserve will be released to repay principal on the outstanding
classes of notes from Class F to Class B (until the stated amount
of each class of notes is reduced to zero).
- A retention mechanism will be used to divert excess available
income towards the repayment of the most junior class of the rated
notes outstanding. The retention amount will be up to 0.4% of the
current outstanding pool balance, and up to a total captured amount
of AUD1,200,000. At the same time, the trustee will issue Class RM
Notes, equivalent to the retention amount allocated, leaving
subordination levels unchanged.
- The Class A1L to Class F Notes will start receiving their
pro-rata share of principal if step-down conditions are met.
- Permitted further advances can be funded within the trust,
which could lead to a deterioration in the credit quality of the
pool. Further advances are subject to certain conditions. Further
advances will be funded through principal collections.
Key pool features are as follows:
- The pool has a weighted-average scheduled loan-to-value (LTV)
ratio of 68.1% and there are no loans in the pool with a scheduled
LTV ratio over 85.0%.
- The portfolio has a low level of weighted-average seasoning of
3.6 months.
- Investment and interest-only loans represent 28.8% and 9.3% of
the pool, respectively.
- Based on Moody's classifications, the portfolio contains 17.9%
exposure to borrowers with prior credit impairment histories
(default, judgment or bankruptcy). Moody's assesses these borrowers
as having a significantly higher default probability.
- Based on Moody's classifications, the portfolio contains 50.5%
of loans granted on the basis of alternative income documentation,
with a further 1.5% granted on the basis of low income
documentation.
- Around 55.2% of the loans in the portfolio were extended to
self-employed borrowers.
Factors That Would Lead to an Upgrade or Downgrade of the Ratings:
Factors that could lead to an upgrade of the notes include a rapid
build-up of credit enhancement, due to sequential amortization or
better-than-expected collateral performance. The Australian jobs
market and housing market are primary drivers of performance.
A factor that could lead to a downgrade of the notes is
worse-than-expected collateral performance. Other reasons that
could lead to a downgrade include poor servicing, error on the part
of transaction parties, a deterioration in the credit quality of
transaction counterparties, or lack of transactional governance and
fraud.
SCORDO TRANSPORT: Second Creditors' Meeting Set for March 29
------------------------------------------------------------
A second meeting of creditors in the proceedings of Scordo
Transport Services Pty. Ltd. (trading as "Motor Cars
International") has been set for March 29, 2019, at 11:30 a.m. at
the offices of SV Partners Insolvency (Vic), 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 March 28, 2019, at 5:00 p.m.
Michael Carrafa and Peter Gountzos of SV Partners were appointed as
administrators of Scordo Transport on Feb. 22, 2019.
TRITON TRUST 2019-2: S&P Assigns Prelim BB Rating on E Notes
------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to eight
classes of prime residential mortgage-backed securities (RMBS) to
be issued by Perpetual Corporate Trust Ltd. as trustee for Triton
Trust No. 8 Bond Series 2019-2.
The preliminary ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including the fact that this is a closed portfolio,
which means no further loans will be assigned to the trust after
the closing date.
-- S&P's view that the credit support is sufficient to withstand
the stresses it applies. This credit support comprises mortgage
insurance covering 66.9% of the loans in the portfolio, accrued
interest, and reasonable costs of enforcement, as well as note
subordination for all rated notes.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including an amortizing liquidity
facility equal to 1.2% of the invested amount of all notes,
principal draws, and a loss reserve that builds from excess spread,
are sufficient under its stress assumptions to ensure timely
payment of interest.
-- The extraordinary expense reserve of A$150,000, funded from day
one by Columbus Capital Pty Ltd., available to meet extraordinary
expenses. The reserve will be topped up via excess spread if
drawn.
-- The benefit of a fixed-to-floating interest-rate swap provided
by National Australia Bank Ltd. (NAB) to hedge the mismatch between
receipts from any fixed-rate mortgage loans and the variable-rate
RMBS.
PRELIMINARY RATINGS ASSIGNED
Triton Trust No. 8 Bond Series 2019-2
Class Rating Amount
(mil. A$)
A1-AU AAA (sf) 385.00
A1-4Y AAA (sf) 40.00
A2 AAA (sf) 25.00
AB AAA (sf) 32.00
B AA (sf) 8.75
C A (sf) 6.25
D BBB (sf) 1.50
E BB (sf) 0.75
F NR 0.75
NR--Not rated.
=========
C H I N A
=========
CIFI HOLDINGS: Fitch Gives 'BB(EXP)' Rating to New USD Sr. Notes
----------------------------------------------------------------
Fitch Ratings has assigned China-based property developer CIFI
Holdings (Group) Co. Ltd.'s (BB/Stable) proposed US dollar offshore
senior notes an expected rating of 'BB(EXP)'.
The final rating is contingent on the receipt of final documents
conforming to information already received. The notes are rated at
the same level as CIFI's senior unsecured rating as they represent
its direct, unconditional, unsecured and unsubordinated
obligations. CIFI intends to use the net proceeds from the proposed
US dollar senior notes mainly to refinance its existing debt and
for working capital.
KEY RATING DRIVERS
Strong Sales: CIFI's contracted sales, including contracted sales
by JVs and associated companies, declined by 9% yoy to CNY15.4
billion in January-February in 2019, with the average selling price
(ASP) increasing by 15% yoy to CNY16,916 per square meter (sq m),
mainly due to deliberate slow-down in project launches in 1H19.
CIFI targets to achieve CNY190 billion in total sales, or 25%
increase yoy, with CNY350 billion of saleable resources in 2019.
CIFI's total sales rose by 46% to CNY152 billion in 2018 but the
ASP fell by 4% to CNY15,900/sq m mainly due to more contracted
sales from third-tier Chinese cities.
Higher Leverage: Fitch estimates that CIFI's leverage, measured by
net debt/adjusted inventory with proportionate consolidation of
joint ventures (JV) and associates, rose to 45%-50% in 2018 from
around 40% in 2017, mainly due to continued high land acquisition
cash flow in 2018. Fitch expects leverage to drop in the next 12
months as the company plans to slow its land acquisition pace in
2019 with attributable land acquisitions budgeted at around 55% of
sales proceeds, compared with 85% in 2017 and 68% in 2018.
Stable Margins: CIFI's EBITDA margin after adding back capitalised
interests fell to 21.6% in 2018 from 26.2% in 2017. The EBITDA
margin would have been higher at 31.2% in 2018 and 29.1% in 2017 if
adjusted for an acquisition revaluation, according to the company.
CIFI reclassified certain project companies from non-consolidated
JVs and associates into subsidiaries and revised the fair value of
the cost of delivered properties. The accounting change resulted in
a higher cost of goods sold and lower margins.
The acquisition revaluations are likely to continue as CIFI has a
significant number of JVs and associates, which will make margins
appear more volatile. Nevertheless, Fitch believes CIFI's
diversified project portfolio across cities of different tiers
allows it to maintain its fast-churn strategy without sacrificing
the overall project margins.
Geographical Diversification: CIFI had a total land bank of 55
million sq m at end 2018, sufficient for three to four years of
development. CIFI entered 15 new cities in 2018, with projects now
spread more than 50 cities across China, helping mitigate risks
from local policy intervention and economies. CIFI boosted land
acquisition in Tier 3 cities in 2018, which were oversupplied, but
focused contracted sales on second-tier and robust third-tier
cities, which have more first-time buyers and upgraders. CIFI's
saleable resources remain well-diversified among cities of
different tiers, providing flexibility to adjust the sales mix for
various market conditions.
DERIVATION SUMMARY
CIFI's closest peer is Sino-Ocean Group Holding Limited
(BBB-/Stable, standalone: BB+) in terms of contracted sales and
land-bank size. Sino-Ocean has continued its geographic focus on
Tier 1 and affluent Tier 2 cities, while CIFI has increased its
focus on Tier 2 and 3 cities. CIFI's leverage of around 40% is
similar to the leverage Fitch expected for Sino-Ocean in 2018.
CIFI's EBITDA margin, after adjusting for the acquisition
revaluation, is higher than Sino-Ocean's 23%-25%, but Fitch expects
Sino-Ocean's attributable recurring EBITDA interest coverage from
investment properties to be at 0.4x, while CIFI's recurring income
is negligible. The one-notch difference between Sino-Ocean's
standalone credit profile and CIFI's IDR is based on Sino-Ocean's
higher investment-property income.
CIFI's leverage is significantly lower than that of several 'BB'
range peers, including Guangzhou R&F Properties Co. Ltd.
(BB-/Negative) and Beijing Capital Development Holding (Group) Co.,
Ltd. (BBB-/Negative, standalone: BB). CIFI's EBITDA margin is in
line with that of Guangzhou R&F and Beijing Capital Development.
However, its recurring EBITDA interest coverage is lower than
Guangzhou R&F's 0.2x.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Our Rating Case for the Issuer
-- Attributable contracted sales of CNY80 billion in 2018,
followed by growth of 21% in 2019 and 12% in 2020
-- Attributable land purchases at around 45%-55% of contracted
sales from 2018-2020
-- Average land acquisition cost of CNY6,000-6,250 per sq m from
2018-2020
-- 30% dividend payout ratio
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
-- Leverage, measured by net debt/adjusted inventory, sustained
at below 30.0%
-- Maintaining high cash flow turnover despite the JV business
model and consolidated contracted sales/debt at over 1.2x (2018:
1.1x)
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
-- Substantial decrease in contracted sales
-- EBITDA margin, not adjusting for the effect of acquisition
revaluation, sustained at below 25%
-- Net debt/adjusted inventory sustained above 45%
LIQUIDITY
Ample Liquidity, Low Funding Cost: CIFI had unrestricted cash of
CNY43.3 billion at end-2018, enough to cover short-term debt of
CNY13.5 billion. CIFI's average funding cost remained stable at
5.8% in 2018 (2017: 5.2%), and should stay low due to CIFI's
diversified onshore and offshore funding channels, as well as its
active capital-structure management.
CIFI HOLDINGS: S&P Rates New USD Sr. Unsecured Notes 'BB-'
----------------------------------------------------------
S&P Global Ratings assigned its 'BB-' long-term issue rating to the
U.S.-dollar-denominated senior unsecured notes that CIFI Holdings
(Group) Co. Ltd. proposes to issue. The China-based property
developer intends to use the proceeds for refinancing its existing
debt and general corporate usages. The issue rating is subject to
S&P's review of the final issuance documentation.
S&P said, "We rate the notes one notch below our 'BB' issuer credit
rating on CIFI to reflect subordination risks. As of Dec. 31, 2018,
CIFI had about Chinese renminbi (RMB) 32 billion in secured
borrowings and RMB20 billion in unsecured debt at subsidiary level,
which together account for around 57% of total debt (including
guarantees to joint ventures). These amounts are considered
priority debt, and the total priority debt ratio is above our
notching-down threshold of 50%.
"In our view, the new issuance will have minimal impact on CIFI's
credit profile with only slight maturity enhancement. Our stable
outlook on CIFI reflects our expectation that the company will
continue to expand its scale of sales with controllable leverage.
We attribute the 9% year-on-year decline in contracted sales in the
first two months of 2019 to a temporary dip in new project
launches, and expect a 25% increase for the full year. Looking
forward, we forecast the company's see-through debt-to-EBITDA ratio
(after proportionally consolidating joint ventures) to be
controllable, staying within a range of 5.0x-5.5x."
FUTURE LAND: S&P Affirms 'BB' Long-Term ICR, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings, on March 20, 2019, affirmed its 'BB' long-term
issuer credit rating on Future Land Development Holdings Ltd. At
the same time, S&P affirmed the 'BB-' issue ratings on the
company's senior unsecured notes.
S&P Global Ratings affirmed the ratings because it expects Future
Land's growth momentum to persist over the next 12-18 months,
driven by the company's abundant saleable resources and good
execution. S&P also believes that Future Land's leverage and debt
servicing ability has improved in line with its forecast.
S&P expects Future Land to be able to achieve its 2019 sales target
of Chinese renminbi (RMB) 270 billion, supported by nearly RMB500
billion of saleable resources to be released in the year. The
company's performance was strong in 2018. Its total contracted
sales grew 75% during the year, reaching RMB221 billion.
Future Land's ability to maintain sales of roughly RMB22 billion
each month since August 2018 demonstrates its good execution and
solidly expanded scale, particularly when the property market has
weakened during the period. In the first two months of 2019, the
company achieved above-average growth with sales of RMB23.7
billion, up 24% year-over-year.
S&P expects Future Land's revenue growth to accelerate over the
next two years as property delivery gradually catches pace with
sales. Revenue recognition was just under RMB51 billion in 2018,
less than our expectation. The company's contracted sales grew at
double the increase in property delivery, resulting in more than
RMB270 billion of sold but unrecognized properties (including joint
venture [JV] projects) at the end of 2018. Future Land expects to
complete construction of more than 12 million square meter (sq m)
of residential gross floor area (GFA) in 2019 and property delivery
should increase significantly.
Future Land's fast expansion of its investment property business in
the form of "Wuyue Plaza" community malls should enhance its
business mix and revenue. In 2018, the company opened 19 new malls
that doubled its investment property related income (including
rental and property management fees) to RMB2.1 billion. Future Land
plans to open 22 new malls in 2019 and expects to double such
income. While S&P considers such a rate of expansion to be
ambitious, the additional capital expenditure for the new malls
should be manageable. This is because the malls are mostly
constructed as part of a larger residential complex, allowing for
better cost distribution. The ramping up of the segment will
provide a more stable cash inflow for interest servicing. S&P
estimates the company's recurring rental income will reach more
than 50% of its interest expense by 2020, compared with around 30%
in 2018.
S&P expects Future Land's profit margin to remain robust in 2019
and 2020 with the gross margin staying at 31%-33%, supported by low
land costs of projects sold and well-controlled construction costs.
The company's profitability has further strengthened with gross
margin reaching nearly 35% in 2018, thanks to the strong growth in
average selling prices (ASP) in 2016 and 2017.
Future Land is likely to continue to participate actively in JV
projects. Such projects contributed to 30% of the company's sales
in 2018, and S&P expects this share to stabilize at 30%-35% over
the next two years. In line with Future Land's fast-churn model, a
significant number of its JV projects have now entered the delivery
and recognition phase and have starting to contribute revenue. As
of Dec. 31, 2018, Future Land has provided guarantees to RMB25.1
billion of JV debt, sufficiently covering its share of the debt.
This limits the risk of unforeseen off-balance sheet contingent
liabilities, in our view.
Future Land's leverage has come down in the past two years from a
high base, and we forecast further moderation in the next 12-18
months despite continuing debt growth and large spending on land
acquisitions. This is because we expect Future Land's revenue and
EBITDA growth to outpace the expansion of debt in 2019. S&P said,
"We believe the company can meet most of its land expenditure needs
from increases in operating cash flows from strong sales and
efficient cash collection. Based on our calculations, Future Land's
ratio of adjusted debt (including reported guarantees) to EBITDA
was 5.8x in 2018. However, the see-through debt-to-EBITDA ratio,
which proportionally consolidates JV level EBITDA, was 4.9x. We
believe the see-through ratio could improve moderately over the
next 12-18 months." Meanwhile the company's EBITDA interest
coverage should trend up to 4.5x-5.0x, from 4.2x in 2018, as it
controls its borrowing cost at around 6%.
S&P said, "The stable outlook on Future Land reflects our
expectation that the company will continue to strengthen its
business position and effectively control its debt profile and
leverage over the next 12-18 months. We believe Future Land will
see significant revenue and EBITDA growth in 2019, leading to the
see-through debt-to-EBITDA ratio improving toward 4.5x over the
period.
"We could upgrade Future Land if the company continues its strong
sales growth momentum, accelerates its delivery and recognition,
and expands its investment-property recurring income, while
maintaining robust profitability and prudent leverage management.
The adjusted debt-to-EBITDA ratio falling toward 5x and see-through
debt-to-EBITDA ratio falling toward 4x would indicate such
improvement.
"We may lower the rating if Future Land's property delivery
execution and revenue recognition are weaker than our expectation
or if the company's sales growth slows such that debt expansion is
more substantial than we anticipate. The adjusted debt-to-EBITDA
ratio rising above 6x and the see-through debt-to-EBITDA ratio
rising above 5.5x for an extended period could trigger a
downgrade."
HUAYUAN PROPERTY: Moody's Rates USD Unsecured Notes 'B2'
--------------------------------------------------------
Moody's Investors Service has assigned a B2 senior unsecured rating
to the USD notes to be issued by Huayuan Property Co., Ltd. (B1
stable).
The rating outlook is stable.
The proceeds of the notes will be used to refinance the company's
existing indebtedness.
RATINGS RATIONALE
"The proposed note issuance will lengthen Huayuan Property's debt
maturity profile and will not materially affect its credit metrics,
because the proceeds will be used to refinance existing debt," says
Cedric Lai, a Moody's Assistant Vice President and Analyst.
Huayuan Property's B1 corporate family rating (CFR) reflects its
long operating history and well-recognized brand in Beijing, as
well as the company's good funding access, underpinned by its close
linkage with the Beijing government.
However, the company's B1 CFR is constrained by (1) its relatively
small operating scale and volatile operating performance when
compared with domestic property peers rated by Moody's, (2) its
weakening credit metrics, and (3) the increased execution risk and
debt-funding needs associated with its expansion to cities outside
Beijing.
The company achieved 56% year-on-year contracted sales growth to
RMB12 billion in 2018 from RMB7.7 billion in 2017. This sales
performance will provide funding for the company's debt repayment
and support future revenue growth.
Moody's expects that Huayuan Property's debt leverage, as measured
by revenue/adjusted debt, will remain weak at around 40% over the
next 12-18 months compared to 42% for the 12 months ended June 30,
2018 and 58% in 2017, because of higher debt funding needs for
rapid land acquisitions to support growth and its expansion into
new regions.
The company's interest coverage, as measured by adjusted
EBIT/interest, will likely also weaken to around 2.0x over the next
12-18 months from 2.8x for the 12 months ended June 2018, due to an
increase in interest expense from increased debt levels and higher
average borrowing costs amid the tight onshore credit environment.
The stable outlook reflects Moody's expectation that Huayuan
Property will manage the refinancing of its short-term debt and
adopt a measured approach to land acquisitions to keep its debt
leverage at appropriate levels over the next 12-18 months.
The B2 senior unsecured rating is one notch lower than its CFR due
to structural subordination risk.
This risk reflects the fact that the majority of claims are at the
operating subsidiaries. These claims have priority over Huayuan
Property's senior unsecured claims in a bankruptcy scenario. In
addition, the holding company lacks significant mitigating factors
for structural subordination. As a result, the likely recovery rate
for claims at the holding company will be lower.
Moody's could upgrade Huayuan Property's ratings if the company
improves its debt leverage, while achieving substantial growth in
its operating scale.
Credit metrics that indicate a possible upgrade include: (1)
revenue/adjusted debt above 80%-85%; or (2) adjusted EBIT/interest
cover above 3x on a sustained basis.
Moody's could downgrade the ratings if Huayuan Property's credit
metrics deteriorate or its liquidity position weakens, or if the
ownership by its parent is reduced materially.
Credit metrics that could trigger a ratings downgrade include
EBIT/interest coverage below 1.5x-2.0x on a sustained basis.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
Huayuan Property Co., Ltd. is a Chinese residential developer. Its
parent company, Beijing Huayuan Group Co., Ltd, effectively owned
53.24% of Huayuan Property at 30 June 2018, through a direct
shareholding of 46.40% and a 6.84% ownership by a party acting in
concert.
Huayuan Group is 100% owned by the Xicheng SASAC under the Xicheng
District People's Government of Beijing.
Huayuan Property listed on the Shanghai Stock Exchange in 2008.
The company operates in Beijing, Tianjin, Zhuozhou, Xi'an,
Chongqing, Changsha, Guangzhou and Foshan. At May 31, 2018, its
land bank totaled around 3.8 million square meters by gross floor
area.
HUAYUAN PROPERTY: S&P Rates New USD Sr. Unsecured Notes 'B+'
------------------------------------------------------------
S&P Global Ratings assigned its 'B+' long-term issue rating to a
proposed issue of U.S.-dollar-denominated senior unsecured notes by
Huayuan Property Co. Ltd. (B+/Negative/--). Huayuan will use the
proceeds to refinance its existing debt. The issue rating is
subject to S&P's review of the final issuance documentation.
S&P said, "We equalize the issue rating with our long-term issuer
credit rating on Huayuan because we see no material structural
subordination risks in the company's capital structure. As of June
30, 2018, Huayuan's capital structure consists of Chinese renminbi
(RMB) 10.2 billion of unsecured debt at the headquarter level,
RMB5.9 billion of secured debt issued by the company, and RMB2.9
billion of priority debt issued by its subsidiaries. As such, the
priority debt ratio is below our notching-down threshold of 50%."
The proposed issuance may mildly improve Huayuan's capital
structure and lengthen the debt maturity profile. This is assuming
the company will use the proceeds to refinance its short-term
onshore debt. However, the impact on Huayuan's credit profile is
unlikely to be significant, given the company's low cash balance
and large upcoming debt maturities. Huayuan's cash balance
decreased to RMB3 billion as of Sept. 30, 2018, from RMB7.3 billion
as of end 2017, because of accelerated land acquisitions. The
successful issuance of onshore and offshore bonds in recent months
has tempered the refinancing risk, in S&P's view.
S&P said, "The negative outlook on the issuer credit rating on
Huayuan reflects our expectation that the China-based property
developer's financial leverage is likely to weaken over the next
12-18 months. We forecast that the company's debt-to-EBITDA ratio
will increase to about 10x in 2018-2019, compared with 5.4x in
2017, due to large land acquisition expenditure and weak revenue
recognition.
"We could lower the issuer credit rating if Huayuan's liquidity
sources remain less than liquidity uses over the next 12 months or
if the company's leverage and debt servicing ability deteriorate
from our base-case expectation such that the debt-to-EBITDA ratio
is more than 10x and EBITDA interest coverage is less than 2x. This
could be due to larger debt-funded land acquisitions or weaker
revenue recognition than our estimate, or the failure to adequately
execute the onshore bond issuance plan to refinance debt
maturities."
TAHOE GROUP: Tries to Offload Dozen Projects Amid Mounting Debts
----------------------------------------------------------------
Zheng Yangpeng at South China Morning Post reports that Tahoe Group
is seeking to offload a dozen projects that it bought for at least
CNY40 billion (US$5.97 billion) in the past two years, according to
sources familiar with the matter.
It is the latest builder to resort to asset sales to raise cash in
the face of mounting debts, the Post says.
China's 20th largest developer according to consultancy CRIC, Tahoe
is a poster child of the sector's debt-fueled growth, its expansion
and ambition having outstripped most of its peers, the report
discloses. Tahoe emerged as the Chinese developer most at risk of
defaulting on its debt in a Bloomberg poll of analysts and
portfolio managers in January.
The 12 projects on offer, mainly residential developments with some
attached commercial space, are in the cities of Guangzhou,
Hangzhou, Shenzhen, Nanchang, Kunshan and Zhongshan. According to
descriptions viewed by the South China Morning Post, they are under
development, with the earliest batch of homes already on sale. The
most recent plot was acquired in December.
Tahoe spent at least 40 billion yuan on the plots in 2017 and 2018,
according to the Post's calculations.
A senior executive with a private equity real estate fund said she
had been approached by a third party about the sale of these
projects. Declining to be named, she said she was not keen as she
thought the projects would be difficult to sell, the Post relays.
The Post relates that this is not the first time the Fujian-based
developer has resorted to asset sales to ease liquidity stress.
Last December, it sold three subsidiaries for CNY635 million, and
transferred a Beijing project to a trust company to secure CNY3.5
billion of financing, the report recalls. Its largest shareholder
and controller Huang Qisen had pledged his 49 per cent share of the
company for financing.
"China's property sector is debt-laden but in terms of risk-taking
and slow cash collection, Tahoe stands in its own league, so I
don't think the case spells bigger trouble for the whole sector,"
the Post quotes Liu Feifan, a property analyst at Guotai Junan
International, as saying.
According to the Post, the Bloomberg poll gave Tahoe a one-year
default risk of 6.75 per cent, the highest among the 47 developers
with a market value of more than US$2 billion. The builder's bond
is considered the riskiest among all corporate notes, with an
average 0.97 per cent chance of default.
About Tahoe Group
Tahoe Group Co., Ltd. is engaged in real estate business in China.
The company develops urban complexes, office buildings, serviced
apartments, and commercial pedestrian streets, as well as operates
hotels. It also engages in the film production and distribution,
brokerage, and advertising activities.
As reported in the Troubled Company Reporter-Asia Pacific on Nov.
7, 2018, Moody's Investors Service downgraded to B3 from B2 the
corporate family rating of Tahoe Group Co., Ltd, and to Caa1 from
B3 the backed senior unsecured rating of the notes issued by Tahoe
Group Global Co., Limited - a wholly owned subsidiary of Tahoe -
and guaranteed by Tahoe. The outlook on all ratings is negative.
"The rating downgrade reflects Tahoe's weak financial management
and its heightened debt-refinancing risk over the next 12-18
months because of weaker-than-expected cash collections from
property sales and high levels of maturing debt over the next 12-
18 months," said Wenhan Chen, a Moody's Assistant Vice President
and Analyst.
As of September 2018, Tahoe had cash of CNY17.4 billion, which
could not fully cover its short-term debt of CNY64.7 billion as
of the same date, onshore bonds of CNY10.5 billion puttable by
the end of 2019, and outstanding land premium payments. The
company's cash/short-term debt ratio further declined to 27% as
of September 2018 from 39% at both the end of June 2018 and the
end of December 2017.
=========
I N D I A
=========
AJEET AND COMPANY: CARE Cuts Ratings on INR17cr Loans to D
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Ajeet and Company, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term/ 14.00 CARE D; Issuer not cooperating;
Short-term Revised from "CARE B+; Stable/
Bank Facilities CARE A4" On the basis of best
Available information
Short term 3.00 CARE D; Issuer not cooperating;
Bank Facilities Revised from "CARE B+; Stable/
CARE A4" On the basis of best
Available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from Ajeet and Company to monitor
the rating(s) vide e-mail communications/letters dated February 13,
2019, February 1, 2019, January 14, 2019 and
January 9, 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 Ajeet and
Company's bank facilities will now be denoted as CARE D; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The ratings have been revised on account of ongoing delays in
servicing and the account has been classified as NPA.
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 (updated from the
latest possible information received from the banker).
Key rating Weakness
On-going delay in debt servicing: As per banker interaction, there
have been on-going delays in debt servicing and the account has
been classified as NPA.
Key rating Strengths
Wide experience of the partners' in the trading industry: Mr.
Sudhir Gosalia, the key partner, has over three decades of
experience in trading business and looks after the overall
operations of the firm. Further Mr. Kaushal and Puneet are
other partners having experience of around a decade and looks after
sale & purchase functions of the entity respectively.
Established in 1950 as proprietary concern & later converted into
partnership concern, Ajeet & Company (AC) is engaged in trading of
whey protein products and timber (teakwood/hardwood) products.
Further ince FY15 the entity has started more concentrating towards
trading of whey protein products only (forming ~99% of the TOI in
FY17) which are imported directly from USA and timber trading
(forming remaining portion of TOI in FY17) wherein it imports
(teakwood/hardwood) from Myanmar, Southeast Asian countries,
African countries & Central & South American countries. AC in its
protein segment deals in brands such as Dymatize, Ronniee Colemen,
Bio Sports and Fitness Pro and is the authorized importer and
reseller in India of Dymatize and Ronnie Colemen Signature Series.
Further the entity sells through online portals, agents and other
local distributors.
ALPINE REALTECH: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Alpine Realtech Private Limited
B-1/46, Lane No. 3
New Ashok Nagar Delhi 110096
Insolvency Commencement Date: March 12, 2019
Court: National Company Law Tribunal, Court II, New Delhi Bench
Estimated date of closure of
insolvency resolution process: September 7, 2019
Insolvency professional: Ms. Anju Agarwal
Interim Resolution
Professional: Ms. Anju Agarwal
73, National Park, Lajpat Nagar IV
National Capital Territory of Delhi
110024
E-mail: anju@insolvencyservices.in
- and -
C-100, Sector-2, Noida
Uttar Pradesh 201301
E-mail: alpine@ascgroup.in
Classes of creditors: Home Buyers
Insolvency
Professionals
Representative of
Creditors in a class: Mr. Pramod Kumar Gupta
B-1/10, Lower Ground Floor
Hauz Khas, South
New Delhi 110016
E-mail: variety.financial@gmail.com
Mr. Pawan Kumar Agarwal
Ground Floor, 1-2/37A
Ekta Sqaure, DDA
Kalkaji, South Delhi
New Delhi 110019
E-mail: irp@ppglegal.com
Mr. Ghanshyam Kaushik
144-C, Mianwali Colony, Gurgaon
Haryana 122001
E-mail: gskaushik111@yahoo.com
Last date for
submission of claims: March 28, 2019
AMIYA STEEL: Ind-Ra Migrates B LT Issuer Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Amiya Steel
Private Limited's Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND B (ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR177 mil. Fund-based limits migrated to non-cooperating
category with IND B (ISSUER NOT COOPERATING) rating; and
-- INR40 mil. Non-fund-based limits migrated to non-cooperating
category with IND A4 (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 27, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2002, Amiya Steel is engaged in the manufacturing
of sponge iron and trading of other related materials such as coal,
iron ore, and thermo-mechanically treated bars, among others. The
company's manufacturing facility, located in Bankura, West Bengal,
has an annual installed capacity of 60,000 metric tons.
ASK HOME: Ind-Ra Migrates 'D' LT Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Ask Home
Furnishing Private Limited's Long-Term Issuer Rating at 'IND D' and
simultaneously migrated the rating to the non-cooperating category.
The issuer did not participate in the rating exercise despite
continuous requests and follow-ups by the agency. Thus, the rating
is based on the best available information. Investors and other
users are advised to take appropriate caution while using these
ratings. The rating will now appear as 'IND D (ISSUER NOT
COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR175 mil. Fund-based working capital limit (long- and short-
term) affirmed and migrated to a non-cooperating category with
IND D (ISSUER NOT COOPERATING) rating;
-- INR5 mil. Non-fund-based working capital limit (short-term)
affirmed and migrated to non-cooperating category with IND D
(ISSUER NOT COOPERATING) rating; and
-- INR45.50 mil. Term loan (long-term) due on March 2022 affirmed
and migrated to non-cooperating category with IND D (ISSUER
NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
the best available information
KEY RATING DRIVERS
The affirmation reflects continuous delays in debt servicing by the
company during the 12 months ended in February 2019 due to tight
liquidity.
RATING SENSITIVITIES
Positive: Timely debt service for at least three consecutive months
would be positive for the ratings.
COMPANY PROFILE
Incorporated in 2005, Ask Home Furnishing manufactures mink
blankets and mink blanket fabrics at its facility in Gurugram,
Haryana. The company sells its products nationwide under the brand,
Home Jewels.
AVANI PROJECTS: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Avani Projects And Infrastructure Limited
59A, Chowringhee Road
Kolkata 700020
Insolvency Commencement Date: March 13, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: September 8, 2019
Insolvency professional: Ajay Kumar Agarwal
Interim Resolution
Professional: Ajay Kumar Agarwal
9, Mangoe Lane, 2nd Floor
Room No. 12, Kolkata
West Bengal 700001
E-mail: cs.aaa.2014@gmail.com
- and -
Ambey Garden, Flat-3C
3rd Floor, Banglaxmi Abasan
Dasadron Check Post, PO-R Gopalpur
Rajarhat Main Road
Kolkata 700136
E-mail: irp.avani.project@gmail.com
Classes of creditors: Home buyers and others (if any)
Insolvency
Professionals
Representative of
Creditors in a class: Mr. Chhedi Rajbhar
Mr. Manish Jain
Mr. Asutosh Debata
Last date for
submission of claims: March 27, 2019
BHARAT NRE: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: Bharat NRE Coke Limited
22 Camac Street
Block C 5th Floor Kolkata
WB 700016
Insolvency Commencement Date: March 11, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: September 7, 2019
(180 days from commencement)
Insolvency professional: Samir Kumar Bhattacharyya
Interim Resolution
Professional: Samir Kumar Bhattacharyya
LSI Resolution Pvt. Ltd.
Sagar Trade Cube
104, S.P. Mukherjee Road
Kolkata 700026
E-mail: skb.resolution@gmail.com
ip.bharatnre@gmail.com
Website: www.lsiresolution.com
Last date for
submission of claims: March 25, 2019
BHUVEE STENOVATE: Insolvency Resolution Process Case Summary
------------------------------------------------------------
Debtor: Bhuvee Stenovate Private Limited
Godrej Waterside, Suit-402,
Plot No. 5, Block-DP Sector-5,
Salt Lake City Kolkata
WB 700091, India
Insolvency Commencement Date: March 12, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: September 8, 2019
(180 days from commencement)
Insolvency professional: Kannan Tiruvengadam
Interim Resolution
Professional: Kannan Tiruvengadam
Netaj Subhas Villa Flat No. 3 C
3rd Floor, 18 Karunamoyee Ghat Road
Near Dharapara Tollygunge, Kolkata
West Bengal 700082
E-mail: calkannan@gmail.com
- and -
C/O LSI Resolution Pvt. Ltd.
Sagar Trade Cube
104, S.P. Mukherjee Road
Kolkata 700026
E-mail: cirp.bhuvee@gmail.com
Last date for
submission of claims: March 26, 2019
CARD PRO: CARE Lowers Ratings on INR7.14cr Loans to D
-----------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Card Pro Solutions Private Limited (CSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 4.84 CARE D; Issuer not cooperating;
Facilities Revised from CARE B; Stable
Based on best available
information
Short-term Bank 2.30 CARE D; Issuer not cooperating;
Facilities Revised from CARE A4; Based on
best available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from CSPL to monitor the
rating(s) vide e-mail communications/letters dated February 26,
2019, February 25, 2019, January 4, 2019 and August 14, 2018 and
numerous phone calls. However, despite CARE's repeated requests,
the company has not provided the requisite information for
monitoring the ratings. In the absence of minimum information
required for the purpose of rating, CARE is unable to express
opinion on the rating. In line with the extant SEBI guidelines
CARE's rating on PFA bank facilities will now be denoted as CARE D;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of the ongoing delays in
debt servicing and the account has been classified as SMA2.
Detailed description of the key rating drivers
At the time of last rating on March 31, 2018 the following were the
rating strengths and weaknesses (updated from the latest possible
information received from the banker):
Key rating Weakness
Ongoing delay in debt servicing: As per banker interaction, there
have been ongoing delays in debt servicing and the account has been
classified as SMA2.
Card Pro Solutions Private Limited (CSPL) incorporated in 1989 as
Kamal Offset Private Limited by Mr. Vikas Choudhary and Mr. Kishin
Gidwani and got its current name in 2010. CSPL is engaged in
business of the manufacturing of pre-paid cards and chip & non-chip
based smart cards. The products manufactured by CSPL are customized
as per the customers' demand which mainly includes telecom
companies, banks, financial institutions and others.
CSPL has its manufacturing facility located at Navi Mumbai with an
installed capacity of 480 crore pin for printing card and 1.8 crore
for smart cards as on March 31, 2017. Further it has head office in
Mumbai (Maharashtra) and also has two more branches in Delhi and
Kolkata for conducting its marketing activities.
CMAX METALS: CRISIL Withdraws 'B+' Rating on INR5cr Loans
---------------------------------------------------------
Due to inadequate information, CRISIL, in line with SEBI
guidelines, had migrated the rating of CMAX Metals India Private
Limited (CMAX) to 'CRISIL B+/Stable/Issuer not cooperating'. CRISIL
has withdrawn its rating on bank facility of CMAX following a
request from the company and on receipt of a 'no objection
certificate' from the banker. Consequently, CRISIL is migrating the
ratings on bank facilities of CMAX from 'CRISIL B+/Stable/Issuer
Not Cooperating to 'CRISIL B+/Stable'. The rating action is in line
with CRISIL's policy on withdrawal of bank loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.5 CRISIL B+/Stable (Migrated from
'CRISIL B+/Stable ISSUER NOT
COOPERATING'; Rating Withdrawn)
Proposed Long 3.5 CRISIL B+/Stable (Migrated from
Term Bank Loan 'CRISIL B+/Stable ISSUER NOT
Facility COOPERATING'; Rating Withdrawn)
Incorporated in 2011,CMAX is engaged in the business of
manufacturing precision sheet metal components applicable for
telecommunication, electrical controls, computer peripherals,
electrical, electronics and medical equipment. The company has its
manufacturing facility in Bangalore.
DEEPSEA DEVELOPERS: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: Deepsea Developers Private Limited
C-98, SIPCOT Industrial Complex
Harbour Express Road
Tuticorin 628008
Insolvency Commencement Date: March 18, 2019
Court: National Company Law Tribunal, Chennai Bench
Estimated date of closure of
insolvency resolution process: September 14, 2019
Insolvency professional: Chandramouli Ramasubramaniam
Interim Resolution
Professional: Chandramouli Ramasubramaniam
'RAJI' 3B1, 3rd floor, Gaiety Palace
No. 1L, Blackers Road, Mount Road
Chennai 600002
E-mail: fcs.rms@gmail.com
Last date for
submission of claims: April 1, 2019
ENERGYWIN TECHNOLOGIES: CRISIL Assigns B+ Ratings to INR2.5cr Loan
------------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' ratings to the long term
bank facilities of Energywin Technologies Private Limited (ETPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan .38 CRISIL B+/Stable (Assigned)
Cash Credit .40 CRISIL B+/Stable (Assigned)
Proposed Long
Term Bank Loan
Facility 1.72 CRISIL B+/Stable (Assigned)
The ratings reflect the modest scale of operations amidst
competition and the average financial risk profile. These
weaknesses are partially offset by extensive industry experience of
promoters and management.
Key Rating Drivers & Detailed Description
Strengths
* Modest scale operations amidst competition: Scale is modest as
reflected in revenue of INR7.86 crores in FY18. The company is
exposed to competition from other players in the industry, which
are also into providing energy management and remote management
solutions, which constrains the business risk profile.
* Average financial risk profile:
The financial risk profile is constrained by a modest networth and
average capital structure as on March 31, 2018. Debt protection
metrics are moderate as reflected in interest coverage ratio of 2.2
times and net cash accruals to adjusted debt of 0.24 time for
fiscal 2018.
Weakness
* Extensive industry experience of promoters and management: The
promoters and the management have over 10 years of experience in
energy management, asset management and remote management
solutions. Their experience has helped the company establish strong
relations with customers and suppliers. Their experience should
continue to support the business.
Liquidity
ETPL has adequate liquidity driven by expected cash accruals of
more than INR0.5 crore per annum in FY19 and FY20 and cash and cash
equivalents of INR0.3 crore as on March 31, 2018. ETPL also has
access to fund based limits of INR0.4 crore, utilized to the tune
of 95% on an average over the 12 months ended Jan 2019. The company
has no long term repayment obligations no major capex plans.
Outlook: Stable
CRISIL believes ETPL will continue to benefit over the medium term
from its promoter's extensive experience. The outlook may be
revised to 'Positive' in case of a substantial and sustained
increase in revenue while maintaining profitability margins,
coupled with an improvement in working capital cycle. Conversely,
the outlook may be revised to 'Negative' if profitability margins
decline steeply, or capital structure weakens significantly, most
likely due to a stretch in the working capital cycle.
ETPL was incorporated in 2011 and based out of Bengaluru, ETPL is
engaged in manufacturing equipment and providing technologies which
cater to efficient energy, time security and asset management in
the renewable energy, power, social and industrial sectors.
EZRA SBL: Ind-Ra Affirms BB+ on INR3.26-Mil. Series A2 PTCs
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Ezra SBL IFMR
Capital 2017 (an ABS transaction) as follows:
-- INR49.76 mil. Series A1 pass-through certificates (PTCs) due
on September 17, 2021 Coupon rate 10.75% issued on February
23, 2017 affirmed with IND BBB+ (SO) / Stable rating; and
-- INR3.26 mil. Series A2 PTCs due on September 17, 2021 Coupon
rate 15.00% issued on February 23, 2017 affirmed with IND
BB+ (SO) / Stable rating.
*p.a.p.m.
The microenterprise loan (MEL) pool assigned to the trust has been
originated by Disha Microfin Limited (Disha; originator or seller).
In September 2015, Disha received an in-principle approval from the
Reserve Bank of India (RBI) to commence operations as a small
finance bank. Disha converted itself into a small finance bank from
a non-banking finance company (NBFC), changing its name to Fincare
Small Finance Bank Limited (FSFBL), effective June 2017.
KEY RATING DRIVERS
Originator's Servicing, Underwriting & Collection Capabilities: The
affirmation reflects adequate levels of credit enhancement (CE) to
support default stresses to commensurate with the rating level,
overall performance of the loans in the pool over the last 23
months since the initial closing, and the servicing, collection and
recovery capabilities of FSFBL. The company has increased its
collection team strength at each branch level, subsequent to the
demonetization announced last year. Additionally, the company is
promoting and creating greater awareness of microfinance products
in the affected regions (200 villages) of its portfolio by
showcasing a short film titled, Pragati. The agency is of the
opinion that the issuer's origination and servicing capabilities
are of an acceptable standard.
Availability of External Credit Support: According to the payout
report dated February 20, 2019, the available CE was INR13.05
million and the future principal outstanding (POS), excluding
overdue, was INR66.38 million. The current CE for the PTCs
increased to 19.21% of the current pool POS, including overdue, at
end-January 2019 from 8.00% at issuance. The available CE is in the
form of a fixed deposit with RBL Bank Ltd.
There has been no use of the CE until date, as the excess spread
and overcollateralization in the transaction have been sufficient
to absorb the shortfalls. As of the collection month of January
2019, the level of overcollateralization available to Series A1 and
Series A2 PTCs was 25.03% and 20.12% of the current POS,
respectively.
Key Pool Characteristics: As of February 20, 2019, the total POS,
including principal overdue, was INR67.94 million, signifying an
amortization of 58.36% of the pool. The 90 plus days past due (dpd)
delinquency bucket was about 3.46% of the original POS and 8.32% of
the current POS, and the 180 plus dpd delinquency bucket was about
2.75% of the original POS and 6.61% of the current POS. On 20
February 2019, the 396-loan pool had a weighted average seasoning
of 33.9 months, implying a moderate repayment track record of the
underlying borrowers. Also, the average current loan balance was
INR171,585, with a weighted average internal rate of return of
25.9%.
Key Assumptions: Ind-Ra has derived a base case gross default rate
of 8%-10%. The agency had analyzed the characteristics of the pool
and established its base case assumptions through four key
performance variables, viz. default rate, recovery rate, recovery
timeline and prepayment rate, which collectively affect the credit
risk in a transaction. Ind-Ra has derived the recovery rate on the
basis of the data shared by the originator and market inputs.
Ind-Ra has assumed a base case recovery rate of 65%-75%, with a
base case recovery time of 12-15 months. The current available CE
can absorb stressed defaults in the range of 60%-70% of the future
POS.
RATING SENSITIVITIES
Ind-Ra conducted rating sensitivity tests. If the assumptions of
both base case default rate and base recovery rate were
simultaneously worsened by 20%, the model-implied rating
sensitivity suggests that the ratings of the PTCs will not be
downgraded.
COMPANY PROFILE
FSFBL was registered as a non-deposit accepting NBFC with the RBI
on April 5, 2010. The company was converted to an NBFC-MFI,
effective December 6, 2013. In September 2015, it received the
in-principle approval from the RBI to start operations as a small
finance bank. It commenced banking operations from July 21, 2017.
In October 2016, FSFBL acquired Future Financial Services Pvt Ltd
(FFSPL), a Chittoor-based NBFC, through a slump sale.
FSFBL is a part of the Fincare group, which comprises FSFBL, FFSPL,
Lok Management Services Pvt. Ltd., India Finserve Advisors Pvt.
Ltd. and Fincare Business Services Pvt. Ltd.
FSFBL's loan portfolio grew to INR18.1 billion in FY18 (FY17:
INR13.1 billion). FSFBL classifies a loan as a non-performing asset
if it is overdue for more than 90 days. Its gross non-performing
asset ratio stood at 0.95% at FY18 compared with 0.80% at FY17.
GMR HYDERABAD: S&P Affirms 'BB+' ICR on Resilient Cash Flows
------------------------------------------------------------
S&P Global Ratings, on March 20, 2019, affirmed its 'BB+' long-term
issuer credit rating on GMR Hyderabad International Airport and its
'BB+' long-term issue rating on the company's senior secured notes.
S&P said, "We affirmed the rating on GMR Hyderabad International
Airport Ltd. (GHIAL) because we expect the company's healthy cash
reserves and good operating performance to provide sufficient
buffer amid regulatory uncertainties over the next two to three
years. The continuing delay in the implementation of the lower
"control period 2" (CP2) tariff will allow the company to increase
its cash reserves, helping to de-risk its upcoming spending plans.
"In our view, the regulatory mechanism still results in reasonably
predictable cash flows for GHIAL over the five-year regulatory
period, despite interim tariff volatility due to delayed regulatory
resets. This is because we believe that the tariff mechanism will
allow for the eventual recovery of costs, capital spending, and
returns, as well as a "true up" mechanism that ensures target
revenue levels if traffic volumes are lower-than-anticipated."
Unlike in other countries with more established regulatory regimes
such as Australia or Hong Kong, recovery of costs and returns in
India is not uncertain.
The timing of regulatory decisions remains the key hindrance in
realizing a fully supportive regulatory framework in India. For
GHIAL, this has translated into strong leverage ratios in the past
three years. This is because the company has effectively recovered
its earlier capital spending, resulting in ratios that have been
better than our estimates. As the company pursues its next phase of
expansion, S&P now envisages a temporary weakening in leverage
ratios to potentially below its downgrade trigger. Nevertheless, we
expect that over a five-year regulatory block, leverage will remain
broadly within our rating threshold.
S&P said, "We estimate GHIAL's leverage will materially increase
over the next three years, as a result of higher capital spending
and the likely drop in tariff following the upcoming reset. We
project the company's ratio of funds from operations (FFO) to debt
to fall sharply to 8%-9% by fiscal 2021 (year ending March 31,
2021), from about 30% in fiscal 2018. The decline will be driven by
GHIAL's increased spending of up to Indian rupees (INR) 60 billion
over the next three years, as the airport increases its capacity.
At the same time, we expect the regulator to reset the company's
tariff at 50% lower than the current levels in the implementation
of the CP2 tariff (April 2016-March 2021). We now expect that CP2
could come into effect by September 2019, from our earlier estimate
of April 2019.
"We believe that the eventual tariff drop in CP2 will increase
GHIAL's dependency on the timely implementation of the subsequent
control period 3 (CP3) tariff (April 2021-March 2026) to support
its financial ratios. This is because more than 70% of GHIAL's
upcoming spending plans will only be recovered under the CP3
tariff, which we expect will be higher than CP2. A prolonged delay
in the CP3 tariff reset could thus result in a mismatch of the
company's actual spending and its eventual recovery, which could
pressure cash flows and leverage.
"Nevertheless, in our view, the ongoing delay in the CP2 tariff
could help de-risk some of GHIAL's upcoming large capital spending
plans. That's because the company continues to charge its higher
control period 1 (CP1) tariff (April 2011-March 2016) of INR420 per
passenger, which has allowed it to accumulate over-recoveries of
about INR10 billion. This amount will add to GHIAL's cash balance
of almost INR13 billion (as of Sept. 30, 2018) and will contribute
to supporting its capital spending.
"In our opinion, the tardiness in tariff resets stems not just from
the less-established nature of the regulator. Given the negative
direction of the CP2 tariff reset, GHIAL has also strategically
used regulatory contentions to prevent the regulator from
implementing a lower tariff earlier. Therefore, despite a
track-record of delayed resets, we see a higher likelihood of CP3
tariff being set and implemented in a more timely manner. We
believe the company will likely litigate regulatory contentions
separately to pursue a higher CP3 tariff more efficiently.
"The stable outlook reflects our view that GHIAL will manage the
execution risks on its enlarged capital spending plans and have
strong passenger growth. We expect the company's ratio of FFO to
debt to be above 9% and FFO cash interest coverage to be more than
2.0x over the next 12-24 months. We also assume that the company's
working capital will not come under sustained pressure owing to
delayed payments from Indian airlines.
"We could lower the rating if we expect GHIAL's ratio of FFO to
debt to be less than 9% on a sustained basis. This could occur if
tariff delays or disputes result in inadequate returns on
investments or costs are not recovered. Significantly higher
capital spending than what we anticipate or cost overruns could
also lead to a downgrade. CP2 tariff that is significantly lower
than our expectation, or a delay of more than one year in the
implementation of CP3 tariff could also lead to downward pressure
on the rating.
"We are unlikely to upgrade GHIAL in the next 12-18 months.
However, we may raise the rating if the company's exposure to
regulatory uncertainties diminishes sufficiently such that the
company can sustain a ratio of FFO to debt of more than 18%. This
would be predicated on a record of timely tariff resets and strong
passenger growth, resulting in greater stability and predictability
of GHIAL's cash flows."
GREATVALUE PROJECTS: CRISIL Withdraws B+ Rating on INR25cr Loan
---------------------------------------------------------------
CRISIL has withdrawn its rating on the long-term bank facility of
Greatvalue Projects India Limited (GPIL) following a request from
the company. The rating action is in line with CRISIL's policy on
withdrawal of bank loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term
Bank Loan Facility 25 CRISIL B+/Stable (Withdrawn)
Incorporated in 2010, GPIL is part of the Greatvalue group, which
is engaged in real estate development of residential and commercial
projects. Mr Manoj Agarwal, Mr Mayank Agarwal, Mr Sachin Agarwal,
Mr Sanjay Rastogi and Ms Pragya Agarwal are the promoters.
GSCO INFRASTRUCTURE: Ind-Ra Lowers Long Term Issuer Rating to 'D'
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded GSCO
Infrastructure Private Limited's (GSCO) Long-Term Issuer Rating to
'IND D' from 'IND BB+ (ISSUER NOT COOPERATING)'.
The instrument-wise rating actions are:
-- INR64 mil. Fund-based working capital limit (long- and short-
term) downgraded with IND D rating; and
-- INR400 mil. Non-fund-based working capital limit (short-term)
downgraded with IND D rating.
KEY RATING DRIVERS
The downgrade reflects delays in debt servicing by GSCO for more
than 30 days in January 2019 owing to tight liquidity, resulting
from increased working capital requirements and a decline in
revenue. The company's revenue fell to INR1,199.21 million in FY18
(FY17: INR2,117.86 million) due to delays in realization from the
government. Furthermore, the account has been placed in the
sub-standard category by the banker.
RATING SENSITIVITIES
Positive: Timely debt service for at least three consecutive months
would be positive for the ratings.
COMPANY PROFILE
Incorporated in 2004, GSCO Infrastructure is engaged in the civil
construction business.
GUMAN FURNITURE: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Guman Furniture And Services Private Limited
A-2, Rana Pratap Nagar, Jhotwara
Jaipur 302012
Insolvency Commencement Date: March 1, 2019
Court: National Company Law Tribunal, Jaipur Bench
Estimated date of closure of
insolvency resolution process: August 28, 2019
(180 days from commencement)
Insolvency professional: Mr. Kamal Kumar Jain
Interim Resolution
Professional: Mr. Kamal Kumar Jain
315-A, Road No. 2, Shanti Nagar
Gopalpura Byepass, Durgapura
Jaipur 302018
E-mail: cakamaljain07@gmail.com
cirp.gfspl@gmail.com
Last date for
submission of claims: March 27, 2019
HIMALAYAN ROAD: Ind-Ra Migrates 'BB' LT Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Himalayan Road
Construction Private Limited's Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR60 mil. Fund-based limits migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) / IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR170 mil. Non-fund-based limits migrated to non-cooperating
category with IND A4+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 20, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Himalayan Road Construction is based in Siliguri, West Bengal. It
is engaged in the construction, improvement, and widening of
roads.
HIMATSINGKA RESORTS: Insolvency Resolution Process Case Summary
---------------------------------------------------------------
Debtor: Himatsingka Resorts Private Limited
3rd Floor, Beekay Tower, Dispur
Guwahati Kamrup 781006, Assam
Insolvency Commencement Date: March 8, 2019
Court: National Company Law Tribunal, Guwahati Bench
Estimated date of closure of
insolvency resolution process: September 3, 2019
Insolvency professional: Chhedi Rajbhar
Interim Resolution
Professional: Chhedi Rajbhar
40, Strand Road, Model House
2nd Floor, Room No. 49
Kolkata 700001
E-mail: crajbharco.ca@gmail.com
hrpl.cirp@gmail.com
Last date for
submission of claims: March 22, 2019
INDIAN TRADING: CRISIL Reaffirms B- Rating on INR12.55cr Loan
-------------------------------------------------------------
CRISIL has revised its outlook on the long-term bank facility of
Indian Trading Bureau Pvt Ltd (ITBPL) to 'Stable' from 'Negative'
while reaffirmed the rating at 'CRISIL B-' and rating on the
short-term bank facility has been reaffirmed at 'CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 12.55 CRISIL B-/Stable (Outlook
revised from 'Negative'
and rating reaffirmed)
Letter of Credit 6.00 CRISIL A4 (Reaffirmed)
The revision in outlook reflects improvement in revenue to INR53.91
crore in fiscal 2018 from INR32.77 crore last year and increase in
profitability as reflected in earnings before interest depreciation
tax and amortisation margin of 5.7% against 4.1%. The expansion in
scale of operations and profitability should sustain in fiscal 2019
as well. The revision in outlook also takes into consideration the
improvement in working capital cycle with gross current assets
declining to 182 days as on March 31, 2018 from 259 days last
year.
The rating continues to reflect ITBPL's susceptibility to
fluctuations in the prices of traded commodities, and foreign
exchange (forex) rates, exposure to risks inherent in the poultry
industry, and a weak liquidity and financial risk profile along
with large working capital cycle. These weaknesses are partially
offset by the extensive experience of the promoters.
Key Rating Drivers & Detailed Description
Weaknesses:
* Susceptibility to fluctuations in the prices of traded
commodities and forex rates: Operating margin remains exposed to
volatility in the prices of traded products and also forex rates,
as the company does not hedge its exposure.
* Vulnerability to risks inherent in the industry: The poultry
industry experiences frequent outbreak of diseases, leading to
decline in realisations and profitability. Also, there is
seasonality in demand for poultry meat because of religious
sentiments. Hence, ITBPL may remain exposed to significant risks
during any such downturn in the industry and variability in demand
from end-users.
* Weak liquidity and financial risk profile: Revenue has been at
INR32-57 crore in the six years through fiscal 2018. Low
profitability along with high interest and finance charges have led
to continuous cash loss for the two fiscals through fiscal 2017,
exerting pressure on liquidity. The financial risk profile has also
been weak with negative networth at INR0.56 crore as on March 31,
2018 (due to write off of deferred revenue expenditure of INR5.28
crore as well). Low profitability has also resulted in weak debt
protection metrics with interest coverage and net cash accrual to
total debt ratios below average at 0.51 time and negative 0.07
time, respectively, in fiscal 2017. However, the same have improved
to 1.2 times and 0.03 time, respectively, in fiscal 2018.
Sustenance of the same will remain key sensitivity factor.
* Large working capital cycle: Working capital cycle of ITBL is
large as indicated by gross current assets (GCA) of 182 days as on
March 31, 2018 which improved from 259 days in last year. This is
underpinned by large debtors of 85 days, inventory holding of 61
days. It is expected that working capital cycle will improve over
the medium term but will largely remain high and continue to
constrain the liquidity of the company.
Strength:
* Extensive experience of the promoters: Benefits from the
promoters' experience of over two decades and healthy relations
with customers and suppliers should continue to support the
business.
Liquidity
Liquidity is weak as indicated by instance of overdrawing in cash
credit limit underpinned by elongated working capital cycle. Cash
accrual, expected at INR50-60 lakh over the medium term (Rs 51 lakh
in fiscal 2018) are tightly matched against annual repayment
obligations of INR10 lakh (Rs 2 lakh). Further bank limit of INR18
crore'enhanced from INR16 crore'has been almost fully used in the
12 months through January 2019 on account of large working capital
cycle and scale up of operations. However, need-based funding
support from promoters is expected to continue.
Outlook: Stable
CRISIL believes ITBPL will continue to benefit from the extensive
experience of its promoters. The outlook may be revised to positive
if improvement in working capital cycle increases cash accruals and
scale of operations and profitability are stable. The outlook can
be revised to negative if decline in revenue or profitability
resulting in lower accruals weakens financial risk profile,
especially liquidity.
ITBPL was incorporated in 1948; it was acquired by the
Kolkata-based Mr Tejvinder Singh Chattha and his family in 1989.
The company trades in poultry feed additives such as amino acids,
premix, and enzymes, and products such as medicines, vaccines, and
disinfectants.
JET AIRWAYS: India State Banks Want Goyal to Reduce Stake to 10%
----------------------------------------------------------------
Reuters, citing news channel CNBC-TV18, reports that a group of
Indian state-run banks want Jet Airways' embattled founder and
Chairman Naresh Goyal to reduce his stake in the carrier to 10
percent.
"Banks want Goyal to bring his stake down to 10 percent, below the
17 percent envisaged in the bank-led provisional resolution plan
(BLPRP)," sources told CNBC-TV18.
The state-run banks are also pushing Goyal to step down, CNBC-TV18
added, Reuters relates.
Jet has more than $1 billion in debt, and owes money to banks,
suppliers, pilots and lessors - some of whom have started
terminating leases with the carrier.
The government has asked state-run banks, led by State Bank of
India (SBI), to rescue Jet without pushing it into bankruptcy, two
people within the administration have told Reuters, as Prime
Minister Narendra Modi seeks to avert thousands of job losses weeks
before a general election.
Several people who have worked closely with Goyal, 69, have told
Reuters that his penchant for control has emerged as a major
obstacle in negotiating a rescue deal.
Reuters relates that SBI Chairman Rajnish Kumar had said on March
20 that a resolution plan was "almost" ready and that it would not
involve a bailout for any individual, including Goyal.
About Jet Airways
Based in Mumbai, India, Jet Airways (India) Limited --
https://www.jetairways.com/ -- provides passenger and cargo air
transportation services. It also provides aircraft leasing
services. It operates flights to 66 destinations in India and
international countries. As of November 22, 2018, the company had
a
fleet of 124 aircraft, comprising Boeing 777-300 ERs, Airbus
A330-200/300, the latest Boeing 737 Max 8, 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.
JSK CORP: Ind-Ra Affirms BB LongTerm Issuer Rating, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed JSK Corporation
Private Limited's (JSKCPL) Long-Term Issuer Rating at 'IND BB'. The
Outlook is Stable.
The instrument-wise rating actions are:
-- INR92.5 mil. Fund-based working capital limits affirmed with
IND BB/Stable rating; and
-- INR4.57 mil. (reduced from INR6 mil.) Term loan due on March
2021 affirmed with IND BB/Stable rating.
KEY RATING DRIVERS
The affirmation reflects JSKCPL's continued moderate credit metrics
due to modest EBITDA margins, owing to the trading nature of the
business. In FY18, EBITDA margins was 2.08% (FY17: 3.03%), interest
coverage (operating EBITDA/gross interest expense) was 1.9x (1.4x)
and net financial leverage (adjusted net debt/operating EBITDAR)
was 3.68x (4.79x). The operating margin declined on account of an
increase in the raw material costs. The improvement in the credit
metrics was due to reduced interest expense and increased cash
balances. The ROCE was 14% in FY18 (FY17: 19%).
The ratings also reflect JSKCPL's medium scale of operations.
Revenue increased to INR910 million in FY18 (FY17: INR531 million),
due to an increase in the customer base. The company earned revenue
of INR945 million with an operating EBITDA margin of around 2.2% in
9MFY19.
The ratings are constrained by JSK's presence in the highly
competitive steel industry which is vulnerable to fluctuations in
the price of raw materials.
The rating factor in the company's moderate liquidity profile as
reflected from its 85% average utilization of the working capital
limits during the 12 months ended February 2019. The cash flow from
operations stood at INR10.19 million in FY18 (FY17: negative
INR34.52 million).
The ratings, however, are supported by the promoters' close to a
decade of experience in the iron and steel trading business along
with the company's established supplier base comprising top players
such as Steel Authority of India Limited ('IND AA'/Negative), JSW
Steel Limited ('IND AA'/Stable), ESSAR Steel India Limited and
Jindal Steel and Power Limited.
Also, JSK also has a pan-India presence and operates through five
offices with the head office in Nagpur along with branch offices in
other parts of Maharashtra, Madhya Pradesh, Gujarat, and
Chhattisgarh, thereby having a diverse customer base.
RATING SENSITIVITIES
Negative: Sustained deterioration in the liquidity along with
credit metrics will be negative for the ratings.
Positive: A sustained improvement in the liquidity profile and
scale of operations will be positive for the ratings.
COMPANY PROFILE
JSK was incorporated in October 2013. The company is engaged in the
trading of TMT bars, structural steels, MS plates, and strips. The
day-to-day operations are managed by Sachin Agrawal, Pratik
Agrawal, Avinash Agrawal, Rajeev Agrawal and Gopal Agrawal who are
also the directors of the company.
K. REMASH: CRISIL Reaffirms B+ Rating on INR3cr Cash Loan
---------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable/CRISIL A4' ratings on
the bank facilities of K. Remash Babu (KRB).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 3.1 CRISIL A4 (Reaffirmed)
Cash Credit 3 CRISIL B+/Stable (Reaffirmed)
The ratings continue to reflect the firm's modest scale of
operations and weak financial risk profile. These weaknesses are
partially offset by the extensive experience of its promoters in
the civil construction segment.
Key Rating Drivers & Detailed Description
Weakness:
* Small scale of operations: With revenue of INR11.7 crore in
fiscal 2018, scale remains modest in an intensely competitive
industry.
* Weak financial risk profile: Due to continuous withdrawals,
gearing was weak at 2.7 times as on March 31, 2018. However
interest cover was comfortable at over 3 times.
Strength
* Extensive experience of promoters: The promoters have been in the
construction segment for more than 30 years and have successfully
completed projects for the Government of Kerala. This has led to
repeat orders.
Liquidity
Bank limits were utilised at an average of 90% in the recent 12
months. Though the accruals are modest, firm does not have any
significant repayment obligations.
Outlook: Stable
CRISIL believes KRB will continue to benefit over the medium term
from the extensive experience of its promoters. The outlook may be
revised to 'Positive' if revenue, profitability, and financial risk
profile improve. The outlook may be revised to 'Negative' if
lower-than-expected accrual or significant capital withdrawal or
sizeable debt-funded capital expenditure weakens financial risk
profile.
Set up in 2008 as a partnership firm by Mr Remash Babu and family,
KRB constructs engineering colleges, schools, hospitals, and civil
stations for the Government of Kerala. It also undertakes contracts
from state Public Works Department.
KULKARNI POWER: CRISIL Maintains B- Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL said the ratings on bank facilities of Kulkarni Power Tools
Limited (KPTL) continues to be 'CRISIL B-/Stable/CRISIL A4 Issuer
not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee .75 CRISIL A4 (ISSUER NOT
COOPERATING)
Bill Discounting .60 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
Cash Credit 13.90 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
Letter of Credit 7.75 CRISIL A4 (ISSUER NOT
COOPERATING)
Mortgage Loan 4.00 CRISIL B-/Stable (ISSUER NOT
Facility COOPERATING)
Packing Credit 2.50 CRISIL A4 (ISSUER NOT
COOPERATING)
Proposed Long Term 11.71 CRISIL B-/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
Term Loan 6.94 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with KPTL for obtaining
information through letters and emails dated October 31, 2018 and
February 12, 2019 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of KPTL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on KPTL is
consistent with 'Scenario 2' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BBB Rating
category or lower'.
Based on the last available information, the ratings on bank
facilities of KPTL continues to be 'CRISIL B-/Stable/CRISIL A4
Issuer not cooperating'.
Furthermore, the company has not paid the fee for conducting rating
surveillance as agreed to in the rating agreement.
KPTL, incorporated in 1976, manufactures electric power tools and
blowers for a variety of applications in the construction,
automotive, railways, shipyards, bus-body building, fabrication
work, housing, and general manufacturing industries. Its
manufacturing unit is in Shirol, Maharashtra.
LUPIN TELEPOWER: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Lupin Telepower Private Limited
H.No. 103, Road No. 5, Vayupuri
Hyderabad TG 500094
Insolvency Commencement Date: March 18, 2019
Court: National Company Law Tribunal, Hyderabad Bench
Estimated date of closure of
insolvency resolution process: September 14, 2019
Insolvency professional: Chakravarthi Srinivasan
Interim Resolution
Professional: Chakravarthi Srinivasan
1-4-211/42/1, Pradhamapuri Colony
Sainikpuri, Hyderabad 500062
E-mail: csriniirp@gmail.com
Last date for
submission of claims: April 1, 2019
MS BIOTECH: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: MS Biotech Private Limited
Registered office:
Plot No. 64, Sagar Society Road No. 2
Banjara Hills Hyderabad
Telangana 500034
Factory Unit:
Sy. No. 237/1, Avapadu
Tadepalligudem 534101
Insolvency Commencement Date: March 15, 2019
Court: National Company Law Tribunal, Hyderabad Bench
Estimated date of closure of
insolvency resolution process: September 11, 2019
Insolvency professional: Sridhar Venkatraya Sundararaja
Interim Resolution
Professional: Sridhar Venkatraya Sundararaja
Regus, 1st Floor, Phoenix Tech Tower
Plot. No. 14/46, Survey No. 1(part)
IDA-Uppal Village and Mandal
Uppal Notified Industrial Area Service
Society, Hyderabad
Telangana 500039
E-mail: sridharema@gmail.com
rp.sridharvs@gmail.com
Last date for
submission of claims: March 29, 2019
NATARAJ GINNING: CARE Reaffirms B+ Rating on INR5.60cr Loan
-----------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Nataraj Ginning & Pressing Mill (NGPM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.60 CARE B+; Stable Reaffirmed
Facilities
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of NGPM continues to be
tempered by small scale of operations and short track record of
business, susceptibility of profits to volatile price fluctuation
and seasonality associated with availability of cotton, working
capital intensive nature of operations, leveraged capital structure
and weak debt coverage indicators albeit improvement, highly
fragmented industry with intense competition from large number of
players and proprietorship nature of constitution with inherent
risk of withdrawal of capital. The rating also factors in growth in
total operating income and satisfactory profitability margins
during the review period. The ratings continues to derive strength
from reasonable experience of proprietor in the cotton processing
business, location advantage and stable outlook of cotton
industry.
Going forward, the ability of the firm to increase its scale of
operations and profitability margins in competitive environment and
ability of the firm to improve its capital structure and debt
coverage indicators while managing its working capital requirement
efficiently would be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operation and short track record of business: The
firm had short track record of business operations, however long
presence established by the proprietor in the market. Furthermore,
the scale of operations of the entity remained small in marked by
total operating income (TOI), remained small at INR14.47 crore in
FY18 coupled with low net worth base of INR0.75 crore as on
March 31, 2018 as compared to other peers in the industry.
Working capital intensive nature of operations: The operating cycle
of the firm as on March 31, 2018 remained elongated at 88 days. The
firm receives payment from its customers within 15-30 days and
makes the payment to its suppliers within 1-2 weeks due to low
bargaining power. The firm maintains its inventory for a period of
2-3 months since cotton being an agro commodity its production is
seasonal (harvesting) from November to February in a year. Apart
from that cotton ginners usually have to procure raw cotton in bulk
to get better discount from its suppliers, mainly farmers. The
average utilization of fund based working capital limits of the
firm was 95% during the last 12 months period ended February 28,
2019.
Proprietorship nature of constitution with inherent risk of
withdrawal of capital: Constitution of the entity as a
proprietorship firm has the inherent risk of possibility of
withdrawal of the capital at the time of personal contingency which
can adversely affect its capital structure. Furthermore,
proprietorship firms have restricted access to external borrowings
as credit worthiness of the proprietor would be key factors
affecting credit decision for the lenders. The proprietor has
infused capital of INR0.30 crore and INR0.13crore in FY17 and FY18
respectively.
Highly fragmented industry with intense competition from large
number of players: The firm is engaged in manufacturing of cotton
bales which is highly fragmented industry due to presence of large
number of organized and unorganized players in the industry
resulting in huge competition.
Susceptibility of profits to volatile price fluctuation and
seasonality associated with availability of cotton The cotton
prices are volatile in nature and depend upon factors like, monsoon
condition, area under cultivation, yield for the year,
international demand supply scenario, export policy decided by the
government and inventory carry forward of last year. Cotton being a
seasonal crop is sown upto October and harvesting is done between
January and may in peninsular part of India. Prices of cotton are
at their lowest in harvesting season and trend up thereafter,
depending upon supply-demand dynamics which results into a higher
inventory holding period for the business.
Leveraged capital structure and weak debt coverage indicators
albeit improvement: The capital structure of NGSP stood leveraged
during the review period. NGSP's debt profile predominantly
comprises of term loan. The debt equity ratio and overall gearing
ratio of the firm improved from 12.44x and 21.59x respectively as
on March 31, 2017 to 5.69x and 9.29x respectively as on March 31,
2018, due to increase in tangible net worth on account of accretion
of profits to reserves along with repayment of term loans. The debt
coverage indicators of the firm stood weak during the review
period. Total debt/GCA improved from 49.65x in FY17 to 9.49x in
FY18, due to increase in cash accruals and healthy PBILDT levels in
absolute terms. The interest coverage ratio improved from 1.08x in
FY17 to 2.02x in FY18 on account of increase in profits by absolute
terms.
Key Rating Strengths
Reasonable experience of proprietor in the cotton processing
business: The proprietor, Mrs. Shivarathri Narsamma, is associated
with the cotton industry for around 8 years and looks after the
overall management of the firm. Furthermore, the proprietor have
also established a long standing relationship with the
customers and suppliers (farmers) supplying raw cotton in the past
also.
Location advantage: NGPM located in one the major cotton growing
areas in Telangana. Availability of raw material is not expected to
be an issue as the firm procures raw material (raw cotton) from the
traders located in and around Muthukur, Bhongir(Dist).
Growth in total operating income and satisfactory profitability
margins during the review period: The total operating income of the
firm has increased from INR4.50 crore in FY17 to INR14.47 crore in
FY18 on account increase in quantum of orders, along with full year
operations in FY18, as in FY17 the firm was operational for 4
months. Furthermore, the firm has achieved sales of INR6.00 crore
in 11MFY19(Provisional). The PBILDT margin of the firm declined
from 12.48% in FY17 to 10.15% in FY18 due to increase in
manufacturing expenses owing to full year of operations in FY18, as
compared to 4 months of operations in FY17. Furthermore, there was
a turnaround from net loss to net profit in FY18. The PAT margin
stood at 2.16% in FY18. The PAT margins improved due to higher
PBILDT levels in absolute terms.
Stable outlook of cotton industry: Amongst all the cotton growing
countries of the world, India ranks number one in cotton
cultivation area spreading out to about 95 lakh hectares. Although
only the second in cotton production in the world, India has
several distinctions to its credit. The ginning outturn of the
Indian cotton also presents a wide spectrum of variations from 24%
to 42%.The purpose of ginning is to separate cotton fibers from the
seed.
Liquidity Analysis: The current ratio of the firm is above unity
during the review period and stood at 1.56x as on March 31, 2018
due to relatively high current assets as compared to current
liabilities. The cash and cash equivalents of the firm stood at
INR0.07 crore as on March 31, 2018. The average fund based working
capital utilization was around 95% for the last 12 months
ended February 28, 2019.
Telangana based, Nataraj Ginning & Pressing Mill (NGPM) was
established on April 1, 2015 and started the commercial operations
from December 9, 2016. The firm was established as a proprietorship
concern by Mrs. Shivarathri Narsamma and she is supported by her
son Mr. Mahesh babu who is managing the overall business operations
of NGPM. The firm is engaged in cotton ginning and pressing with a
total installed capacity of 200 bales per day and the firm sells
its products in and around Mothkur. The manufacturing unit is
located in Mothkur, Telangana.
NEHA INTERNATIONAL: CARE Migrates D Rating to Not Cooperating
-------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Neha
International Limited (NIL) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 5.60 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Short term Bank 23.50 CARE D; Issuer not cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from Neha International Limited
to monitor the ratings vide e-mail communications dated March 4,
2019, March 8, 2019, March 9, 2019, March 11, 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. The rating on Neha International Limited's bank facilities
will now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The ratings take into consideration the strain in liquidity
position and consequently leading to delays in servicing of debt
obligations.
Detailed description of the key rating drivers
At the time of last rating on November 20, 2018 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Deterioration in the liquidity profile resulting in delays in
meeting debt obligations: The liquidity profile of Neha
International Limited (NIL) deteriorated on account of cash flow
mismatches. The same has resulted in delays with respect to debt
servicing of the company.
Decline in the operating income and profitability margins during
FY18: At consolidated level, the total operating income of the
company declined by 28.35% from INR451.67 crore during FY17 to
INR323.63 crore during FY18. The primary reason for decline in TOI
during FY18 is due to subdued global agri commodity scenario
coupled with subdued floriculture industry scenario in Western
Europe. Profitability margins remained low due to trading nature of
operations. The PBILDT margin of the company has remained stable at
2.46% during FY18 (2.16% during FY17). However, the PAT margin
deteriorated significantly from 0.26% during FY17 to -7.52% during
FY18 due to high extraordinary expense amounting to INR21.84 crore.
Analytical approach: CARE in its analysis considered the
consolidated business and financial risk profiles of Neha
International Limited (NIL) and its subsidiaries - Globeagro
Holdings, Holetta Roses Plc, Alliance Flower Plc, Oromia Wonders
Plc, NINT Agri Plc, Neha Agri Tanzania Ltd, Neha AgriVentures (U)
Ltd, Neha Agri Zambia Ltd, Neha Agri Senegal, SURAL, Neha
Agriservices Pte Ltd, Neha Agriservices FZE, Dream Flowers Plc, and
Neha Agri Corp Pte. Ltd as most of these entities operate in the
same line of business.
Established in 1993, Neha International Ltd (NIL) is engaged into
trading of agricultural products mainly Maize, Soya Bean, Sun
Flower, Edible oils etc. The company has been promoted by Mr G
Vinod Reddy, who has about two decades of experience in the line of
activity. The company got listed on BSE expand in February 1995.
Neha at the group level is into floriculture space also exporting
cut roses to Europe and Middle Eastern markets in Saudi Arabia,
Qatar and UAE, through its subsidiaries (based in Ethiopia) and
step down subsidiaries. Being primarily into trading, the company
procures the agricultural products from small local traders and
sells it to big traders & poultry farms domestically.
NIPMAN FASTENER: CARE Lowers Ratings on INR184.77cr Loans to D
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Nipman Fastener Industries Private Limited (NFIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 137.77 CARE D; ISSUER NOT COOPERATING;
Facilities- Revised from CARE BBB; Stable
Term Loan
Long Term Bank 47.00 CARE D; ISSUER NOT COOPERATING;
Facilities- Revised from CARE BBB; Stable
Fund Based
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from NFIPL to monitor the ratings
vide various communications including emails dated February 18,
2019; February 12, 2019; January 18, 2019;
January 14, 2019; January 7, 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. The
rating on Nipman Fastener Industries Private Limited's bank
facilities will now be denoted as CARE D; ISSUER NOT COOPERATING.
The ratings have been revised on account of non-receipt of
requisite information and delays in debt repayments.
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
Key Rating Weakness
Delays in Debt Servicing: The ratings have been revised on account
of delays in debt repayments.
Solvency: The capital structure of the company is marked with
overall gearing ratio of 2.89x as on March 31, 2018 as
against 2.99x as on March 31, 2017.
NFIPL is engaged in manufacturing automotive fasteners that
includes various types of screws and bolts for automotive
applications. It primarily sells (around 75%-85% of the total
revenues) to Hero MotoCorp Ltd (HMCL). The manufacturing facilities
of the company are located at Ghaziabad (UP); Manesar (Haryana),
Bawal (Haryana) and Haridwar (Uttaranchal) with installed capacity
of 1635 tonnes fasteners per month. NFIPL was promoted in 1997 by
Mr. Pravin Malhotra with other promoter being Mrs. Priyanka
Malhotra (wife of Mr. Pravin Malhotra and the daughter of Late Mr.
O.P. Munjal, Chairman of Hero Cycles Ltd).
NITIN FIRE: CRISIL Maintains 'D' Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL said the ratings on bank facilities of Nitin Fire Protection
Industries Limited (NFPIL; part of the Nitin group) continues to be
'CRISIL D/CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 39 CRISIL D (ISSUER NOT
COOPERATING)
Cash Credit 112.5 CRISIL D (ISSUER NOT
COOPERATING)
Letter of Credit 170 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Cash 12.5 CRISIL D (ISSUER NOT
Credit Limit COOPERATING)
Proposed Letter 10 CRISIL D (ISSUER NOT
of Credit COOPERATING)
Standby Letter 106 CRISIL D (ISSUER NOT
of Credit COOPERATING)
CRISIL has been consistently following up with NFPIL for obtaining
information through letters and emails dated October 31, 2018 and
February 12, 2019 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of NFPIL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on NFPIL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'.
Based on the last available information, the ratings on bank
facilities of NFPIL continues to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
The Nitin group is promoted by Mr. Nitin Shah and his sons, Mr.
Rahul Shah and Mr. Kunal Shah. It is an end-to-end solutions
provider for fire protection and safety equipment. It provides gas-
and water-based fire protection systems, and caters mainly to the
telecommunications, information technology, banking, and
manufacturing industries. The group manufactures and trades in
high-pressure seamless cylinders and industrial cylinders.
NFPIL, incorporated in 1995, provides fire detection and fire
suppression systems, and manufactures fire extinguishers. It
entered the United Arab Emirates (UAE) by acquiring a majority
stake in New Age Co LLC (New Age), which was an associate before
April 2010. New Age is an approved vendor for all seven emirates of
the UAE, and has a strong track record of providing fire protection
services and maintenance. The Nitin group has a presence in the
Middle East through Nitin Ventures FZE and in Singapore through
Nitin Global Pte Ltd. Eurotech Cylinders Pvt Ltd trades in
high-pressure compressed natural gas cylinders and valves and
caters mainly to the domestic market. NFPIL remains part of a
non-integrated, non-incorporated joint venture at an oil block in
Rajasthan, in which it has 11.1% equity ownership.
POWERMAX RUBBER: CRISIL Withdraws 'D' Rating on INR10cr Loans
-------------------------------------------------------------
CRISIL has reaffirmed its ratings on the bank facilities of
Powermax Rubber Factory (PRF) and subsequently withdrawn the
ratings at the company's request and on receipt of a no-objection
certificate from the bankers. The withdrawal is in line with
CRISIL's policy on withdrawal of bank loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3 CRISIL D (Rating reaffirmed
and Withdrawn)
Cash Term Loan 6 CRISIL D (Rating reaffirmed
and Withdrawn)
Proposed Long Term 1 CRISIL D (Rating reaffirmed
Bank Loan Facility and Withdrawn)
PRF was set up in 2015 as a partnership between Mr Rajesh Jain and
his relatives; it began operations in November 2017. The
Chennai-based firm manufacture tyres for two, three and four
wheelers. The manufacturing facility in is Gummadipondi, Tamil
Nadu.
PRAG DISTILLERY: CARE Migrates 'D' Ratings to Not Cooperating
-------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Prag
Distillery Pvt. Ltd. (PDPL) to Issuer Not Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 12.82 CARE D; Issuer not cooperating;
Facilities Based on Best Available
(Term Loan-ECB) Information
Long-term Bank 20.00 CARE D; Issuer not cooperating;
Facilities Based on Best Available
(Fund-based) Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 08, 2018, placed the
rating(s) of PDPL under the 'issuer non-cooperating' category as
PDPL had failed to provide information for monitoring of the rating
and had not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. PDPL continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a emails dated
February 26, 2019, February 15, 2019, January 7, 2019 and numerous
phone calls. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information.
The rating on Prag Distillery Pvt. Ltd.'s bank facilities will now
be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings take into account the ongoing delays in
repayment/servicing of debt obligation owing to continued strain on
the liquidity profile of the company led by poor operational
performance in FY18 (refers to the period April 1 to March 31).
Detailed description of the key rating drivers
At the time of last rating on March 8, 2018, the following were the
rating strengths and weaknesses (updated for the information
available from Registrar of Companies and Banker interaction).
Key Rating Weaknesses
Delays in Debt Servicing: There are ongoing delays in servicing of
debt obligation owing to continued strain on the liquidity profile
of the company led by poor operational performance in FY18 (refers
to the period April 1 to March 31).
Incorporated in March 2005, Prag Distillery Pvt. Ltd. (PDPL) is
engaged in manufacturing and bottling of Indian Made Foreign Liquor
(IMFL). In 2008, Tilaknagar Industries Ltd (TIL) acquired 100%
stake in PDPL; forming it a wholly-owned subsidiary. The company is
involved into manufacturing IMFL (whisky, brandy, rum, gin and
vodka) under various brands owned by TI such as Mansion House,
Courier Napolean, Golden Chariot Whisky, Hot Shot Brandy, Nigro He
Mans Rum, Madira Rum, Shot Rum, etc. PDPL's manufacturing
operations comprises three manufacturing units (one directly
operated unit, a leased unit in the state of Andhra Pradesh and a
tie-up unit in the state of Telangana).
PRATIKSHA GEMS: CARE Assigns B+ Rating to INR4.82cr LT Loan
-----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Pratiksha Gems (PG), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 4.82 CARE B+; Stable Assigned
Facilities
Detailed Rationale
The rating assigned to the bank facilities of PG is primarily
constrained on account of its moderate scale of operations with
thin profitability margins, weak debt coverage indicators and
working capital intensive nature of operations during FY18 (refers
to the period from April 1 to March 31). The ratings, further,
continue to remain constrained due to partnership nature of its
constitution, presence in a highly competitive and fragmented gems
& jewellery industry along with susceptibility of profit margins to
foreign exchange fluctuation risk.
The rating, however, derives strength from healthy experience of
partners in gems & jewellery industry, established track record of
operations and location advantage by way of presence in diamond
processing hub. Further, the rating also derives strength from the
moderate capital structure. The ability of PG to increase its scale
of operations and improve its overall financial risk profile by
improving its profitability and solvency position along with
efficient working capital management are the key rating
sensitivities.
Detailed description of key rating drivers
Key Rating Weaknesses
Moderate scale of operations with thin profitability margins The
scale of operations as marked by Total Operating Income (TOI) of PG
has remained muted in the past three years period ended FY18. It
remained moderate and stable at INR24.24 crore in FY18 (INR24.41
crore in FY17). During FY18, PBILDT margin of PG remained low at
3.16% as against 3.58% during FY17. PAT margin of PG remained
stable and thin at 0.42% during FY18 as against 0.40% during FY17.
Weak debt coverage indicators: The debt coverage indicators
remained weak marked by total debt to gross cash accruals (TDGCA)
of 40.27 years as on March 31, 2018 (39.70 years as on March 31,
2017) owing to low cash accruals, while interest coverage ratio
remained stable and moderate at 1.22 times during FY18 as against
1.19 times during FY17.
Working capital intensive nature of operations: The liquidity
position of PG remained working capital intensive in nature marked
by elongated operating cycle at 141 days during FY18, while average
working capital limits utilization remained high at around 95%
during past twelve months period ended January, 2019. The current
ratio remained moderate at 1.51 times as on March 31, 2018 as
compared to 1.33 times as on March 2017. Cash and bank balance
remained low at INR0.26 crore as on March 31, 2018 while cash flow
from operations remained low at INR0.28 crore during FY18.
Partnership nature of constitution: PG, being a partnership firm,
is exposed to inherent risk of partners' capital being withdrawn at
time of personal contingency which may put pressure on financial
flexibility of the firm.
Presence in a highly competitive and fragmented Gems & Jewellery
industry along with susceptibility of profit margins to foreign
exchange fluctuation risk: PG has its presence in the Gems and
Jewellery industry which is highly fragmented in nature with
presence of numerous independent small-scale enterprises in
unorganized sector and some of the large well-established players
in organized sector leading to high level of competition. PG
procures rough diamonds largely from Belgium, Dubai and Israel,
thereby exposing the firm to foreign exchange fluctuation risk. The
firm does not follow any active hedging policy to mitigate its
risk which makes it susceptible to fluctuations in the foreign
exchange market.
Key Rating Strengths
Healthy experience of partners and established track record of
operations: PG was established in February 2002 as a partnership
firm by Mr. Devraj Mania, Mr. Ashok Mania and Mr. Dinesh Mania,
having an average experience of more than three decades in gems and
jewellery industry. PG has long track record of operations of
around a decade and a half years and thus has a strong association
with its customers and suppliers base developed over a period of
time.
Location advantage: PG enjoys location advantage as the
manufacturing facility of the firm is located in Surat, Gujarat,
which is the diamond processing hub of India resulting in easy
availability of raw material and labour.
Moderate capital structure: The capital structure of PG remained
moderate marked by overall gearing at 1.15 times as on March 31,
2018 (1.35 times as on March 31, 2017). The marginal improvement is
on account of an increase in tangible net worth base led by
infusion of partners' capital. The total debt of INR5.60 crore as
on March 31, 2018 comprised of term loan of INR0.77 crore availed
from banks, auto loans of INR0.01 crore and working capital bank
borrowing of INR4.82 crore.
Surat-based (Gujarat) PG was established as a partnership firm,
promoted by Mr. Devraj Mania, Mr. Ashok Mania and Mr. Dinesh Mania
in February, 2002. The firm is engaged into processing of rough
diamonds into polished diamonds and gives the same on job-work
basis. The manufacturing facility of PG is located at Surat,
Gujarat. PG imports rough diamonds largely from Dubai, Belgium and
Israel while it also purchases the same locally. It supplies
polished diamond to local as well as export market of USA,
Singapore and Hong Kong.
PUNJ LLOYD: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: Punj Lloyd Limited
Registered office:
Punj Lloyd House
17-18, Nehru Place
New Delhi 110019
Principal office:
Corporate Office I
78, Institutional Area, Sector-32
Gurgaon 122001, Haryana
Insolvency Commencement Date: March 8, 2019
Court: National Company Law Tribunal, Prinicipal Bench, New Delhi
Estimated date of closure of
insolvency resolution process: September 4, 2019
Insolvency professional: Gaurav Gupta
Interim Resolution
Professional: Gaurav Gupta
203, Savitri Complex-1
Near Dholewal Chowk
Ludhiana 141003, Punjab
E-mail: gauravinduca@gmail.com
Mobile: 98149 18377
- and -
C/o Surendra Raj Gang
GT Restructuring Services LLP
L-41, Connaught Circus
New Delhi 110001
E-mail: ip.punj@in.gt.com
Mobile: 98149 18377
97173 90678
Last date for
submission of claims: March 25, 2019
ROSELABS LIMITED: CRISIL Maintains D Ratings in Not Cooperating
---------------------------------------------------------------
CRISIL said the ratings on bank facilities of Roselabs Limited (RL)
continues to be 'CRISIL D/CRISIL D Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL D (ISSUER NOT
COOPERATING)
Inland/Import 1.5 CRISIL D (ISSUER NOT
Letter of Credit COOPERATING)
Proposed Long Term 0.5 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING)
CRISIL has been consistently following up with RL for obtaining
information through letters and emails dated August 31, 2018 and
February 12, 2019 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of RL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on RL is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' rating category or
lower'.
Based on the last available information, the ratings on bank
facilities of RL continues to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
Incorporated in 2008, RL is promoted by Ahmedabad (Gujarat) based
Mr Pawan Agarwal and his family members. The company is engaged in
trading of pharmaceuticals, dyes, chemicals, textile products and
plastic sheets. The company has its marketing offices in various
states across India.
RRAS TRADERS: CRISIL Assigns 'B+' Ratings to INR3cr Loans
---------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the
bank facilities of RRAS Traders And Exports Private Limited
(RRAS).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long 2.5 CRISIL B+/Stable (Assigned)
Term Bank Loan
Facility
Cash Credit 0.5 CRISIL B+/Stable (Assigned)
Pre Shipment Credit 2.0 CRISIL A4 (Assigned)
The ratings reflect RRAS's below-average financial risk profile,
and modest scale of operations in the intensely competitive agro
products trading business. These weakness are partially offset by
the promoters' extensive entrepreneurial experience.
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale of operations in the intensely competitive agro
products industry: Intense competition continues to constrain
scalability: revenue was INR15.11 crore in fiscal 2018. Though
revenue is expected to improve gradually with addition of customers
and increasing demand from current clients, scale should remain
average over the medium term. Furthermore, the agro products
industry in India is highly fragmented with the presence of
numerous small to medium scale players catering to both the
domestic and overseas demand, leading to intense competition.
Profitable scalability of operations remain critical and will be
monitored.
* Below-average financial risk profile: Capital structure is below
average with a small networth. Networth and total outside
liabilities to adjusted networth of INR0.99 crore and 3.29 times,
respectively, as on March 31, 2018. Capital structure is likely to
remain weak over the medium term due to large incremental working
capital requirements and modest accretion to reserve.
Strength
* Extensive experience of the promoters: Benefits from the
promoter's entrepreneurial experience of 10 years in the civil
construction, agro industry etc. has helped the company to ramp-up
its sales. Also establishing relations healthy relations with
customers and suppliers should continue to support business risk
profile.
Liquidity
Liquidity is stretched. Bank limit utilisation averaged 93% in the
12 months through November 2018, occasionally supported by ad hoc
limit to meet incremental working capital requirements. Current
ratio was moderate at 1.31 times as on March 31, 2018. However
absence of any term debt obligations partly cushions the liquidity
amid expected modest cash accruals.
Outlook: Stable
CRISIL believes RRAS will continue to benefit from the extensive
experience of its promoters. The outlook may be revised to
'Positive' if a substantial and sustained increase in revenue and
profitability strengthens cash accrual and capital structure. The
outlook may be revised to 'Negative' if stretch in working capital
cycle or lower-than-expected profitability/accrual weakens
financial risk profile, particularly liquidity.
RRAS, based in Mumbai, was incorporated in 2013. It trades in agro
products. The company is promoted and managed by Mr Ratansingh M
Rathore and his wife Mrs Sanjaykunwar R. Rathore.
SAISANJ RETAIL: CARE Lowers Rating on INR15cr LT Loan to B
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Saisanj Retail Private Limited (SRPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 15.00 CARE B; Stable Revised from
Facilities CARE BB-; Stable
Detailed Rationale & Key Rating Drivers:
The revision in ratings assigned to the bank facilities of SRPL is
on account of subdued financial performance during FY18 (FY refers
to the period from April 1 to March 31) which has resulted in
operating as well as cash loss and full erosion of net worth as on
March 31, 2018. The ratings continue to remain constrained by
trading nature of business, weak liquidity position, working
capital intensive nature of operations and low entry barriers
resulting in intense competition. The ratings are, however,
underpinned by experienced promoters, diversified product portfolio
and well-established relationship with suppliers & registered
seller on e-commerce platform enabling wide geographical reach.
The ability of the firm to increase its scale of operations and
margins, efficient management of working capital requirements and
maintain comfortable capital structure are the key rating
sensitivities.
Detailed description of the key rating drivers:
Key Rating Weaknesses
Subdued financial performance in FY18: The Company is engaged in
the online retail trading business, and by virtue of same has
limited pricing control due to intense competition in the industry
leading to fluctuating revenues and low profitability margins. SRPL
has registered Total Operating Income (TOI) of INR25.95 crore
during FY18 with y-o-y decline of 76% over FY17 [Rs.108.10 Crore]
at the back of shifting the focus from high volume – low margin
products to low volume – high margin products (from baby segment
to home & kitchen products). Due to shift in focus, the inventory
for baby segment had to written off which has been reflected in the
increase in operational expenditure (traded goods cost) resulting
in operating loss of INR13.63 crore. Consequently, the company has
reported net loss of INR15.63 crore and cash loss of INR14.88 crore
in FY18.
Erosion of net worth & weak liquidity position: Owing to high
losses, the net worth of the company has been fully eroded as on
March 31, 2018. As on March 31, 2018, the company had negative net
worth of INR10.15 crore. Consequently, the other debt coverage
indicators have also weakened significantly. The liquidity position
of the company was weak marked by the current ratio of 0.35x as on
March 31, 2018. The realizations from the debtors were utilized for
servicing of the interest for FY18.
Working capital intensive nature of operations: SRPL operates in
online retail business that demands high working capital infusion
for operations and inventory maintenance. Working capital cycle of
the company stretched from 42 days in FY17 to 141 days in FY18 at
the back of increase in average inventory cycle & collection period
from 38 days & 28 days in FY17 to 99 days & 74 days in FY18 mainly
due to averaging effect at the back of decline in revenue coupled
with delay in delivery of shipment of goods from the vendor
resulting in later realizations from the customers.
Low entry barriers resulting in intense competition: The
performance of the firm has been low mainly due to the nature
of the business operations and intense market competition with
established players such as shopclues, snapdeal etc. Further, the
growth prospects in the industry has attracted encouraged many
organized players and various unorganized players to enter into the
segment.
Key Rating Strengths
Experienced Promoters: SRPL is headed by Mr. Sashikanth Somavarapu
(Managing Director). He has completed masters from MIT Sloan School
of Management with Bachelor of Engineering (electronics) and has
expertise of about 20 years with work experience at renowned
companies such as Amazon, Ford and Ciber Inc. Mr. Hari Prasad
Cherukuri is a Retired Lieutenant & Former Army Commander of
Northern India's Army and is director at board of various companies
with decade of experience in diverse industries. Ms. Rekha
Somavarapu led the development of 'Redlily', brand of SRPL
operating in the industry. She has expertise of 19 years with work
experience at companies such as, Ford, Compuware and Washington
Mutual.
Diversified product portfolio: SRPL has diversified its product
offering into three main categories such as, electronics, Kids &
baby and home & kitchen that cater to every age-group of consumers.
During FY18, majority of the revenue of SRPL is from the baby &
kids segment (63.21%) followed by electronics (18.88%) and home &
kitchen (17.91%).
Well-established relationships with Suppliers and registered on
e-commerce platforms enabling wide geographic: access: Over the
years, SRPL has established good relations with its suppliers who
are authorized distributors of various brands, such as, Usha, Sony,
Himalaya, Pampers etc and plays a critical role with regard to
procurement of goods at competitive pricing. Majority of the
company's revenue is derived from online sales via Amazon (around
85% in FY18 and 77% in FY17).
Stable industry outlook: The e-commerce industry is expanding at a
rapid pace in the country and poses a threat to the brick and
mortar retail business. Further, Government of India has announced
various initiatives namely, Digital India, Make in India, Start-up
India, Skill India and Innovation Fund. The e-commerce industry
been directly impacting the micro, small & medium enterprises
(MSME) in India by providing means of financing, technology and
training and has a favourable cascading effect on other industries
as well. The total size of e-Commerce industry (only B2C e-tail) in
India is expected to reach US$ 101.9 billion by 2020.
Saisanj Retail Private Limited (SRPL) based at Hyderabad,
Telangana, was incorporated on January 20, 2011 and is promoted by
Mr. Sashikanth Somavarapu, Ms. Rekha Somavarapu and Retired Lt.
Gen. Hari Prasad Cherukuri. SRPL is primarily engaged in online
retailing and positioning of brands across various segments namely,
toys, kids & baby, home & kitchen and electronics. SRPL is
registered with Amazon.in and Flipkart among others as an
authorized seller to market its products and plans to begin
operations in offline market. The company is also setting up
website (redlily.com) with the brand-name 'Redlily'.
SHIVA COTTON: Ind-Ra Lowers Long Term Issuer Rating to 'D'
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Shiva Cotton
Industries' Long-Term Issuer Rating to 'IND D (ISSUER NOT
COOPERATING)' from 'IND B+ (ISSUER NOT COOPERATING)'. The issuer
did not participate in the rating exercise despite continuous
requests and follow-ups by the agency. Therefore, investors and
other users are advised to take appropriate caution while using
these ratings. The rating will now appear as 'IND D (ISSUER NOT
COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR60 mil. Fund-based working capital limit (Long-term)
downgraded with IND D (ISSUER NOT COOPERATING) rating; and
-- INR35 mil. Long-term loans downgraded with IND D (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Based on the best available
information
KEY RATING DRIVERS
The downgrade reflects the classification of the company as a
non-performing account by the lender.
RATING SENSITIVITIES
Positive: Timely debt service for at least three consecutive months
would be positive for the ratings.
COMPANY PROFILE
Incorporated in 2014, Shiva Cotton Industries commenced operations
in March 2015 in the Shahpur District of Karnataka. The firm is
primarily engaged in the ginning and pressing of cotton.
SHREE SAI: CRISIL Reaffirms B+ Ratings on INR5.9cr Loans
--------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the
long-term bank facilities of Shree Sai Knittings Private Limited
(SSKPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.0 CRISIL B+/Stable (Reaffirmed)
Term Loan 0.9 CRISIL B+/Stable (Reaffirmed)
The rating continue to reflect the extensive experience of
promoters in the textile industry, and SSKPL's diverse clientele.
These rating strengths are partially offset by the modest scale of
operations and the company's average capital structure.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: Intense competition in the textile
industry keeps the scale of operations modest, as reflected in net
sales of INR22.08 crore in fiscal 2018, and limits the pricing
power with suppliers and customers, thereby constraining
profitability.
* Average financial risk profile: Financial risk profile is marked
by adjusted networth and total outside liabilities to adjusted
networth ratio of INR2.64 crore and 4.29 times, respectively, as on
March 31, 2018, and remains constrained by high reliance on working
capital debt. The TOL/ANW ratio should remain moderate in the
medium term, aided by improved scale of operations and a stable
operating margin leading to sufficient reserve accretion. Debt
protection metrics were marked by an interest coverage and net cash
accrual to adjusted debt ratios of 2.11 times and 0.06 time,
respectively, as of fiscal 2018.
Strength
* Extensive experience of the promoters: The four-decade-long
experience of the promoter, Mr Sudama Arora in the textile
industry, and his established relationships with customers and
suppliers, will continue to support the business risk profile. In
addition to SSKPL, Mr Arora also manages Vinit Knittings Pvt Ltd.
Liquidity
Liquidity remains stretched, marked by expected cash accrual of
INR0.70-0.80 crore in fiscals 2019 and 2020, against maturing debt
of INR0.28 crore. It is aided by continuous infusion of unsecured
loans by the promoters. Fund-based limit of INR7.0 crore was fully
utilized, averaging 96% over the 12 months through November 2018,
with instances of an ad-hoc limit in few months. Cash and bank
balance was INR0.03 crore as on March 31, 2018.
Outlook: Stable
CRISIL believes SSKPL shall continue to benefit from the extensive
experience of its promoters. The outlook may be revised to
'Positive' if the company reports significant growth in revenue and
profitability, leading to higher cash accrual, and a stronger
financial risk profile. The outlook may be revised to 'Negative' in
case of a decline in scale of operations or profitability, or if a
stretch in the working capital cycle, weakens the financial risk
profile, especially liquidity.
SKKPL was set up in 2014, by the promoter, Mr Sudama Arora and his
family members. The company manufactures industrial cloth at its
unit in Sonepat, Haryana. The industrial cloth manufactured is used
by rexine manufacturers in the Delhi and NCR region.
SRI PADMAVATI: CRISIL Withdraws B+ Ratings on INR20cr Loans
-----------------------------------------------------------
CRISIL has withdrawn its rating on the proposed long-term bank loan
facility of INR9.5 crore on Sri Padmavati Energy Solutions India
Private Limited (SPES) request as it has not utilized the facility
and on the cash credit facility of INR5 crore of SPES at the
company's request and receipt of no objection certificate from its
banker.
CRISIL has withdrawn its rating on the long-term loan of INR5.5
crore on receipt of No dues certificate from the banker. The rating
action is in line with CRISIL's policy on withdrawal of its ratings
on bank loans.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B+/Stable (ISSUER NOT
COOPERATING, Rating Withdrawn)
Long Term Loan 5.5 CRISIL B+/Stable (Migrated
from 'CRISIL B+/Stable
ISSUER NOT COOPERATING';
Rating Withdrawn)
Proposed Long Term 9.5 CRISIL B+/Stable (Migrated
Bank Loan Facility from 'CRISIL B+/Stable
ISSUER NOT COOPERATING';
Rating Withdrawn)
CRISIL has been consistently following up with SPES for obtaining
information through letters and emails dated November 14, 2017,
January 17, 2018, February 12, 2018 and February 16, 2018 among
others, apart from telephonic communication. However, the issuer
has remained non-cooperative.
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SPES. This restricts CRISIL's
ability to take a forward looking view on the credit quality of the
entity. CRISIL believes that the information available for SPES is
consistent with 'Scenario 2' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower.
Therefore on account of inadequate information, CRISIL continues
its ratings at 'CRISIL B+/Stable/Issuer not cooperating'.
CRISIL has withdrawn its rating on the proposed long-term bank loan
facility of INR9.5 crore on SPES request as it has not utilized the
facility and on the cash credit facility of INR5 crore of SPES at
the company's request and receipt of no objection certificate from
its banker
CRISIL has withdrawn its rating on the long-term loan of INR5.5
crore on receipt of No dues certificate from the banker. The rating
action is in line with CRISIL's policy on withdrawal of its ratings
on bank loans.
Incorporated in 2011, SPES is managed by Mr Umesh Thakkral. The
company manufactures lead alloy and trades in batteries. It is
based in Hyderabad.
STAR REALCON: CRISIL Lowers Ratings on INR9cr Loans to 'D'
----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facilities
of Star Realcon Private Limited (SRPL) to 'CRISIL D' from 'CRISIL
B/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 0.5 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL B/Stable')
Secured Overdraft 8.5 CRISIL D (Downgraded from
Facility 'CRISIL B/Stable')
The downgrade reflects delays of over 60 days by SRPL in servicing
the interest repayment, on the bank facility it availed of, owing
to weak liquidity.
The rating also factors in the large working capital requirement.
These weaknesses are partially offset by the extensive experience
of the promoters in the construction industry.
Key Rating Drivers & Detailed Description
Weaknesses
* Delays in interest payments: SRPL has delayed in meeting its
interest repayment obligation (by over 60 days), on the bank
facility availed, due to a stretched liquidity profile.
* Large working capital requirement: Operations may remain working
capital intensive over the medium term, driven by sizeable debtors
outstanding for over six months and large inventory of land, which
leads to full utilisation of bank lines. Realisation of debtors and
rise in the working capital will remain key rating sensitivity
factors.
Strength
* Extensive experience of the promoters: Benefits from the
promoters' experience of over three decades, their strong
understanding of local market dynamics, and healthy relations with
customers and suppliers should continue to support the business.
Liquidity
It is weak as reflected in almost fully utilized bank limits and
delay in meeting its financial obligation. This is mainly on
account of large working capital needs.
SRPL was established in 2006 by Mr Nitin Kumar Gupta and his son,
Mr Goldy Gupta. The Delhi based company undertakes civil
construction activities and real estate development projects in
Delhi, Ghaziabad, Chennai, and Rajasthan.
TANTIA CONSTRUCTIONS: Insolvency Resolution Process Case Summary
----------------------------------------------------------------
Debtor: Tantia Constructions Limited
Block DD-30, Sector 1
Salt Lake City, 7th Floor
Kolkata 700064
West Bengal
Insolvency Commencement Date: March 13, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: September 9, 2019
(180 days from commencement)
Insolvency professional: Kshitiz Chhawchharia
Interim Resolution
Professional: Kshitiz Chhawchharia
B. Chhawchharia & Co.
8A & 8B, Satyam Tower
3 Alipore Road
Kolkata 700027
West Bengal
E-mail: kshitiz@bccoindia.com
- and -
Grant Thornton India
10C, Hungerford Street
Kolkata 700017
West Bengal
E-mail: rp.tantia@in.gt.com
Classes of creditors: Unsecured Financial Creditors
Insolvency
Professionals
Representative of
Creditors in a class: Arun Kumar Gupta
Aditya Kumar Tibrewal
Mahesh Chand Gupta
Last date for
submission of claims: March 27, 2019
TRANSPARENT ENERGY: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: Transparent Energy Systems Private Limited
Pushpa Heights, 1st Floor
Bibwewadi Corner, Pune–Satara Road
Pune 411037
Insolvency Commencement Date: March 8, 2019
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: September 3, 2019
Insolvency professional: Ashish Vyas
Interim Resolution
Professional: Ashish Vyas
B-1A Viceroy Court CHS
Thakur Village, Kandivali East
Mumbai 400101
E-mail: ashishvyas2006@gmail.com
- and -
103 Arch Gold Apt.
Next to MTNL Exchange
S.V. Road, Poinsar, Kandivali (West)
Mumbai 400067
E-mail: iptespl@gmail.com
Last date for
submission of claims: March 21, 2019
TRISHA TRENDS: CRISIL Reaffirms B+ Ratings on INR10cr Loans
-----------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the
long-term bank facilities of Trisha Trends Private Limited (TTPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 6 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility 4 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect the modest scale of TTPL's
operations, large working capital requirement, and an average
financial risk profile. These weaknesses are partially offset by
the experience of the promoters in retailing readymade garments.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations amid intense competition: Intense
competition may continue to constrain scalability, pricing power,
and profitability. Thus, revenue was modest at INR18.46 crore in
fiscal 2018.
* Large working capital requirement: Operations are likely to
remain working capital intensive over the medium term. Gross
current assets were 369 days as on March 31, 2018, driven by
sizeable inventory of 350-400 days because of the wide variety of
products. Hence, the bank limit has been extensively utilized.
* Average financial risk profile: Financial risk profile may remain
constrained by large working capital debt. Networth was modest at
INR3.94 crore as on March 31, 2018, with total outside liabilities
to tangible networth ratio high at 4.58 times. Debt protection
metrics were also average, with interest coverage and net cash
accrual to total debt ratios of 1.69 times and 0.06 time,
respectively, in fiscal 2018.
Strength
* Experience of the promoters: Benefits from the promoters'
experience of around 18 years, their strong understanding of local
market dynamics, and healthy relations with customers and suppliers
should continue to support the business.
Liquidity
Liquidity is marked by, modest accrual of around 50-80 lacs vs no
term debt obligations, high blu of around 97 percent (for past 12
months ended Dec-2018) and support from the promoters in form of
unsecured loan of INR2.20 crore.
Outlook: Stable
CRISIL believes TTPL will continue to benefit from the experience
of the promoters. The outlook may be revised to 'Positive' if a
substantial increase in revenue and profitability strengthens the
financial risk profile. Conversely, the outlook may be revised to
'Negative' if a steep decline in revenue or profitability, a
further stretch in the working capital cycle, or any large,
debt-funded capital expenditure weakens the financial risk
profile.
TTPL was incorporated in 2011 to take over the business of Amrita
Creatives, a proprietorship firm set up in 2000. TTPL manufactures
and sells women's garments such as sarees, salwar suits, lehengas,
and wedding gowns, under the brand, Trisha; it has three retail
stores in Hyderabad. Ms Amrita Mishra and her sons, Mr Mayank
Mishra and Mr Manav Mishra, manage the business.
UNITED ENGINEERS: CRISIL Assigns B+ Rating to INR4cr Cash Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the
bank facilities of The United Engineers (TUE).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Bank
Guarantee 6 CRISIL A4 (Assigned)
Proposed Cash
Credit Limit 4 CRISIL B+/Stable (Assigned)
The ratings reflect the extensive experience of the promoters, and
moderate profitability. These strengths are partially offset by the
modest scale of operations, susceptibility to fluctuation in raw
material prices, and the large working capital requirement.
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale of operations: Intense competition from several
small players and dominance of large entities have kept the scale
of operations modest, as reflected in revenue of around INR29.26
crore and INR28.43 crore, respectively, in fiscals 2018 and 2017.
* Susceptibility to unfavourable changes in raw material prices:
Price of the main raw material, steel plates, remains volatile, and
linked to the price of steel. Profitability is thus, likely to
remain exposed to fluctuation in realisations and raw material
prices.
* Large working capital requirement: Operations are highly working
capital intensive, as reflected in gross current assets of 388 days
as on March 31, 2018, as against 467 days a year earlier. This is
due to large receivables of 171 days (193 days a year earlier), and
inventory of 124 days.
Strengths:
* Extensive experience of the promoters: The three-decade-long
experience of the promoters in the heavy machinery and engineering
industry, and their healthy relationships with customers and
suppliers, will continue to support the business risk profile.
* Modest operating margin: Operating margin declined to 7.5% in
fiscal 2018, from 13.9% in the previous fiscal, led by increase in
raw material prices and other overhead cost. PAT margin stood at
1.4%, lower than 5.0% during the same period.
* Moderate financial risk profile: Gearing was moderate at 1.37
times as on March 31, 2018. Debt protection metrics were adequate,
with interest coverage ratio of around 2.7 times in fiscal 2018.
Liquidity
Cash accrual of around INR1.04 crore expected in fiscal 2019,
should comfortably cover the term debt of INR0.99 crore. Current
ratio was moderate at 1.91 times as on March 31, 2018.
Outlook: Stable
CRISIL believes TUE will continue to benefit from the extensive
experience of its promoters. The outlook may be revised to
'Positive' if substantial and sustained growth in revenue and cash
accrual, along with improved working capital management,
strengthens the business risk profile and liquidity. The outlook
may be revised to 'Negative' if low cash accrual, stretch in the
working capital cycle, or any sizeable capital expenditure, weakens
the financial risk profile.
TUE, which was formed in 1976, manufactures coated pressure
vessels, tanks, silos, hoppers, reactors, and boiler structures.
The company has a manufacturing facility at Madhyamgram, West
Bengal.
VAISHNODEVI OIL: Ind-Ra Migrates 'BB' LT Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Vaishnodevi Oil
Seeds Processing Industries' Long-Term Issuer Rating to the
non-cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR140 mil. Fund-based limits migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) rating; and
-- INR6 mil. Term loan due on March 2021 migrated to non-
cooperating category with IND BB (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 16, 2018. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Formed in 2006, Vaishnodevi Oil Seeds Processing Industries is a
partnership firm engaged in the extraction and trading of mustard
oil and oil cake.
VASTU LAND: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: Vastu Land Realtors Pvt Ltd
Plot No. 245, Kashi Bhandar
Nandanwan Layout, Nandanwan
Nagpur, MH 440009, India
Insolvency Commencement Date: February 27, 2019
Court: National Company Law Tribunal, Nagpur Bench
Estimated date of closure of
insolvency resolution process: September 3, 2019
Insolvency professional: Srigini Rajat Naidu
Interim Resolution
Professional: Srigini Rajat Naidu
Block No. 11-12, First Floor, Mount Annex
Opp. Oriental Insurance Co.
Mount Road, Ext. Sadar
Nagpur 440001
E-mail: rajat_naidu@yahoo.com
Last date for
submission of claims: March 22, 2019
VIKRANT FORGE: Ind-Ra Lowers Long Term Issuer Rating to 'D'
-----------------------------------------------------------
India Ratings has downgraded Vikrant Forge Private Limited's (VFPL)
Long-Term Issuer Rating to 'IND D' from 'IND BB-'. The Outlook was
Stable.
The instrument-wise rating actions are:
-- INR156.54 mil. (reduce from INR273.89 mil.) Term loan (long-
term) due on March 2020 downgraded with IND D rating;
-- INR400 mil. Fund-based limits (long-term) downgraded with IND
D rating; and
-- INR100 mil. Non-fund-based limit (short-term) downgraded with
IND D rating.
KEY RATING DRIVERS
The downgrade reflects delays in debt servicing by VFPL during the
three months ended February 2019 owing to a stressed liquidity
position.
RATING SENSITIVITIES
Positive: Timely debt service for at least three consecutive months
could result in a positive rating action.
COMPANY PROFILE
VFPL manufactures open die forgings, which are supplied in the
black-forged state or further, processed into rough machined and
finish machined states.
VISHAL CONSTRUCTION: CRISIL Reaffirms B Ratings on INR6.55cr Loans
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CRISIL has reaffirmed its rating on the bank facilities of Vishal
Construction (VC) at 'CRISIL B/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
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Bank Guarantee 3.45 CRISIL A4 (Reaffirmed)
Cash Credit 3.00 CRISIL B/Stable (Reaffirmed)
Long Term Loan 2.00 CRISIL B/Stable (Reaffirmed)
Proposed Working
Capital Facility 1.55 CRISIL B/Stable (Reaffirmed)
CRISIL rating on the long term bank facilities of VC continue to
reflect below average financial risk profile and modest scale of
operations. These rating strengths are partially offset by the
extensive experience of its promoters in the civil construction
industry.
Key Rating Drivers & Detailed Description
Weakness
* Below-average financial risk profile: Modest net worth and high
total outstanding liabilities to adjusted net worth (Rs. 4.08 crore
and 3.28 times as on March 31, 2018) represent below average
financial risk profile. Interest coverage ratio was 2.31 times for
fiscal 2018 as against 4.58 in fiscal 2017.
* Modest scale of operations: The firm has modest scale of
operations marked by revenues of INR15.03 crores in fiscal 2018
against INR23.02 crore in fiscal 2017.
Strength:
* Extensive experience of promoters: Firm is promoted by Mr. Vikas
Kakad, a first generation entrepreneur, is a civil engineer by
qualification. Mr. Vikas Kakad has been in this industry for around
2 decades. CRISIL believes that the business risk profile would
continue to benefit over the medium term on account of the
promoter's extensive experience in the industry.
Liquidity
The firm have stretched liquidity as it is expected to generate
modest cash accruals over the medium term against repayment
obligations. Further
Bank limit utilisation is high around 90 percent for the past
twelve months ended December 31, 2018. CRISIL believes that bank
limit utilization is expected to remain high on account of large
working capital requirement. In addition Current ratio is low as on
March 31, 2018.
Outlook: Stable
CRISIL believes that VC will continue to benefit over the medium
term from the industry experience of its promoters in the civil
construction industry. The outlook may be revised to 'Positive' in
case of significant improvement in the firm's scale of operations
and profitability resulting in higher-than-expected cash accruals.
The outlook may be revised to 'Negative', if the firm undertakes
any significant debt-funded capital expenditure or on account of
lower cash accruals leading to weakening of liquidity.
VC is a partnership firm set up in 1996 by Mr Vikas Kakad and Ms
Shakuntala Kakad. Based in Mumbai, the firm primarily undertakes
construction of bridges in Maharashtra.
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S I N G A P O R E
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HYFLUX LTD: MAS and SGX Keeping Close Tabs on Water Firm
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The Straits Times reports that Singapore's financial regulators
said on March 23 that they are keeping a close watch on troubled
water firm Hyflux, and will investigate if laws have been
breached.
ST relates that the Monetary Authority of Singapore (MAS) and the
Singapore Exchange (SGX) said in response to queries: "If there is
any evidence of potential breaches of the law or regulations,
including any potential disclosure lapses, we will investigate and
take appropriate actions."
This comes after national water agency PUB said on March 21 that it
will take over Hyflux's Tuaspring Desalination Plant if the company
cannot resolve its defaults by April 5, and waive the compensation
sum.
At the same time, Hyflux's restructuring effort might be at risk as
white knight Salim-Medco consortium could walk away from the deal,
the report states.
About Hyflux
Singapore-based Hyflux Ltd -- https://www.hyflux.com/ -- provides
various solutions in water and energy areas worldwide. The company
operates through two segments, Municipal and Industrial. The
Municipal segment supplies a range of infrastructure solutions,
including water, power, and waste-to-energy to municipalities and
governments. The Industrial segment supplies infrastructure
solutions for water to industrial customers.
As reported in the Troubled Company Reporter-Asia Pacific on
May 24, 2018, Hyflux Ltd. said that the Company and five of its
subsidiaries, namely Hydrochem (S) Pte Ltd, Hyflux Engineering Pte
Ltd, Hyflux Membrane Manufacturing (S) Pte. Ltd., Hyflux
Innovation
Centre Pte. Ltd. and Tuaspring Pte. Ltd. have applied to the High
Court of the Republic of Singapore pursuant to Section 211B(1) of
the Singapore Companies Act to commence a court supervised process
to reorganize their liabilities and businesses. The Company said
it is taking this step in order to protect the value of its
businesses while it reorganises its liabilities.
The Company has engaged WongPartnership LLP as legal advisors and
Ernst & Young Solutions LLP as financial advisors in this process.
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HOUSING DEVELOPMENT: Fitch Assigns 'B+' LongTerm IDRs
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Fitch Ratings has assigned Maldives-based Housing Development
Corporation Ltd (HDC) Long-Term Foreign-Currency and Local-Currency
Issuer Default Ratings of 'B+'. The Outlook is Stable.
HDC is a 100% state-owned enterprise formed by presidential decree.
It undertakes and manages the overall planning and building of the
reclaimed city of Hulhumale, which is the Maldives' biggest urban
development project. Its core business is the development of
Hulhumale through real estate and infrastructure projects,
including social housing, roads and bridges, commercial properties
and recreation premises. HDC also provides non-core services, such
as municipal services, building maintenance and land
administration, and regulation of supplementary developments.
Fitch classifies HDC as a government-related entity (GRE) that is
credit linked to the Maldivian sovereign (B+/Stable). This is
attributable to our assessment of the entity's very strong legal
status, control and oversight; very strong level of historical
financial support; and strong socio-political and very strong
financial implications of a potential default.
These factors mean there is a strong likelihood of HDC receiving
extraordinary state support, if required. The assessment translates
into an overall support score of 50 under our Government-Related
Entities Rating Criteria, leading to the equalisation of HDC's
rating with the Maldives sovereign.
KEY RATING DRIVERS
'Very Strong' Status, Ownership, Control: HDC is wholly owned and
fully controlled by the government. It is registered as a limited
liability company under the Maldives' Company Law and is allowed to
go bankrupt. HDC is also supervised by the Privatization and
Corporatization Board (PCB) under the Ministry of Finance (MoF) on
behalf of the Maldives government. HDC's board of directors have to
be appointed by the government of Maldives, while its major
decisions need the government's approval.
'Very Strong' Support Record, Expectations: The Maldives government
has provided strong financial support for HDC, mainly through
funding support and guarantees on the company's international
unsecured borrowings. At end-2017, the MoF provided 48% of HDC's
debt and guaranteed 12% of the company's debt. By end-2018,
according to the company's unaudited management accounts, the MoF
accounted for 8% of HDC's debt and guaranteed 79% of HDC's debt.
Fitch believes HDC will continue to receive strong government
support.
'Strong' Socio-Political Default Impact: HDC is the only GRE
responsible for developing Hulhumale city into the largest urban
area of Maldives with plans to accommodate two-thirds of the
country's population. The company also provides some municipal
services and other services. A default by HDC would disrupt the
development of Hulhumale and affect the daily life of local
residents.
'Very Strong' Financial Default Implications: Fitch believes HDC is
a proxy financing vehicle of the government of Maldives, given that
it is the largest GRE by asset size in the country that accounts
for 52% of the top 5 GREs' total assets in Maldives at end-2017. At
end-2018, 79% of HDC's debt was guaranteed by the sovereign.
Furthermore, the guarantees provided by the government to other
GREs state that if one government entity defaults, other guaranteed
loans may be treated as in default too. Therefore, a default by HDC
would not only damage the Maldivian government's reputation, but
also the availability of financing options for other key GREs in
the Maldives.
'Weak' Standalone Credit Profile: Fitch assessed HDC's financial
profile as 'Weak' with a maximum standalone credit profile in the
of 'B' category. HDC used to have moderate debt leverage during
2015-2017. However, net debt/EBITDA increased to 45.8x by end-2018
from 2.95x at end-2017 due to the significant addition of debt in
2018 to fund major infrastructure projects. Fitch believes HDC is
likely to maintain a similar profile in the medium term due to its
continued debt growth and policy role to provide social housing,
which would constrain profitability.
RATING SENSITIVITIES
Credit-Linked with Sovereign: HDC's ratings are credit-linked to
those of the government of the Maldives, hence positive or negative
rating action on the sovereign would result in similar rating
action on the issuer.
Downward Pressure: A material weakening of the operational and
administrative links with the sponsor and/or direct government
control, manifested in HDC's lower strategic importance in the
development of Hulhumale, and weakening in the incentive for the
government to provide support would result in negative rating
action.
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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.
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