/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/190628.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 Friday, June 28, 2019, Vol. 22, No. 129 Headlines A U S T R A L I A ANG SECURITIES: Second Creditors' Meeting Set for July 4 CUSTOM GRANNY: First Creditors' Meeting Set for July 8 DREAMTIME CONSULTING: Second Creditors' Meeting Set for July 3 GREEN GABLES: First Creditors' Meeting Set for July 5 OLYMPUS PARK: Second Creditors' Meeting Set for July 3 YOUNIVERSE SOLUTIONS: First Creditors' Meeting Set for July 9 C H I N A ZHANGZHOU TRANSPORTATION: Fitch Rates $500MM Sr. Unsec. Notes BB+ H O N G K O N G WTT INVESTMENT: Moody's Upgrades Sr. Unsec. Notes to Ba2 I N D I A ABHISHEK SOLAR: Ind-Ra Lowers Long Term Issuer Rating to 'D' AGRA ICE: CARE Migrates B+ Rating to Not Cooperating Category AMODA IRON: CRISIL Migrates D Rating in Not Cooperating AMTEK AUTO: Lenders Asked to Consider Deccan Value Investors' Bids ANANTHA AGENCY: CARE Maintains B+ Rating in Not Cooperating ASTRICA LABORATORIES: CARE Lowers Rating on INR7.95cr Loan to B BEGUSARAI MUNICIPAL: Ind-Ra Withdraws BB Long Term Issuer Rating CLAYMINE MICRONS: CRISIL Lowers Rating on INR13.8cr Loan to D COCHIN MINERALS: Ind-Ra Affirms Then Withdraws B- LT Issuer Rating DIGITAL FACTORY: CARE Lowers Rating on INR6.25cr LT Loan to B- EROS INTERNATIONAL: Moody's Withdraws B2 CFR for Business Reasons GSK INFRASTRUCTURES: Ind-Ra Migrates B+ Rating to Non-Cooperating H. SHERUL: CRISIL Maintains D Rating in Not Cooperating HERODEX POWER: CRISIL Maintains D Rating in Not Cooperating HINDUSTAN NEWSPRINT: CRISIL Maintains D Rating in Not Cooperating IL&FS: Government Seeks to Implead Auditors in Mismanagement Case IL&FS: India Pays Lenders to Avoid Default on Sovereign Guarantee INTERNATIONAL MEGA: CRISIL Maintains D Rating in Not Cooperating INVENTION INDIA: CRISIL Maintains D Rating in Not Cooperating JAGATJIT INDUSTRIES: CARE Lowers Rating on INR90cr LT Loan to D MANIKANTA PAPER: CARE Lowers Rating on INR7.40cr Loan to B MANJEET SINGH: CARE Downgrades Rating on INR17.46cr Loan to D NEELKANTH SWEETS: CARE Migrates B+ Rating to Not Cooperating PADMABHUSHAN KRANTIVEER: Ind-Ra Assigns 'B' LT Issuer Rating PRASAD EDUCATION: CARE Maintains D Rating in Not Cooperating R V PLASTIC: Ind-Ra Affirms BB- LT Issuer Rating, Outlook Stable R.S. ENTERPRISES: CARE Maintains B Rating in Not Cooperating RADHA POULTRY: CARE Lowers Rating on INR8cr LT Loan to B REGAL TRADING: Ind-Ra Lowers Long Term Issuer Rating to 'BB+ SARA SAE: CRISIL Hikes Rating on INR39.24cr New Loan to 'B' SARVEJANA HEALTHCARE: Ind-Ra Lowers Long Term Issuer Rating to BB+ SHAKTHI SEEDS: CARE Migrates 'B' Rating to Not Cooperating SHRIM INDUSTRIES: CRISIL Lowers Rating on INR10.55cr Loan to D SINTEX-BAPL LIMITED: CARE Lowers Rating on INR810.68cr Loan to C SSG TECHNO: CRISIL Hikes Rating on INR5cr Cash Loan to 'B' TEXAS TEXTILE: Insolvency Resolution Process Case Summary VASU METPLAST: CARE Migrates B+ Rating to Not Cooperating [*] INDIA: Falling Bond Sales Cue Waning Trust in Shadow Banks I N D O N E S I A CHANDRA ASRI: S&P Ups ICR to BB- On Parent's Strong Credit Quality M A L A Y S I A ICON OFFSHORE: Unit Faces Suit Over Contract Dispute N E W Z E A L A N D PLAMAN RESOURCES: Did Not Mention Fossils in OIO Application S I N G A P O R E NICO STEEL: Obtains 1-Year Extension to Exit SGX Watch List SINGAPORE: Heading for Technical Recession in Q3, Maybank Says - - - - - ================= A U S T R A L I A ================= ANG SECURITIES: Second Creditors' Meeting Set for July 4 -------------------------------------------------------- A second meeting of creditors in the proceedings of Ang Securities Pty Ltd has been set for July 4, 2019, at 9:30 a.m. at the offices of Worrells Solvency & Forensic Accountants, Level 2, AMP Building, at 1 Hobart Place, in Canberra, ACT. 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 July 3, 2019, at 4:00 p.m. Stephen John Hundy of Worrells Solvency & Forensic Accountants was appointed as administrator of Ang Securities on May 30, 2019. CUSTOM GRANNY: First Creditors' Meeting Set for July 8 ------------------------------------------------------ A first meeting of the creditors in the proceedings of Custom Granny Flats & Studios Pty Ltd will be held on July 8, 2019, at 11:00 a.m. at the offices of Farnsworth Shepard, at Level 5, 2 Barrack Street, in Sydney, NSW. Adam Shepard of Farnsworth Shepard was appointed as administrator of Custom Granny on June 26, 2019. DREAMTIME CONSULTING: Second Creditors' Meeting Set for July 3 -------------------------------------------------------------- A second meeting of creditors in the proceedings of Dreamtime Consulting Pty Ltd has been set for July 3, 2019, at 2:30 p.m. at the offices of WA Insolvency Solutions, a division of Jirsch Sutherland, Level 49, at 108 St Georges Terrace, in Perth, WA. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by July 2, 2019, at 4:00 p.m. Jimmy Trpcevski and David Ashley Norman Hurt of WA Insolvency Solutions were appointed as administrators of Dreamtime Consulting on May 27, 2019. GREEN GABLES: First Creditors' Meeting Set for July 5 ----------------------------------------------------- A first meeting of the creditors in the proceedings of Green Gables Express Pty Ltd will be held on July 5, 2019, at 10:30 a.m. at the offices of Orange Ex-Services Club, John Hamilton Room, at 231-243 Anson Street, in Orange, NSW. Amanda Lott and Timothy Heesh of TPH Insolvency weres appointed as administrators of Green Gables on June 25, 2019. OLYMPUS PARK: Second Creditors' Meeting Set for July 3 ------------------------------------------------------ A second meeting of creditors in the proceedings of Olympus Park Pty. Ltd. has been set for July 3, 2019, at 10:30 a.m. at Level 12, 460 Lonsdale 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 July 2, 2019, at 4:00 p.m. Malcolm Kimbal Howell of Jirsch Sutherland was appointed as administrator of Olympus Park on May 29, 2019. YOUNIVERSE SOLUTIONS: First Creditors' Meeting Set for July 9 ------------------------------------------------------------- A first meeting of the creditors in the proceedings of Youniverse Solutions Pty Ltd will be held on July 9, 2019, at 3:00 p.m. at the offices of G S Andrews Advisory, at 22 Drummond Street, in Carlton, Victoria. Gregory Stuart Andrews and Andrew Juzva of G S Andrews Advisory were appointed as administrators of Youniverse Solutions on June 27, 2019. ========= C H I N A ========= ZHANGZHOU TRANSPORTATION: Fitch Rates $500MM Sr. Unsec. Notes BB+ ----------------------------------------------------------------- Fitch Ratings has assigned China-based Zhangzhou Transportation Development Group Co., Ltd.'s (ZTDG, BB+/Stable) USD500 million 6.5% senior unsecured notes due 2022 a final rating of 'BB+'. The final rating is the same as the expected rating assigned on June 13, 2019 and follows the receipt of documents conforming to information received. KEY RATING DRIVERS The notes were issued by ZTDG directly and constitute its direct, unconditional, unsubordinated and unsecured obligations and at all times rank pari passu with all its other present and future unsecured and unsubordinated obligations. Proceeds will be used for refinancing and general corporate purposes. ================= H O N G K O N G ================= WTT INVESTMENT: Moody's Upgrades Sr. Unsec. Notes to Ba2 -------------------------------------------------------- Moody's Investors Service has upgraded to Ba2 from Ba3 the rating on the senior unsecured notes that were issued by WTT Investment Ltd and have been assumed by HKBN Ltd.'s Metropolitan Light Company Limited. The rating outlook has been changed to stable from positive. At the same time, Moody's has withdrawn WTT HK Limited's Ba3 corporate family rating with a positive outlook. RATINGS RATIONALE "The upgrade of the rating for WTT's senior unsecured notes reflects the full assumption of bond obligations by HKBN and the extension of unconditional guarantees by HKBN's key subsidiaries to the WTT notes," says Gloria Tsuen, a Moody's Vice Present and Senior Credit Officer. Following the completion of their merger, WTT and HKBN announced on May 29, 2019 that MLCL, which is 100%-owned by HKBN and is an intermediary holding company, had assumed all the obligations under the WTT notes. In addition, HKBN Group Limited and key operating subsidiary, Hong Kong Broadband Network Limited, each unconditionally guarantees the notes. "These developments mean that the expected loss prospect on the WTT notes is now on par with existing HKBN debt, and which is driven by HKBN's credit quality," adds Tsuen. Moody's has withdrawn WTT HK Limited's CFR because the company will no longer have sufficient or otherwise adequate information to support the maintenance of the rating. The Ba2 rating primarily reflects HKBN's (1) solid business profile as the second largest telecommunications service provider in Hong Kong in the fixed-line segment by revenue; (2) geographic concentration in Hong Kong and modest scale when compared to global telecommunications peers; (3) good liquidity; and (4) moderate financial leverage. HKBN provides enterprise and residential fixed-line services and, via its strategic partnerships, mobile and media services. HKBN generated HKD4.3 billion in revenue in the 12 months to the end of February 2019. The merger will strengthen HKBN and WTT's combined competitive position in the enterprise fixed-line market, with a widened network coverage, and a larger and more diversified customer base. There will also be operational and capital spending synergies. Moody's estimates that HKBN will record adjusted debt/EBITDA of around 4.9x — with vendor loan notes included in adjusted debt — on a proforma basis for the fiscal year ending August 2019. Leverage will decrease to around 4.4x by fiscal 2020, driven by EBITDA growth, significantly lower than the 6.0x reported by WTT for 2018. This leverage level is weak for the Ba2 rating category but is mitigated by the company's stable business profile. The rating outlook is stable, reflecting Moody's expectation that the merged company's overall market presence will be stable and adjusted debt/EBITDA will improve gradually in the next one to two years. Moody's could upgrade the rating if HKBN maintains its business profile and reduces its leverage materially, such that adjusted debt/EBITDA improves to below 3.5x-3.75x. Moody's could downgrade the rating if (1) HKBN's market share or profitability erodes significantly; or (2) HKBN pursues an aggressive shareholder distribution or investment strategy. Specific metrics that Moody's would consider in downgrading the rating include (1) adjusted debt/EBITDA above 5.0x, or (2) adjusted EBITDA margin below 35%. The principal methodology used in these ratings was Telecommunications Service Providers in January 2017. Established in 1995, WTT Holding Corp, the parent of WTT Investment Ltd, is an enterprise-focused fixed-line telecommunications operator in Hong Kong. WTT offers a full range of products, including data connectivity, broadband, fixed-line voice, cloud services and a wide range of in-house ICT solutions. Founded in 1999 and listed since 2015 in Hong Kong, HKBN Ltd. is a fixed-line telecommunications network service provider offering residential and enterprise solutions. ========= I N D I A ========= ABHISHEK SOLAR: Ind-Ra Lowers Long Term Issuer Rating to 'D' ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has downgraded Abhishek Solar Industries Private Limited's (ASIPL) Long-Term Issuer Rating to 'IND D' from 'IND BB-'. Simultaneously, Ind-Ra has reassigned ASIPL a Long-Term Issuer Rating of 'IND B-' with a Stable Outlook. The instrument-wise rating action is: -- INR60 mil. Fund-based working capital limits* downgraded and Reassigned with IND B-/Stable rating; -- INR60 mil. Non-fund-based working capital limits** downgraded and reassigned with IND A4 rating; -- INR8.98 mil. Term loan due in March 2021 is withdrawn (repaid in full); and * Reassigned 'IND B-'/Stable after being downgraded to 'IND D' **Reassigned 'IND A4' after being downgraded to 'IND D' KEY RATING DRIVERS The downgrade reflects ASIPL's overutilization of working capital limits for more than 30 days during September 2018 due to stressed liquidity position. However, the same was regularized in October 2018. The reassignment of 'IND B-' Long-Term Issuer Rating reflects ASIPL's utilization of its fund-based working capital facilities was within the sanctioned limits during the 90 days ended May 31, 2019, due to early realization of its receivables from counterparties, although there have been instances of overutilization, which were regularized in 1-16 days. The company's liquidity position remained tight as reflected by its 98.33% average utilization of the working capital limits during the 12 months ended in May 2019. Its networking capital cycle elongated to 318 days in FY19 (FY18: 194, FY17: 143) due to rise in collection period to 407 days (227 days) as the company executes government orders where the realization period is very high and inventory holding period is 8 days (4 days). FY19 financials are provisional in nature. The ratings are constrained by ASIPL's continued small scale of operations as indicated by FY19 revenue of INR210.829 million (FY18: INR492.36 million). The decline in revenue was due to low order execution owing to weak order book. The downgrade also factors in ASIPL's moderate credit metrics. The interest coverage (operating EBITDA/gross interest expense) deteriorated to 3.61x in FY19 (FY18: 7.54x) and deterioration of net leverage (total adjusted net debt/operating EBITDA) to 1.67x (1.34x) owing to lower EBITDA level which stood at INR34.83 million in FY19 (FY18: INR85.03 million) due to higher operating cost. However, the ratings are supported by healthy EBITDA margins as margins in solar industry are typically high. FY19 EBITDA margins contracted to 16.52% (FY18: 17.27%) as a result of the increase in other costs. ASIPL's return on capital employed (ROCE) was 16.09%. The ratings are also supported by the company director's experience of two decades in the solar panel business. RATING SENSITIVITIES Negative: Any deterioration in the credit metrics could be negative for the ratings. Positive: An improvement in the scale of operations along with an improvement in the overall credit metrics in FY20 could be positive for the ratings. COMPANY PROFILE Incorporated in 1999, ASIPL (formerly Abhishek Industries) manufactures a wide range of solar products such as solar photovoltaic modules, solar lanterns, solar study lamp, solar street lights, and solar water pumps, among others with an annual installed capacity of 30MW. AGRA ICE: CARE Migrates B+ Rating to Not Cooperating Category ------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Agra Ice Factory and Cold Storage to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 7.40 CARE B+; Stable Issuer not Bank Facilities cooperating; Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking no default statement from Agra Ice Factory and Cold Storage to monitor the ratings vide e-mail communications dated June 7, 2019, June 5, 2019, May 31, 2019, May 15, 2019, May 8, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided no default statement for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The ratings of Agra Ice Factory and Cold Storage's bank facilities will now be denoted as CARE B+; Stable ISSUER NOT COOPERATING. AMODA IRON: CRISIL Migrates D Rating in Not Cooperating ------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Amoda Iron and Steel Limited (AISL) to 'CRISIL D/CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee .34 CRISIL D (ISSUER NOT COOPERATING; Rating Migrated) Letter of Credit 3.63 CRISIL D (ISSUER NOT COOPERATING; Rating Migrated) Long Term Loan 2.79 CRISIL D (ISSUER NOT COOPERATING; Rating Migrated) Open Cash Credit 9 CRISIL D (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with AISL for obtaining information through letters and emails dated March 12, 2019 and April 11, 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 AISL. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on AISL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of AISL to 'CRISIL D/CRISIL D Issuer not cooperating'. AISL is promoted by Mr.U Kondal Rao in April 2003 and is engaged in manufacturing of Sponge Iron which is used in induction furnaces to produce steel bars. The Plant is located in Jaggayyapet, Andhra Pradesh. AMTEK AUTO: Lenders Asked to Consider Deccan Value Investors' Bids ------------------------------------------------------------------ BloombergQuint reports that the National Company Law Appellate Tribunal (NCLAT) on June 26 directed the lenders of Amtek Auto Ltd. to consider insolvency resolution plans submitted by Deccan Value Investors and others, based on the original information memorandum inviting bids. A two-member NCLAT bench, headed by Chairman Justice SJ Mukhopadhaya, slammed Amtek Auto's committee of creditors for issuing fresh information memorandum inviting new resolution plans, BloombergQuint relates. "We have not allowed the committee of creditors or resolution professional to issue fresh information memorandum or invitation calling for more applications," said NCLAT. On June 13, resolution professional of the debt-ridden auto components maker had issued a fresh information memorandum inviting fresh submission of resolution plans. The CoC has received 5-6 fresh expressions of interest after NCLAT's May 20 order, BloombergQuint says. Clarifying its earlier order passed on May 20, NCLAT asked CoC to consider the bids submitted on the basis of the previous information memorandum, according to BloombergQuint. "In view of such interim order, the CoC is required to consider the resolution plan, if any, filed by any persons including the one submitted by Deccan Value Investors," said NCLAT. BloombergQuint notes that Deccan Value Investors was the second highest bidder for Amtek Auto with a INR3,150 crore offer. NCLAT also allowed Deccan Value Investors to modify and improve its offer after negotiation with the CoC. "However, it will be open to the committee of creditors to negotiate and ask the resolution applicants to improve their plan in terms of the original information memorandum," NCLAT, as cited by BloombergQuint, said. Earlier, U.K.-based Liberty House was chosen as the highest bidder for Amtek Auto but it later backed out and refused to furnish the bank guarantee for the acquisition. Based in India, Amtek Auto Limited (BOM:520077) -- http://www.amtek.com/aal.php-- engages in automotive components manufacturing and commercial sales. The Company is engaged in forging, grey and ductile iron casting, gravity and high pressure aluminum die casting and machining and sub-assembly. It has a product portfolio with a range of engineered components, including flywheel ring gears, machining, forging, casting aluminum and casting iron. The Company supplies components for passenger cars, light and heavy commercial vehicles, 2/3 wheelers, light weight commercial vehicles and heavy weight commercial vehicles. The Company has facilities across India, the United Kingdom, Germany, Brazil, Italy, Mexico, Hungary and the United States. The Company also manufactures components for non-auto sectors, such as the railways, specialty vehicles, aerospace, agricultural and heavy earth moving equipment. In July 2017, NCLT had admitted insolvency proceedings initiated by a consortium of banks led by Corporation Bank. ANANTHA AGENCY: CARE Maintains B+ Rating in Not Cooperating ----------------------------------------------------------- CARE Ratings said the rating for the bank facilities of Anantha Agency's Private Limited (AAPL) continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 15.00 CARE B+; Stable Issuer not Bank Facilities cooperating: Based on best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 30, 2018, placed the rating(s) of AAPL under the 'issuer non-cooperating' category as AAPL had failed to provide information for monitoring of the rating. AAPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and email dated May 29, 2019, May 24, 2019, May 22, 2019, May 20, 2019 and May 15, 2019 In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers The ratings assigned to the bank facilities of Anantha Agency's Private Limited (AAPL) are continues to be constrained by short track record of the firm, working capital intensive nature of operations and limited to short distance coverage. However, the rating also takes into account the small scale of operations with low net worth base, leveraged capital structure and weak debt coverage indicators. The ratings are underpinned by the experienced promoters, Pollution free, eco-friendly vehicle and economical mode of transportation and stable demand outlook of e-rickshaw segment. Going forward, the company's ability to increase its scale of operations along with profit margins and improve its capital structure and debt coverage indicators would be the key rating sensitivities. Key Rating Weakness Short track record and small scale of operations with low net worth base: The firm has a track record of three years; however the scale of operations of the company remained small at INR0.40 crore in FY18 with low net worth base of INR0.10 crore as on March 31, 2018. Leveraged capital structure and weak debt coverage indicators: The capital structure of the company marked by overall gearing ratio remained leveraged at 1.94x as on March 31, 2018 due to low net worth of INR0.10 crore as on March 31, 2018. The debt coverage indicators marked by total debt/GCA remained weak at 59.43x in FY18 due to the low cash accruals. The PBILDT/Interest coverage ratio also remained weak at 1.11x in FY18 due to the low operating profit. Working capital intensive nature of operation: Working capital cycle stood high at 203 days in FY18 due to high inventory days of 160 days. Limited to short distance coverage: The e-rickshaw are mainly utilized for short distance by the commuters mainly on account of lack of charging points as the battery is not very powerful and as a result is discharged very fast, however the government is planning to set a charging point station preferably with solar power, near Metro stations which will help the e-rickshaw drivers to cope with the charging issue. Key rating strengths Experienced promoters: The company was incorporated in 2013 as a private limited company, by Mr Ravi Anantha and his wife Mrs Indrani Anantha. The promoters have experience of around 15 years in in various fields like food and distribution, education and real estate business, and are common promoter in one of the associate firm Shri Nagarjuna Flour Mills. Pollution free, eco-friendly vehicle and economical mode of transportation: E-rickshaws are battery operated vehicles and hence can be excellent alternatives to petrol/diesel/CNG- driven vehicles, which causes severe pollution. The e-rickshaw does not emit smoke and hence they are non-polluting results in ecofriendly vehicle. Compared to other types of vehicles, e-rickshaws are quite economical and can easily be afforded by a common man. Further, it is also cheap for the passengers as they have to pay less transport charges, compared to the charge they pay for auto-rickshaws or hand-pulled rickshaws. Stable demand outlook for e-rickshaw segment: Battery operated auto rickshaws don't just replace the pedal rickshaws that require so much physical strain and discomfort but also prove to be a much more affordable solution to fuel/CNG auto rickshaws that have been used for the same purpose. This makes it the perfect alternative and middle ground between the two – being cost effective, green and incredibly easy to run and maintain. E rickshaws can provide a decent income since the battery charging cost is far lower than any other fuel, new material such as fibre glass has been introduced in them, since the material provides high strength, durability and lighter than metals. Uttar Pradesh government in December 2016 has distributed 2,000 ERickshaw to beneficiaries of 31 districts for promoting green energy. Anantha Agency's Private Limited (AAPL) was incorporated in 2013 and promoted by Mr Ravi Anantha and his wife Mrs Indrani Anantha. The company has taken up dealership of e-rickshaw (battery powered) from M/s Saera Electric Auto Pvt Ltd (SEPL, a New Delhi based company engaged in manufacturing battery operated tricycles popularly termed as "ERickshaws"). The company is setting up office building and warehouse to start the trading of e-rickshaw across southern India. The total cost proposed to set up the facility is INR1.20 crore funded by bank term loan of INR1.00 crore with equity share capital of INR0.10 crore and unsecure loan of INR0.10. Furthermore, the company has proposed working capital facility of INR14.00 crore to manage day to day operations. The company is under discussion with multiple banks and entire bank facilities are yet to be sanctioned. The company is planning to deal with passengers as well as in cargo loading e-rickshaw segments under brand name of 'Mayuri E-rickshaw' and 'Cheeta E-Ricksaw' of SEPL. The on-road price for erickshaw ranges between INR85,000 to INR1,30,000. In FY18, AAPL had a Profit after Tax (PAT) of INR0.02 crore on a total operating income of INR0.40 crore. ASTRICA LABORATORIES: CARE Lowers Rating on INR7.95cr Loan to B --------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Astrica Laboratories Private Limited (ALPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 7.95 CARE B; Stable Issuer not Bank Facilities Cooperating Revised from CARE B+; Stable Issuer not cooperating based on best available Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 22, 2018, placed the rating(s) of ALPL under the 'issuer non-cooperating' category as ALPL had failed to provide information for monitoring of the rating. ALPL continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and email dated May 29, 2019, May 24, 2019, May 22, 2019, May 20, 2019 and May 15, 2019 In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers The ratings assigned to the bank facilities of Astrica Laboratories Private Limited (ALPL) are continues to be constrained by highly regulated nature of industry and working capital intensive nature of operations. However, the rating also takes into account decline in profitability margins and working capital intensive nature of operations. The ratings are underpinned by the experience of the promoters for two decades in pharma industry. Going forward, the company's ability to increase its scale of operations along with profit margins and improve its capital structure and debt coverage indicators would be the key rating sensitivities. Key Rating Weakness Highly regulated nature of pharma industry: The pharmaceutical industry are regulated by several policies and bodies in terms of pricing, quality control, safety and health standards, and several other certifications and control standards. The company has to undergone for the necessary approvals and certifications, further the same has to be regularly upgraded for smooth functioning of their business. Any changes or regulations by the regulatory bodies may hamper the business of the companies prevailing in the industry. Key rating strengths Experience of the promoters for two decade in pharma industry ASPL is promoted by Mr Bhaskar Rao (Managing Director) and Mr Gopal Rao (Director), Mr Gopala Krishna and Ms Hymavathi. Mr Goapala Krishna is a qualified post graduate and having two decades of experience in pharma business. He has worked with Dr Reddys Laboratories in different functions. Apart, he worked in Department Technology & Process Development (T&P), as chemical Engineer. Mr K Bhaskar Rao is also qualified post graduate and worked as marketing manager for various companies like Sathavahana Ispat Limited, Sesa Industries Limited among others. Mr Subba Reddy (Spouse of Ms Hymavathi) is a qualified post graduate from BITS Pilani. He has worked for Dr Reddys for 9 years as research scientist. Further, the team is well supported by the technical, production and research department. Due to the promoters' vast experience in pharma business, the directors have established relation with customer and suppliers. Astrica Laboratories Private Limited (ASPL), was incorporated on July 18, 2007 and promoted by Mr Gopala Krishna and Mr Bhaskar Rao along with two other directors. The company has set-up a manufacturing unit for bulk drugs with an installed capacity of 30,000 kg per annum. The company achieved commercial operations on October 01, 2016. The total cost incurred for setting up the manufacturing facilities was INR16.86 crore funded byequity of INR 7.80 crore, unsecured loan INR 2.86 crore and remaining through term loan of INR 6.20 crore.The manufacturing unit of the company is located at Medak District, Telangana. However, the company is planning to increase the installed capacity to 60,000 kg per annum. The proposed project is likely to be completed by February 2017 and likely start the commercial operations by April 2017. The total proposed cost of project is INR9.65 crore which is proposed to be funded through bank term loan of INR4.50 crore and equity of INR5.15 crore. Overall, the project D/E is 1.05x. The company is manufacturing the products like Raberprazole Sodium (Anti-ulcerative), Pantoprazole sodium (Anti-ulcerative), Moxifloxacin Hydrochloride (Antibacterial), clopidogrel Bisulphate (Anti-thrombotic), Terbinafine Hydrochloride (Anti-fungal) and Duloxetine Hydrochloride (Anti-depressant) among others. The company is expected to sell its products to both domestic (95%) as well as export (5%). ASPL has proposed to import 70% of its raw material from China and remaining 30% of raw material from domestic market. In FY18, ALPL had a Profit after Tax (PAT) of INR0.06 crore on a total operating income of INR24.66 crore, as against PAT and TOI of INR0.09 crore and INR8.32 crore, respectively, in FY17. BEGUSARAI MUNICIPAL: Ind-Ra Withdraws BB Long Term Issuer Rating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Begusarai Municipal Corporation's Long-Term Issuer Rating of 'IND BB'. The Outlook was Stable. KEY RATING DRIVERS Ind-Ra is no longer required to maintain the rating as the issuer rating was assigned under the Atal Mission for Rejuvenation and Urban Transformation Programme and no specific debt was issued against the rating. COMPANY PROFILE Begusarai town is the administrative headquarters of Begusarai district in Bihar. CLAYMINE MICRONS: CRISIL Lowers Rating on INR13.8cr Loan to D ------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Claymine Microns LLP (CML) to 'CRISIL D/CRISIL D' from 'CRISIL B+/Stable/CRISIL A4'. The downgrade reflects delay in repayment of bank debt, due to stretched liquidity, constrained by the slowdown in the ceramic industry. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 1.19 CRISIL D (Downgraded from 'CRISIL A4') Cash Credit 4.00 CRISIL D (Downgraded from 'CRISIL B+/Stable') Proposed Long Term Bank Loan Facility 1.01 CRISIL D (Downgraded from 'CRISIL B+/Stable') Proposed Term Loan 13.80 CRISIL D (Downgraded from 'CRISIL B+/Stable') Key Rating Drivers & Detailed Description Weakness: * Delay in meeting term debt: Due to stretched liquidity, cash accrual was insufficient to cover the maturing debt, and thus, led to a delay in servicing bank debt. Strength: * Extensive experience of the promoters: The decade-long experience of the promoters, in the ceramic industry, will support the business risk profile. Liquidity The liquidity remained weak due to working capital intensive operations. The latest bank limit utilization stood almost full. CML was set up in 2017, as a partnership firm. The firm commenced commercial operations from June 2018. The Morbi-based firm manufactures soda and potash feldspar, which are used in the ceramic industry. COCHIN MINERALS: Ind-Ra Affirms Then Withdraws B- LT Issuer Rating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has affirmed and withdrawn Cochin Minerals & Rutile Limited's (CMRL) Long-Term Issuer Rating of 'IND B-'. The Outlook was Stable. The instrument-wise rating actions are: -- The 'IND B-' rating on the INR83.68 mil. Long-term loans* due on June 2020 affirmed and withdrawn; -- The 'IND B-' rating on the INR315 mil. Fund-based working Capital facilities** affirmed and withdrawn; and -- The 'IND A4' rating on the INR414 mil. Non-fund-based facilities+ affirmed and withdrawn. *Affirmed at 'IND B-'/Stable before being withdrawn **Affirmed at 'IND B-'/Stable/'IND A4' before being withdrawn +Affirmed at 'IND A4' before being withdrawn Ind-Ra is no longer required to maintain the ratings, as the agency has received a no objection certificate from the company's lenders. This is consistent with the Securities and Exchange Board of India's circular dated March 31, 2017, for credit rating agencies. Ind-Ra will no longer provide a rating and analytical coverage for Cochin Minerals & Rutile Limited. KEY RATING DRIVERS The affirmation reflects CMRL's continued medium scale of operations, as indicated by revenue of INR2,234.0 million in FY19 (FY18: INR1,641.0 million). Revenue growth was driven by an increase in orders. The figures for FY19 are provisional. The ratings also take into consideration CMRL's moderate credit metrics. The metrics improved on a YoY basis in FY19, primarily because the operating EBITDA rose to INR143.6 million (FY18: INR91.0 million) owing to revenue growth. The interest coverage (operating EBITDA/gross interest expense) was 3.1x in FY19 (FY18: 1.3x) and the net financial leverage (total adjusted net debt/operating EBITDA) was 1.8x (3.6x). The ratings are constrained by CMRL's tight liquidity, with average utilization of fund-based working capital facilities of over 94.5% for the 12 months ended May 2019. The company's cash flow from operations declined to INR30.0 million in FY19 (FY18: INR38.0 million) due to an increase in working capital requirements. The free cash flow stood at INR28.0 million in FY19 (FY18: INR69.0 million). CMRL had cash and cash equivalents of INR63.0 million in FY19 (FY18: INR7.0 million). Its net cash conversion cycle improved to 171 days in FY19 (FY18: 268 days) due to a decrease in inventory and debtor days. The ratings also reflect the intense competition in the automobile dealership business. The rating factor in the average EBITDA margins. The margin increased to 6.4% in FY19 (FY18: 5.5%) due to a decrease in variable costs. The return on capital stood at around 13% in FY19 (FY18: 8.0%). The ratings continue to be supported by the promoters' experience of over two decades in the business of manufacturing synthetic rutile, which has led to longstanding relationships with customers and suppliers. COMPANY PROFILE Incorporated in 1989, CMRL manufactures and exports metallurgical-grade synthetic rutile. Its 50,000 metric-tons-per-annum manufacturing facility is located in Alva, Kerala. In addition, CMRL sells by-products such as ferric chloride, ferrous chloride, and chemo. DIGITAL FACTORY: CARE Lowers Rating on INR6.25cr LT Loan to B- -------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Digital Factory (DF), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 6.25 CARE B-; Stable Issuer not Bank Facilities Cooperating Revised from CARE B; Issuer not cooperating based on best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 12, 2018, placed the rating(s) of DF under the 'issuer non-cooperating' category as DF had failed to provide information for monitoring of the rating. DF continues to be non-cooperative despite repeated requests for submission of information through e-mails, phone calls and email dated May 25, 2019, May 24, 2019, May 22, 2019, May 20, 2019 and May 15, 2019 In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers At the time of last rating on March 12, 2018 the following were the strengths and weaknesses. Key Rating Weakness Small scale of operations: DF was established in 2013 and hence, has a long track record of operations. Despite long track record of operations, the scale of operations remains small marked by total operating income of INR22.51 crore in FY16 and net worth of INR1.09 crore as on March 31, 2016, compared with other peers in the industry. Leveraged capital structure and moderate debt coverage indicators: The firm has a leveraged capital structure marked by the overall gearing which deteriorated year-on-year from 2.78x as on March 31, 2014 to 7.07x as on March 31, 2016 due to increasing unsecured loans and working capital facilities along with vehicle loans to manage business operations. However, the firm has moderate debt coverage indicators, though deteriorated year-on-year. Despite increase in cash accruals, the total debt/GCA of the firm deteriorated from 4.05x in FY14 to 8.84x in FY16 due to increase in debt level. Due to increase in interest cost, the PBILDT interest coverage ratio deteriorated from 31.54x in FY14 to 2.03x in FY16. Geographical concentration risk: The firm has receives about 100% of the work orders from Andhra Pradesh and Telangana state, resulting in high customer and geographic concentration risk. Constitution of the entity as Proprietorship firm: Constitution as a partnership firm has the inherent risk of possibility of withdrawal of the partners' capital at the time of personal contingency which can affect its capital structure. Further, partnership concern has restricted access to external borrowing which limits their growth opportunities to some extent. Key rating strengths Satisfactory profitability margins: The PBILDT margin of the firm increasing y-o-y i.e. from 3.93% in FY14 to 7.65% in FY16 due to increasing scale of operations resulting in absorption of fixed overheads and increasing sales realization for manufacturing iron and wood furniture. Due to increase in interest expenses associated with vehicle loan and working capital facilities along with depreciation cost, the PAT margin of the firm declined from 2.50% in FY14 to 1.76% in FY16 Experienced partners with reputed clientele: DF was established in the year 2013, promoted by Mr. Ankinedu Chowdary. He is a qualified Graduate and has five years of experience in the Furniture Industry. He is actively involved in the day to day operations of the firm. The firm has reputed clientele i.e Narayana Educational Society, Ravindra Bharti Educational Society, Andhra Pradesh Education Welfare & Infrastructure Development Corporation (APEWIDC) and Telangana education and welfare infrastructure Development Corporation (TEWIDC). Growth in total operating income during review period: The total operating income of the firm grew at Compounded Annual Growth Rate (CAGR) of 43.12% during FY14-FY16 i.e, from INR 10.99 crore in FY14 to INR 22.51 crore in FY16 on the back of increase in customers from private clientele to government departments. Furthermore, the firm has achieved total operating income of INR25 crore during 11MFY17 (Provisional). Moderate operating cycle: The operating cycle of the firm remained comfortable at 44 days in FY16. The average days for making the products range from 30-60 days. The firm receives the payment from its customers within 40-60 days. Around 50% of the payment is received in advance and remaining after delivering the product. The firm makes the payment to its suppliers within 50-70 days. The average working capital utilization was 90% for the last 12 months. Digital Factory (DF) was established in the year 2013, promoted by Mr Prasad Nannapaneni. The firm is engaged in manufacturing of iron and wooden furniture. The firm gets the orders from private and government entities. The firm makes products like Tables, Chairs, Racks, and other interior works which is being manufactured for its well know customer i.e Narayana Educational Society, Ravindra Bharti Educational Society, Andhra Pradesh Education Welfare & Infrastructure Development Corporation (APEWIDC) and Telangana Education and Welfare infrastructure Development Corporation (TEWIDC). The firm procures raw materials like iron sheet, iron pipes, wooden sheets and other materials form Pune, Gujarat, Delhi and Telangana. In FY16, DF had a Profit after Tax (PAT) of INR0.40 crore on a total operating income of INR22.51 crore, as against PAT and TOI of INR0.29 crore and INR16.74 crore, respectively, in FY15. EROS INTERNATIONAL: Moody's Withdraws B2 CFR for Business Reasons ----------------------------------------------------------------- Moody's Investors Service withdrawn the B2 corporate family rating of Eros International Plc. At the time of withdrawal the outlook was negative. RATINGS RATIONALE Moody's has decided to withdraw the rating for its own business reasons. Eros International Plc is the holding company of the Eros Group. Through its group subsidiaries, the company acquires, co-produces and distributes Indian language films in various formats globally (50 countries, in over 25 dubbed or subtitled languages), then monetizes the IPRs through multiple distribution channels. Eros International Plc is listed on the New York Stock Exchange, and the promoter group owns 31.3% of the company. GSK INFRASTRUCTURES: Ind-Ra Migrates B+ Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated GSK Infrastructures' 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 action is: -- INR10 mil. Fund-based working capital facilities migrated to non-cooperating category with IND B+ (ISSUER NOT COOPERATING) / IND A4 (ISSUER NOT COOPERATING) rating; and -- INR60 mil. Non-fund-based working capital facilities Migrated to non-cooperating category with IND A4 (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on June 26, 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 2007, GSK Infrastructures is an engineering, procurement, and construction contractor engaged in government projects. The firm undertakes civil construction of sewerage and water pipelines in Andhra Pradesh and Telangana. H. SHERUL: CRISIL Maintains D Rating in Not Cooperating ------------------------------------------------------- CRISIL said the ratings on bank facilities of H. Sherul and Co. (HSC) continues to be 'CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Foreign Bill 18.5 CRISIL D (ISSUER NOT Discounting COOPERATING) Packing Credit 21.5 CRISIL D (ISSUER NOT in Foreign Currency COOPERATING) Pre Shipment Credit 10 CRISIL D (ISSUER NOT COOPERATING) Proposed Short Term 25 CRISIL D (ISSUER NOT Bank Loan Facility COOPERATING) CRISIL has been consistently following up with HSC for obtaining information through letters and emails dated November 30, 2018 and May 13, 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 HSC, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on HSC 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 HSC continues to be 'CRISIL D Issuer not cooperating'. HSC, established as a partnership firm in 2000, is engaged in cutting and polishing of diamonds. The firm has its manufacturing facilities in Mumbai (Maharashtra) and Surat (Gujarat). The firm currently has two partners - Mr. Bhupatbhai Lukhi, and Mr. Rameshbhai Lukhi. HERODEX POWER: CRISIL Maintains D Rating in Not Cooperating ----------------------------------------------------------- CRISIL said the ratings on bank facilities of Herodex Power Systems Private Limited (HPSPL) continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 14.5 CRISIL D (ISSUER NOT COOPERATING) Cash Credit 19 CRISIL D (ISSUER NOT COOPERATING) Letter of Credit 5 CRISIL D (ISSUER NOT COOPERATING) Proposed Long Term 10.42 CRISIL D (ISSUER NOT Bank Loan Facility COOPERATING) CRISIL has been consistently following up with HPSPL for obtaining information through letters and emails dated November 30, 2018 and May 13, 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 HPSPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on HPSPL 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 HPSPL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. HPSPL, established in August 1995 is promoted by Mr Shashank Kalkar and Mr Prashant Desai. The company provides products and services for the electricity transmission and distribution sector. It manufactures automatic power factor controller panels and offers various power systems-based EPC turnkey project solutions to the sector. Its manufacturing facility is at Nashik, Maharashtra. HINDUSTAN NEWSPRINT: CRISIL Maintains D Rating in Not Cooperating ----------------------------------------------------------------- CRISIL said the ratings on bank facilities of Hindustan Newsprint Limited (HNL) continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 5 CRISIL D (ISSUER NOT COOPERATING) Cash Credit 110 CRISIL D (ISSUER NOT COOPERATING) Letter of Credit 45 CRISIL D (ISSUER NOT COOPERATING) CRISIL has been consistently following up with HNL for obtaining information through letters and emails dated December 5, 2018 and May 28, 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 HNL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on HNL 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 HNL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. HNL was incorporated in 1983 as a wholly-owned subsidiary of Hindustan Paper Corporation Ltd, which was set up by the Government of India in 1970. HNL has a capacity to produce 100,000 tonnes per annum (tpa) of newsprint at its facility in Kottayam, Kerala. It also has a 22-megawatt captive power plant and a 100-tonne-per-day de-inking unit to convert waste paper into pulp; the pulp is used as raw material for production of newsprint. IL&FS: Government Seeks to Implead Auditors in Mismanagement Case ----------------------------------------------------------------- Rohit Jain at BloombergQuint reports that the Ministry of Corporate Affairs seeks to bring charges of oppression and mismanagement against auditors and independent directors of IL&FS group as it looks to pin accountability for the financial troubles at the infrastructure lender and builder. BloombergQuint relates that the ministry filed an application in the Mumbai bench of the National Company Law Tribunal to implead 23 persons and entities in the petition filed last year. These include Deloitte Haskins & Sells and BSR & Associates, a unit of KPMG--the former and current auditors--and former independent directors at Infrastructure Leasing & Financial Services Ltd. and its non-bank lending unit IL&FS Financial Services Ltd, the report discloses. That comes days after the ministry sought a five-year ban and removal of the auditors for allegedly colluding with the management in dubious lending practices found by the Serious Frauds Investigation Office, BloombergQuint says. The probe stemmed from the surprise defaults of IL&FS last year that set off a liquidity crisis, forcing the government to take over control. And it triggered concerns about the efficacy of India's corporate governance mechanism involving everyone from rating agencies and audit firms to independent directors. The ministry had last year filed the petition under Sections 241 and 242 of the Companies Act alleging oppression and mismanagement at IL&FS, BloombergQuint recounts. Sanjeev Shorey, the government's counsel, on June 21 cited the SFIO probe to bring similar charges against more individuals and entities, the report says. According to BloombergQuint, the government's arguments are: * Impleadment of auditors was on the basis of two interim investigation reports by SFIO. * Regional director at the ministry was directed by the central government to implead additional respondents to the case filed for oppression and mismanagement. * Impleadment is necessary to ensure that respondents do not alienate or encumber their properties. * Impleadment for oppression and mismanagement is also necessitated under Section 339 read with Section 242 of the Companies Act which deals with liabilities arising out of fraudulent conduct of business. Such conduct can be past or present. * The auditors, however, disputed the allegations and opposed inclusion in the petition. BloombergQuint says Janak Dwarkadas, appearing for Deloitte Haskins and Sells, argued that: * In cases involving oppression and mismanagement under Sections 241 and 242, impleadment of auditor is not necessary as it is not directly or necessarily connected with the case. * A case under these sections can be made against the management. * The charges in the SFIO report are allegations and are not proved in court of law, which makes a strong ground for exclusion from impleadment. BloombergQuint adds that Navroz Seervai, representing BSR & Associates, said: * BSR was appointed as a statutory auditor from November 2017 for a part of the financial year. * Complaints against BSR are also being investigated by the Institute of Chartered Accountants of India. * A complaint under Section 447 is also filed in the criminal court. Separate proceedings in similar matters can create a conflict. * An auditor being an independent body is not involved in day- to-day management of company, as it only audits the accounts of companies and hence cannot be impleaded. According to BloombergQuint, counsel representing Sampath Ganesh, partner at BSR, said he can't be impleaded in his individual capacity as he was acting on behalf of the BSR. After hearing the arguments, the tribunal reserved its order for judgment, BloombergQuint says. The NCLT asked the counsel representing the ministry to ensure that notices and reports a provided to the other parties, adds BloombergQuint. About IL&FS Infrastructure Leasing & Financial Services Limited (IL&FS) -- https://www.ilfsindia.com/ -- is an infrastructure development and finance company based in India. It focuses on the development and commercialization of infrastructure projects, and creation of value added financial services. The company operates in Financial Services, Infrastructure Services, and Others segments. As reported in the Troubled Company Reporter-Asia Pacific on Oct. 3, 2018, the Indian Express said that the government on Oct. 1, 2018, stepped in to take control of crisis-ridden IL&FS by moving the National Company Law Tribunal (NCLT) to supersede and reconstitute the board of the firm which has defaulted on a series of its debt payments. This was said to be an attempt to restore the confidence of financial markets in the credibility and solvency of the infrastructure financing and development group. IL&FS: India Pays Lenders to Avoid Default on Sovereign Guarantee ----------------------------------------------------------------- The Economic Times reports that the Indian government has paid up INR25 crore to Asian Development Bank (ADB) and German development bank KfW on sovereign guarantees issued on behalf of the now financially distressed Infrastructure Leasing & Financial Services (IL&FS) and is staring at another INR250 crore payout towards guaranteed IL&FS loans. The government paid this sum in instalments between October 2018 and March 2019 after IL&FS defaulted on loan repayments, sources close to the development said, ET relates. According to the report, IL&FS had taken two loans totalling about INR850 crore split in dollar and euro denominations for road and water projects. After the default, payment of principal and interest was due between October and March. All these loans have a sovereign guarantee, which implies that the government will have to pay these loans in case of any default, the report says. Considering the default status of IL&FS, the government had no option but to pay from its contingency funds to avoid a default on a loan guaranteed by it, one of the people quoted above said, ET relays. It is shown as loan towards defaulting company till resolution or liquidation. The government will have to pay the balance about in case IL&FS continues on to default on its obligation. "The government has paid INR25 crore--$3 million to ADB and $1.2 million to KfW that was due by the end of last financial year from its contingency funds," ET's source said. "We are working with the board to resolve this issue in the coming months." ET adds that IL&FS had taken a loan of $50 million for road projects and another $50 million for water projects. These loans were guaranteed by the Government of India as the loans were availed from overseas. The loans were used for toll road projects in Gujarat, Andhra Pradesh and Rajasthan and water supply projects in Tamil Nadu and Odisha, ET relates. IL&FS group companies have an outstanding debt of over INR91,000 crore, ET discloses. The Mumbai bench of the National Company Law Tribunal (NCLT) superseded the IL&FS board with a government-nominated board on October 1 last year. According to ET, the Ministry of Corporate Affairs (MCA) had approached the National Company Law Appellate Tribunal (NCLAT) for a 90-day moratorium on loans taken by IL&FS group companies. As part of the resolution framework, the new board has categorised IL&FS group units into green, amber and red, based on their ability to meet payment obligations over the coming 12 months, the report says. Those able to meet all payment obligations are green. Those that can only make operational payments and meet senior secured debt obligations are categorised as amber, while those unable to meet obligations for even senior secured financial creditors are categorised as red, ET notes. About IL&FS Infrastructure Leasing & Financial Services Limited (IL&FS) -- https://www.ilfsindia.com/ -- is an infrastructure development and finance company based in India. It focuses on the development and commercialization of infrastructure projects, and creation of value added financial services. The company operates in Financial Services, Infrastructure Services, and Others segments. As reported in the Troubled Company Reporter-Asia Pacific on Oct. 3, 2018, the Indian Express said that the government on Oct. 1, 2018, stepped in to take control of crisis-ridden IL&FS by moving the National Company Law Tribunal (NCLT) to supersede and reconstitute the board of the firm which has defaulted on a series of its debt payments. This was said to be an attempt to restore the confidence of financial markets in the credibility and solvency of the infrastructure financing and development group. INTERNATIONAL MEGA: CRISIL Maintains D Rating in Not Cooperating ---------------------------------------------------------------- CRISIL said the ratings on bank facilities of International Mega Food Park Limited (IMFPL) continues to be 'CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Rupee Term Loan 74.9 CRISIL D (ISSUER NOT COOPERATING) Term Loan 14.03 CRISIL D (ISSUER NOT COOPERATING) CRISIL has been consistently following up with IMFPL for obtaining information through letters and emails dated November 30, 2018 and May 13, 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 IMFPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on IMFPL 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 IMFPL continues to be 'CRISIL D Issuer not cooperating'. Incorporated in 2010 as a closely held public limited company and special-purpose vehicle, IMFPL has set up a mega food park under the ministry of food processing industries' Mega Food Parks' scheme at village Dabwala Kalan in Punjab. Total project cost of Rs 1364 million is being funded with term debt of Rs 564 million, promoters' contribution of Rs 300 million, and Government of India grant of Rs 500 million. Key promoters include International Fresh Farm Products Pvt Ltd, Narain Exim Corporation, and Citrus Estates. The project is expected to provide adequate infrastructure facilities for food processing along the entire value chain. Major revenue streams will be retailing and wholesaling of dairy and agricultural products, rentals from food processing and cold storage facilities, and selling power to Punjab State Electricity Board from its biomass power plant. Operations of the dairy, cold storage, and warehousing segments commenced in February 2014, while the biomass plant is expected to start operating in April 2015. INVENTION INDIA: CRISIL Maintains D Rating in Not Cooperating ------------------------------------------------------------- CRISIL said the ratings on bank facilities of Invention India (Exports) Private Limited (IIL) continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Foreign Bill 6 CRISIL D (ISSUER NOT Discounting COOPERATING) Letter of Credit 1 CRISIL D (ISSUER NOT COOPERATING) Packing Credit 2.5 CRISIL D (ISSUER NOT COOPERATING) Proposed Long Term 1.35 CRISIL D (ISSUER NOT Bank Loan Facility COOPERATING) CRISIL has been consistently following up with IIL for obtaining information through letters and emails dated November 30, 2018 and May 13, 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 IIL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on IIL 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 IIL continues to be 'CRISIL D/CRISIL D Issuer not cooperating'. IIL was incorporated in 1978 by Mr Harbhajan Singh and Mr Kulbir Singh. Its plant in Sonipat (Haryana) has manufacturing capacity of 1.8 million readymade garments per annum. The company derives most of its revenue from exports to Europe. JAGATJIT INDUSTRIES: CARE Lowers Rating on INR90cr LT Loan to D --------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Jagatjit Industries Ltd (JIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 90.00 CARE D; ISSUER NOT COOPERATING Bank Facilities Revised from CARE B+; Stable; Issuer not cooperating Long-term/ 20.00 CARE D; ISSUER NOT COOPERATING Short-term Revised from CARE B+; Bank Facilities Stable/CARE A4; Issuer not cooperating Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 29, 2019 , placed the ratings of JIL under the 'Issuer not cooperating' category as Jagatjit Industries Ltd had failed to provide information for monitoring of the rating as agreed to in its rating Agreement. 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 of Jagatjit Industries Ltd bank facilities will now be denoted as CARE D; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers In view of the deterioration in the financial profile of the company in FY19 (refers to period from April 01 to March 31) as per the audited financials of the company and non-availability of any further information and lack of management cooperation, CARE has revised the rating for bank loan facilities of Jagatjit Industries Ltd from CARE B+; Stable/CARE A4; ISSUER NOT COOPERATING to CARE D; ISSUER NOT COOPERATING. The rating revision takes into account the stressed liquidity position of the company. The total PBILDT of JIL for FY19 is INR13.16 crore which is not sufficient to cover the interest cost for the year amounting to INR72.59 crore. The rising interest cost have adversely impacted its financial profile leading to losses in FY19 and writing down of its net-worth as well. With the weakning of its financials position leading to stress in the liquidity, JIL is unlikely to meet its Interest & debt obligations in a timely manner. However, as the company has failed to provide information for monitoring of the rating, the ratings are based on the best available information. MANIKANTA PAPER: CARE Lowers Rating on INR7.40cr Loan to B ---------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Manikanta Paper Mill Private Limited (MPMPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 7.40 CARE B; Stable Issuer not Bank Facilities cooperating: Revised from CARE B+; Stable Issuer not Cooperating On the basis Of best available Information Detailed Rationale & Key Rating Drivers CARE has been seeking no default statement from MPMPL to monitor the rating vide e-mail communications dated May 9, 2019, June 5, 2019, June 6, 2019 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided no default statement 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 ratings on MPMPL's bank facilities will now be denoted as CARE B; Stable; ISSUER NOT COOPERATING. MANJEET SINGH: CARE Downgrades Rating on INR17.46cr Loan to D ------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Manjeet Singh Bhatia (MSB), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 8.07 CARE D Revised from Bank Facilities CARE BB; Stable Long-term/ 17.46 CARE D/CARE D Revised Short-term from CARE BB; Stable/ Bank Facilities CARE A4 Detailed Rationale & Key Rating Drivers The revision in the ratings assigned to the bank facilities of MSB takes into account on-going delays in servicing of its debt obligations on the back of poor liquidity. Detailed description of the key rating drivers Key Rating Weaknesses On-going delays in debt servicing: Debt servicing of MSB is irregular as reflected by delays in servicing of its term loan installment, on the back of poor liquidity. MSB is a proprietorship firm which is engaged into the business of retailing of alcohol (Indian made foreign liquor (IMFL) and country liquor (CL)) through licensed liquor shops in the state of Madhya Pradesh (MP). The firm enters into open tendering process every year to avail license for the retailing of the liquor and depending upon the allotment of shops during tendering, the number of shops held by the entity varies every year. The entity operated 50 retail shops (30 CL and 20 IMFL) during FY19 and received license for operating 41 retail shops (25 CL and 16 IMFL) in FY20. NEELKANTH SWEETS: CARE Migrates B+ Rating to Not Cooperating ------------------------------------------------------------ CARE Ratings has migrated the rating on bank facilities of Neelkanth Sweets Private Limited (NSPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 10.00 CARE B+; Stable; Issuer not Bank Facilities cooperating; Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking no default statement from NSPL to monitor the ratings vide e-mail communications dated June 5, 2019, June 3, 2019, May 31, 2019, May 15, 2019, May 8, 2019, and May 6, 2019, April 30, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided no default statement for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The ratings on NSPL's bank facilities will now be denoted as CARE B+; Stable; ISSUER NOT COOPERATING. PADMABHUSHAN KRANTIVEER: Ind-Ra Assigns 'B' LT Issuer Rating ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has assigned Padmabhushan Krantiveer Dr. Nagnathana Nayakawadi Hutatma Kisan Ahir Sahakari Sakhar Kharkhana Ltd (Hutatma Sugar) a Long-Term Issuer Rating of 'IND B'. The Outlook is Stable. The instrument-wise rating action is: -- INR2.0 bil. Fund-based limits assigned with IND B/Stable/IND A4 rating. KEY RATING DRIVERS Hutatma Sugar's ratings are constrained by its weak credit metrics owing to high working capital requirements and debt-led capex in FY17 to set up 30-kilo liters per day (klpd) distillery unit. According to the provisional financials for FY19, interest coverage (operating EBITDA/gross interest expense) was 1.14x (FY18: 1.21x) and net leverage (adjusted net debt/operating EBITDAR) was 8.85x (9.93x). The interest coverage deteriorated in FY19 on high-interest expense backed by high debt level even as EBITDA increased to INR403.08 million in FY19 (FY18: INR349.74 million) resulting in a slight improvement in the net leverage. With Hutatma Sugar's debt CapEx plan to expand the distillery unit's capacity to 60klpd in FY21, Ind-Ra expects the credit metrics to deteriorate further as the funding will be 70% from government corporations like National Cooperative Development Corporation, 20% from banks and other financial institutions and the remaining from internal accruals. Liquidity is tight with negative cash flow from operations since FY15 (FY19: negative INR103.52 million). The average maximum utilization of Hutatma Sugar's fund-based limits was 63% for the 12 months ended in April 2019. The company has total repayment obligations of INR403.8 million in FY20. Cash and cash equivalents were comfortable at INR94.86 million at FYE19 (FYE18: INR94.10 million). The ratings reflect Hutatma Sugar's modest margins of 13.17% in FY19 (FY18: 10.75%) with return on capital employed of 7% (6%). The margins improved in FY19 due to the subsidies such as buffer stock subsidy and export sugar subsidy applicable to the sugar industry, an initiative by the government to bridge the low global price and maintain higher inventory in warehouses. Ind-Ra expects the margins to improve further in the near term on top-line improvement and continued subsidies provided by the government. The ratings are supported by Hutatma Sugar's large scale of operations with revenue of INR3,061.12 million in FY19 (FY18: INR3,251.99 million). The revenue declined in FY19 despite an increase in the sale of its main revenue contributor sugar due to its low-margin nature. Hutatma's total cane crushing capacity is 3,500 tons of crushed per day with high operating efficiency (FY19: 12.65%). Considering the company's expansion plans in FY21 and the minimum support price of INR31,000/ton set by the government in February 2019, Ind-Ra expects the revenue to improve in the near term. The ratings benefit from the over three-decade-long experience of Hutatma Sugar's promoters in the sugar industry. RATING SENSITIVITIES Positive: An improvement in the revenue and credit metrics along with liquidity on a sustained basis will be positive for the ratings. Negative: Any further decline in the revenue and credit metrics along with liquidity will be negative for the ratings. COMPANY PROFILE Hutatma Sugar is a co-operative society incorporated in 1984 with a total of 8,138 cane producing members. Its sugar manufacturing plant is situated in Walva, Sangli with a total cane crushing capacity of 3,500 tons per day. Hutatma Sugar is also into a distillery with a total capacity of 30klpd. PRASAD EDUCATION: CARE Maintains D Rating in Not Cooperating ------------------------------------------------------------ CARE Ratings said the rating for the bank facilities of Prasad Education Trust continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 43.82 CARE D; Issuer Not Cooperating; Bank Facilities Based on best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 27, 2018 placed the rating of Prasad Education Trust under the 'issuer noncooperating' category as PET had failed to provide information for monitoring of the rating. PET continues to be noncooperative despite repeated requests for submission of information through e-mails, phone calls May 28, 2019, May 29, 2019 and May 30, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The ratings takes into account the ongoing delays in the servicing of interest and principal repayment obligations due to stressed liquidity position. Detailed description of the key rating drivers Key Rating Weaknesses Ongoing delay in debt servicing: There have been delays in debt servicing on account of liquidity stress due to cash flow miss match arising out of nonreceipt of fee from students owing to delay in permission from Medical Council of India for admissions in its MBBS course. Uttar Pradesh based PET was established in 1997 with an objective to provide education services. The society is managed by Mr. B. P. Singh (Chairman), Mrs. Anita Yadav (Trustee) and Mr Palash P Yadav (Vice Chairman). PET provides undergraduate and post-graduate courses in various fields of Engineering, Computers Science, Management and Pharma. The college is affiliated to Uttar Pradesh Technical University, Dr. Ram Manohar Lohia Avadh University and is approved by the All India Council for Technical Education (AICTE). The society also operates a CBSE school in the name of Prasad International School providing primary and secondary education from Nursery to class XIIth. The school is affiliated to Central Board of Secondary Education (CBSE). PET has a total strength of 3720 students in college in the academic session (AS) 2016-17 and Prasad International School has a total strength of 1179 students for the academic session 2016-17. R V PLASTIC: Ind-Ra Affirms BB- LT Issuer Rating, Outlook Stable ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed R V Plastic Limited's (RVPL) Long-Term Issuer Rating at 'IND BB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR140 mil. (reduced from INR150 mil.) Fund-based working capital limit affirmed with IND BB-/Stable IND A4+ rating; -- INR60 mil. (reduced from INR70 mil.) Non-fund-based limit affirmed with IND A4+ rating; and -- INR20 mil. Proposed fund-based working capital limit* assigned With Provisional IND BB-/Stable rating. * The rating is provisional and shall be confirmed upon the sanction and execution of loan documents for the above facilities by RVPL to the satisfaction of Ind-Ra. KEY RATING DRIVERS The affirmation reflects RVPL's continued small scale of operations as indicated by its FY19 revenue of INR253.31 million (FY18: INR283.72 million). A decline in sales of the traded products led to the fall in revenue. FY19 financials are provisional in nature. The rating affirmation also factors in RVPL's modest operating margins due to the trading nature of the business, which expanded to 9.70% in FY19 (FY18: 8.03%) on lower employee cost. The company's return on capital employed stood at 9% in FY19 (FY18: 9%). The ratings remain constrained by RVPL's weak credit metrics. Its net leverage (adjusted net debt/operating EBITDA) deteriorated marginally to 8.40x in FY19 (FY18: 8.22x) due to an increase in debt to INR215.89 million (INR202.81 million) owing to higher utilization of working capital limits, partially offset by an increase in absolute EBITDA to INR24.58 million (INR22.78 million) owing to lower employee cost and higher operating income generated. The company's interest coverage (operating EBITDA/gross interest expense) stood at 1.20x in FY19 (FY18: 1.19x). The ratings also reflect the company's tight liquidity, indicated by average working capital utilization of around 99.48% during the 12 months ended May 2019. In FY19, the company's cash and cash equivalents were INR9.43 million (INR4.74 million) and cash flow from operations remained negative at INR13.67 million (FY18: negative INR25.44 million) due to elongation of the net cash cycle to 376 days (300 days). However, the ratings are supported by RVPL's directors' over four decades of experience in trading of plastic granules business. RATING SENSITIVITIES Negative: Any deterioration in the credit metrics and/or deterioration in the liquidity profile will be negative for the ratings. Positive: A substantial improvement in the revenue, leading to an improvement in the credit metrics, by FY21 will be positive for the ratings. COMPANY PROFILE RVPL was incorporated on 25 January 1995 and is engaged in trading of plastic granules. The company's registered office is in New Delhi and head office in Faridabad (Haryana). R.S. ENTERPRISES: CARE Maintains B Rating in Not Cooperating ------------------------------------------------------------ CARE Ratings said the rating for the bank facilities of R.S. Enterprises continues to remain in the 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 9.00 CARE B; Stable; Issuer Not Bank Facilities Cooperating; Based on best available information Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated March 6, 2018 placed the rating of R.S. Enterprises under the 'issuer noncooperating' category as RSE had failed to provide information for monitoring of the rating. RSE continues to be noncooperative despite repeated requests for submission of information through e-mails, phone calls May 28, 2019, May 29, 2019 and May 30, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. The rating takes into account non-availability of requisite information and no due-diligence conducted with banker due to non-cooperation by R.S. Enterprises with CARE'S efforts to undertake a review of the rating outstanding. CARE views information availability risk as a key factor in its assessment of credit risk. Further, the ratings continue to remain constrained owing to weak financial risk profile, working capital intensive nature of operations, partnership nature of its constitution and intense competition given the highly fragmented nature of industry. The ratings, however, draws comfort from experienced promoters and long track record of operations and growing scale of operations. Detailed description of the key rating drivers Key Rating Weaknesses Modest scale of operations: Despite the growth registered on y-o-y basis in last 3 financial years (FY14-FY16) the scale of operations stood modest which limits the firm's financial flexibility in times of stress and deprives it of scale benefits. Low profitability margins, leveraged capital structure and weak coverage indicators: The firm's profitability margins have been historically on the lower side owing to the trading nature of the business and intense market competition given the highly fragmented nature of the industry. Higher interest cost further restricted the net profitability of the firm and the same remained below 0.30% for the past three financial years i.e. FY14-FY16. The capital structure of the firm stood leveraged due to high dependence on external borrowings to meet working capital requirements. Furthermore, coverage indicators as marked by interest coverage ratio and total debt to GCA stood also stood weak for the past three financial year i.e. (FY14-FY16) owing to low profitability margins and low cash accruals. Intense competition given the highly fragmented nature of industry: RSE operates in highly fragmented industry wherein the presence of large number of players in the unorganized sector and organized sectors. There are number of small and regional players and catering to the same market which has limited the bargaining power of the firm and has exerted pressure on its margins. Key Rating Strengths Experienced promoters: The partners viz. Mr. Samir Kumar Singhal and Mr. Achin Kumar Singhal are graduates by qualification. They have extensive experience varied up to two decades in the fabric trading industry through their association with this entity. Moderate operating cycle: The firm has to maintain inventory of wide range, colour and designs of fabrics to cater immediate demand of the customers. The same resulted into an average inventory period of 57 days for FY16. The firm procures material mainly in cash basis however, the firm allows an average credit period of around half month to its customers on account of competitive nature of industry. Delhi based R. S. Enterprises (RSE) is a partnership firm established in 2006. RSE succeeded an erstwhile proprietorship firm established in 1995 by Mr. Samir Kumar Singhal. The firm is currently being managed by Mr. Samir Kumar Singhal and Mr. Achin Kumar Singhal sharing profit and losses equally. RSE is engaged in trading of various types of fabrics viz., Cambric dyeel, cambric chicken print, cambric gray, and cotton gray. The firm procures traded goods domestically from manufacturers located in Delhi, Ahmedabad, Surat etc. RSE caters to local garment manufacturers based mainly in North India. RADHA POULTRY: CARE Lowers Rating on INR8cr LT Loan to B -------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Radha Poultry Farm, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 8.00 CARE B; Stable; Issuer not Bank Facilities cooperating; Revised from CARE B+; Stable on the basis of best available information Detailed Rationale & Key Rating Drivers CARE has been seeking no default statement from Radha Poultry Farm to monitor the ratings vide e-mail communications dated May 13, 2019, May 23, 2019 and June 6, 2019 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided no default statement for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The ratings on Radha Poultry farm bank facilities will now be denoted as CARE B+; Stable; ISSUER NOT COOPERATING. REGAL TRADING: Ind-Ra Lowers Long Term Issuer Rating to 'BB+ ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has downgraded Regal Trading Private Limited's (RTPL) Long-Term Issuer Rating to 'IND BB+' from 'IND BBB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR150 mil. Fund-based limit downgraded with IND BB+/Stable/IND A4+ rating; and -- INR150 mil. Non-fund-based limit downgraded with IND A4+ rating. KEY RATING DRIVERS The downgrade reflects the breach of the negative rating guideline, with RTPL's interest coverage (operating EBITDA/gross interest expense) deteriorating to 1.9x in FY19 (FY18: 2.5x) due to an increase in interest expenses resulting from higher utilization of the working capital limit. The net leverage (net debt/operating EBITDA) improved to 4.8x in FY19 (FY18: 9.6x) on account of reduction in the other debt to INR22 million (INR72 million). The figures for FY19 are provisional. The ratings factor in the continued modest scale of operations, as indicated by revenue of INR1,213 million in FY19 (FY18: INR1,144 million). The revenue increased by 6% yoy on account of an increase in orders and the growing share of the manufacturing business (share in revenue in FY19: 48%; FY18: 40%). The company achieved revenue of INR210 million in 2MFY20. As of June 2019, RTPL had an order book of INR250 million, to be executed by end-July 2019. The ratings reflect RTPL's tight liquidity position, with 98% average maximum use of the fund-based working capital facilities during the 12 months ended May 2019. The company has been reporting negative cash flow from operations since FY16 (FY19: negative INR98 million FY18: negative INR96 million). The working capital cycle stretched to 97 days in FY19 (FY18: 42 days) as the company procures raw materials from suppliers at a short credit period (FY19: 25 days; FY18: 100 days) to get cash discounts. RTPL had an unutilized cash credit limit of INR1.84 million as of March 2019. The company had a cash balance of INR32.0 million as of March 2019 (As of March 2018: INR1 million). Moreover, the EBITDA margins remained modest due to the trading nature of the business. The margin increased to 3.3% in FY19 (FY18: 1.2%) on account of an increase in revenue from the manufacturing segment, which offers higher margins of 3.0%-4.0%. The return on capital employed was 11% in FY19 (FY18: 5%). The ratings also continue to be constrained by geographical concentration risk, as RTPL receives a majority of the orders from Delhi, Gujarat and Uttar Pradesh. The ratings, however, are supported by the promoter's experience of three decades in the trading and manufacturing of timber and plywood, which has resulted in established relationships with the customers and suppliers. RATING SENSITIVITIES Positive: Any substantial improvement in the revenue from the manufacturing segment, comfortable liquidity position and an improvement in the EBITDA margin, leading to an improvement in the interest coverage above 2.0x on a sustained basis, could be positive for the ratings. Negative: Any decline in the revenue and EBITDA margin, leading to deterioration in credit metrics on a sustained basis, or a stretch in the liquidity position, could be negative for the ratings. COMPANY PROFILE Incorporated in 1989, RTPL is engaged in trading of timber and plywood. The company also provides furnished timber products through molding and modeling services. It derives 50%-55% of the revenue from the trading of timber and 45%-50% from molding and modeling of timber. SARA SAE: CRISIL Hikes Rating on INR39.24cr New Loan to 'B' ----------------------------------------------------------- Due to inadequate information, CRISIL, in line with Securities and Exchange Board of India guidelines, had migrated its ratings on the bank facilities of Sara Sae Private Limited (SSPL) to 'CRISIL BB+/Negative/CRISIL A4+ Issuer Not Cooperating'. However, the company has now shared the requisite information for a comprehensive review of the ratings. Consequently, CRISIL has downgraded the ratings to 'CRISIL D/CRISIL D' and subsequently revised it to 'CRISIL B/Stable/CRISIL A4' from 'CRISIL BB+/Negative/CRISIL A4+ Issuer Not Cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bill Purchase- 13.08 CRISIL B/Stable (Revised Discounting from 'CRISIL BB+/Negative Facility ISSUER NOT COOPERATING' to 'CRISIL D' and Simultaneously Revised to 'CRISIL B/Stable') Cash Credit 13.09 CRISIL B/Stable (Revised from 'CRISIL BB+/Negative ISSUER NOT COOPERATING' to 'CRISIL D' and Simultaneously Revised to 'CRISIL B/Stable') Letter of credit 25 CRISIL A4 (Revised from & Bank Guarantee 'CRISIL A4+ ISSUER NOT COOPERATING' to 'CRISIL D' and Simultaneously Revised to 'CRISIL A4') Packing Credit 13.09 CRISIL A4 (Revised from 'CRISIL A4+ ISSUER NOT COOPERATING' to 'CRISIL D' and Simultaneously Revised to 'CRISIL A4') Proposed Long Term 39.24 CRISIL B/Stable (Revised Bank Loan Facility from 'CRISIL BB+/Negative ISSUER NOT COOPERATING' to 'CRISIL D' and Simultaneously Revised to 'CRISIL B/Stable') The migration factors in continuous overutilization of fund-based bank facilities between July and October 2018 for a period of more than 90 days, resulting in the account being categorised under NPA (non-performing asset) by the bank. The delay was triggered on account of reduction in total bank exposure in March 2018, due to overall stress in the oil and gas equipment industry and continuous decline in revenue. The account was regularised in November 2018 after equity infusion by the promoters. Furthermore, company misrepresented facts as they did not highlight delays in the monthly No default Statement shared with CRISIL. Financial risk profile remains weak due to increase in interest cost and continuous negative accrual, resulting in a subdued capital structure and interest cover. The profile should remain weak over the medium term, too. The rating reflects SSPL's weak financial risk profile, and susceptibility to volatility in global energy markets. These weaknesses are partially offset by the company's established market position in the oil and gas equipment industry, and healthy association with JAM (Joulan Asset Management). Analytical Approach CRISIL has combined the business and financial risk profiles of SSPL and its subsidiary, STS Product Inc (STS), and their step-down subsidiaries, STS Products S Pte Ltd (SPL), STS Products FZE (FZE), Blue Forgings Pvt Ltd (BFPL) and Consolidated Pressure Control (CPC). This is because the entities, collectively referred to as the Sara group, are in the same business, have common management and significant inter-company transactions, and derive considerable business synergies from each other. Key Rating Drivers & Detailed Description Weaknesses * Weak financial risk profile: Financial risk profile is weak. Total outside liabilities to adjusted networth ratio and networth are estimated at around 0.85 time and Rs 118.16 crore, respectively, as on March 31, 2019. Total debt was Rs 62.0 crore. Operating losses in the past three fiscals ended 2018 has weakened debt protection metrics, with interest coverage and net cash accrual to total debt ratios of 0.18 times and -0.11 time, respectively, in fiscal 2019. Furthermore, operating margin was low at 0.95%. The group does not have any major debt-funded capital expenditure over the medium term but has large working capital requirements. These requirements will, likely, be met via equity infusion by the promoters and utilisation of bank limit. * Susceptibility to volatility in global energy markets: Susceptibility to global and national macroeconomic developments and to cyclicality in crude oil prices persists. The group's growth prospects have a direct correlation with the global energy market. It offers fast-moving and capital goods to oil rig operators. The number of oil rigs and investment in drilling are key factors that could weaken business risk profile. Hence, business risk profile is expected to remain susceptible to volatility in global energy markets. Strengths * Established presence in oilfield equipment business, and the extensive experience of promoters: Benefits from the key promoter's (Mr V K Dhawan) experience of over three decades, and his relationships with clients and ability to identify market trends should continue to support business risk profile. Over the years, the group has diversified its product profile to cater to most of the requirements of the oil and gas exploration industry. Furthermore, the group has a presence in almost all major countries and has recently opened its service centres in many regions to become a full-fledged equipment and service provider. There extensive experience helps them establish strong relations with stakeholders across the supply chain. * Expected benefit from association with JAM: SSPL is now a portfolio company of KKR-backed JAM, which provides comprehensive asset management services to the energy industry. JAM is an integrated provider of engineering, maintenance, repair, overhaul, and project management services to the energy industry. Association with JAM is expected to aid business and financial risk profiles by catering more high value orders over the medium term. Liquidity Liquidity is stretched. Net cash accrual is estimated at a negative Rs 7.08 crore in fiscal 2019 and should remain negative over the medium term. Utilisation of fund-based limit averaged 118% in the 16 months through March 2019. However, funding support expected from the promoters should continue to aid liquidity; about Rs 25 crore was infused in fiscal 2019. Outlook: Stable CRISIL believes the Sara group's operating margin will remain under pressure over the medium term on account of adverse headwinds in the global energy sector. However, the group will continue to benefit from its promoters' extensive experience and healthy association with JAM. The outlook may be revised to 'Positive' if improvement in revenue and profitability strengthens debt protection metrics. The outlook may be revised to 'Negative' if lower-than-expected improvement in operating margin weakens debt protection metrics and liquidity. The Sara group manufactures machinery and equipment that find application in oil well-drilling and production activities. The machinery and equipment are covered under API licences and the quality system accredited under ISO-9001. SSPL is a portfolio company of JAM. Its subsidiaries include STS, CPC, and BFPL. SARVEJANA HEALTHCARE: Ind-Ra Lowers Long Term Issuer Rating to BB+ ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has downgraded Sarvejana Healthcare Private Limited's (SHPL) Long-Term Issuer Rating to 'IND BB+' from 'IND BBB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR170.76 mil. (reduced from INR233.57 mil.) Term loan due on June 2021 downgraded with IND BB+/Stable rating; and -- INR280 mil. Fund-based limits downgraded with IND BB+/Stable/IND A4+ rating. Analytical Approach: Ind-Ra has taken a consolidated view of SHPL and its 100% subsidiaries -Rajyalakshmi Healthcare Private Limited (RHPL; 'IND BB'/Stable) and Suryateja Healthcare Private Limited (SuPL) collectively referred to as Sunshine Hospitals- while arriving at the ratings. This is on account of the strong legal linkages among them, with the parent company extending unconditional and irrevocable corporate guarantees to the entire debt of the subsidiaries. KEY RATING DRIVERS The downgrade reflects the group's tight liquidity position as reflected by the group's average 96% maximum utilization of fund-based facilities in 12 months ended May 2019 and its debt service coverage ratio of 0.68x in FY19. This was driven by the company taking in additional debt to fund its debt obligations in the mix of internal debt and external debt. FY19 financials are provisional in nature. The downgrade also factors in deterioration in the group's FY19 credit profile as reflected in its consolidated interest coverage (operating EBITDA/gross interest expense) of 1.18x (FY18: 1.97x) and net leverage (adjusted net debt/operating EBITDAR) of 7.74x (7.97x). The interest coverage ratio deteriorated due to increasing in gross interest expense although the net leverage ratio improved marginally due to improved absolute EBITDA. On a standalone basis, the interest coverage stood at 4.09x and net leverage at 4.44x in FY18 which declined in FY19 to 3.7x and 4.8x, respectively, because of the increase in net borrowings. The consolidated operating margin declined to 4.76% in FY19 (FY18: 4.84%; FY17: 7.38%) due to EBITDA losses booked by the subsidiaries that are still at nascent stages of operation. Increase in operating expenses towards the new hospitals has strained EBITDA margins. The company expects the margins to improve FY20 onwards on the back of improved margins of the subsidiaries as capex was completed by FY19 and operations of the subsidiaries are now stabilizing. SHPL's standalone margin stood at 9.1% in FY18, which further improved to 9.96% in FY19. The downgrade takes into consideration the high receivable days –82days in FY19 (FY18: 69 days) - due to delay in payments from government schemes, which is offset by high creditor days of 88days (69). The rating continues to be supported by the company's cash flow from operations that remained positive at INR87.23 million in FY19 (FY18: INR86.47 million) against the capital expenditure of INR632.97 million in FY18. The capex was majorly funded by the long-term borrowings availed from banks. The year-end cash balance reflects INR24.95 million in FY19 (FY18: INR78.66 million). The free cash flow for the group was negative at INR23.05 million (FY18: negative INR546.50 million), while the standalone free cash flow for SHPL was positive at INR245.11 million (FY18:115.4 million). The ratings are also supported by the improvement in consolidated revenue of INR3,300.24 million in FY19 (FY18: INR2,867 million; FY17: INR2,525 million). The improvement in revenue was driven by an increase in the revenue from subsidiaries on account of increase in an operational capacity with a number of beds rising to 295 in FY19 from 95 in FY17. However, on a standalone basis, revenue declined to INR2,653 million in FY19 (FY18: INR2,717.69 million; FY17: INR2,522.6 million) due to a decline in operating revenue. SHPL's Secunderabad unit continues to generate the highest portion of total revenue- INR2,287 million in FY19 (FY18: INR 2,478 million). The rating further continues to derive support from the promoter - Dr. Gurava Reddy's over two decades of experience. Reddy is a renowned orthopedic surgeon having aided in establishing a brand name for the hospitals in orthopedics specialty in Telangana region. RATING SENSITIVITIES Negative: Any further decline in the credit metrics and stress in liquidity may lead to negative rating action. Positive: An improvement in the performance of subsidiaries in FY20 and onwards, and leverage reducing below 5x along with improved liquidity profile would be positive for ratings. COMPANY PROFILE Incorporated in 2009, SHPL operates two multispecialty hospitals with a total bed capacity of 520 beds. It operates an additional two hospitals, through its subsidiaries RHPL and SuPL with a bed capacity of 815 beds. The hospital focuses on orthopedics and cardio divisions. SHAKTHI SEEDS: CARE Migrates 'B' Rating to Not Cooperating ---------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Shakthi Seeds Private Limited (SSPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 8.00 CARE B; Stable Issuer not Bank Facilities cooperating: Based on best available Information Detailed Rationale & Key Rating Drivers CARE has been seeking no default statement from SSPL to monitor the rating vide e-mail communications dated June 5, 2019, June 6, 2019, June 7, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided no default statement 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 ratings on SSPL's bank facilities will now be denoted as CARE B; Stable; ISSUER NOT COOPERATING. SHRIM INDUSTRIES: CRISIL Lowers Rating on INR10.55cr Loan to D -------------------------------------------------------------- CRISIL has downgraded the rating on bank facilities of Shrim Industries Private Limited (SIPL) to 'CRISIL D Issuer Not Cooperating' from 'CRISIL B/Stable' as account has been classified as SMA-2. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Term Loan 10.55 CRISIL D (ISSUER NOT COOPERATING; Downgraded from 'CRISIL B/Stable') CRISIL has been consistently following up with SIPL for obtaining information through letters and emails dated March 12, 2019, and April 11, 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 SIPL. Which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on SIPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on best available information, CRISIL has downgraded the rating to 'CRISIL D Issuer Not Cooperating' from 'CRISIL B/Stable' as account has been classified as SMA-2. Incorporated in 2014, SIPL is promoted by Mr Shubham Sharma and Ms Priti Sharma. The company is setting up a plant in Kotdwar, Uttarakhand to majorly cultivate and sell white button mushroom. It has started production of oyster mushroom from September 2017 on a modest scale. The company is also planning to sell compost and spawn. SINTEX-BAPL LIMITED: CARE Lowers Rating on INR810.68cr Loan to C ---------------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Sintex-BAPL Limited (Sintex-BAPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 810.68 CARE C; Issuer Not Cooperating; Bank Facilities Revised from CARE BB+; Stable; ISSUER NOT COOPERATING Short-term 250.00 CARE A4; Issuer Not Cooperating Bank Facilities Non-Convertible 200.00 CARE C; Issuer Not Cooperating; Debentures (NCD) Revised from CARE BB+; Stable; ISSUER NOT COOPERATING Detailed Rationale & Key Rating Drivers CARE had, vide its press release dated May 10, 2019, placed the rating of Sintex-BAPL under the 'issuer non-cooperating' category as Sintex-BAPL had failed to provide information for monitoring of the rating. Sintex- BAPL continues to be non-cooperative despite repeated requests for submission of information through e-mail dated June 13, 2019 and June 15, 2019. Further, the company has not submitted the monthly No Default Statement (NDS) for the month ended May 31, 2019 despite repeated request through e-mail dated May 31, 2019, June 3, 2019, June 5, 2019 and June 7, 2019. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which, however, in CARE's opinion is not sufficient to arrive at a fair rating. The ratings on Sintex- BAPL's bank facilities and instruments will now be denoted as CARE C; ISSUER NOT COOPERATING/CARE A4; ISSUER NOT COOPERATING. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above ratings. The revision in ratings of the bank facilities and instruments of Sintex-BAPL takes into account non-submission of monthly NDS by it to CARE for the month of May 2019 especially in light of moderation in its performance during FY19 (UA; refers to period April 01 to March 31) as per its recently published financial results on the stock exchange whereby its profitability and cash accruals have been lower than previously envisaged due to sharp increase in its interest & finance cost which is expected to exert further strain on its already stretched debt coverage and liquidity indicators. Moreover, the revision in ratings also takes into account deterioration in Sintex group's financial profile and stress on the group's liquidity as reflected from recent instances of delay/default in servicing some of the debt obligations by Sintex Industries Limited (SIL; rated: CARE D; Issuer not Cooperating) and Sintex Prefab and Infra Limited (SPIL; rated: CARE D/CARE C). The above issues coupled with continued lack of clarity on Sintex-BAPL's liquidity profile due to non-sharing of requisite information by the company related to latest available free cash and bank balance, working capital utilization and bank statements, etc; has hindered the assessment of the company's latest liquidity position which was one of the critical drivers in its credit analysis considering its large scheduled debt repayments falling due in FY20-FY22. The ratings further continue to be constrained on account of its high leverage, sub-optimal utilization of assets leading to low return ratios and fixed assets turnover, susceptibility of its profitability to fluctuation in crude-based raw material prices and foreign exchange rates and linkages to the cyclical auto-component industry which is presently facing a slowdown. The ratings also take cognizance of the decision of the promoters of Sintex Plastic Technology Limited (SPTL; the holding company of Sintex-BAPL) to not opt for the conversion of a portion of share warrants issued by SPTL into equivalent number of equity shares as the current share price of SPTL is substantially below the conversion price (as per filing on stock exchange). This is expected to restrict SPTL's ability to provide any need-based financial support to Sintex-BAPL, if required. The ratings, however, continue to derive strength from wide experience of its promoters with an established track record in the plastic-based custom moulding/automotive components industry, its wide product profile with diversified end-use industry application, reputed clientele, access to strong brand, geographical diversity of its manufacturing operations along with well established distribution network and access to foreign markets. The ratings also take note of management's plan to sell its auto component division to deleverage its balance sheet. The ability of Sintex-BAPL to efficiently leverage upon its wide distribution network and strong brand, ensure optimum utilization of installed capacities and effectively manage raw material price volatility so as to significantly enhance its operating cash accruals along with timely rationalization of its outstanding debt leading to significant improvement in its debt coverage indicators would be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Lower than previously envisaged profitability and cash accruals: As per the financial results of Sintex-BAPL, the total income of the company during FY19 largely remained in line with what was envisaged. However, the profitability and cash accruals remained significantly lower than envisaged largely due to sharp increase in the interest cost on the back of higher debt level during FY19. Increase in debt along with increase in interest cost led to deterioration in debt coverage indicators during FY19. Liquidity analysis; Poor liquidity Sintex-BAPL has large scheduled debt repayments in FY20 and FY21 (~INR400 crore p.a.) largely pertaining to its subsidiary, Sintex Holdings B.V. (which is also largely backed by the corporate guarantee of Sintex-BAPL), which are expected to be disproportionately higher than the envisaged operating cash accruals of the company, leading to heightened refinancing risk and significant moderation of its debt coverage indicators. CARE had earlier derived comfort from Sintex-BAPL's large available liquidity at consolidated level as on March 31, 2018 (INR348 crore as per the company's audited annual report) which the company management had articulated would be used to provide support to its upcoming large debt repayments. CARE had sought latest updates on liquidity available with Sintex-BAPL to gauge its forthcoming debt servicing capability considering large upcoming scheduled debt repayments. However, despite numerous requests, the company has not shared requisite information in this regard and consequently there remains a probability of its liquidity position having become poor especially in light of recent stress being witnessed in the liquidity of two of its group companies (SIL and SPIL). Furthermore, the latest available fund-based working capital utilisation of the company also remained high at nearly 94.30% during the 12-months ended June 30, 2018; no updates on this has been made available by the company to CARE subsequently. In light of large scheduled debt repayments, the cash & bank balance as a liquidity cushion was central to the analysis of Sintex-BAPL. In absence of availability of latest updates on the liquidity position of the company such as latest free cash & bank balance, monthly working capital utilisation and bank statements, it is difficult to take cognisance of any liquidity backup which could be available to bridge any operational cash flow mismatches. CARE had sought information regarding latest free cash & bank balance, monthly working capital utilisation, latest debt levels, bank statements, etc. vide numerous emails and personal meetings in order to gauge the latest liquidity position of Sintex-BAPL. However, company has not shared this information despite numerous reminders and hence 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. High proportion of pledge of promoters' shareholding in SPTL apart from SPTL's exposure to outstanding FCCBs in SIL Further, as per the shareholding pattern of SPTL as on March 31, 2019 published on stock exchange, the proportion of pledge of promoters' shareholding as a percentage of their total shareholding in SPTL increased to 70.59% (i.e. effective un-pledged promoters holding is 9.67%) as compared to 67.82% as on September 30, 2018. This has further restricted the financial flexibility of the promoters for supporting the operations of the company and its subsidiaries. As on June 17, 2019, market capitalization of SPTL (holding company of Sintex-BAPL) stood at INR542 crore (which has almost halved from the position around one and a half month back). Moreover, SIL had issued FCCB worth USD 110 million during FY17. Post de-merger of some of its businesses in to Sintex- BAPL and SPIL, SIL had retained the primary repayment liability of FCCB. However, FCCB holders were entitled for one share each of SIL and SPTL upon conversion. Although, a large part of these FCCBs were converted into equity however still as on March 31, 2019, FCCBs worth USD 13.5 million (~ INR94.5 crore) is outstanding where the primary liability lies with SIL whereas in case of SIL's failure to repay the same, the liability falls on SPTL. Further, SPTL is a holding company of Sintex-BAPL and it does not have operational cash flow except dividend, hence it may also expose Sintex-BAPL to this liability. These FCCBs are due for redemption in 2022. The latest market price of SIL (INR3.46 per share as on June 17, 2019) and SPTL (INR8.60 per share as on June 17, 2019) aggregating to INR12.06 per share is significantly lower than the exercise price of INR93 per share. Forfeiture of upfront warrant subscription amount by SPTL: Furthermore, as per announcement on stock exchange by SPTL on May 4, 2019, SPTL has forfeited a portion of the warrant subscription amount (INR66.97 crore) paid by the promoter group company, Star Line Leasing Ltd (SLLL), since it decided not to opt for the conversion of the share warrants issued by SPTL and has also conveyed their inability to exercise their right of conversion of warrants into equivalent number of equity shares (as they had to pay an additional INR200 crore) as current share price of SPTL is substantially below the conversion price. An additional infusion of INR200 crore in FY20 would have aided the liquidity at SPTL level, which with the forfeiture of share warrants, led by fall in share prices would restrict the financial flexibility of the Sintex group (which includes Sintex-BAPL's fellow subsidiary Sintex Prefab and Infra Limited (rated CARE D/ CARE C)). Highly leveraged capital structure due to high debt level and low capital base: The capital structure of the company continued to remain weak marked by an overall gearing ratio of more than 10 times as on March 31, 2019 due to low capital base and high debt level. Sintex-BAPL's total debt to gross cash accruals also remained high at 12.51 years during FY19. Under-utilization of resources/investment leading to weak return indicators and impairment of investment: The capacity utilisation of Sintex-BAPL's auto component manufacturing capacities have remained moderate at around 77% whereas the capacity utilisation of custom moulding manufacturing capacities have remained even lower at around 66% during FY18. Sintex-BAPL had low fixed assets turnover of 1.48x during FY18 which reduced from 1.72x in FY17. Further, on the back of under-utilization of assets, the return on its capital employed also remained lower at 7.91% during FY18 compared to 8.76% during FY17. Shutting down of Sintex-BAPL's US subsidiary along with one-time expenses incurred on demerger and restructuring of loans also adversely affected its profitability during FY18. Furthermore, the y-o-y contribution of sales to leading auto companies declined during FY18 due to delays in execution of orders post implementation of GST. Detailed financial statements along with schedules for FY19 have not been provided by the company despite requests. Vulnerability of profitability to volatility in raw material prices and forex fluctuation along with subdued auto industry scenario which is one of the end user industries Plastic resins, granules and powder are the key raw material of Sintex-BAPL (apart from other materials) which comprised more than 50% of its total cost of raw material. Since most of the raw materials required by Sintex-BAPL are crude oil derivatives, their prices are also subject to volatility in line with those of global crude oil prices. Further, Sintex-BAPL has negligible import as well as export on consolidated basis. However, on the other hand, Sintex-BAPL has foreign currency long term loans outstanding as on March 31, 2018 which makes the operations of company susceptible to forex fluctuation. Further, during FY19, automobile industry witnessed significant reduction in sales growth to around 6.5% on y-o-y basis vis-à-vis 14.5% in FY18 which was largely due to liquidity crunch, uneven monsoon, increased insurance cost, higher fuel costs and growing influence of shared mobility in the country. This is expected to adversely impact the already moderate capacity utilisation for Sintex-BAPL's automotive business segment and could consequently impact its sales and profitability adversely. Key Rating Strengths Established operations in moulded plastics business with wide product profile: Sintex-BAPL has established operations in the manufacturing of moulded plastic based automotive components which it supplies directly to automobile OEMs or to their tier-I vendors. Presently, apart from the auto components, Sintex-BAPL's product portfolio includes more than 4,000 types of plastics & related products of various shapes. Moreover, its products have diversified applications. Further, Sintex-BAPL's major overseas investment includes SAS Sintex NP, France which contributed nearly 50% of the total consolidated revenue during FY18. These overseas investments have augmented the technical capabilities of the company. During FY18, the company curtailed the operations of its loss-making US Subsidiary, Sintex Wausaukee Composites, Inc. Diversified operations with multi-locational manufacturing plants and access to foreign markets: Sintex-BAPL is a leading Indian plastic processing group with a pan-India manufacturing presence apart from manufacturing operations in nearly 10 countries to cater to the global demand. Sintex-BAPL has total 38 manufacturing locations across India and in overseas which benefits in terms of lower logistic cost, effective inventory management and catering to geographically diversified markets. The company is also establishing two new facilities for manufacturing autocomponents at Hosur (Tamil Nadu) and Becharaji (Gujarat), which it had planned to establish by December 2018 for catering to specific demands from leading auto companies such as TVS Motors, Maruti Suzuki and Honda. Long standing relationship with its established and reputed clientele: With an accepted brand name and established track record of operations, the company has built a reputed clientele which caters to diverse industries across the globe. Over the years, the company has been successfully securing repeat orders from leading companies in the automobile, electrical, engineering, aerospace, defence, medical auto and electrical engineering product-segments. Well established distribution network throughout India and strong brand name: Sintex-BAPL has a network of over 1,000 dealer/distributor and more than 40,000 retailers spread across the country. Its widespread distribution network provides distinct advantage of being located closer to its target customer segments. Also, the company is pioneer in water tanks market and its brand 'Sintex' has become a generic name for water tank products in the country. In order to leverage from its brand visibility, Sintex-BAPL markets its other custom moulding products under brand 'Sintex'. Long track record of Sintex group along with wide experience of its promoters: The promoters of Sintex-BAPL have wide experience of running plastic and textile businesses with an established operational track record of almost nine decades since its incorporation in 1931. Originally incorporated in December 2007 as Bright Autoplast Private Limited, the name of the company was changed to Sintex-BAPL in September 2015. Subsequent to incorporation, Sintex-BAPL acquired automotive business of Bright Brothers Limited which was engaged in automotive business since 1975. Sintex-BAPL was earlier a wholly owned subsidiary of Sintex Industries Limited. However, under the composite scheme of arrangement amongst various Sintex group companies, SIL divested its 100% ownership to Sintex Plastic Technology Limited (SPTL). Sintex-BAPL is engaged in manufacturing of various engineering plastic components for automobile Original Equipment Manufacturers (OEMs), tier-I auto ancillaries and electrical goods manufacturers in the domestic market. Moreover, subsequent to the transfer of custom moulding business (both domestic and overseas), the product portfolio of Sintex- BAPL has expanded significantly. Presently, Sintex-BAPL's portfolio includes various kinds of moulded plastic based products like water tanks, sheet-moulding casting (SMC), industrial products, doors, section and interiors, power transmission & distribution accessories, FRP storage tanks and automobile and electrical components. The company has its manufacturing facilities located at 12 places across India with an aggregate installed capacity of 84,800 Metric Tons Per Annum (MTPA) as on March 31, 2018. The Board of Directors of SPTL, parent company of Sintex-BAPL, vide its board meeting dated May 21, 2019, has considered and approved the sale of auto division of Sintex-BAPL with an objective to deleverage its balance sheet, subject to receipt of necessary approvals. SSG TECHNO: CRISIL Hikes Rating on INR5cr Cash Loan to 'B' ---------------------------------------------------------- CRISIL has revised its ratings on the bank facilities of SSG Techno Services Private Limited (STSPL) from 'CRISIL B/Stable/CRISIL A4' to 'CRISIL D/CRISIL D' and simultaneously upgraded the ratings to 'CRISIL B/Stable/CRISIL A4'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 5 CRISIL B/Stable (Revised from 'CRISIL B/Stable' to 'CRISIL D' and Simultaneously Upgraded to 'CRISIL B/Stable') Letter Of Guarantee 1.6 CRISIL A4 (Revised from 'CRISIL A4' to 'CRISIL D' and Simultaneously Upgraded to 'CRISIL A4') The rating revision to 'CRISIL D/CRISIL D' takes into account the continuously overdrawn cash credit limit for more than 30 days in January 2019 on account of stretched liquidity. The upgrade to 'CRISIL B/Stable/CRISIL A4' considers the timely servicing of interest on cash credit since February 2019. The 'CRISIL B/Stable/CRISIL A4' ratings factor in the company's modest scale of operations, large working capital requirement, these weaknesses are partially offset by the promoters' experience in the civil construction industry. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations: Revenue of Rs 9.25 crore in fiscal 2018 indicates the company's small scale in the intensely competitive civil construction industry. The subdued scale will continue to constrain the business risk profile over the medium term. * Large working capital requirement: Gross current assets were sizeable at 373 days as on March 31, 2018, driven by a large work-in-progress inventory. Hence, bank limit was almost fully utilized. Strength: * Experience of the promoters: The promoters' experience of 35 years and strong relationships with customers and suppliers should continue to support the business. Liquidity Liquidity is likely to remain weak over the medium term. While the company has no debt obligation, its cash accrual is expected to be small, at Rs 0.20-0.30 crore per annum over the medium term. Bank limit was almost fully utilized over the 12 months through May 2019. Outlook: Stable CRISIL believes STSPL will continue to benefit from its promoters' experience. The outlook may be revised to 'Positive' if revenue increases substantially while profitability and capital structure remain stable. The outlook may be revised to 'Negative' if large working capital requirement or low cash accrual weakens the financial risk profile and liquidity. STSPL was established in 2002 as a proprietorship firm (SSG Enterprise) by Mr Subrata Sengupta, and was reconstituted as a private limited company with the current name in 2010. Mr Subrata Sengupta, Mr Saugata Sengupta, and Ms Nupur Sengupta are the directors. The company constructs railway bridges, road over bridges, reinforced concrete bridges, and screw pile bridges in West Bengal, Bihar, and Jharkhand. TEXAS TEXTILE: Insolvency Resolution Process Case Summary --------------------------------------------------------- Debtor: Texas Textile & Industries Ltd 106, Anand Palit Road Ground Floor Kolkata 700014 Insolvency Commencement Date: June 19, 2019 Court: National Company Law Tribunal, Kolkata Bench Estimated date of closure of insolvency resolution process: December 16, 2019 Insolvency professional: Sanjai Kumar Gupta Interim Resolution Professional: Sanjai Kumar Gupta 153A, A P C Road Kolkata 700006 E-mail: casanjaigupta@gmail.com - and - A6 Charulata, BE-8 Rabindra Pally P.O. - Prafulla Kanan Kolkata 700101 E-mail: cirp.texas@gmail.com Last date for submission of claims: July 3, 2019 VASU METPLAST: CARE Migrates B+ Rating to Not Cooperating --------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Vasu Metplast Private Limited to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term 7.00 CARE B+; Stable; Issuer not Bank Facilities cooperating; Based on best available information Detailed Rationale & Key Rating Drivers CARE has been seeking no default statement from Vasu Metplast Private Limited to monitor the ratings vide e-mail communications dated June 7, 2019, June 5, 2019, May 31, 2019, May 15, 2019, April 30, 2019, March 16, 2019, February 15, 2019, January 23, 2019, December 21, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the no default statement for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The ratings on Vasu Metplast Private Limited's bank facilities will now be denoted as CARE B+; Stable; ISSUER NOT COOPERATING. [*] INDIA: Falling Bond Sales Cue Waning Trust in Shadow Banks -------------------------------------------------------------- Divya Patil at Bloomberg News reports that waning investor confidence in India's troubled shadow lenders is sapping demand for corporate debt. Companies sold INR1.2 trillion ($17.3 billion) of bonds so far in the April-June period, down 57% from the previous quarter and the weakest since the year-ago period, according to data compiled by Bloomberg. That's as average yields on top-rated three-year corporate debt have dropped 23 basis points to 7.74% during the period. Bloomberg relates that liquidity risk in the nation's credit markets roared back this month after non-bank financier Dewan Housing Finance Corp. delayed bond interest payments, a sign of stress in the sector that has persisted since IL&FS Group defaulted last year. The crisis has hit demand for cars to appliances, bulk of which were financed by shadow banks, and contributed to the slowdown in the economy, the report says. "There's a crisis of confidence among investors," Bloomberg quotes Rajeev Radhakrishnan, head of fixed-income at SBI Funds Management, as saying. "A prolonged period of liquidity crisis, which if unresolved, can potentially lead to solvency issues and the impact won't be isolated to specific entities given the inter-linkages." ================= I N D O N E S I A ================= CHANDRA ASRI: S&P Ups ICR to BB- On Parent's Strong Credit Quality ------------------------------------------------------------------ On June 26, 2019, S&P Global Ratings raised its long-term issuer credit rating on Chandra Asri and the long-term issue ratings on the company's US$300 million senior unsecured notes to 'BB-' from 'B+'. S&P said, "We raised the ratings on PT Chandra Asri Petrochemical Tbk. to reflect the stronger operating performance of parent PT Barito Pacific Tbk. We now view the credit quality of Barito to be similar to that of Chandra Asri, which we expect will remain a core, uninsulated subsidiary. Barito's other subsidiary Star Energy Ltd., has become a meaningful contributor, improving the parent's earnings stability and diversity." The addition of Star Energy's stable cash flows has lowered Barito's reliance on Chandra Asri's performance. Barito acquired a 66.67% stake in Star Energy, an Indonesian geothermal power producer in June 2018 in a non-cash transaction. Star Energy has installed capacity of 875 megawatts (MW) across three power generating assets, Wayang Windu, Salak, and Darjat. Its take-or-pay power purchase contracts benefit from creditworthy counterparties, i.e., PT Perusahaan Listrik Negara (PLN; BBB/Stable/--) and PT Pertamina (Persero) (BBB/Stable/--). The tariffs under the off take contracts cover foreign exchange, operations, and maintenance cost inflation risks. Star Energy's geological reserves indicate sufficiency for the power plant to operate at the current capacity for more than 20 years. Both provide substantial visibility to the company's operating performance. Star Energy's stable operating cash flows also temper the volatile and cyclical cash flows from Chandra Asri's petrochemical operations. Over the past two years, Star Energy has benefited from high utilization levels of more than of 90%. However, the company faces a few risks, such as geothermal operational stability. Recently, geological disturbances caused unplanned shut downs of three to five days at a couple of units. S&P said, "We forecast Star Energy will account for 50% or more of Barito's EBITDA over the next two years. We estimate that Star Energy's EBITDA will be US$350 million-US$400 million during this time and its debt will amortize down from the current level of about US$1.5 billion. The company should have adequate buffer after servicing its debt, including annual interest expenses of US$130 million-US$140 million, and principal amortization of about US$40 million. Capital spending will be about US$50 million a year. Star Energy's individual assets have meaningful minority stakes owned by partners. Therefore dividends available to Barito from Star Energy will remain minimal. "We anticipate that Chandra Asri will generate EBITDA of US$275 million-US$325 million over 2019-2020, commensurate with our expectations of mid-cycle spreads for the petrochemical products for the industry overall. The company maintains a strong cash balance of more US$500 million compared to debt of around US$650 million. We expect Chandra Asri to maintain its ratio of gross debt to EBITDA at less than 2.5x through the cycle, at least until it progresses on its cracker expansion. "We expect Barito to maintain EBITDA of more than US$700 million over the next two years, compared with gross debt of US$2.3 billion. This translates to the ratio of gross debt to EBITDA averaging less than 3.5x through the cycle. The company's debt will remain stable or perhaps even decline during this time, until capex at Chandra Asri begins to increase. At the holding company—Barito—level, the main source of cash flows will be dividends from Chandra Asri. We expect Chandra Asri to pay about US$80 million a year in dividends, with US$40 million of that going to Barito." This amount is sufficient to cover Barito's interest payment of about US$20 million on its US$200 million debt. Chandra Asri and Barito's new capital expenditure planned over the next four to five years could increase their individual leverage. Chandra Asri is finalizing its plan to build a second cracker plant with capacity similar to its existing one at a total investment of about US$4 billion. The investment will happen over 2021-2024, once the final investment decision is made potentially by end-2020. S&P believes the company will secure a partner to shoulder a significant share of this project's expenses. Although Chandra Asri will fund a large portion of its share of the investment in the cracker with internal cash flows, it will still need to take on some debt. At the peak of this investment cycle, the company's cash flow leverage could increase beyond our expectation, but will come down to levels commensurate with a 'bb-' stand-alone credit profile (SACP) once the project is operational. In S&P's view, Barito's credit profile can accommodate additional borrowings of US$100 million-US$150 million. In partnership with PLN, Barito is progressing on a new thermal power plant project, which will have a total investment of US$3.1 billion. Barito will not consolidate this project in its financials given its 49% ownership, and will fund it by project debt of 70% or more. The company will partly fund its equity contribution of US$150 million by exercising the warrants it issued in 2018. Barito will pay the rest of the equity contribution in kind by providing land of about 40 hectares for the project. The company has the flexibility and willingness to bring in partners to share the ownership and investment obligations for its share of the project. The financial closure and final investment decision for this project is pending. S&P said, "We equalize the rating on Chandra Asri to Barito's group credit profile of 'bb-'. That's because we view Chandra Asri as an integral part of the group's strategy, the company contributes 40%-50% of the group's consolidated EBITDA, and it will remain majority-owned and controlled by the group. Barito will continue to rely on Chandra Asri for its liquidity and debt servicing needs. Also, we expect the business and financial relations between the two to stay strong, such that their credit quality is unlikely to be different." Chandra Asri's 'bb-' SACP reflects the company's still-modest scale compared with regional peers, high single-site concentration, and exposure to volatile product spreads in the petrochemical sector. Its integrated operations, larger operating scale following its cracker expansion, and improved balance sheet mitigate these weaknesses. S&P said, "The stable outlook on Chandra Asri reflects our expectation that Barito's credit profile will remain stable over the next 12 months, with a consolidated debt-to-EBITDA ratio of close to 3.5x. We also expect Chandra Asri to remain a core subsidiary within the group. During the period, we expect the company to maintain steady production, sales, and mid-cycle profitability such that its debt-to-EBITDA ratio stays below 2.5x." S&P may lower the rating on Chandra Asri if the consolidated credit profile of Barito weakens substantially. Barito's consolidated ratio of debt to EBITDA exceeding 4.0x without any prospect of near-term improvement could indicate such weakness. The ratio could deteriorate if: -- Chandra Asri's operations deteriorate materially because of a pronounced and lasting decline in product spreads; -- Star Energy faces geological or operational issues undermining power generation; or -- New investments through the group increase Barito's gross debt beyond US$3.5 billion, without commensurate cash flow additions. The rating could also come under pressure if Barito's liquidity deteriorates due to a depleting cash pile, material fall in dividend income, or absence of timely refinancing. S&P said, "We may revise our assessment of Chandra Asri's SACP down to 'b+' if the company's debt-to-EBITDA ratio approaches 3.5x with no prospect of recovery. Such a scenario could most likely arise if the company's investments increase its debt toward US$1.5 billion while EBITDA fails to stay above US$300 million due to prolonged weakness in petrochemical product spreads." S&P may raise the rating on Chandra Asri if we expect Barito's credit quality to improve, a scenario it believes is unlikely over the next two to three years. Such an improvement at Barito hinges on: (1) the company's consolidated debt-to-EBITDA ratio reaching 3.0x, especially after the peak of the group's investment cycle; (2) Barito and Chandra Asri maintaining sufficient liquidity and raising the necessary funding for investment well in advance; (3) Barito's operating profile remaining steady through the investment phase and amid volatile margins through the cycle; and (4) new projects being completed on time and within budget to improve Barito's operating scale. A higher SACP for Chandra Asri is unlikely until at least its new cracker expansion is complete and increases production. A 'bb' SACP would require the company to achieve a larger scale, broader product diversity, a permanently reduced sensitivity to fluctuations in product spreads through enhanced integration or greater economies of scale. For an upward revision to the SACP, Chandra Asri's debt-to-EBITDA ratio has to stay less than 2.0x through a product spread cycle. =============== M A L A Y S I A =============== ICON OFFSHORE: Unit Faces Suit Over Contract Dispute ---------------------------------------------------- The Sun Daily reports that Icon Offshore Bhd's wholly owned subsidiary Icon Ship Management Sdn Bhd (ISM) has been served with a writ of summons with the statement of claim filed by Labuan Shipyard & Engineering Sdn Bhd (LSE) over disputes in a contract. According to the report, the agreement dated September 30, 2011 was entered between ISM and LSE in relation to the engineering, construction, testing and delivery of a 77 meters DP2 diesel electric propulsion platform supply vessel. Sun Daily relates that LSE is claiming general damages and alleged outstanding sum of MYR13.94 million from ISM comprising cost allegedly incurred between October 1, 2014 and March 9, 2015 for various services for the maintenance of the vessel. LSE also alleged that ISM had not made prompt and punctual payment of all milestone payments resulting in LSE incurring finance charges and interest charges; and there was an alleged shortfall in payment of Milestone No. 11 by ISM, Sun Daily adds. A case management date for the suit has been fixed on July 5 in the High Court of Malaya in Kuala Lumpur, according to Sun Daily. Having received legal advice, ISM believes that there are good grounds to resist various claims made in the suit and will defend the suit, Sun Daily says. "Messrs Skrine, advocates & solicitors, have been appointed to represent ISM in the suit and to take all necessary steps on behalf of ISM to defend the suit." Sun Daily adds that Icon does not expect the suit to have any significant financial and operational impact to ISM and the group. "The company will make further announcements on material developments in the suit as and when necessary from time to time." Icon Offshore Berhad is a Malaysia-based investment holding company. The Company operates in integrated business operations, which consists of the vessel owning/leasing activities and provision of vessel chartering and ship management services to oil and gas and related industries. It provides offshore support vessels (OSVs) in Southeast Asia. It provides logistical support services across offshore oil and gas life cycle, from exploration and appraisal, field development, operation and maintenance, to decommissioning activities. The Company's vessels are used for providing a range of services, including seismic survey, drilling operations support, towing, anchor handling and mooring of barges, repair and maintenance support, accommodation facilities for personnel and transportation of personnel and supplies to platforms. It also provides ship management services to third-party vessel owners. Its subsidiaries include Icon Ship Management Sdn. Bhd. and Icon Fleet Sdn. Bhd. ===================== N E W Z E A L A N D ===================== PLAMAN RESOURCES: Did Not Mention Fossils in OIO Application ------------------------------------------------------------ Simon Hartley at Otago Daily Times reports that Plaman Resources did not notify the Overseas Investment Office of the presence of fossils at the Foulden Maar site, near Middlemarch, when it applied for consent to buy a neighbouring farm. Months passed before the Overseas Investment Office (OIO) became aware of the fossil treasure trove, which subsequently prompted a public and scientific backlash to the mining proposal, the report says. According to the report, Plaman lodged its farm-purchase application in February last year, but the OIO only found out about the fossils in mid-2018, when its inquiries found an ecological report, which had been commissioned earlier by Plaman. "Plaman did not refer to fossils at the Foulden Maar site in its February 2018 application," a spokesman for the OIO said when asked about the disclosure timeframe by the ODT. It was the OIO's further inquiries in mid-2018 which led it to an ecological report commissioned by Plaman, the spokesman said. "This report refers to the site's scientific values, including its significance for fossils. We considered the report as part of our assessment of Plaman's application," the report quotes the spokesman as saying. Similarly, in a leaked, confidential, more than 100-page report by investment bankers Goldman Sachs there is little mention of fossils, other than diatomite being "fossilised remains of diatoms, a type of phytoplankton," ODT relays. ODT says the investment document highlighted the diatomite's suitability as feed for the poultry and pig sectors and "assumptions" revenue from the venture would hit more than $1 billion by 2025. Goldman Sachs lent Plaman Resources more than $30 million for the venture, the report notes. Now that Plaman Resources has been placed in voluntary receivership and liquidation, because it was unable to secure more funding and reorganise its structure, the OIO has the application "on hold," according to ODT. ODT adds that the OIO has said the receivership and liquidation did not automatically mean Plaman's farm purchase application was discarded, but Plaman's financial position was relevant to assessment of the application. Separately, it remains unclear how receiver KordaMentha will deal with the non-operational mine on Moonlight Rd, bought for $5.3 million in 2015, ODT states. KordaMentha was contacted for comment on how it would now value the mine and whether there were any interested parties, but on June 26 declined "to make any further comment at this stage," ODT relays. ODT adds that the ancient volcanic crater lake of Foulden Maar appears to have been "saved" and there are calls for government intervention, status change to a heritage site or development of a science-tourism operation. However, the receivers have an obligation to realise the monetary value of assets for the sake of creditors. About Plaman Resources Plaman Resources currently owns 42 hectares of land which contains much of Foulden Maar, and mining, prospecting and exploration rights in Otago. Plaman Resources is listed by the Companies Office as in receivership and liquidation. Neale Jackson and Brendon Gibson of KordaMentha were appointed as receivers of the Company on June 13, 2019. Concurrently, Conor McElhinney and Andrew Grenfell of McGrathNicol were appointed jointly and severally as Liquidators of the Company on June 13, 2019 by special resolution of its shareholders. ================= S I N G A P O R E ================= NICO STEEL: Obtains 1-Year Extension to Exit SGX Watch List ----------------------------------------------------------- Ng Ren Jye at The Business Times reports that the Singapore Exchange (SGX) has granted Nico Steel Holdings a one-year extension to exit the bourse's watch list by Sept. 4, 2020, failing which it will need to provide a reasonable exit offer to its shareholders. According to the report, the metals supplier applied for the extension based on healthier cash flow from its operating activities, as it recorded a pre-tax profit of US$209,000 for the financial year ended Feb 28, 2018, and a pre-tax profit of US$469,000 for the fiscal year ended Feb 28, 2019. As at Feb. 28, 2019, the group said it has a positive operating cash flow of US$798,000 and is in a net cash position of US$5 million, BT discloses. It was placed on the watch list on Sept. 5, 2016, and had three years to exit the list by Sept. 4, 2019, or face being delisted by SGX, the report adds. Nico Steel Holdings Limited, an investment holding company, provides metal alloys and metallurgical solutions in Singapore, the People's Republic of China, Malaysia, Thailand, and internationally. It operates through Coil Center and Plating segments. The company provides metal slitting services; ferrous and non-ferrous raw materials in strip-in coils for use in the stamping, and metal and plastic fabricating industries; electro-plating process, metal surface treatment, and chemistry blending services for electronic products; and import and export trading, and distribution services. It also offers internal and external cosmetic parts for LCDs, LEDs, notebooks and keyboards, hard disk drive (HDD) covers and dampers, SIM card holders, bezel plates, RF shields, etc.; and customized specialty metals, as well as metallurgical consultancy services. In addition, the company provides metal alloys that comprise stainless and cold rolled steel products, copper and copper alloys, and aluminum and aluminum alloys; and customized metal alloys under the Nico brand. It serves HDD, telecommunications, consumer electronics, computer peripherals, and other industries. SINGAPORE: Heading for Technical Recession in Q3, Maybank Says -------------------------------------------------------------- Michelle Jamrisko at Bloomberg News reports that Singapore's economy will probably experience a "shallow technical recession" in the third quarter as the global trade outlook worsens, according to Maybank Kim Eng Research. Bloomberg says the escalating U.S.-China trade conflict is weighing on Singapore's export-reliant economy, which Maybank expects will grow 1.3% this year, down from a previous projection of 1.6% and lower than the government's forecast range of 1.5% to 2.5%. "Disruptions to the supply chain will likely intensify as the trade war broadens to tech and the U.S. imposes export controls on more Chinese tech firms," Maybank economists Chua Hak Bin and Lee Ju Ye said in a note, Bloomberg relays. The slump in exports has hit manufacturing, which contracted more than expected in May, Bloomberg discloses citing data released on June 26. The outlook for electronics, which make up 27% of factory output, is particularly weak since U.S. export controls may hit chipmakers like Broadcom Inc. and Intel Corp., which operate in Singapore, Maybank said. A recession is defined as two consecutive quarters of negative quarter-on-quarter growth, and if that happens it will increase the chance of the central bank easing monetary policy in October, the economists said, according to Bloomberg. The Monetary Authority of Singapore, which uses the exchange rate as its main tool, left its policy settings unchanged in April, Bloomberg states. MAS and the Ministry of Trade and Industry are reviewing their growth forecast range for the year and can't yet say whether it'll be revised to even lower than the current 1.5%-2.5% estimate, Managing Director Ravi Menon told reporters during the Thursday [June 27] release of the central bank's annual report, according to Bloomberg. A fresh figure will have to wait at least until second-quarter economic data are fully collected through July, Edward Robinson, MAS's chief economist, said at the same event. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman, Editors. Copyright 2019. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. *** End of Transmission ***