/raid1/www/Hosts/bankrupt/TCRAP_Public/190904.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, September 4, 2019, Vol. 22, No. 177
Headlines
A U S T R A L I A
ALITA RESOURCES: Suspends Trading After Going Into Administration
HORIZON STATE: First Creditors' Meeting Set for Sept. 11
LATITUDE AUSTRALIA 2019-1: Fitch to Rate Class E Notes 'BB'
QNV HOLDINGS: Second Creditors' Meeting Set for Sept. 10
SPEEDCAST INTERNATIONAL: S&P Cuts ICR to 'B' on Governance Risks
TIAN HOLDINGS: Second Creditors' Meeting Set for Sept. 10
WEN ZHOU: First Creditors' Meeting Set for Sept. 11
YANSAN HOLDINGS: Second Creditors' Meeting Set for Sept. 10
C H I N A
CHINA WATER: S&P Alters Outlook to Negative & Affirms 'BB+' ICR
COUNTRY GARDEN: Moody's Alters Outlook on Ba1 CFR to Positive
LOGAN PROPERTY: Fitch Raises LT IDRs to BB, Outlook Stable
LOGAN PROPERTY: S&P Assigns 'BB-' Rating on New USD Unsec. Notes
ZHONGLIANG HOLDINGS: Moody's Rates New USD Sr. Unsec. Notes B2
I N D I A
AMARNATH INT'L: Insolvency Resolution Process Case Summary
AMUL COTTON: CARE Keeps B+ on INR6.5cr Loans in Not Cooperating
ATTERO RECYCLING: Insolvency Resolution Process Case Summary
BARAK VALLEY: CARE Lowers Rating on INR25CR LT Loan to C
BULLAND BUILDTECH: CARE Keeps D on INR45cr Loans in Not Cooperating
CRITICAL ACCESS: CARE Keeps B on INR8.5cr Loans in Not Cooperating
EMCO LIMITED: CARE Keeps D on INR1710cr Loans in Not Cooperating
GALI BHANU: CARE Lowers Rating on INR5.53cr LT Loan to B
GOYAL EDUCATIONAL: CARE Keeps D on INR13cr Debt in Not Cooperating
JAI SAKTHI: CARE Keeps B+ on INR35.6cr Loans in Not Cooperating
M & T CONSTRUCTIONS: CARE Keeps 'B' Rating in Not Cooperating
MAHAAJAY SPINNERS: CARE Keeps B on INR3.5cr Loan in Not Cooperating
OCEAN ELEVATOR: Insolvency Resolution Process Case Summary
PELLET ENERGY: CARE Keeps D on INR28.5cr Loans in Not Cooperating
PROMINENT METAL: Insolvency Resolution Process Case Summary
RAJRANI COLD: CARE Keeps D on INR13.7cr Loans in Not Cooperating
RANG SUPER: Insolvency Resolution Process Case Summary
RCL PAPER: CARE Keeps D on INR100.3cr Loans in Not Cooperating
SHRI JAGANNATH: CARE Keeps D on INR14.3cr Loans in Not Cooperating
SREE VINAYAK: CARE Keeps D on INR7.2cr Loans in Not Cooperating
SRI MURARI: CARE Keeps B+ on INR15cr Loans in Not Cooperating
SUSEE PREMIUM: CARE Keeps D on INR14.4cr Loans in Not Cooperating
TARA JEWELS: CARE Keeps D on INR743cr Loans in Not Cooperating
UNIQUE IMPEX: CARE Keeps B+ on INR4.5cr Loans in Not Cooperating
UNNATI FORTUNE: CARE Keeps D on INR25cr Loans in Not Cooperating
VEDBHUMI BUILDERS: CARE Keeps D on INR38cr Loans in Not Cooperating
N E W Z E A L A N D
MIDDLE EARTH: Flight School Placed Into Liquidation
NEW ZEALAND: Business Outlook Deteriorates Over Fears of Recession
WELHAUS LIMITED: Building Firm Goes Into Liquidation
S I N G A P O R E
ASL MARINE: Posts SGD116.6MM Net Loss in Q4 Ended June 30
KOON HOLDINGS: Auditors Raises Going Concern Doubt
S O U T H K O R E A
ASIANA AIRLINES: Aekyung, 2 Others Submit Preliminary Bids
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A U S T R A L I A
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ALITA RESOURCES: Suspends Trading After Going Into Administration
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Fiona Lam at The Business Times reports that Alita Resources
suspended trading of its shares on Sept. 3, days after
administrators and receivers were appointed in relation to its
default on a secured AUD40 million (SGD37.4 million) loan.
In a bourse filing on Sept. 3, the company said it is "unable to
reasonably assess its financial position as it is currently placed
under administration." Accordingly, trading in its shares will
remain suspended under Catalist rules while the administration
continues, said the company, The Business Times relays.
Alita Resources appointed KordaMentha as its voluntary
administrators on Aug. 28, according to its announcement on Aug.
30.
The Business Times relates that Galaxy Resources, as lender of the
AUD40 million loan, then gave Alita Resources a notice of default
on Aug. 29 as a result of this appointment. Following the event of
default, Galaxy declared that all moneys owing under the loan,
including interest, are immediately due and payable.
Galaxy also appointed KPMG as receivers and managers on Aug. 29,
the report says.
According to The Business Times, the KPMG receivers said on Aug. 30
that they are completing an urgent assessment of Alita Resources'
financial position, but "with the intention of transitioning
operations to care and maintenance shortly."
Alita Resources applied to the Singapore Exchange (SGX) on Aug. 29
seeking extensions of time to announce its financial results for
fiscal 2019 by Nov. 1, and to issue its annual report by Nov. 29,
the report notes. It also requested for a two-month extension to
convene its FY2019 annual general meeting as well as a one-month
extension to issue its sustainability report, both by January 3
next year.
The Business Times adds that the company and its secured lenders
had previously extended the standstill period for the loan several
times, to allow more time for discussions on refinancing options
and recapitalisation proposals.
The latest extension of the standstill by the consortium of
lenders, led by Tribeca Investment Partners, was until Aug. 29,
says The Business Times.
About Alita Resources
Alita Resources Limited (ASX:A40) operates as a mineral exploration
and excavation company. The Company explores and produces lithium
and tantalum concentrates. Alita Resources offers its services in
Australia.
The Company went into voluntary administration on Aug. 28, 2019
after restructuring talks with potential investors failed. Richard
Tucker and John Bumbak of Kordamentha were appointed as
administrators to the Company on Aug. 28.
A first meeting of creditors in the case is scheduled to be
convened on Sept. 9, 2019 at 10:00 a.m. at The Duxton Hotel, at 1
St Georges Terrace, in Perth, WA.
HORIZON STATE: First Creditors' Meeting Set for Sept. 11
--------------------------------------------------------
A first meeting of the creditors in the proceedings of Horizon
State Pty Ltd will be held on Sept. 11, 2019, at 12:00 p.m. at the
offices of TPH Advisory, Lower Level, at 133 Macquarie Street, in
Sydney, NSW.
Timothy Heesh and Amanda Lott of TPH Insolvency were appointed as
administrators of Horizon State on Aug. 31, 2019.
LATITUDE AUSTRALIA 2019-1: Fitch to Rate Class E Notes 'BB'
-----------------------------------------------------------
Fitch Ratings assigned expected ratings to Latitude Australia
Credit Card Loan Note Trust Series 2019-1's floating-rate notes.
The issuance consists of notes backed by credit card receivables
originated by Latitude Finance Australia. The notes are backed by a
collateral pool of credit card receivables with an average
outstanding balance across active accounts of AUD2,063. The
portfolio is well-seasoned; by balance, 60.5% is held in accounts
seasoned in excess of 36 months. The portfolio is geographically
diversified among Australian states, with no specific geographic
concentration.
The notes will be issued by Perpetual Corporate Trust Limited in
its capacity as trustee of Latitude Australia Credit Card Master
Trust.
Latitude Australia Credit Card Loan Note Trust 2019-1
Class A1 LT AAA(EXP)sf Expected Rating
Class A2 LT AAA(EXP)sf Expected Rating
Class B LT AA(EXP)sf Expected Rating
Class C LT A(EXP)sf Expected Rating
Class D LT BBB(EXP)sf Expected Rating
Class E LT BB(EXP)sf Expected Rating
Originator VFN
Subordination LT NR(EXP)sf Expected Rating
KEY RATING DRIVERS
Stable Receivable Performance: Charge-off performance has remained
stable over the last year, with gross charge-offs averaging 4.6%,
below the Fitch steady-state assumption of 5.25%. Monthly payment
rate (MPR), a measure of how quickly consumers are paying off their
credit card debt, has averaged 13.6% over the past year, above
Fitch's steady-state assumption of 12.5%. Yield has also remained
steady, averaging at 14.9% in Australia, above Fitch's steady state
of 13.0%. All steady state assumptions remain stable.
Satisfactory Originator and Servicer Quality: Latitude has been
managing large consumer receivable portfolios for over a decade in
Australia and New Zealand. Latitude is not rated and servicer risk
is mitigated through back-up arrangements. Fitch undertook an
onsite operational review and found that the operations of the
originator and servicer were comparable with other non-bank credit
card providers.
Mitigated Counterparty Risk: Fitch's rating of the notes is
dependent on the financial strength of certain counterparties.
Fitch believes this risk is mitigated, as evident from the ratings
of the transaction counterparties.
Mitigated Interest-Rate Risk: Interest rate risk is mitigated by
available credit enhancement.
QNV HOLDINGS: Second Creditors' Meeting Set for Sept. 10
--------------------------------------------------------
A second meeting of creditors in the proceedings of:
-- QNV Holdings Pty Ltd
-- QNV Property Pty Ltd
-- QNV Constructions (NSW) Pty Ltd
-- QNV Constructions (QLD) Pty Ltd
-- QNV Constructions (VIC) Pty Ltd
-- QNV Constructions (SA) Pty Ltd
-- QNV Constructions (TAS & NT) Pty Ltd
has been set for Sept. 10, 2019, at 11:00 a.m. at the following
offices:
* Rodgers Reidy NSW, Level 12, 210 Clarence Street
Sydney, NSW
* Rodgers Reidy QLD, Level 9, 46 Edward Street,
Brisbane, Queensland
* Rodgers Reidy VIC, Level 3, 326 William Street
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 Sept. 9, 2019, at 4:00 p.m.
Andrew James Barnden and Brent Leigh Morgan of Rodgers Reidy were
appointed as administrators of QNV Holdings on Aug. 6, 2019.
SPEEDCAST INTERNATIONAL: S&P Cuts ICR to 'B' on Governance Risks
----------------------------------------------------------------
S&P Global Ratings, on Sept. 2, 2019, lowered its issuer credit
rating and its issue ratings on Speedcast International Ltd. to 'B'
from 'B+'. At the same time, S&P placed the ratings on CreditWatch
with negative implications. The recovery rating on the company's
senior secured debt remains at '4' (45%), indicating average
recovery prospects upon payment default.
S&P said, "We lowered our ratings on Speedcast to reflect funding
uncertainties and governance risks. Material overdue payments to
certain trade creditors have contributed to an additional funding
requirement. The company's auditor noted that the funding
uncertainty may cast doubt on the group's ability to continue as a
going concern. In our opinion, delayed supplier payments are not
included as debt in the group's covenant calculation and somewhat
obscured its underlying financial position. We understand the
company is in discussions with funding providers to secure
additional sources of liquidity."
In addition, the overhaul of Speedcast's senior management and
board raises risks around the effectiveness of its governance
structures, particularly during a period of financial stress. The
chief financial officer resigned together with the chairman.
The CreditWatch negative placement reflects the risk that the
company may not be able to quickly resolve funding pressures.
S&P said, "We could lower the rating if the company is unable to
meet its funding requirement. We could also lower the rating if
operational challenges further pressure its covenant headroom. We
could affirm the rating with a stable outlook if the company
addresses its funding requirements in a timely manner.
"We are revising our assessment of liquidity to less than adequate.
While we expect the Speedcast's sources of cash to exceed uses by
at least 1.2x over the next 12 months, we believe there is
uncertainty regarding the company's ability to access funding from
its existing lenders or equity base.
"In our view, Speedcast is unlikely to be able to absorb low
probability, high impact events without the need for refinancing.
The company is currently facing heavy scrutiny in debt and equity
capital markets.
"Having said this, we note that the company was able to
successfully increase its revolving credit facility covenant of net
debt to pro forma underlying EBITDA to 4.5x from 4.0x in July
2019."
TIAN HOLDINGS: Second Creditors' Meeting Set for Sept. 10
---------------------------------------------------------
A second meeting of creditors in the proceedings of Tian Holdings
(Aust) Pty Ltd, trading as 'Chatters Cafe Restaurant (Midland), has
been set for Sept. 10, 2019, at 10:00 a.m. at the offices of Hall
Chadwick Chartered Accountants, Level 11, Allendale Square, at 77
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 Sept. 9, 2019, at 5:00 p.m.
Richard Albarran and Cameron Shaw of Hall Chadwick were appointed
as administrators of Tian Holdings on Aug. 6, 2019.
WEN ZHOU: First Creditors' Meeting Set for Sept. 11
---------------------------------------------------
A first meeting of the creditors in the proceedings of Wen Zhou
Investments Pty Ltd will be held on Sept. 11, 2019, at 2:30 p.m. at
the offices of Hamilton Murphy, Level 1, 255 Mary Street, in
Richmond, Victoria.
Richard Rohrt of Hamilton Murphy was appointed as administrator of
Wen Zhou on Aug. 30, 2019.
YANSAN HOLDINGS: Second Creditors' Meeting Set for Sept. 10
-----------------------------------------------------------
A second meeting of creditors in the proceedings of Yansan Holdings
Pty Ltd, trading as 'Chatters Cafe Restaurant (Morley), has been
set for Sept. 10, 2019, at 11:00 a.m. at the offices of Hall
Chadwick Chartered Accountants, Level 11, Allendale Square, at 77
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 Sept. 9, 2019, at 5:00 p.m.
Richard Albarran and Cameron Shaw of Hall Chadwick were appointed
as administrators of Yansan Holdings on Aug. 6, 2019.
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C H I N A
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CHINA WATER: S&P Alters Outlook to Negative & Affirms 'BB+' ICR
---------------------------------------------------------------
S&P Global Ratings, on Sept. 3, 2019, revised its outlook on China
Water Affairs Group Ltd. (CWA) to negative from stable. At the same
time, S&P affirmed its 'BB+' long-term issuer credit rating on CWA.
S&P also affirmed the issue rating on the company's senior
unsecured notes at 'BB+'.
S&P said, "The outlook revision reflects our view that potential
further acquisitions of Kangda International Environmental Co. Ltd.
(Kangda) might weaken CWA's financial risk profile in the next 12
to 18 months. CWA acquired 29.5% of Kangda's shares in April 2019
and currently classifies it as an associate on its financial
report. In our view, Kangda has a weaker credit profile than CWA.
"We believe the acquisition of Kangda is in line with CWA's
long-term business strategy." The company has been starting to seek
growth in wastewater treatment (WWT) in recent years. As of the
June 2019, Kangda has 87 operational WWT projects with total
operational capacity of 3.2 million tons a day in China. These
projects are mainly located in Shandong and Henan provinces, where
CWA has limited exposure. The potential acquisition of Kangda could
boost CWA's total operational tap water and WWT capacity by about
26% to 12.1 million tons a day and help the latter expand its
footprint in the Chinese market.
In fiscal 2019 (year ended March 31, 2019), CWA's reported debt
increased to Hong Kong dollar (HK$) 15.2 billion from HK$11.2
billion, partially attributable to the acquisition of the 29.5%
stake in Kangda. Although CWA has dominant board representation at
Kangda (five out of nine members), it does not currently have
effective control over the company given it has less than 50% of
voting rights. S&P expects CWA to acquire further stakes in Kangda
when certain conditions are met, such as financial improvement at
Kangda and under suitable timing, considering Kangda is also listed
on the Hong Kong Stock Exchange. As the largest shareholder, CWA is
currently helping Kangda to improve its financials by lowering its
operational costs, as well as improve its capital structure by
replacing short-term borrowing with long-term loans and lower
funding costs. It also helped negotiate with local governments
regarding some of Kangda's outstanding receivables.
S&P said, "We view Kangda as having a weaker credit profile than
CWA. We estimate Kangda's ratio of funds from operations (FFO) to
debt was around 1.5%-3.5% in the first half of 2019, compared with
about 16% in fiscal 2019 for CWA. Therefore, if CWA acquires more
stakes and eventually consolidates Kangda, its FFO-to-debt ratio
might materially weaken. That said, our base-case scenario only
accounts for Kangda as an associate company in our financial
forecasts, given CWA's lack of effective control at this stage, and
that CWA has limited legal liability over Kangda's debt. We are
waiting for more visibility on the timing and possibility for
further acquisitions.
"CWA's own financial performance has been relatively stable over
the past year. We believe the increase in new project coverage,
urbanization, and increase in water use per household will continue
to drive CWA's growth in operating cash flow. We estimate CWA's
capital expenditure to be HK$1.5 billion-HK$2.0 billion annually in
the coming three years (mainly on water supply projects). We also
anticipate stable growth in installation fees and water consumption
charges. Nevertheless, the weakening in the Chinese renminbi could
weigh on CWA's financials, given the company's reported currency is
in Hong Kong dollars.
"The negative outlook on CWA reflects our expectation that the
company is likely to acquire controlling stakes of Kangda over the
next 12 to 18 months. We view Kangda's credit profile to be weaker
than that of CWA. If CWA further acquires Kangda shares and
eventually consolidates the company over the same period, we expect
its FFO-to-debt ratio to likely drop to below 13%.
"The acquisition of the waste water treatment company is in line
with CWA's strategy and could help it diversify its asset portfolio
and enlarge its geographic coverage, in our view. Apart from the
acquisition, CWA's business performance is still solid, driven by
its continuous expansion in the tap water supply business in China
with stable profitability. We anticipate the water tariff regime in
China to remain generally stable and allow CWA's projects to earn
steady returns.
"We could lower the ratings if CWA's FFO to debt remains
consistently below 13%. This could happen if 1) CWA obtains
effective control over Kangda through a debt-funded acquisition,
and Kangda's credit profile remains weaker than that of CWA; 2) CWA
provides financial support to Kangda, which results in CWA no
longer being bankruptcy remote from Kangda, or we view such support
as materially weakening the company's liquidity or leverage
position; or 3) CWA aggressively expands into other projects with a
higher debt burden than we forecast.
"We may also lower our ratings if regulatory changes in China or
poor execution on the 8%-12% allowable return for water supply
projects undermine CWA's profitability and cash flows. This could
happen if the government does not allow a tariff hike despite
project returns being consistently below target.
"We may revise the outlook to stable if we believe the company is
unlikely to further acquire or consolidate Kangda, or if we believe
the consolidation of Kangda will not negatively affect CWA's cash
leverage ratios. This could happen if Kangda's financials have
materially improved such that after consolidation, CWA's
FFO-to-debt will remain above 13%."
COUNTRY GARDEN: Moody's Alters Outlook on Ba1 CFR to Positive
-------------------------------------------------------------
Moody's Investors Service revised the ratings outlook on Country
Garden Holdings Company Limited to positive from stable.
At the same time, Moody's has affirmed the Ba1 corporate family
rating and Ba2 senior unsecured rating.
RATINGS RATIONALE
"The change in outlook to positive reflects its expectation that
Country Garden's credit metrics over the next 12-18 months will
improve to levels that are strong for its current rating level,"
says Josephine Ho, a Moody's Vice President and Senior Analyst.
"In addition, the change in outlook reflects its expectation that
Country Garden's strong execution capability and prudent financial
management will help it weather the challenging conditions in
China's property industry," adds Ho, who is also Moody's Lead
Analyst for Country Garden.
Moody's expects Country Garden's leverage -- as measured by
revenue/adjusted debt -- will improve to 105%-110% over the next
12-18 months from 97% in 2018, supported by healthy revenue growth
following strong contracted sales in 2017 and 2018.
At the same time, stable profit margins should keep its interest
coverage -- as measured by EBIT/interest -- above 5.0x in the next
12-18 month, compared to 4.9x at the end of 2018.
Country Garden reported a 5% decline in contracted sales in the
first seven months of 2018, after robust 31% and 61% year-over-year
growth in 2018 in 2017, respectively.
Nevertheless, Moody's expects Country Garden to deliver contracted
sales growth of 5% over the next 12-18 months, backed by the
company's sufficient salable resources -- including attributable
salable resources of RMB1.8 trillion as of the end of June 2019, a
scheduled project launch, and a track record of strong sales
execution.
In addition, Moody's expects Country Garden will continue to
benefit from the ongoing urbanization in China, which will support
demand for the company's products in lower-tier cities over the
next 1-2 years.
China's property industry has experienced challenging operating
conditions in recent months, including tightening credit conditions
and slowing sales growth, which will negatively impact the smaller
and financially weaker developers. However, Moody's expects that
Country Garden will benefit from the industry consolidation, given
its strong market position and access to funding.
Country Garden's Ba1 CFR reflects its strong sales execution
through the property cycles, good geographic coverage, and status
as one of the largest developers in China in terms of contracted
sales. The CFR also reflects the company's established track record
in suburban property development in the country.
On the other hand, the rating is constrained by the company's low
profit margins and large exposure to lower tier cities, where
demand has been volatile.
Country Garden's liquidity position is good. The company's
cash/short-term debt was at 195% as of June 2019, largely unchanged
from 191% at the end of 2018.
Moody's expects the company will maintain good liquidity through
proactive liquidity management, and that it will retain its good
access to various funding channels, including onshore bonds,
offshore syndicated loans and capital market instruments.
Country Garden's senior unsecured bond rating is one notch lower
than it would otherwise be because of the risk of structural
subordination. This risk reflects the fact that the majority of
claims are at operating subsidiaries and have priority over claims
at the holding company in a bankruptcy scenario. In addition, the
holding company lacks significant mitigating factors for structural
subordination. As a result, the expected recovery rate for claims
at the holding company will be lower.
In terms of environmental, social and governance (ESG), Moody's has
considered the concentrated ownership by Country Garden's key
shareholder, Ms. YANG Huiyan, who held a total 57.2% stake in the
company at June 30, 2019. Such risk is partly mitigated by the
presence of five independent non-executive directors out of a total
14 board of directors, and the presence of other internal
governance structures and standards, as required under the
Corporate Governance Code for companies listed on the Hong Kong
Stock Exchange. Related party transactions have been low relative
to its sales at around 3%, and dividend payouts have been moderate
at below 40% over the last five years.
Country Garden's ratings could be upgraded if it (1) maintains
sustainable sales growth and profit margins while demonstrating
strong financial discipline; (2) maintains a strong liquidity
profile, such that cash/short-term debt exceeds 150%-200%; and (3)
improves its credit metrics, such that adjusted EBIT/interest
coverage rises above 5.0x and revenue/adjusted debt exceeds
100%-110% on a sustained basis.
A rating downgrade is unlikely given the positive outlook.
However, Moody's could revise the outlook to stable if (1) the
company becomes less financially prudent in pursuit of business
growth; (2) its sales and liquidity positions weaken, such that its
cash/short-term debt falls below 125%; (3) its gross profit margins
weaken below 20%; (4) its debt leverage deteriorates, with
revenue/adjusted debt falling below 100%; or (5) its interest
coverage weakens, such that its EBIT coverage of interest drops
below 3.5x-4.0x on a sustained basis.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in January 2018.
Country Garden Holdings Company Limited, founded in 1992 and listed
on the Hong Kong Stock Exchange, is a leading Chinese integrated
property developer. As of June 30, 2019, the company's land bank by
attributable gross floor area (GFA) in China, including that of
joint ventures (JVs) and associates, was 263.1 million square
meters (sqm). Its revenue was RMB202 billion ($28 billion) in H1
2019. In addition, as of December 2018, the company owned and
operated 50 hotels, with a total of around 15,000 rooms. The hotels
are mainly located in Guangdong Province and Anhui Province, and
complement the company's township development projects.
LOGAN PROPERTY: Fitch Raises LT IDRs to BB, Outlook Stable
----------------------------------------------------------
Fitch Ratings has upgraded China-based Logan Property Holdings
Company Limited's Long-Term Foreign-Currency and Local-Currency
Issuer Default Ratings, senior unsecured rating and the rating on
its outstanding US dollar senior notes to 'BB' from 'BB-'. The
Outlook is Stable. Fitch has also upgraded the rating on Logan's
subordinated perpetual capital securities to 'B+' from 'B'.
The upgrades reflect the improvement in Logan's financial profile,
with Fitch expecting the company's leverage to be below 40% in the
next 12-18 months, and remain at this lower level because the
company has sufficient land bank to support its growth. Logan has
shown financial discipline during its business expansion, which was
evident in the decline in leverage, and maintained high
profitability with EBITDA margin at above 30%.
KEY RATING DRIVERS
Reduced Leverage: Logan's leverage, measured by net debt/adjusted
inventory that proportionately consolidates joint ventures (JVs)
and associates, fell to 36% in 1H19 from 41% at end-2018 and 48% at
end-2017. The company spent CNY21.3 billion on replenishing its
land bank in 1H19, or a steady pace of 47% of its contracted sales
during the period (2018: 50%, 2017: 58%).
By end-June 2019, the company had a total land reserve of 35.9
million square metres (sq m), which was sufficient for development
in the next five years. Fitch expects the company to spend 45%-50%
of its consolidated contracted sales on land replenishment in
2019-2020 and to maintain a land bank sufficient for four to five
years of development.
Sustained High Margins: Logan's EBITDA margin, excluding
capitalised interest from cost of sales, stayed high at 34% in 1H19
(2018: 32%, 2017: 33%). The sustained high profitability
contributes to its deleveraging. Fitch expects the company's EBITDA
margin to remain at 30%-32% in the next one to two years. By
end-1H19, Logan had unrecognised contracted sales of CNY70 billion,
which have gross profit margin of about 30% and will be recognised
as revenue over the next 18-24 months. High-margin primary land
development income will continue to contribute to the company's
total revenue in next three to five years, which also support the
company's EBITDA margin.
Larger Sales Scale: Logan's contracted sales rose by 25% to CNY54.6
billion in 7M19. The contracted floor space sold rose 80% to 4.0
million sq m, but the contracted average selling price (ASP)
moderated to CNY13,510/sq m due to higher sales from the Nanning
region, where prices are lower. The company is well on-track to
meet its full-year sales target of CNY85 billion in 2019. It has
saleable resources of CNY105 billion for launch in 2H19, including
the high-ASP Shenzhen Acesite Park with an estimated ASP of around
CNY55,000 per sqm. Fitch expects Logan's annual contracted sales to
increase to CNY90 billion in 2019 and CNY115 billion in 2020.
Concentration Risk Reduced: Fitch believes Logan's well-located
land bank and expansion into new cities, including the Yangtze
River Delta, Hong Kong and Singapore, in the last 12-24 months will
mitigate concentration risks over the next year or two. Presales
for the projects in Yangtze River Delta and Singapore were launched
in 1H19 and they contributed 3% and 6%, respectively, to Logan's
total contracted sales (2018: Yangtze River Delta: zero, Singapore:
5%). While the Greater Bay Area (including Shenzhen) remains the
largest contracted sales driver, accounting for around 53% of
Logan's total attributable contracted sales in 1H19 (1H18: 70%),
Fitch expects sales contribution from the Greater Bay Area to
reduce to around 50% in 2020-2021.
DERIVATION SUMMARY
Logan's contracted sales are comparable with those of 'BB' rated
Chinese homebuilders, such as CIFI Holdings (Group) Co. Ltd.'s
(BB/Stable) CNY76 billion, and are higher than those of 'BB-' rated
peers, which have contracted sales of CNY40 billion-60 billion,
including KWG Group Holdings Limited (BB-/Stable), China Aoyuan
Group Limited (BB-/Positive) and Yuzhou Properties Company Limited
(BB-/Stable).
Logan's leverage of 36% at end-June 2019 is also lower than 40%-45%
of other 'BB' rated peers such as CIFI and Future Land Development
Holdings Limited (BB/Rating Watch Negative). However, CIFI's
asset-light non-property development revenue generated EBITDA that
covered interest by 0.3x in 2018 (Logan: less than 0.1x) and Fitch
believes that the non-development property segment is significant
and sufficiently stable to provide some support to CIFI's rating.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Contracted sales of CNY90 billion in 2019 and CNY115 billion
in 2020 (2018: CNY71 billion)
- EBITDA margin, with capitalised interest excluded from cost
of sales, of 30%-32% in 2019-2020 (1H19: 34%)
- 45%-50% of contracted sales proceeds to be spent on land
acquisitions in 2019-2020 to maintain a land bank sufficient
for around five years of development
RATING SENSITIVITIES
Developments that May, Individually or Collectively, Lead to
Positive Rating Action
- Leverage, as measured by net debt/adjusted inventory that
proportionately consolidates joint ventures and
associates, sustained below 35%
Developments that May, Individually or Collectively, Lead to
Negative Rating Action
- Leverage sustained above 40%
- EBITDA margin, excluding capitalised interests from
cost of goods sold, sustained below 30%
LIQUIDITY
Sufficient Liquidity: Logan had total cash on hand of CNY38.3
billion, including CNY3.3 billion of restricted cash and pledged
deposits but excluding assets under cross-border guarantee
arrangements of CNY2.8 billion, as of end-June 2019, sufficient to
cover short-term debt and corporate bonds of CNY21.8 billion and
liabilities under cross-border guarantee arrangements of CNY3.2
billion.
FULL LIST OF RATING ACTIONS
Logan Property Holdings Company Limited
- Long-Term Foreign-Currency IDR upgraded to 'BB' from 'BB-';
Outlook Stable
- Long-Term Local-Currency IDR upgraded to 'BB' from 'BB-';
Outlook Stable
- Senior unsecured rating upgraded to 'BB' from 'BB-'
- Ratings on outstanding senior unsecured notes upgraded to
'BB' from 'BB-'
- Rating on subordinated capital securities upgraded to 'B+'
from 'B'
LOGAN PROPERTY: S&P Assigns 'BB-' Rating on New USD Unsec. Notes
----------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' long-term issue rating to a
proposed issue of U.S.-dollar-denominated senior unsecured notes by
Logan Property Holdings Co. Ltd. (BB/Stable/--). The China-based
developer intends to use the proceeds to refinance its existing
debt. The issue rating is subject to our review of the final
issuance documentation.
S&P rates the senior unsecured notes issued by Logan one notch
below the issuer credit rating because they rank below a
significant amount of secured debt in the capital structure. As of
June 30, 2019, Logan's capital structure consists of Chinese
renminbi (RMB) 10.0 billion in secured debt, RMB36.7 billion in
unsecured debt at the subsidiary level (including financial
guarantees provided to borrowings of joint ventures), and RMB29.3
billion in unsecured debt at the parent level (including perpetual
securities). As such, Logan's priority debt ratio is about 61.5%,
which is significantly above our notching-down threshold of 50%.
On Aug. 28, 2019, S&P Global Ratings raised the long-term issuer
credit rating on Logan to 'BB' from 'BB-'. S&P said, "We expect
Logan to maintain its recently lowered leverage--supported by
strong sales growth, good cash collection, and disciplined land
acquisitions. Our stable outlook on Logan reflects our view that
Logan's leverage will stabilize at around 4x over the next 12
months."
ZHONGLIANG HOLDINGS: Moody's Rates New USD Sr. Unsec. Notes B2
--------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to Zhongliang
Holdings Group Company Limited's proposed senior unsecured USD
notes.
The rating outlook is stable.
Zhongliang plans to use the proceeds from the proposed notes for
refinancing.
RATINGS RATIONALE
"The proposed bond issuance will not materially change Zhongliang's
credit metrics in the next 12 to 18 months, and will help address
its short-term refinancing needs," says Cedric Lai, a Moody's Vice
President and Senior Analyst.
Moody's expects that Zhongliang's adjusted EBIT/interest will be
maintained at 2.6x over the next 12-18 months, compared to 2.7x for
the 12 months to June 2019, and that its debt leverage — as
measured by revenue/adjusted debt — will gradually normalize
towards 75%-85% from 111% over the same period.
Zhongliang's B1 CFR reflects the company's strong brand name in
second-tier and lower-tier cities in the Yangtze River Delta
region, and good track record of contracted sales growth.
Underpinned by strong housing demand in lower-tier cities over the
past two years and strong sales execution, Zhongliang recorded
year-over-year 26.8% growth in contracted sales to RMB63.7 billion
in 1H 2019. The company's contracted sales rose 56% year-on-year to
RMB101.5 billion in 2018, following 242% year-on-year growth in
2017.
However, Zhongliang's B1 CFR is constrained by the concentration of
its land bank in second-tier and lower-tier cities, and by its
reliance on expensive non-bank financing.
The B2 senior unsecured debt rating is one notch lower than
Zhongliang's corporate family rating due to structural
subordination risk.
This subordination risk refers to the fact that the majority of
Zhongliang's claims are at its operating subsidiaries and have
priority over claims at the holding company in a bankruptcy
scenario. In addition, the holding company lacks significant
factors for structural subordination. Consequently, the expected
recovery rate for claims at the holding company will be lower.
Zhongliang's liquidity position is good. The company's cash balance
of RMB24.7 billion at the end of June 2019 covered 171% of its
short-term debt. Such cash holdings, together with the company's
operating cash flow, should be sufficient to cover its short-term
debt and estimated committed land payments over the next 12-18
months.
With respect to governance risks, Moody's has considered the risk
associated with the concentration of the company's ownership in its
controlling shareholders, Mr. Yang Jian and his spouse, who held a
82.9% stake in the company at August 30, 2019.
The financial risk associated with this ownership concentration is
partly mitigated by (1) the presence of three independent
non-executive directors on a board of seven directors, and of two
independent non-executive directors who chair the audit and
remuneration committees, and (2) the application of the Listing
Rules of the Hong Kong Stock Exchange and the Securities and
Futures Ordinance in Hong Kong.
The stable rating outlook reflects Moody's expectation that
Zhongliang will continue to grow its contracted sales, maintain its
good liquidity position, and remain prudent in its land
acquisitions.
Moody's could upgrade the CFR if Zhongliang (1) achieves strong
contracted sales growth; (2) strengthens its financial profile,
with revenue/adjusted debt above 80% and EBIT/interest above 3.0x
on a sustained basis; (3) maintains its good liquidity position;
and (4) reduces its trust financing and borrowings from asset
management companies.
Moody's could downgrade the CFR in case of a deterioration in
Zhongliang's contracted sales growth, liquidity position, or credit
metrics.
Credit metrics that could trigger a rating downgrade include (1)
revenue/adjusted debt below 50%-55%; or (2) adjusted EBIT/interest
coverage below 2.0x, both on a sustained basis.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
Zhongliang Holdings Group Company Limited is a Shanghai-based
residential property developer. The company engages in real estate
development in China.
=========
I N D I A
=========
AMARNATH INT'L: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: M/s Amarnath International Infrastructure Private Limited
House of Anee Baishya, S.R. Das Path
Rehabari, Ulubari Guwahati Kamrup
AS 781008
India
Insolvency Commencement Date: August 19, 2019
Court: National Company Law Tribunal, Guwahati Bench
Estimated date of closure of
insolvency resolution process: February 21, 2020
(180 days from commencement)
Insolvency professional: Amit Pareek
Interim Resolution
Professional: Amit Pareek
C/o Amit Pareek & Associates
4th Floor, Ram Prasad Complex
Chatribari, Guwahati 781001
E-mail: amitpareek99@yahoo.com
amarnathirp@gmail.com
Last date for
submission of claims: September 9, 2019
AMUL COTTON: CARE Keeps B+ on INR6.5cr Loans in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Amul Cotton
Industries (ACII) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.50 CARE B+; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of ACII continues to
remain constrained on account of its moderate scale of operation
with low profitability, moderate capital structure and weak debt
coverage indicators. The ratings also continue to remain
constrained due to susceptibility of ACII's profit margins to
cotton price fluctuations with seasonality associated with the
cotton industry, its presence in the highly fragmented cotton
ginning and pressing industry with limited value addition and
limited financial flexibility owing to partnership nature of
constitution.
The rating, however, continues to draw strength from the vast
experience of the partners in the cotton ginning business coupled
with location advantage in terms of proximity to the cotton growing
regions in Gujarat.
ACI's ability to increase its scale of operations along with an
improvement in profit margins while managing fluctuation in
profitability in light of the volatile raw material prices and
further improvement in the solvency and liquidity position remain
the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Moderate scale of operations with low profitability: The scale of
operation of ACI deteriorated by 27.71% over previous year on
account of non-availability of raw material during the year and
remained moderate at INR35.88 crore during FY19 (Provisional,
refers to period April 1 to March 31) as compared to INR49.63 crore
during FY18. The profitability of ACI marginally improved over
previous year and remained low as marked by PBILDT margin of 1.76%
and PAT margin of 0.37% during FY19 (Prov.) as against 1.22% and
0.13% respectively during FY18. In absolute terms also PBILDT and
PAT remained low at INR0.63 crore and INR0.13 crore respectively
during FY19 (Prov.)
Moderate capital structure and weak debt coverage indicators: Owing
to high amount of working capital utilisation and moderate
net-worth base, ACI's capital structure remained moderate marked by
an overall gearing ratio of 1.28 times as on March 31, 2019
(Prov.), though improved from 1.56 times as on March 31, 2018.
The debt coverage indicators of the firm remained weak marked by
total debt to GCA of 26.53 years as on March 31, 2019 (Prov.) as
against 40.46 years as on March 31, 2018 and interest coverage of
1.47 times in FY19 (Prov.) as against 1.31 times in FY18.
Susceptibility of profit margins to cotton price fluctuations along
with seasonality associated with the cotton industry: The
profitability of ACI is exposed to fluctuations in raw material
prices, which is being an agricultural commodity its prices are
volatile in nature and linked to production in the domestic market.
Further, agro based industries have seasonality associated with
availability of raw materials due to different harvesting periods.
Further, the supply of key raw materials is primarily dependent
upon monsoon during a particular year.
Presence in the highly competitive and fragmented cotton ginning
and pressing industry with limited value addition: ACI operates in
an industry characterized by high fragmentation and intense
competition on account of presence of a large number of small and
medium-scale units due to minimal technological and financial
investment requirement. Furthermore, due to limited value addition,
players present in this segment operate at a very low bargaining
power against its customers as well as suppliers.
Partnership nature of constitution: Being a partnership firm, ACI
is exposed to inherent risk of partners' capital being withdrawn at
time of personal contingency, and firm being dissolved upon the
death/retirement/insolvency of partners.
Key rating strengths
Experienced partners: Mr. Saukatali Gangani and Mr. Najimali
Gangani are key partners of ACI, who possess more than 15 years of
experience in same line of business.
Location advantage: ACI's plant is located in cotton-producing belt
of Gujarat region which is the one of the largest producers of raw
cotton in India. ACI's presence in cotton-producing region results
in benefit derived from lower logistics expenditure, easy
availability and procurement of raw materials at effective prices,
labour and electricity.
Liquidity Analysis: The average utilization of its working capital
limit remained moderate at ~70% for past 12-months ended June 2019.
Further, cash and bank balance remained low at INR0.32 crore as on
March 31, 2019 (Prov.). The cash flow from operating activity stood
at INR0.63 crore during FY19 (Prov.) as against INR0.32 crore
during FY18. Operating cycle of ACI deteriorated and
remained elongated at 87 days during FY19 (Prov.) as compare to 60
days during FY 18.
Amreli (Gujarat) based ACI is a partnership firm established in
2006. The firm is formed by Mr. Saukatali Gangani and Mr. Najimali
Gangani along with other family members. ACI is primarily engaged
in cotton ginning & pressing activities with an installed capacity
of 200 cotton bales per day as on March 31, 2019 and operates from
its sole manufacturing facility located at Babra Amreli (Gujarat).
ACI deals in Shankar- 6 cotton which is being sourced through local
farmers from Gujarat. Ramkrushna Spinning Mills private Limited is
group entity of ACI engaged into the business of manufacturing
cotton yarn since July, 2012.
ATTERO RECYCLING: Insolvency Resolution Process Case Summary
------------------------------------------------------------
Debtor: Attero Recycling Private Limited
Registered office:
2, Green Park
Saharanpur Road
Dehradun UR 248001
India
Address other than Registered office where all or any
books of accounts and papers maintained:
173, Bhagwanpur Industrial Area
Roorkee UR 247661
Insolvency Commencement Date: August 23, 2019
Court: National Company Law Tribunal, Allahabad Bench
Estimated date of closure of
insolvency resolution process: February 19, 2020
(180 days from commencement)
Insolvency professional: CS Babita Jain
Interim Resolution
Professional: CS Babita Jain
35B/6 Madhokunj Rammohan Plaza
Katra, Allahabad 211002
E-mail: jainbabita06@gmail.com
irp.attero@gmail.com
Last date for
submission of claims: September 9, 2019
BARAK VALLEY: CARE Lowers Rating on INR25CR LT Loan to C
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Barak Valley Cements Limited (BVCL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 25.00 CARE C; Stable Revised from
Facilities CARE B; Stable
Detailed Rationale & Key Rating Drivers:
The revision in the rating assigned to the bank facilities of BVCL
takes into account the stretched liquidity position of the company
leading to overdrawals in cash credit account and delays in debt
servicing for the term loan facility availed by the company
(however, term loan facility is not rated by CARE). The rating is
further constrained by relatively small scale of operations,
moderate financial risk profile and solvency position, working
capital intensive operations, exposure to volatility in input costs
and cyclicality of the cement industry. However, the rating
continues to derive strength from the long track record of
operations of the company in cement industry, cement plant
operations with captive limestone mines and locational advantage
with strong customer base in North-East India.
Going forward, improvement in financial profile, strengthening of
liquidity position, efficient management of working capital cycle,
any geographical diversification and any major debt-funded capex
shall be the key rating sensitivities.
Detailed description of the key rating drivers:
Key Rating Weaknesses
Relatively small scale of operations: The company has relatively
small scale of operations with installed capacity of 1000 tonnes
per day (TPD) of cement and 600 TPD of clinker and sells cement
only in the North-Eastern region of India. Capacity utilization
during FY19 stood at 72% for cement and 90% for clinker.
Moderate financial risk profile and solvency position: The company
has reported total operating income (TOI) of INR140.28 crore and
profits after tax (PAT) of INR3.03 crore for FY19 as compared to
TOI of INR150.23 crore and PAT of INR2.83 crore for FY18. The
decline in TOI was mainly on account of heavy rains in the North
Eastern region and partial plant shutdown for 35-40 days during
FY19 for replacement and repair of machinery parts, which impacted
the overall cement production. However, PAT in FY19 was higher on
account of increase in other income, along with lower depreciation
and interest cost. Overall gearing and interest coverage ratio
stood at 0.76x as on March 31, 2019 (0.80x as on March 31, 2018)
and 1.79x for FY19 (2.00x for FY18). During Q1FY20, the company has
reported TOI of INR38.52 crore and PAT of INR1.05 crore as compared
to TOI of INR34.36 crore and PAT of INR0.98 crore during Q1FY19.
Working capital intensive operations and stretched liquidity
position: The company's operations are working capital intensive.
Gross current asset days stood at 77 days, while creditor days
stood at 88 days in FY19 resulting into negative working capital
cycle. However, high credit period is on account of stretched
liquidity position of the company. Average utilization of
fund-based limits remained high at 99.42% for the 12 months period
ended May 2019. The company had free cash and bank balance of
INR4.31 crore as on March 31, 2019.
Exposure to volatility in input costs and cement prices: The
company has captive lime stone mines and procures its entire
limestone requirement from its wholly-owned subsidiary i.e.
Meghalaya Minerals and Mines Limited. Further, it meets its coal
requirement through auctions or open market purchases from the
domestic producers and thus remains exposed to risk arising on
account of the volatility in the raw material prices. The company
also remains exposed to risk of volatile movement in the price of
diesel with respect to freight cost. Furthermore, with the
company's presence restricted to North-East India, it remains
susceptible to demand-supply dynamics and volatility in the prices
of cement.
Key rating strengths
Long track record of operations in cement industry: Established in
1999, the company has nearly 2 decades of experience in the
business of cement manufacturing and sells cement under the brand
name 'Valley Strong Cement'. It manufactures Ordinary Portland
Cement (OPC) and Portland Pozzolana Cement (PPC) and it target
markets are located in the North-Eastern states of India.
Cement plant operations with captive limestone mines: The company's
manufacturing plant has locational advantage as the unit is
situated on the National Highway connecting Guwahati and Silchar
and located in the Barak Valley region of Badarpurghat, Distt.
Karimganj, Assam and it is connected to other states of North-East
such as Manipur, Mizoram, Tripura and southern part of Meghalaya,
which are the company's target markets. The company also has
captive lime stone mines, in its wholly owned subsidiary viz.
Meghalaya Minerals and Mines Limited (MMML), in district Jaintia of
Meghalaya. The limestone mines are located within 75 km radius from
the cement plant and have deposit life of over 100 years. BVCL is
procuring its entire requirement of limestone from its subsidiary.
Strong customer base in North-Eastern region of India: The company
sells cement through a distribution network comprising 150 dealers,
in the North-Eastern states of Assam, Mizoram, Tripura, Manipur and
Meghalaya. The company has a diversified and strong customer base
including institutions and government agencies like Director
General Of Supplies & Disposals (DGS&D), 19th Assam Rifals,
Executive Engineer Rural Development (EERD), CPWD, ONGC, BSF, etc.
Industry outlook: Given the inherently cyclical nature of the
cement industry, the company remains exposed to risks
associated with the same. However, higher outlay and focus on
infrastructure, housing and rural development are likely to
boost the cement demand in the long-term, which in turn will
benefit the companies in the sector.
Liquidity analysis: The company has free cash and bank balance of
INR4.31 crore as on March 31, 2019. Average utilization of
fund-based limits remained high at 99.42% for the 12 months period
ended May 2019. The company has scheduled debt repayments of around
INR1.56 crore in FY20 and INR1.23- INR1.56 crore in FY21 as against
generated Gross Cash Accruals of INR8.72 crore in FY19.
Barak Valley Cements Limited (BVCL), incorporated in April 1999, is
engaged in the business of manufacturing and marketing cements of
different grades under the brand name 'Valley Strong Cement'. The
manufacturing unit of the company is located at Jhoom Basti,
Devendranagar, Badarpurghat, District Karimganj, Assam and the
company sells cement in the North-Eastern states of India.
BULLAND BUILDTECH: CARE Keeps D on INR45cr Loans in Not Cooperating
-------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Bulland
Buildtech Private Limited (BBP) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 45.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 29, 2018 placed the
rating of BBP under the 'issuer non-cooperating' category as
Bulland Buildtech Private Limited had failed to provide information
for monitoring of the rating. Bulland Buildtech Private Limited
continues to be non-cooperative despite repeated requests for
submission of information through e-mail dated
August 2, 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 rating on Bulland Buildtech Private Limited's
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
Key rating weaknesses
At the time of last rating on June 26, 2018, the following were the
rating weakness: There has been ongoing delays in debt servicing
due to stretched liquidity position.
Delhi-based BBP was incorporated by Mr Rajneesh Nagar, Mr RamKesh
Basist and Mr Krishan Pal Singh. The company is engaged in real
estate development. Currently, BBP is developing 'Bulland Elevates'
residential project with 10.95 lsf of saleable area. The promoters
of BBP have other business interests such as dealership of Lohia
Machinery Limited (LML), dealership of TVS Motor Company; which is
being carried out through associate concerns, namely, M/s Bulland
Automobile and M/s Bulland Motors, and M/s Flash Express Courier
Services engaged in courier business.
CRITICAL ACCESS: CARE Keeps B on INR8.5cr Loans in Not Cooperating
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Critical
Access Health Services & Research Center Private Limited continues
to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 8.50 CARE B; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 27, 2018 placed the
rating of Critical Access Health Services & Research Center Private
Limited under the 'issuer non-cooperating' category as Critical
Access Health Services & Research Center Private Limited had failed
to provide information for monitoring of the rating. Critical
Access Health Services & Research Center Private Limited continues
to be non-cooperative despite repeated requests for submission of
information through emails, phone calls August 9, 2019, August 8,
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 July 20, 2018, the following were the
rating strengths and weaknesses (updated with information from
MCA):
Key Rating Weaknesses
Nascent stage of operations: The company had started commercial
operations in May, 2015. Stabilization of the revenue stream
remains a risk though the same is minimized partially considering
the experience of the promoters in the same line of business.
Furthermore, the operations of the company has achieved a total
operating income of INR5.57 crore in FY18. Reputational risk
coupled with stringent regulatory framework for healthcare sectors
in India Despite the increasing trend of privatization of the
healthcare sector in India, the sector continues to operate under
stringent regulatory control. Furthermore, word-of-mouth and
reputation play a major role in attracting patients.
Risk of unavailability or inability to attract quality doctors and
medical professionals: Due to scarcity of trained medical persons
including doctors owing to heavy competition in state of Haryana,
it becomes relatively difficult to attract and retain skilled pool
of medical personne. Given that the quality of medical staff is a
key driver for a hospital's success, the Hospital's ability to
attract and retain experienced doctors and consultants in the
current competitive scenario remains critical. However, given the
fact that medical professionals themselves are the owner of
hospital, the attrition risk is mitigated to a large extent.
High competition and fragmented nature of industry: CAHSRL faces
competition from established government/trust hospitals as well as
private established hospitals. Thus, the ability of the hospital to
establish itself as a key player in highly competitive market
remains crucial for its future prospects.
Key Rating Strengths
Experienced promoters: Promoters of CAHSRL, Dr Smt. Krishna Sangwan
is having experience of over 35 years and is renowned Gynecologist
by virtue of her association and also Professor and HOD of
Department of Gynecology and Obstetrics, P.G.I.M.S., Rohtak and
M.M.I.M.S.R., Mullana. Dr Om Prakash Midha, another director; is a
management professional with a corporate experience of more than
two decades in the healthcare industry. Both of them collectively
looks after the operation of the company.
Locational advantage: The location of Panipat is near Delhi and
linked through NH-1 and is strategically located. The vicinity has
already witnessed development and available area is adequate for
the project with space for staff quarters, parking and landscaping
and also for future expansion.
Incorporated on March 12, 2010, Critical Access Health Services &
Research Centre Private Ltd (CAHSRL) is promoted by Dr Sudeep
Sangwan and Dr. Smt. Krishna Sangwan. CAHSRL plans to setup a 100
bedded multi-specialty hospital at Panipat, Haryana by December
2016 of which 50 beds are already operational since May 2015. The
hospital is a multispecialty hospital and trauma centre along with
value added services mainly comprising of 10 bedded ICU, OPD, 2
Operating rooms/ Labour room, Imaging department with Spiral CT
scan, X-ray, ultrasound machine, theatre sterile supply unit,
Mammography, Laboratory services and so on. The hospital will
outsource laundry services to provide clean linen while
sterilization of requisite linen is proposed to be carried out
in-house.
EMCO LIMITED: CARE Keeps D on INR1710cr Loans in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of EMCO
Limited continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 498.14 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Short-term Bank 1,212.46 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 26, 2018, placed the
rating of EMCO Limited under the 'issuer non-cooperating' category
as EMCO Limited had failed to provide information for monitoring as
agreed in its Rating Agreement. EMCO Limited continues to be
non-cooperative despite repeated requests for submission of
information through e-mails dated June 12, 2019, June 6, 2019 and
May 31, 2019 and numerous phone calls. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings take into account the ongoing delays in debt servicing
by the company.
Detailed description of the key rating drivers
Key Rating Weaknesses
Due to the stressed liquidity position, there are devolvement in
LCs and on-going delays in servicing of debt obligations by the
company.
Incorporated as a private limited company in 1964, EMCO Limited
(EMCO) was converted into a public limited company in 1965. The
current promoter, R.S. Jain Group, took over the company from B.S.
Jain Group in 1991. EMCO operates through two main verticals:
Products and Projects. The products division is engaged in the
manufacturing of transformers and electronic energy meters. EMCO
has six manufacturing facilities for transformer, transmission
tower line and meters viz two in Thane, two in Jalagaon, and one
each in Dadra and Vadodara.
GALI BHANU: CARE Lowers Rating on INR5.53cr LT Loan to B
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Gali Bhanu Prakash (GBP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.53 CARE B; Issuer Not Cooperating;
Facilities Revised from CARE B+ on the
basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking no default statement from GBP to monitor the
ratings vide e-mail communications dated August 1, 2019, August 5,
2019 and August 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
publicly available information which however, in CARE's opinion is
not sufficient to arrive at a fair rating. The ratings Gali Bhanu
Prakash on bank facilities will now be denoted as CARE B; Stable;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
For detail strengths and weakness considered during last review
please refer to our press release published on June 21,2018
Andhra Pradesh based, Gali Bhanu Prakash (GBP) was established as a
proprietorship firm in the year 2002 and promoted by Mr. G. Bhanu
Prakesh. The firm is engaged in providing ware house on lease
rental to Andhra Pradesh State Civil Supplies Corporation Limited
(APSCSCL). The property is built on total land area of 30 acres
comprising of 2 godowns having storage capacity for food crops like
rice around 10000MT and 15000MT respectively. Term loan has been
taken for the proposed construction of a godown with the capacity
of 15000MT.
GOYAL EDUCATIONAL: CARE Keeps D on INR13cr Debt in Not Cooperating
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Goyal
Educational & Welfare Society continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 12.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Short-term Bank 1.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 3, 2018 placed the
rating of Goyal Educational & Welfare Society under the 'issuer
non-cooperating' category as Goyal Educational & Welfare Society
had failed to provide information for monitoring of the rating.
Goyal Educational & Welfare Society continues to be non-cooperative
despite repeated requests for submission of information through
e-mails, phone calls August 12, 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 the ongoing delays in the servicing
of interest obligations due to stressed liquidity position.
Goyal Educational and Welfare Society (GEWS) was established on
July 22, 2008 under the Haryana Registration and Regulation
Societies Act, 2012 with an objective to provide education services
by establishing and operating various educational institutions.
Initially, the society was promoted by Mr. Mahender Goyal who is
the president of the society and carries out the day to day affairs
with required support from other key members. The society is
running three institutions under the brand name "Rawal
Institutions" (RI) which includes Rawal Institute of Engineering
and Technology (RIET), Rawal Institute of Management (RIM) and
Rawal College of Education (RCE) established in 2008 in a single
campus offering varied courses. The day to day management of the
society is carried by Mr. Mahender Goyal (President), Mr. Anil
Rawal (Vice President), Mr. Surender Kumar Goyal (Joint Secretary)
and Mr. C.B Rawal. The society has employed experienced teaching
and administrative staff to run the courses in efficient manner.
GEWS has a total number of 188 employees which includes 118
teaching staff and 70 administrative staff.
JAI SAKTHI: CARE Keeps B+ on INR35.6cr Loans in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Jai Sakthi
Mills (JSM) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 35.62 CARE B+; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated July 6, 2018, placed the
rating(s) of JSM under the 'Issuer noncooperating' category as JSM
had failed to provide information for monitoring of the rating. JSM
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and email
dated July 22, 2019, July 26, 2019, July 30, 2019 and August 8,
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.
At the time of last rating July 6, 2018 the following were the
rating strengths and weaknesses:
Detailed description of the key rating drivers
Key Rating Weakness
Decline in PBILDT margin albeit increase in total income: The
PBILDT margins of the firm declined by 598 bps from 15.54% in FY15
(refers to the period April 1 to March 31) to 9.56% in FY16 due to
increase in the number of orders undertaken with low profit margins
and increase in the raw material cost. However, the total operating
income of the firm increased by 42.88% from INR67.33 crore in FY15
to INR96.20 crore in FY16.
Working capital intensive nature of operations: The operating cycle
of the firm increased from 63 days in FY15 to 84 days in FY16 due
to increase in inventory days from 80 days in FY15 to 97 days in
FY16.
Profitability susceptible to volatile raw material prices: The yarn
manufacturing sector is exposed to the price risk of raw material
(cotton). Yarn units are required to keep stock of
sufficient cotton inventory to meet the demand. These units also
tend to purchase cotton when the prices are relatively favorable
and build up the stock. This results in the need to fund the pile
up inventory. Also, given the commoditized nature of cotton and
the regulations around the import/export of the same, based on the
demand and supply dynamics, cotton prices tend to move sharply.
Hence, units which have purchased cotton at relatively higher cost,
incur losses on the inventory when prices fall sharply,
owing to slowdown in demand for cotton and yarn as well as due to
supply glut of cotton. Given the absence of prior experience in
the textile industry, JSM is further exposed to this risk as the
management needs to take calculated procurement decisions.
Partnership nature of entity: Partnership nature of business has an
inherent risk of withdrawal of capital at the time of personal
contingency. The firm also has the risk of business being
discontinued upon the death/insolvency of the partners. The ability
to raise funds is also very low as partnership firms have
restricted access to external borrowings.
Key rating strengths
Moderate capital structure: The overall gearing of the firm
improved from 1.63x in FY15 to 1.24x in FY16 due to increase in net
worth from INR18.37 crore as on March 31, 2015, in to INR25.04
crore as on March 31, 2016, due to accretion of profits and
infusion of capital by the partners.
Liquidity Analysis: The liquidity position of the firm stood below
unity at 1.50x and 1.42x marked by current ratio and quick ratio
respectively as on March 31, 2015.
JSM is a partnership concern established in April 2010, for
production of yarn and cloth in Sulur, Coimbatore and Tamil Nadu.
JSM has 10 partners, all belonging to same family. In FY14, the
firm has added 7 more partners from the own family in order to
infuse more capital to support the operations. Although established
in April 2010, JSM commenced its commercial production of yarn and
cloth from June 2012. The installed capacity of the firm as on
March 31, 2015, is 18,000 spindles. The firm has 15 ring-frames
with 1200 spindles. JSM has a production capacity of 46.80 lakh kg
of yarn per annum (Average of 12000 kgs of yarn per day). The
entire cloth manufacturing is completely outsourced to other units
wherein the yarn is supplied by JSM. JSM produces yarn varieties in
the count of 25s, 30s and 34s semi-combed hosiery yarn, which are
used in making cloth which is finally used in the making of men's
vests and T-Shirts.
M & T CONSTRUCTIONS: CARE Keeps 'B' Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of M & T
Constructions (MTC) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.00 CARE B; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 8, 2018, placed the
rating(s) of MTC under the 'Issuer non-cooperating' category as MTC
had failed to provide information for monitoring of the rating. MTC
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and email
dated July 22, 2019, July 26, 2019, July 30, 2019 and August 8,
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 June 8, 2018, the following were the
rating strengths and weaknesses:
Key Rating Weakness
Small sized player with regional concentration: The entity
constructs roads and bridges mainly for PWD and KSCCL in Kerala.
The projects are executed only in Kerala. The size of the
operations as reflected by total operating income of INR2.12 crore
in FY15 (refers to the period April 1 to March 31) are very small
and restrict the ability of the firm to bid for large size orders.
The MIS systems adopted by the firm are also rudimentary with scope
for improvement.
Weak financial risk profile: The total operating income has been
declining sharply from INR8.23 crore in FY13 to INR2.12 crore in
FY15. As a result, the PAT levels have also been thin and
declining. Networth remains small at INR1.77 crore in FY15. The
overall gearing stood high at 2.85x while the total debt/GCA stood
stressed at 44.13 times, owing to declining PAT. Interest coverage
remained low at 1.18x in FY15.
Working capital intensive nature of operations: MTC's inventory is
mainly in the nature of work-in-progress to the extent of INR6.10
crore in FY14 and INR6.34 crore in FY15 which is significantly
higher than the revenues for FY15. Delays in execution of orders
resulted in inability to bill which impacted the firm's liquidity
position. Inventory period was 1616 days in FY15. The firm has not
classified the receivables separately. As 100% of the revenue is
contributed by the Government bodies like PWD and KSCCL in Kerala,
the receivables are on the basis of budget allocation from the
State Government which may be delayed, which results in requirement
of additional working capital.
Key rating strengths
Long experience of the partners in the construction industry
coupled with the long operational track record of Operations: MTC
has a track record of about 22 years. Mr Manoj Krishna who is one
of the key promoter has been in this industry since 1991. He
started his career on completion of Diploma in Civil Engineering.
He was working under private contractors in the construction of
residential and commercial buildings for about one and half years
and later he started his own firm by name MTC. In the year 2000,
the firm was registered as a 'C' class contractor and subsequently
in the year he was upgraded to 'B' class contractor and in the year
2003, the firm got registered as 'A' Class contractor with PWD,
Kerala.Mr Thomas V.T, who is a graduate and also a key partner is
associated with the firm since its inception and both the partners
have an experience for more than two decades in the construction of
roads and bridges.
Liquidity Analysis: The liquidity position of the firm stood at
1.32x and 0.07x marked by current ratio and quick ratio
respectively as on March 31, 2015.
MTC is a partnership firm established in the year 1993 by the
partners Mr Manoj Krishna and Mr Thomas V.T. The profits of the
firm are shared equally between the partners. The firm is
registered as an 'A' class contractor with Public Works Department
(PWD) of State Government of Kerala from the year 2003. MTC
constructs roads and bridges for PWD and Kerala State Construction
Corporation Limited in Kerala which contributes the entire revenue
of the firm.
MAHAAJAY SPINNERS: CARE Keeps B on INR3.5cr Loan in Not Cooperating
-------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Mahaajay
Spinners India Private Limited (MSIPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 3.50 CARE B; Issuer Not Cooperating;
Facilities Based on best available
information
Shor-term Bank 6.50 CARE A4; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from MSIPL to monitor the rating
vide e-mail communications/ letters dated May 20, 2019, July 3,
2019, July 5, 2019 , and July 8, 2019 and numerous phone calls.
However, despite CARE's repeated requests, the company has not
provided the requisite information for monitoring the rating. In
the absence of minimum information required for the purpose of
rating, CARE is unable to express opinion on the rating. In line
with the extant SEBI guidelines, CARE has reviewed the rating on
the basis of publicly available information which however, in
CARE's opinion is not sufficient to arrive at fair rating. The
rating on Mahaajay Spinners India Private Limited's bank facilities
will now be denoted as CARE B; Stable;/CARE A4 ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
The rating assigned to the bank facilities of Mahaajay Spinners
India Private Limited (MSIPL) continues to be tempered by small
scale of operation, leveraged capital structure with weak debt
coverage indicators albeit improvement. The rating also factors in
increase in PBILDT margin and net profit achieved in FY18. The
rating, however, continues to derive strength from long track
record of the company and experienced promoters in textile
industry.
Key Rating Weakness
Small scale of operation: The company has small size of operations
marked by a net-worth base of INR3.67 cores as of March 31, 2018,
with an marginal increase from INR3.53 crore as of March 31, 2017
and the scale of operations stood small marked by total operating
income of INR15.66 crore in FY18 as against TOI of INR15.29 crore
in FY17.
Leveraged capital structure with weak debt coverage indicators
albeit improvement: The capital structure of the company marked by
overall gearing stood leveraged at 3.07x as on March 31, 2018, when
compared to 2.23x as on March 31,2017. The Debt coverage
indicators, marked by Total debt to GCA stood weak at 15.89x as on
March 31,2018 as against -28.42x in FY17. Further, interest
coverage ratio marginally improved from 0.70x as of March 31, 2017
and marginally improved to 1.57x as on March 31, 2018. The Debt
coverage indicators, marked by Total debt to GCA stood weak at
8.74x as on March 31, 2018 , although improved as against 25.06x as
of March 31, 2017. Further, interest coverage ratio marginally
improved from 1.67x as of March 31, 2017 and stood at 2.12x as on
March 31, 2018.
Key Rating Strengths
Long track record of the company and experienced promoters in
textile industry: The promoters of the company have long experience
of two decades in the yarn manufacturing and the company has long
track record of more than a decade in the manufacturing of cotton
and viscose yarn with established relationship with domestic
customers.
Increase in PBILDT margin and net profit achieved in FY18: The
PBILDT margin increased from 4.72% in FY17 to 12.50% in FY18.
Further, net profit achieved by the company in FY18.
Elongated operating cycle days: The operating cycle of the company
elongated to 253 days in FY18 as against 217 days in FY17.
Liquidity Analysis: The current ratio of the company increased from
1.07x as of March 31, 2017 to 1.35x as of March 31, 2018. The cash
and cash equivalents stood at INR0.86 crore in FY18 as against
INR0.45 crore in FY17.
Mahaajay Spinners India Private Limited (MSIPL) was incorporated in
2005, as private limited company based out of Salem (Tamilnadu).
The board of directors of the company consists of Mr Bharath Kumar
M (Managing Director), Mr Maha Ajay Prasath and Mr Hariharan. It is
an ISO 9001: 2015 quality certified company. MSIPL is engaged in
manufacturing of various types of home furnishing textile like bed,
table, kitchen, bath linens, besides others.
OCEAN ELEVATOR: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Ocean Elevator Private Limited
G-II, Utility Block
Ganga Tower, L.C.T. Ghat
Mainpura, Patna
PIN 800001
Insolvency Commencement Date: August 22, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: February 18, 2020
Insolvency professional: Rajesh Keshri
Interim Resolution
Professional: Rajesh Keshri
P-48, Pragati Pally
Lake Town, Kolkata 700089
E-mail: keshri.co@gmail.com
Last date for
submission of claims: September 9, 2019
PELLET ENERGY: CARE Keeps D on INR28.5cr Loans in Not Cooperating
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Pellet
Energy Systems Private Limited (PES) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 28.50 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 28, 2018 placed the
rating of PES under the 'issuer non-cooperating' category as Pellet
Energy Systems Private Limited had failed to provide information
for monitoring of the rating. Pellet Energy Systems Private Limited
continues to be non-cooperative despite repeated requests for
submission of information through e-mail dated August 2, 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
rating on Pellet Energy Systems Private Limited's 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
Key rating weaknesses
At the time of last rating on June 26, 2018, the following were the
rating weakness: There has been ongoing delays in debt servicing
due to stretched liquidity position.
Pellet Energy Systems Private Limited (PES) currently being managed
by Mr. Bharat Sharma and Ms. Shruti Sharma was initially
incorporated as Luxury Woodplus Private Limited in 2010. The name
changed to its present status in October 2011. PES is engaged in
manufacturing of biomass pellets at its manufacturing unit located
in Roorkee, Uttarakhand with installed capacity of 500 tons per
day. The company has commenced its manufacturing operations in
April, 2015. The product finds its usage as a fuel in industrial,
commercial and household segment. The main raw material is
sugarcane baggase which is procured domestically. PES primarily
sells its product to FMCG (Fast Moving Consumer Goods) companies
domestically. Its group entities include Advance Hydrau Components
Pvt Ltd engaged in Manufacturing of hydraulic and mechanical
machinery, Subha International engaged in Export of engineering
goods and turnkey projects and Advance Machines engaged in
Manufacturing of engineering goods.
PROMINENT METAL: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Prominent Metal Private Limited
XWH20, 2nd Floor
Plot No. 5 Park End
Vikas Marg Delhi
East Delhi 110092
Insolvency Commencement Date: July 25, 2019
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: January 21, 2020
(180 days from commencement)
Insolvency professional: Vivek Parti
Interim Resolution
Professional: Vivek Parti
A-166, 2nd Floor, Defence Colony
New Delhi 110024
Delhi
E-mail: v_parti@yahoo.com
irppmpl@prominentmetal.in
Last date for
submission of claims: September 9, 2019
RAJRANI COLD: CARE Keeps D on INR13.7cr Loans in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Rajrani
Cold Storage and Ice Plant Private Limited continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 13.71 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 29, 2018 placed the
rating of Rajrani Cold Storage and Ice Plant Private Limited under
the 'issuer non-cooperating' category as Rajrani Cold Storage and
Ice Plant Private Limited had failed to provide information for
monitoring of the rating. Rajrani Cold Storage and Ice Plant
Private Limited continues to be noncooperative despite repeated
requests for submission of information through e-mail dated
August 2, 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 rating on Rajrani Cold Storage and Ice Plant
Private Limited's 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
Key rating weaknesses
At the time of last rating on June 26, 2018, the following were the
rating weakness: There has been ongoing delays in debt servicing
due to stretched liquidity position.
Promoted by Mr. Sushil Tripathi, Raj Rani Cold Storage and Ice
Plant Private Limited (RCI) was Incorporated in 1989. The company
is engaged in processing of milk and milk products such as skimmed
milk powder (SMP), desi ghee, condensed milk, whole milk powder,
poly-pack milk, table butter, sweet curd etc. The manufacturing
unit is located in Fatehpur, Uttar Pradesh with the installed
capacity of processing 2.5lakhs litres of milk per day (LLPD) as on
March 31, 2015. RCI is an ISO 22000:2005 and HACCP (Hazard Analysis
and Critical Control Points) certified company. In addition to the
milk processing, the company also has a cold storage facility for
storing potatoes for the local farmers with the total capacity for
60,000 quintals per annum as on March 31, 2015. The main raw
material for the company is milk which it procures from local
farmers/milk centres and stores it in the chilling centres owned by
the company. The final products are sold under the brand name 'Raj'
mainly in the state of Uttar Pradesh, Haryana, and Punjab, through
a network of distributors.
RANG SUPER: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: Rang Super Shopping Private Limited
101/1 Feedar Road Po & Ps: Belgharia
Kolkata WB 700056
India
Insolvency Commencement Date: August 27, 2019
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: February 23, 2020
(180 days from commencement)
Insolvency professional: Mr. Bhupendra Singh Narayan Singh Rajput
Interim Resolution
Professional: Mr. Bhupendra Singh Narayan Singh Rajput
A-309, ATMA House
Opp. Old RBI, Ashram Road
Ahmedabad 380009
E-mail: cabsrajput309@gmail.com
Last date for
submission of claims: September 10, 2019
RCL PAPER: CARE Keeps D on INR100.3cr Loans in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of RCL Paper
and Packagings Limited (RCLPPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 7.28 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Shor-term Bank 2.75 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 15, 2018, placed the
rating(s) of RCLPPL under the 'issuer non-cooperating' category as
RCLPPL had failed to provide information for monitoring of the
rating. RCLPPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated July 19, 2019, July 22, 2019, July 24, 2019, July
30, 2019 and July 31, 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 June 15, 2018, the following were the
rating strengths and weaknesses:
Key Rating Weakness
Delays in debt servicing: The company has delayed servicing its
debt obligations on account of cash flow mismatch. Susceptibility
of its profit margins to fluctuation in raw material prices; paper
The company's major raw materials being paper constitutes for
around 90% of total purchases and the rest being printing material.
Price of paper is seen increasing year-on-year and is driven by the
increasing quantities demanded. Hence, any adverse fluctuation in
the prices and availability of the paper can affect the
profitability margins of the firm, which already remains low due to
the high cost of raw materials.
Highly fragmented and competitive nature of industry marked by the
presence of several other players in the market: The company is
engaged in printing of letter heads, bus tickets, account books,
pin mailers and other printing jobs. The paper printing industry is
highly fragmented with the presence of several players in the
market. Such competitive and fragmented market results in lower
profit margins due to competitive prices of peers in the market.
Key Rating Strengths
Experience promoters for around two decades: The company is
promoted by Mr Balakrishnan (director) and Mr Prathap (director)
who are qualified graduates and have around 25 years of experience
in the printing industry. The other director, Mr Ramchander Reddy
is a doctor and involved in the strategic decisions of the
company.
RCL Paper and Packaging Limited (RPPL) formerly known as RCL
Technologies Limited was incorporated in 1993 as Reddy Computers
Limited and subsequently its name was changed to RCL Technologies
Limited in the year 2000. Furthermore, on November 05, 2014, the
name of the company was changed to RCL Paper and Packaging Limited.
The company is engaged in the business of digital printing of
letter heads, bus tickets, account books, pin mailers and other
printed documents. Initially, RCL used to outsource the printing
works, after receiving order from its clients, to various third
parties, on a job-work basis till 2011. However, the company
started its own printing unit in 2011. Recently, the Company is
planning to purchase new packing and printing equipments to start
manufacturing of paper gift boxes and other packaging boxes.
SHRI JAGANNATH: CARE Keeps D on INR14.3cr Loans in Not Cooperating
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Shri
Jagannath Educational Health and Charitable Trust (SJCET) continues
to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 14.29 CARE D; Issuer Not Cooperating;
Facilities Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated June 20, 2018, placed the
rating(s) of SJCET under the 'Issuer non-cooperating' category as
SJCET had failed to provide information for monitoring of the
rating. SJCET continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated July 19, 2019, July 26, 2019, July 30, 2019 and
August 8, 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 June 20, 2018 the following were the
rating strengths and weaknesses:
Key Rating Weakness
Delays in debt servicing: The trust has delayed on debt servicing.
The delays were primarily due to cash flow mismatches and the
application of accruals for the debt funded establishment of the
poly technic college.
Key rating strengths
Experience of trustees in the field of academics supported by
qualified professionals: Prior to starting SJCET, Mr. S.A.
Subramanian, Chairman and Managing Trustee was teaching English in
various colleges for twenty years. He hails from a family of
educationalists and has prior experience of running a small school
and a coaching center in his early days. Another Trustee,
Mr.O.M.Manivelu is a practicing civil engineer with teaching
experience in Civil Engineering. However, Mr. Satheesh
Krishnaraj(one of the founder trustees) has been replaced by Mr.
Durgashankar in the current academic year (AY 2011-12).The
day-to-day activities of the college are being managed by Director
Dr.V.Jayaraman, a Post Graduate in Aeronautical Engineering from
IIT Madras and Dr. R.Saravanan, Principal of the college who has
more than 2 decades of teaching and research experience, who has
replaced Dr.G. Subramanian, who retired. The policy decisions such
as starting new college under the same trust, new courses in JCTET
and investment in infrastructure are decided by a committee
comprising of Trustees.
SJCET is a non-minority, charitable trust registered under Section
12A of the Income Tax Act. SJCET was established in 2008 by Mr S.
A. Subramanian, along with Mr O. M. Manivelu and Mr S. Satheesh
Krishnaraj. However, Mr. Satheesh Krishnaraj resigned from the
Trusteeship and was replaced by Mr. Durgashankar (a BE graduate,
son-in-law of Mr. Subramanian), in AY 2011-12. Mr Arul Selvan,
(MrDurga Shankar's brother) is the Vice Chairman and Joint Managing
Trustee (BE, MBA).
SREE VINAYAK: CARE Keeps D on INR7.2cr Loans in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sree
Vinayak Vidhyalayaa Charitable Trust (SVVCT) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 7.21 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated January 25, 2019, placed the
rating(s) of SVVCT under the 'Issuer non-cooperating' category as
SVVCT had failed to provide information for monitoring of the
rating. SVVCT continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated July 22, 2019, July 26, 2019, July 30 2019 and
August 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.
Detailed description of the key rating drivers
At the time of last rating January 25, 2019, the following were the
rating strengths and weaknesses:
Key Rating Weakness
Ongoing delays in meeting debt obligations: The trust was unable to
generate sufficient cash flows leading to strained liquidity
position resulting in ongoing delays in meeting
its interest obligations in time.
Sree Vinayak Vidhyalayaa Charitable Trust (SVVCT) was established
as a non-profit making organization in the year 2006 by Mr.Sekar
and his family members at Erode, Tamil Nadu. SVVCT is registered as
a public charitable trust and established educational institutions
for the purpose of promoting engineering, scientific, managerial
and other graduation courses. Various health and awareness camps
are held in association with the government hospitals in and around
Erode, Tamil Nadu as part of their philanthropic activities. The
trust operates three educational institutions namely, Aishwarya
College of Engineering & Technology, Aishwarya Polytechnic College
and Sri Vinayak Vidhyalaya College of Education.
SRI MURARI: CARE Keeps B+ on INR15cr Loans in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sri Murari
Pavan Agrotech (SMPA) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 15.00 CARE B+; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated February 1, 2019, placed the
rating(s) of SMPA under the 'issuer non-cooperating' category as
SMPA had failed to provide information for monitoring of the
rating. SMPA continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated July 18, 2019, July 22, 2019, July 24, 2019, July
31, 2019 and August 2, 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 January 30, 2019, the following were
the rating strengths and weaknesses:
Key Rating Weakness
Short track record with low net worth base: SMPA started its
commercial operations from 2016. Hence, it has a short track record
of operations. Furthermore, the net worth of the firm stood low at
INR2.99 crore as on March 31, 2017 as compared to other peers in
the industry.
Thin and declining profitability margins: The profitability margins
of the firm have been declining during review period. The PBILDT
margin declined from 2.03% in FY16 to 1.95% in FY16 due to thin
margin associated with sales of cotton lint and seeds along with
under absorption of overheads on account of initial years of
operations. Furthermore, PAT margin of the firm remained thin and
stood at 0.14% in FY17 due to increased finance charges.
Leveraged capital structure and weak debt coverage indicators
during review period: The capital structure of the firm though
improved still remained leveraged during the review period. The
debt equity ratio of the firm improved from 3.09x as on March 31,
2016 to 0.10x as on March 31, 2017 on account of repayment of term
loan obligations and remained comfortable. The firm primarily
depends on working capital borrowings for its day to day
operations. The average utilization of the cash credit facility
remained 60% during the review period to support the increasing
scale of operations. The overall gearing ratio of the firm, though
marginally improved from 5.34x as on March 31, 2016 to 4.21x as on
March 31, 2017, remained leveraged. The debt coverage indicators of
the firm remained weak marked by total debt/GCA of the firm which
deteriorated from 13.00x in FY16 to 17.91x in FY17 due to low cash
accruals and higher outstanding balance of working capital facility
as on account closing date. The PBILDT interest coverage ratio
stood at 1.63x in FY17 compared to 1.75x in FY16 on account of
increase in the interest costs.
Highly fragmented industry with intense competition from large
number of player: The cotton industry is highly fragmented in
nature with several organized and unorganized players. Prices of
raw cotton are highly volatile in nature and depend upon the
factors like area under cultivation, crop yield, international
demand-supply scenario, export quota decided by the government and
inventory carry forward of the previous year. The cotton processing
operators procure raw materials in bulk quantities to avail
discount from suppliers to mitigate the seasonality associated with
availability of cotton resulting in higher inventory holding
period. Further, the profitability margins of the firm are
susceptible to fluctuation in raw material prices.
Constitution as partnership firm: Constitution as a partnership
firm has the inherent risk of possibility of withdrawal of the
partner's capital at the time of personal contingency which can
adversely affect its capital structure. Furthermore, partnership
firms have restricted access to external borrowings as credit
worthiness of the partners would be key factors affecting credit
decision for the lenders.
Key Rating Strengths
Experienced partners of the firm for more than two decades in
cotton ginning industry: SMPA is promoted by Mr. Srihari and his
family members. Mr. Srihari has more than two decades of experience
in cotton industry. The other partners Mr. Chakravarthi, Mr.
Srinath and Mr. Shrikanth are also actively involved in the day to
day operations of the firm. Due to experience of the partners, the
firm has good relation with customer and supplier.
Location advantage: SMPA is located in one the major cotton growing
areas in Andhra Pradesh. Availability of raw material is not
expected to be an issue as the firm procures raw material (raw
cotton) from the farmers located in and around Nandyal. SMPA enjoys
proximity to the cotton producing belt of Andhra Pradesh and
Telangana which results in ease of access to raw material with low
transportation cost.
Increasing total operating income: The total operating income of
the firm increased from INR88.38 crore in FY16 to INR98.99 crore in
FY17 due to high demand of cotton lint by its existing customers
along with addition of new customers. The firm generates its 80% of
income from the sales of cotton lint and the remaining 20% from the
sales of cotton seed. During 9MFY18, the firm has achieved total
operating income of INR67 crore.
Satisfactory operating cycle: The operating cycle of the firm stood
satisfactory at 34 days in FY17. The firm receives its payments
from its customers within 15-20 days and makes the payment to its
suppliers within 15 days. Furthermore, the firm maintains the
average inventory of 20-30 days to meet the customer requirement on
time. Cash credit facility utilization of the firm was 60% in the
last 12 months ended December 31, 2017.
Liquidity Analysis: The current ratio of the firm stood below unity
at 0.92x as on March 31, 2017 as against 1.24x as on
March 31, 2016 due to increase in account payables.
Sri Murari Pavan Agrotech (SMPA) was established in 2015 as a
partnership firm and promoted by Mr. Srihari and his family
members. The firm is engaged in manufacturing of cotton lint and
seeds. The partners of the firm are engaged in same line of
business since 1990 as they were operating cotton ginning business
under sole proprietorship as "Murari Agro Industries" and "Krishna
Traders". Subsequently, these proprietor firms were merged and
started the partnership firm with the name of "Sri Murari Pavan
Agrotech". The commercial operations started from April 2016. The
manufacturing unit is spread across 2.52 acres located at Nandayal,
Andhra Pradesh. SMPA purchases raw material from local farmers
located in and around Nandayal. The firm sells the cotton lint and
seeds to the customers with Andhra Pradesh and Telangana.
SUSEE PREMIUM: CARE Keeps D on INR14.4cr Loans in Not Cooperating
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Susee
Premium Automobiles Private Limited (SPAPL) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 14.48 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated January 18, 2019, placed the
rating(s) of SPAPL under the 'issuer non-cooperating' category as
SPAPL had failed to provide information for monitoring of the
rating. SPAPL continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and email dated June 22, 2019, 2019, August 6, 2019,
August 7, 2019 & August 8, 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 company was unable to generate sufficient cash flows leading to
strained liquidity position resulting in ongoing delays in meeting
its debt obligations in time.
Detailed description of the key rating drivers
Key Rating Weakness
Ongoing delays in meeting debt obligations: The company was unable
to generate sufficient cash flows leading to strained liquidity
position resulting in ongoing delays in meeting its debt
obligations in time.
Susee Premium Automobiles Private Limited (SPAPL) was incorporated
in the year 2008 by Mr. S. Jeyabalan, Mr. J. Rajiv Subramanian and
Ms. J. Nirmala. SPAPL is the authorised dealer of Ford India
Private Limited (FIPL rated IND AAA; stable/IND A1+) for vehicles
and spare parts. It has two operating showrooms named Rockcity Ford
in Trichy and Salem, Tamil Nadu. The company procures the vehicles
and spare parts directly from FIPL's manufacturing units in Gujarat
and Chennai. The registered office is located in Madurai, Tamil
Nadu.
TARA JEWELS: CARE Keeps D on INR743cr Loans in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Tara Jewels
Limited (TJL) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term/Short 486.00 CARE D; Issuer Not Cooperating;
Term (Fund Based) based on best available
information
Long Term/Short 257.00 CARE D; Issuer Not Cooperating;
Term (Non Fund based on best available
Based) information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from TJL to monitor the ratings
vide e-mail communications dated January 4, 2018, January 9,2018,
January 11, 2018, February 21, 2018, February 23,2018, June 7,
2019, June 13, 2019 and June 20, 2019. However, despite CARE's
repeated requests, the company has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
publicly available information. Furthermore, Tara Jewels Limited
has not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement The ratings on Tara Jewels Ltd.'s
bank facilities will be denoted as CARE D; ISSUER NOT COOPERATING.
The ratings assigned to the bank facilities of Tara Jewels Ltd.
take into account of feedback received from its bankers about
instances of delays in servicing of the debt obligations by the
company.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on March 13, 2018, the following were
the rating strengths and weaknesses.
Key Rating Weaknesses
Ongoing delays in debt servicing: The rating factors in delays in
debt servicing on account of stretched liquidity position. The
company has been incurring cash losses on account of weak demand
for its products. The company's account has been categorized as NPA
by Consortium of Banks as on March 31, 2018. At present, the
company has entered into CIRP (Corporate Insolvency Resolution
Process).
Tara Jewels Limited (TJL) was incorporated in 1998 as Tara Ultimo
Pvt Ltd (TUPL) by Mr. Rajeev Sheth (current Chairman and MD). In
FY09, Tara Ultimo Pvt. Ltd. (TUPL) was merged with T Two
International Pvt. Ltd. (TTIPL), trading in diamond and jewellery,
and Tara Jewels Exports Pvt. Ltd. (TJEPL), engaged in cutting and
polishing of diamonds for the Tara group. Postmerger, TUPL was
renamed 'Tara Jewels Pvt Ltd.' (TJPL). In September 2010, the
company was converted into a public limited company and the name
was changed to Tara Jewels Ltd. (TJL). TJL is an integrated player
in the jewellery industry with presence in designing, manufacture
and retailing of diamond studded jewellery. TJL has been accorded
Star Trading House status by Government of India and subsequently
also been designated as a nominated agency under foreign trade
policy by the Ministry of Commerce.
UNIQUE IMPEX: CARE Keeps B+ on INR4.5cr Loans in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Unique
Impex (UI) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 4.50 CARE B+; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated January 18, 2019, placed the
rating(s) of UI under the 'issuer noncooperating' category as UI
had failed to provide information for monitoring of the rating. UI
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and email
dated August 7, 2019, August 8, 2019, August 12, 2019 & August 13,
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 January 18, 2019, the following were
the rating strengths and weaknesses:
Key Rating Weakness
Relatively small scale of operations with low networth base and
thin profit margins: Despite having a long track record of over two
decades, scale of operations of the firm is relatively small as
compared to other peers in the industry, marked by total operating
income (TOI) of INR24.84 crore in FY17 and low networth at INR0.80
crore as on March 31, 2017. Furthermore, the profit margins of the
firm have been thin during review period FY15-
17. The PBILDT margin of the firm stood in the range of 2%-3%
during review period due to competitive intensity of business
segment due to presence of numerous players. The PBILDT margin
decreased from 2.82% in FY16 to 2.22% in FY17 due to increase in
the amount of manufacturing expenses and material cost incurred
during FY17. Also, the PAT margin stood thin at 0.67% in FY17 due
to low PBILDT levels in absolute terms. Moreover, since the firm
has a diverse range of products, the profit margins are susceptible
to the type of product being sold.
Leveraged capital structure and weak debt coverage indicators: The
capital structure of the firm marked by overall gearing has been
leveraged during the review period due to low networth base and
moderate debt levels. Moreover, the overall gearing of the firm
deteriorated from 2.99x as on March 31, 2015 to 4.58x as on March
31, 2017 on account of increase in debt levels as a result of
increase in utilisation of working capital facilities. The debt
coverage indicators marked by interest coverage and TD/GCA have
been also weak during the review period. However, interest coverage
ratio has improved from 1.50x in FY15 to 1.85x in FY17 on account
of increase in PBILDT levels. Though TD/GCA improved from 39.11x in
FY15 to 14.53x in FY17 due to increase in gross cash accrual, it
stood weak.
Susceptibility of profit margins to fluctuation in raw material
prices and foreign exchange rates: The firm has considerable amount
of foreign exchange exposure due to export sales. Export sales of
the company contributed to around 91% of total operating income in
FY17 when compared to 85% in FY16. The export sales are being done
to customers located at USA, UK, Spain, France, Germany etc. Due to
the significant amount of exports, it is exposed to foreign
currency fluctuation risk which would impact the profitability
margins of the company. However, the company enters into forward
contracts or uses credit exposure limit, based on market conditions
to mitigate forex fluctuations. Being net exporter of goods, the
impact of rupee appreciation can have a significant influence on
the firm's operational performance. Unique Impex has incurred a net
gain of INR0.27 crore in FY17 when compared to a net loss of
INR0.30 crore in FY16 on foreign exchange.
Constitution of the entity as partnership firm with inherent risk
of withdrawal of capital: Constitution as a partnership has the
inherent risk of possibility of withdrawal of the capital at the
time of personal contingency which can adversely affect its capital
structure. Furthermore, partnerships have restricted access to
external borrowings as credit worthiness of the partners would be
key factor affecting credit decision for the lenders. There is a
net withdrawal of INR0.17 crore by the firm during the review
period FY15-17.
Presence in highly fragmented and competitive industry: Unique
Impex is operating in highly competitive and fragmented industry
where the firm witnesses intense competition from
both the organized and largely unorganized players. This fragmented
and highly competitive industry results into price
competition thereby affecting the profitability margins of the
companies operating in the industry.
Key Rating Strengths
Long track record of the firm and experienced management: Unique
Impex is operating in the textile industry for the last two decades
and has a long operational track record in the field. The
promoters of UI possess vast experience in textile industry. The
business of unique impex started since 1996 in a small scale.
Mr. V S Ramakrishnan (41 years) possesses an overall experience of
21 years in textile industry. Furthermore, the top management is
assisted by second line of management having adequate experience in
the industry. Mr. P. M. Subramanian (General Manager at
UI) possesses a rich understanding of products and one decade of
experience in the home furnishing industry.
Growth in total operating income during review period: Total
operating income of the firm has been increasing y-o-y at a
compounded annual growth rate (CAGR) of 76.21% from INR8 crore in
FY15 to INR24.84 crore in FY17 at the back of increase in repeat
orders from existing customers as well as addition of new
customers. Furthermore, the firm has achieved sales of INR20.18
crore during 7MFY18 and has current orders in hand worth
Rs. 4.37 crore to be executed by April 2018.
Established relationship with suppliers and customers: With a
presence of over two decades in the textile industry, UI has good
relationships with suppliers and customers resulting into
established customer base and helps to seek regular orders from
existing customers. Its major clientele include Biglot Stores Inc
(USA, Spain), Dollar Tree (Ba1; Positive), Manttra Inc (U.K), Goya
Importaciones (Spain) to name a few. Also, the firm has attained
memberships of prestigious associations such as Power loom
Development & Export Promotion Council and Handloom Export
Promotion Council. In addition to that, active participation in
trade fairs andexhibitions in Poland, Belgium, USA, Mexico and
India has given the firm wide exposure in the textile industry
across the globe.
Comfortable operating cycle days: The operating cycle of the firm
stood comfortable at 23 days during FY17 which improved from 45
days in FY16. The improved working capital cycle days of the firm
are at the back of reduced number of collection days and inventory
days. The firm's average collection period stood in the range of
20-30 days as the company receives payments from their customers
within 30 days depending on the customer relationship. On the
suppliers end, UI makes payments to their suppliers within 15-30
days. Also, the average inventory period improved from 48 days in
FY16 to 22 days in FY17 due to the fact that the firm maintained
only sufficient quantity of inventory in hand in order to meet
customer requirement on time.
Liquidity Analysis: The firm has reported satisfactory liquidity
position during FY17 marked by its current ratio which stood at
1.07x as against 1.17x during FY17. Further the firm had cash and
bank balances to the tune of INR0.67 Crore as on March 31, 2017.
Karur based, Unique Impex (UI) was established in the year 1996 by
Mr. V S Ramakrishnan and Mrs. R Kavita as a partnership firm.
The firm is engaged in manufacturing and exporting of a diversified
range of home furnishing and fashion textiles. The diverse range of
home furnishing and textiles comprise of organic table cloth, mat,
napkin, towels, cushion covers, curtains, apron, glove, pot holder,
cloth bags, baby cotton nappies, cotton apron, beach mattress and
mitten. The gamut is manufactured from organic as well as
conventional yarn and cotton procured from textiles mills in the
domestic market. In addition to this, Unique Impex also offer a
wide range of fashion textiles such as shawls, stole, pareo,
bandana, scarves and many more.
UNNATI FORTUNE: CARE Keeps D on INR25cr Loans in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Unnati
Fortune Hotmart Private Limited (UFH) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 25.00 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 28, 2018 placed the
rating of UFH under the 'issuer non-cooperating' category as UFHPL
had failed to provide information for monitoring of the rating.
UFHPL continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls dated July
8, 2019 and May 31, 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 take into account ongoing delays in meeting the debt
obligations.
Ghaziabad (Uttar Pradesh) based Unnati Fortune Hotmart Pvt Ltd
(UFH), a private limited company was incorporated by Mr. Anil
Mithas and Mrs. Madhu Mithas in June 2011 and is part of Unnati
Fortune group. The group consists of 25 companies however, only few
of them are operational. UFH is setting up a four star hotel in
Vaishali near Ghaziabad (Uttar Pradesh). The proposed hotel is
being developed on a land parcel of 3,902 sq. mtrs. The proposed
hotel consists of 30 rooms, convention centre, fitness centre,
restaurant, banquet and other facilities (which include pool,
Terrace Garden and Meditation room). Apart from the mentioned
facilities the company is also constructing anchor shop (12,002
sqft) and retail shop (15,003 sqft). Initially the hotel was
expected to start by July, 2016 but due to delays in disbursement
of loan the construction activity was delayed. The hotel will be
operational by May 2017.
VEDBHUMI BUILDERS: CARE Keeps D on INR38cr Loans in Not Cooperating
-------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Vedbhumi
Builders and Developers Private Limited (VBPL) continues to remain
in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 38.94 CARE D; Issuer Not Cooperating;
Facilities Based on best available
information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated March 5, 2018, placed the
rating of VBPL under the 'issuer non-cooperating' category as VBPL
had failed to provide information for monitoring of the rating.
VBPL continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and emails
dated July 2, 2019, July 8, 2019 and August 6, 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 ratings.
Detailed description of the key rating drivers
At the time of last rating on March 5, 2018 the following were the
rating strengths and weaknesses (updated for the information
available from Registrar of Companies):
Key Rating Weaknesses
Delay in debt servicing obligations: As per the interaction with
the banker during last review, the account has been classified
as NPA on account of overdrawals in cash credit facility and
continuous delays in installment repayment of term loans.
Vedbhumi Builders & Developers Private Limited (VBDPL) was
incorporated in 2005 by Mr. Yogesh Chawda & Mr. Vijay Pawar. The
promoters have been involved in the development of residential and
commercial projects in the city of Nagpur and its catchment areas
since over a decade. VBDPL, in past, has developed one
residential/commercial project 'Bhumi Arcade' which was completed
in June, 2012. The project was residential cum commercial project
comprising of 21 apartments and 25 commercial units with a total
salable area of 69,379 sq.ft and the same has been completely sold
off. Promoters in their individual capacities have executed 11
projects with total saleable area of 18,58,175 sq.ft.
=====================
N E W Z E A L A N D
=====================
MIDDLE EARTH: Flight School Placed Into Liquidation
---------------------------------------------------
Sharnae Hope at Stuff.co.nz reports that future pilots' flight
paths are up in the air after Matamata's Middle Earth Flying School
was put into liquidation.
Middle Earth Flying School, trading as New Zealand Aviation, went
into liquidation on August 29, the report discloses.
It is one of two flight schools based at Waharoa (Matamata)
Aerodrome. The company was placed into liquidation due to cashflow
constraints and the ongoing viability of the current business
model, Stuff relates.
"As it is the early stages of the liquidation at this point, we are
uncertain about the exact amount owed to creditors but we believe
there are amounts owing to the Inland Revenue Department and
staff," Stuff quotes CA ANZ Accredited Insolvency practitioner
Steven Khov as saying.
Around 40 students and 10 staff members were notified before the
announcement was made, the report notes.
According to Stuff, Mr. Khov and another liquidator, Kieran Jones,
met with students and staff on Aug. 30 and have been in contact
with NZQA and Public Trust, where the students' fees are held.
"We worked over the weekend to come to an arrangement with another
training provider that will give all the students the option to
transfer their training to them so that they can continue with
their course as seamlessly as possible. The training provider is
also a registered and accredited PTE [Private Training
Establishment] with NZQA. They have started engaging with the
students to offer them the option to transfer.
"We felt that it was most important to ensure that a solution was
found urgently to enable the students to continue their training.
Once these urgent issues are resolved, we will then focus on our
other duties as liquidators such as investigating the affairs of
the company."
Stuff relates that NZQA said Immigration New Zealand has also been
notified of the liquidation, so international students can arrange
any necessary changes to their visa.
A Matamata flight instructor, who wishes not to be named, said
there is talk that another flight school has plans to buy out
Middle Earth Flying School, but nothing has been confirmed
publicly, Stuff relays.
"The student's contracts will be transferred and the staff had a
meeting on Sept. 2 and will be re-interviewed. They [the company]
is going to keep it running for a little while in Matamata and then
will move it to where their other flight school is."
The instructor wouldn't name the company planning to buy out Middle
Earth Flying School or where it was based, but said this move could
affect Matamata's economy, the report adds.
NEW ZEALAND: Business Outlook Deteriorates Over Fears of Recession
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Dom Thomas at Radio New Zealand reports that the ANZ Business
Outlook for August showed a net 52 percent of businesses in New
Zealand expect conditions to deteriorate in the year ahead, from 44
percent last month.
It is the lowest headline reading in 11 years, the report says.
According to RNZ, individual businesses have turned negative about
their own outlook for the first time since April 2009, with a net 1
percent pessimism level.
"Employment, investment and export intentions all fell to dismal
levels, along with profit expectations," the report quotes ANZ
chief economist Sharon Zollner as saying.
She said the economy had positives but they seemed to be ignored.
"The outlook for the economy appears to be deteriorating further,
with firms extremely downbeat despite easier monetary conditions,
fairly robust commodity prices, and positive population growth.
"Whatever the cause, the risk is rising that it becomes
self-fulfilling," Ms. Zollner said, RNZ relays.
RNZ says the survey's indicators pointed to firms not just halting
hiring but cutting staff, as well as costs by not investing.
The fears of a slowdown even recession have risen sharply in recent
months around the world with fears of fall out from the US-China
trade dispute, Brexit, and falling demand, RNZ notes.
That has prompted central banks in developed economies, including
the Reserve Bank of New Zealand, to cut interest rates to their
lowest levels since the global financial crisis in attempts to
bolster demand and activity, adds RNZ.
WELHAUS LIMITED: Building Firm Goes Into Liquidation
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Anan Zaki at Radio New Zealand reports that two Canterbury
construction firms whose staff and contractors have said they were
owed thousands have gone into liquidation or ceased trading.
According to RNZ, Welhaus Limited and sister company Welstruct
faced a number of complaints earlier this year about missed
payments to former staff and contractors.
RNZ relates that owner Dan Tremewan said Welstruct was in
liquidation and his other business, Welhaus, had stopped trading.
Former Welhaus employee Kerry Oberholzer said she and other
employees were still owed wages, the report relays.
She said she was waiting for a mediation meeting with Mr. Tremewan
later this month.
"It has been really tough these last few months and I've basically
spent the time trying to find a new job . . . and it has been
really hard for somebody to pick yourself up," the report quotes Ms
Oberholzer as saying.
RNZ adds Mr Tremewan said his businesses had faced difficulties due
to clients owing them large sums of money.
Welhaus Limited built pre-engineered, panelised homes.
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S I N G A P O R E
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ASL MARINE: Posts SGD116.6MM Net Loss in Q4 Ended June 30
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The Straits Times reports that impairment losses on financial
assets and other operating expenses took a toll on ASL Marine's
results for its fiscal fourth-quarter.
For the three months ended June 30, net loss deepened to SGD116.6
million, from a net loss of SGD52.2 million for the year-ago
period, the report discloses. This translated to a loss per share
(LPS) of 18.53 cents for the quarter, versus a LPS of 8.3 cents in
the preceding year.
Revenue for the quarter fell 6.9 per cent to SGD63.3 million, from
SGD68 million.
According to the report, full-year net loss also widened to SGD141
million, versus a loss of SGD71.4 million last year, despite
revenue rising 23.7 per cent to SGD312.9 million for the 12-month
period.
LPS for the full year stood at 22.41 cents, versus an LPS of 11.34
cents a year ago.
Looking ahead, ASL Marine noted that as its businesses are
primarily reliant on the market conditions in the shipbuilding,
shipping, oil & gas and offshore & marine industries, the main
macroeconomic variables it is sensitive to include global trade,
oil prices and infrastructure spending in Asia, The Straits Times
relays.
These macro trends remain mixed, ASL Marine said, and suggested an
"improving but volatile business environment" for the group.
"However, given that capital goods lag the industry cycle and is
very sensitive to macro economy, the group will benefit from these
factors only gradually," the company, as cited by The Straits
Times, said.
Headquartered in Singapore, ASL Marine Holdings Ltd. --
http://aslmarine.infinitesparks.com/-- provides marine services
primarily in the Asia Pacific, South Asia, Europe, Australia, and
the Middle East.
KOON HOLDINGS: Auditors Raises Going Concern Doubt
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The Strait Times reports that Koon Holdings auditor Ernst and Young
LLP has issued a disclaimer of conclusion over the construction and
precast firm's interim financial results for the six months ended
June 30.
The Strait Times relates that the review flagged that the group
recognised a net loss of SGD50.0 million for the period, and its
current liabilities exceeded its current assets by SGD20.6 million
- conditions that indicate the existence of material uncertainty.
Coupled with challenging conditions affecting the construction and
precast sectors in Singapore, the material uncertainty may "cast
significant doubt" on Koon Holdings' ability to continue as a going
concern, Ernst and Young said, The Strait Times relays.
According to The Strait Times, the disclaimer of conclusion was
issued as the auditing firm was not able to obtain assurance it
would become aware of all significant matters required. The auditor
reviewed the interim financial information - which was
"substantially less in scope" compared with an audit, which would
be able to identify all significant matters.
Mainboard-listed Koon Holdings on Sept. 2 announced its results for
the first half of the year, along with the independent auditor's
report. The firm sunk into the red, posting a SGD50.2 million net
loss attributable to owners of the company, from a net profit of
SGD232,000 a year ago, the report discloses.
This came on the back of lower revenue contributions, impairment
losses and higher administrative costs and other expenses, which
were partially offset by higher other income and lower share of
losses on joint ventures, The Strait Times says.
Loss per share stood at 19.07 cents, from an earnings per share of
0.09 cent a year ago. No dividend has been declared for the period,
the report says.
Revenue fell 6.4 per cent to SGD67.0 million, from SGD71.6 million
the year prior, on lower contributions from its construction
division, The Strait Times relays.
Koon Holdings Limited is a civil engineering and construction
company with operations in Singapore. The Company provides
contractor services for civil and drainage engineering, building,
shore protection, marine and foundation works. Koon Holdings rents
machinery and equipment, and provides tugboats and barges
services.
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S O U T H K O R E A
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ASIANA AIRLINES: Aekyung, 2 Others Submit Preliminary Bids
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Joo Kyung-don at Yonhap News Agency reports that Aekyung, a South
Korean activist fund, and a consortium led by a local brokerage
firm, submitted initial bids to acquire Asiana Airlines Inc.,
industry sources said on Sept. 3.
Yonhap relates that Kumho Asiana Group, the airline's parent, and
its lead manager for the sale, Credit Suisse, received letters of
intent from potential investors, including Aekyung and local
activist fund Korea Corporate Governance Improvement (KCGI),
according to sources.
The consortium led by Mirae Asset Daewoo Co., a major brokerage
house here, also joined the bidding, they said. The consortium
includes HDC Hyundai Development Co., a construction conglomerate
that runs duty-free shops and hotels, Yonhap discloses.
According to the report, Kumho Asiana aims to sell a 31 percent
stake in Asiana held by its subsidiary, Kumho Industrial Co.,
together with its two budget carrier units -- Air Seoul Inc., which
is wholly owned by the airline, and 46 percent owned Air Busan Co.
-- as part of its broad restructuring efforts.
Yonhap notes that the 31 percent stake was worth around US$313
million at Sept. 3's closing price of KRW5,540. But analysts
estimate the deal could be worth up to around KRW2 trillion (US$1.6
billion) when a management premium and acquisition of new shares to
be issued are considered. Shares in Asiana Airlines closed 1.77
percent lower at KRW5,540 on the Seoul bourse on Sept. 3,
underperforming the broader KOSPI's 0.18 percent loss, the report
says.
Aekyung owns the nation's largest budget carrier, Jeju Air Co., and
KGCI fund is the second-largest shareholder with a 16 percent stake
in Hanjin KAL, the parent company of Korean Air Lines Co, Yonhap
discloses.
KGCI also formed a consortium to enter a bid, but it didn't reveal
its local partner, says Yonhap.
Yonhap relates that major conglomerates, such as SK, CJ, and
Hanwha, have been widely mentioned as potential buyers for Asiana,
but they said they did not submit their respective bids for
Asiana.
Kumho Asiana plans to complete the sale of the airline unit within
this year, Yonhap notes. The South Korean transportation
conglomerate is expected to shortlist the bidders this month before
due diligence. It is expected receive final binding bids no later
than November, Yonhap says.
In 2018, Asiana Airlines and its main creditor, the state-run Korea
Development Bank, signed a deal that required the carrier to secure
liquidity through sales of assets and other means, Yonhap recalls.
In the January-June period, the airline's net losses widened to
KRW292 billion from KRW43 billion a year earlier due to the won's
weakness against the dollar, Yonhap discloses. A weak won drives up
not only the value of dollar-denominated debts when converted into
the local currency but also fuel purchasing costs.
It owes financial institutions a total of KRW2.7 trillion in
short-term obligations, with KRW660 billion of loans maturing this
year, Yonhap notes.
Headquartered in Osoe-Dong Kangseo-Gu, South Korea, Asiana Airlines
Incorporated is engaged in air transportation, engineering,
construction, facilities, electricity, ground handling, catering,
communication, logo products and e-business. Asiana Airlines is a
unit of the Kumho Asiana Group, a South Korean conglomerate whose
business portfolio includes tire manufacturing and chemical
production.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2019. All rights reserved. ISSN: 1520-9482.
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*** End of Transmission ***