/raid1/www/Hosts/bankrupt/TCRAP_Public/191223.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, December 23, 2019, Vol. 22, No. 255
Headlines
A U S T R A L I A
ADVANCED ACADEMY: Second Creditors' Meeting Set for Jan. 2
AROONA BLUE: First Creditors' Meeting Set for Jan. 3
CYNEAST PTY: Second Creditors' Meeting Set for Jan. 2
ORACLE (NSW): Second Creditors' Meeting Set for Jan. 3
C H I N A
HARTFORD GREAT: Losses Since Inception Casts Going Concern Doubt
HNA GROUP: Close to Sale of IT Outsourcing Unit Pactera
JIAYUAN INTERNATIONAL: Moody's Rates $225MM Unsec. Notes 'B3'
SEAZEN GROUP: S&P Affirms 'BB' ICR on Stable Sales, Outlook Stable
[*] CHINA: Real Estate Bankruptcy Hit 459 as of November 2019
I N D I A
3C REAL ESTATE: NCLT Begins Insolvency Process vs. Unit
A TO Z BARTER: Insolvency Resolution Process Case Summary
AMB FOOD: CARE Lowers Rating on INR5.25cr LT Loan to 'B'
BANSAL RICE: Ind-Ra Lowers LongTerm Issuer Rating to 'D'
BRIJ KISHORE: CARE Lowers Rating on INR8cr LT Loan to 'B'
CASTINGS INDIA: CARE Lowers Rating on INR7.76cr LT Loan to B
DEWAN HOUSING: CARE Cuts Rating on Assignee Payouts to 'D'
DISTRIBUTION LOGISTICS: CARE Hikes Rating on INR637.46cr Loan to B+
ELITE TRAEXIM: CARE Keeps B on INR7.2cr Debt in Not Cooperating
GLOBARENA TECHNOLOGIES: Ind-Ra Cuts LongTerm Issuer Rating to 'D'
GONTERMANN-PEIPERS: Insolvency Resolution Process Case Summary
GUINEA MOTORS: CARE Lowers Rating on INR17cr LT Loan to 'B+'
HOTEL EAST PALACE: Insolvency Resolution Process Case Summary
INTEGRATED SPACES: CARE Assigns 'D' Rating to INR30cr LT Loan
JET AIRWAYS: NCLT Extends Resolution Process by 90 Days
JUMBO FINVEST: CARE Lowers Rating on INR525.03cr Loan to 'D'
KALASHREEMUKHA: CARE Lowers Rating on INR15cr LT Loan to B+
LAKEVIEW TECHSYSTEMS: Insolvency Resolution Process Case Summary
MA MONI: CARE Reaffirms B+ Rating on INR5.50cr LT Loan to B+
MOUNTHILL REALTY: Insolvency Resolution Process Case Summary
NILLTECH SOFTWARE: Insolvency Resolution Process Case Summary
OMKAR GRATINGS: Insolvency Resolution Process Case Summary
RYDAK SYNDICATE: Ind-Ra Cuts Issuer Rating to BB+, Outlook Stable
SHREE NARMADA: Insolvency Resolution Process Case Summary
SRI ARAVINDA: CARE Keeps B+ on INR7cr Debt in Not Cooperating
N E W Z E A L A N D
CRYPTOPIA LIMITED: Liquidators Retrieve Customer Info From Arizona
EAST WIND: SFO Opens File on NZ$45-Mil. Ponzi Scheme
T A I W A N
CHANG JUNG: MOE Probes Tainan Girls School's Insolvency
- - - - -
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A U S T R A L I A
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ADVANCED ACADEMY: Second Creditors' Meeting Set for Jan. 2
----------------------------------------------------------
A second meeting of creditors in the proceedings of Advanced
Academy Pty. Limited has been set for Jan. 2, 2020, at 9:30 a.m. at
the offices of Kirralaa Room, Level 2, The Grace Hotel, at 77 York
Street, in Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Jan. 5, 2020, at 4:00 p.m.
Benjamin Michael Carson of Farnsworth Carson was appointed as
administrator of Advanced Academy on Nov. 25, 2019.
AROONA BLUE: First Creditors' Meeting Set for Jan. 3
----------------------------------------------------
A first meeting of the creditors in the proceedings of Aroona Blue
Mountains Spring Water Pty. Ltd. will be held on Jan. 3, 2020, at
10:30 a.m. at the offices of PKF Sydney, Room 8, at 1 O'Connell
Street, in Sydney.
Jason Glenn Stone and Glenn Jeffrey Franklin of PKF Melbourne were
appointed as administrators of Aroona Blue on Dec. 19, 2019.
CYNEAST PTY: Second Creditors' Meeting Set for Jan. 2
-----------------------------------------------------
A second meeting of creditors in the proceedings of Cyneast Pty Ltd
has been set for Jan. 2, 2020, at 10:00 a.m. at Kirralaa Room,
Level 2, The Grace Hotel, at 77 York Street, in Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Dec. 31, 2019, at 5:00 p.m.
Benjamin Michael Carson of Farnsworth Carson was appointed as
administrator of Cyneast Pty on Nov. 25, 2019.
ORACLE (NSW): Second Creditors' Meeting Set for Jan. 3
------------------------------------------------------
A second meeting of creditors in the proceedings of Oracle (NSW)
Pty Ltd has been set for Jan. 3, 2020, at 10:00 a.m. at the offices
of O'Brien Palmer, Level 9, at 66 Clarence Street, in Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Jan. 2, 2020, at 4:00 p.m.
Liam Thomas Bailey and Christopher John Palmer of O'Brien Palmer
were appointed as administrators of Oracle (NSW) on Nov. 26, 2019.
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C H I N A
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HARTFORD GREAT: Losses Since Inception Casts Going Concern Doubt
----------------------------------------------------------------
Hartford Great Health Corp. filed its quarterly report on Form
10-Q, disclosing a net loss (attributable to the Company) of
$305,703 on $64,516 of service revenues for the three months ended
Oct. 31, 2019, compared to a net loss (attributable to the Company)
of $3,749 on $0 of service revenues for the same period in 2018.
At Oct. 31, 2019, the Company had total assets of $7,433,386, total
liabilities of $6,611,444, and $821,942 in total stockholders'
equity.
Hartford Great Health Corp. has incurred losses since inception,
resulting in an accumulated deficit of US$1,222,519 and US$916,816
as of October 31, 2019 and July 31, 2019, respectively. The
Company's operation provided consecutive negative cash flow,
US$63,297 and US$3,246 for the three months ended October 31, 2019
and 2018, respectively. The Company said that these conditions
raise substantial doubt about its ability to continue as a going
concern.
A copy of the Form 10-Q is available at:
https://is.gd/0r8PbH
Hartford Great Health Corp., through its subsidiaries, provides
hospitality housing and travel agency services. It operates a
vacation hotel in Hangzhou, China. The company was formerly known
as PhotoAmigo, Inc. and changed its name to Hartford Great Health
Corp. in August 2018. Hartford Great Health Corp. was founded in
2008 and is based in Rosemead, California.
HNA GROUP: Close to Sale of IT Outsourcing Unit Pactera
-------------------------------------------------------
Qu Hui, Bao Zhiming and Han Wei at Caixin Global report that HNA
Group is close to sealing a deal to sell its tech outsourcing arm
Pactera Technology International Ltd. to a state-backed buyer as
the conglomerate continues offloading assets for debt relief.
HNA Technology Group (HK) Co., a unit of HNA, is selling all of HNA
EcoTech Panorama Cayman Co. to a Hong Kong-based unit of
state-owned telecom equipment maker China Electronics Corp., Caixin
relates citing a filing published on the website of the antitrust
bureau of China's State Administration for Market Regulation. HNA
EcoTech Panorama is the parent of Pactera.
The deal was filed with the antitrust watchdog for quick review
saying the transaction will not cause market concentration as the
seller and buyer are not in relevant markets, according to the
disclosure cited by Caixin. No financial detail was disclosed in
the filing, the report notes.
HNA didn't reply to questions from Caixin. But a staffer at Pactera
confirmed the deal. HNA reached an agreement with China Electronics
in October to sell the assets for around $500 million, the staffer
said, speaking on condition of anonymity, Caixin relays.
HNA bought Pactera in 2016 from Blackstone Group LP for about $675
million as the then high-flying aviation-to-finance conglomerate
sought to expand its business reach into technology.
Pactera is one of China's largest companies specializing in
outsourced technology services for corporate clients, most notably
financial institutions. It was formerly listed in New York and was
privatized by private equity giant Blackstone in 2014 in a deal
that valued it at $680 million, Caixin recalls.
HNA's ambitious expansion hit a wall in the second half of 2017 as
Beijing stepped up a crackdown on private companies' debt-driven
investments. HNA has since embarked on a series of asset sales to
reduce its debt overhang, including most of its technology assets.
Since 2018, HNA has sold or agreed to dispose of more than 40
assets to pay down debt, Caixin discloses citing Bloomberg. HNA's
chairman told media late last year that the company sold about $45
billion of assets in 2018.
But HNA is still under the pressure of a cash crunch. As of the end
of June, HNA had interest-bearing liabilities totaling CNY550
billion ($78.57 billion), according to the group's financial
report. HNA posted net losses of CNY3.5 billion during the first
half of 2019, with total debt of CNY706.7 billion, of which
short-term debt was CNY95.1 billion, Caixin discloses.
HNA has posted Pactera on its list of assets for sale since 2018,
drawing domestic and overseas bidders including Digital China,
China UnionPay, Mahindra Group and Advent International, Caixin
notes.
Despite being China's top supplier of information technology
services to domestic financial institutions, Pactera is still
losing money, even as it generates annual revenue in the $1 billion
range, sources told Caixin.
About HNA Group
China-based HNA Group Co. Ltd. offers airlines services. The
Company provides domestic and international aviation
transportation, air travel, aviation maintenance, and aviation
logistics services. HNA Group also operates holding, capital,
tourism, logistics, and other business.
As reported in the Troubled Company Reporter-Asia Pacific on Sept.
17, 2018, the Financial Times related that HNA Group defaulted on a
CNY300 million (US$44 million) loan raised through Hunan Trust.
According to the FT, the company is already under strict
supervision by a group of bank creditors, led by China Development
Bank, following a liquidity crunch in the final quarter of 2017.
The default came despite an estimated $18 billion in asset sales by
HNA in 2018 that have done little to address its ability to meet
its domestic debts, the FT noted.
JIAYUAN INTERNATIONAL: Moody's Rates $225MM Unsec. Notes 'B3'
-------------------------------------------------------------
Moody's Investors Service assigned a B3 senior unsecured rating to
the USD225 million notes issued by Jiayuan International Group
Limited (B2 stable) in July 2019.
The proceeds of the notes were used by Jiayuan to refinance its
existing debt.
RATINGS RATIONALE
Jiayuan's B2 corporate family rating reflects (1) the company's
track record in its core markets in Jiangsu Province; and (2) its
low cost and quality land bank. These strengths support the
company's business growth plan and give it pricing flexibility in a
downcycle.
However, the B2 CFR is constrained by Jiayuan's small operating
scale, moderate geographic diversification, and the execution risks
associated with its rapid growth plan.
Moody's expects that Jiayuan's contracted sales will grow to around
RMB30 billion over the next 12-18 months from RMB20 billion in
2018. In the first 11 months of 2019, the company's contracted
sales grew 41% to RMB25 billion.
Moody's also expects that Jiayuan's projected credit metrics will
support its B2 CFR. Specifically, Moody's expects revenue/adjusted
debt will improve to around 70% and EBIT/interest will remain
around 3.0x over the next 12-18 months compared to 68% and 3.2x for
the 12 months to June 30, 2019.
In terms of environmental, social, and governance (ESG) factors,
Moody's has considered the risks associated with the concentration
of the company's ownership by Mr. Shum Tin Ching, who held a 69.3%
stake in Jiayuan as of August 31, 2019, and Mr. Shum's share pledge
financing.
Given the company's listed status, Jiayuan is subject to the Hong
Kong Listing Rules and Securities and Future Ordinance. In
addition, Mr. Shum has demonstrated his commitment to the company,
by injecting assets to strengthen Jiayuan's operations and equity
base, and reducing his share pledge loan to lower the risk of a
change in control.
Moody's notes that Jiayuan announced a change of auditor to
PricewaterhouseCoopers on December 17, 2019, after the resignation
of Deloitte. PricewaterhouseCoopers will act as the company's
auditor until the conclusion of Jiayuan's next annual general
meeting.
While the change in auditor will not have an immediate impact on
Jiayuan's ratings, any delay in releasing its 2019 results as a
result of the change or a failure in appointing a long-term
replacement after the annual general meeting would warrant a
reassessment of the situation.
Jiayuan's liquidity is adequate. Moody's expects that the company's
cash holdings, together with contracted sales proceeds after
deducting basic operating cash flow items, will enable it to meet
its refinancing needs over the next 12-18 months. Jiayuan's
reported cash holdings of RMB5.7 billion as of June 30, 2019
covered 117% of its short-term debt. The company's refinancing of
maturing USD bonds over the last 5-6 months has also lengthened its
debt maturity profile.
The B3 senior unsecured rating on the USD notes is one notch lower
than the CFR, due to structural subordination risk. This risk
reflects the fact that the majority of claims are at the operating
subsidiaries. These claims have priority over Jiayuan's senior
unsecured claims in a bankruptcy scenario. In addition, the holding
company lacks significant mitigating factors for structural
subordination. As a result, the likely recovery rate for claims at
the holding company will be lower.
The stable outlook reflects Moody's expectation that (1) Mr. Shum
will not materially increase his share pledge financing, (2) the
company's liquidity will remain adequate, with continued access to
the onshore and offshore loan and debt capital markets; and (3) the
company will grow its sales and maintain cash collection as planned
over the next 12-18 months.
Moody's could upgrade the ratings if Jiayuan (1) grows its business
while achieving its credit metrics, maintaining adjusted
revenue/debt above 70% and EBIT/interest higher than 3.0x on a
sustainable basis; (2) maintains adequate liquidity, with
cash/short-term debt consistently above 1.5x; and (3) keeps the
risk of a change of control at a low level.
Moody's could downgrade the ratings if Jiayuan's (1) liquidity
profile weakens; (2) risk of a change in control increases; or (3)
contracted sales or revenue prove weaker than Moody's had expected,
leading to a deterioration in the company's credit metrics.
Credit metrics indicative of a ratings downgrade include adjusted
revenue/debt below 55%, EBIT/interest below 2.0x, or
cash/short-term debt below 1.0x, all on a sustained basis.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
Jiayuan International Group Limited develops mass-market
residential properties mainly in Jiangsu and Anhui provinces. The
company had a total land bank of around 13 million square meters at
the end of August 2019. It also develops and operates commercial
properties alongside its residential property projects.
SEAZEN GROUP: S&P Affirms 'BB' ICR on Stable Sales, Outlook Stable
------------------------------------------------------------------
On Dec. 18, 2019, S&P Global Ratings affirmed its 'BB' long-term
issuer credit rating on Seazen Group and 'BB-' long-term issue
rating on the company's outstanding offshore senior unsecured
notes. S&P also removed the ratings from CreditWatch, where they
were placed with negative implications on July 5, 2019.
S&P said, "We affirmed the rating on Seazen Group with a stable
outlook because we believe the company has managed the negative
repercussions from the detention of its now ex-chairman in July. We
also expect the impact of the incident to continue to subside and
the company to maintain its steady sales performance into 2020.
Although Seazen Group's access to funding has not completely
normalized, we believe the current improvement will likely continue
into 2020. There are encouraging signs that the company's financing
channels have reopened, as reflected by some recovery in access to
commercial banking and fundraising through offshore bonds.
"In our opinion, Seazen Group's steady sales in the past five
months have helped the company withstand the initial credit crunch
following the then chairman's detention in July. The company
achieved Chinese renminbi (RMB) 124 billion in contracted sales
over July-November. This became its primary source of cash inflow
to support construction spending and debt repayment in the absence
of new debt financing during that period. Seazen Group will likely
meet its annual sales target of RMB270 billion, given sales of
RMB246 billion in the first 11 months of the year.
"Despite our expectation of continued improvement, Seazen Group's
financing access is unlikely to return to pre-July levels in terms
of funding costs and funding availability within the next six
months. The company issued US$350 million in offshore notes and
RMB1.2 billion in domestic bonds in early December. Funding costs
for both were higher, compared with similar transactions in the
first half of the year.
"The restoration of market confidence is critical for Seazen Group,
in our view. Capital market debt securities remain the largest
component in the company's debt structure, accounting for nearly
50% of its total borrowing. If investor demand wanes, the company
may need to use internal operating cash flow for the repayment of
its two offshore bonds maturing in the next 12 months.
Additionally, Seazen Group has about RMB8.5 billion domestic
company bonds and medium-term notes maturing in the next 12 months,
which would test its refinancing access in the onshore debt
market.
"We believe the company's banking access has gained traction since
October, given about RMB5 billion of new project development loan
drawdowns in the fourth quarter. It is noteworthy that funds have
come from new banks and selective existing banking relationships,
reflecting continual blockage in some of its previous banking
relationships. The monthly amount of bank loans that Seazen Group
is able to draw down at the moment remains below pre-July levels.
"We expect funding costs on new bank borrowings to remain high in
the next 12 months. The company is allowing some cost flexibility
to strengthen existing bank relationships and establish new ones.
We believe there is still a risk that the volume of new bank loans
will be insufficient for the company's continually rising
construction spending requirements, due to its large sold but
unrecognized backlog. This could lead to greater pressure on the
company's operating cash flow, thus limiting the flexibility on
land replenishment, which could ultimately affect its scale in the
next 12-24 months, and result in a slippage in revenue
recognition.
"In our opinion, Seazen Group's need for land replenishment will
become more acute in 2020 if it wants to maintain its current
operating scale. The company has acquired only about RMB2.5 billion
of new land parcels since July, compared with total land purchase
consideration of RMB73 billion in the first half of 2019. We
estimate its total saleable residential gross floor area (GFA)
(including joint venture projects) will fall to about 65 million
square meters (sq m) by end-2019. This can sustain about 2.5 years
of sales at its current total sales volume, which is relatively
short in our view.
"We believe Seazen Group's land purchase will need to return to at
least 30%-35% of its contracted sales or the company will risk
shrinking scale. Financing channels are yet to be supportive for
large debt increases, especially for land acquisitions. Land
replenishment could therefore be dependent on its operating cash
inflow after other expenditures, which could reduce the company's
land bank to two years of sales volume.
"Overall, we expect Seazen Group's debt growth to be moderate in
the next 12-18 months, given limitations on its financing. The
company needs to strike a fine balance between the need to
replenish its land bank and the required construction spending. We
expect the company's total reported debt to decrease to about RMB95
billion by end-2019, from RMB104 billion as of June 30, 2019. This
is mainly because of the cash repayment of onshore bonds and the
depressed rate of bank loan drawdowns in the second half of the
year. As such, although the company's leverage is likely to fall by
the year-end, we expect it to gradually increase in the next 18-24
months, given the growing need for construction capital expenditure
and land replenishment.
"We believe stability of the company's senior management and core
staff members has contributed significantly to its operational
resilience since July. In addition, we think the new employee stock
option scheme, which awarded equity to over 100 senior and middle
management staff, has helped to materially reduce the risk of key
personnel departures over the next two years.
"The stable outlook reflects our expectation that Seazen Group will
maintain steady sales and its current operating scale in the next
12-18 months. We believe the company's financing activities will
continue to normalize, while leverage will slightly increase after
improving in 2019. This leverage trend is largely driven by healthy
operating cash inflow and a more pressing need for land
replenishment and construction expenditure that could require debt
financing.
"We may lower the rating if Seazen Group's property delivery
execution and revenue recognition are weaker than our expectation.
We may also downgrade the company if its sales start to decline
noticeably due to insufficient land bank, such that its leverage
worsens more than we expected. The consolidated and see-through
debt-to-EBITDA ratios persistently staying above 5.5x could
indicate such a scenario. We could also lower the rating if Seazen
Group's financing access fails to improve. A substantially weakened
ability to draw down on bank lending and material execution
difficulties or cost increases in onshore and offshore debt
issuance could signal such a deterioration.
"We could upgrade Seazen Group if the company maintains robust
sales and operating cash flow, and sufficient land replenishment,
while improving leverage such that the consolidated and see-through
debt-to-EBITDA ratios fall toward 4x."
[*] CHINA: Real Estate Bankruptcy Hit 459 as of November 2019
-------------------------------------------------------------
Lin Wenhui, Wang Jing and Guo Yingzhe at Caixin Global report that
local governments in China are taking action to prevent a downturn
in the real estate industry from triggering further problems as
concerns grow that bankrupt developers could run away with the
funds for homes purchased before they were finished.
According to Caixin, more property developers have filed for
bankruptcy this year than last, amid sluggish economic growth and
tightening regulatory control over the real estate market and
relevant financing channels, meant to curb speculation. As of Nov.
27, 459 real estate companies had filed for bankruptcy this year,
slightly more than the 458 bankruptcy filings seen in the whole of
2018, Caixin discloses citing calculations by research firm China
Real Estate Information Corp. based on public court records.
Money flowing into property development has slowed, with investment
growth of 10.2% year-on-year in the first 11 months of this year,
down from a recent high of 11.9% growth in the January-to-April
period, according to National Bureau of Statistics data, Caixin
relays. In addition, growth in outstanding loans has slowed for the
last four quarters, dropping to 11.7% year-on-year at the end of
the third quarter, Caixin adds citing central bank data.
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I N D I A
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3C REAL ESTATE: NCLT Begins Insolvency Process vs. Unit
-------------------------------------------------------
The Times of India reports that insolvency proceedings have been
initiated against another company of crisis-hit 3C Real Estate
Group. In the wake of a plea by a buyer who has not received his
plot, the National Company Law Tribunal (NCLT) appointed an
insolvency resolution professional (IRP) to resolve the financial
liabilities of Three C Homes Pvt Ltd, the 3C group subsidiary that
is building Lotus City, a residential plot scheme in Sector 22A of
Yamuna Expressway.
TOI says the IRP has a maximum 270 days for the resolution,
following which the project could be pushed into liquidation. The
group's another subsidiary, Granite Gate Company, that is building
its 'Lotus' brand projects - Panache and Boulevard - is already
facing insolvency proceedings for the delay in delivery of homes of
investors, TOI relates.
In the latest case, Arun Sinha, a buyer, told the insolvency court
that he had paid INR3.78 lakh in April 2012 for a 208 sq yard wide
plot in Block C of the scheme. As per the agreement, Sinha also
paid the remaining INR28.50 lakh to the builder in instalments,
according to TOI.
The report says 3C promised to hand over the possession of the plot
after developing necessary infrastructure for a residential colony
by November 2017. Having paid a total of INR32.28 lakh as per the
agreement, Sinha kept waiting for the possession.
TOI notes that the real estate company was given a chance to
present its explanation before the tribunal in September but it
failed to do so. "We had moved the application before NCLT in
February against 3C. In September, the tribunal heard the matter in
detail. We received a certified copy on Thursday," said advocate
Aditya Parolia, who represented Sinha, TOI relays.
The tribunal has appointed Gaurav Katiyar as IRP and asked him to
initiate the proceedings, the lawyer said.
3C began floating the 100 acre project with 550 plots in 2011. The
company promised to start handing over possession June 2014
onwards, TOI recalls. However, instead of the original 100 acres,
the company was able to acquire only 43 acres from locals and also
pushed the deadline of plot handover to 2017.
Some 3,000 buyers had bought flats in Sector 110 based Lotus
Panache, while 500 buyers are awaiting completion of their flats in
Lotus Boulevard in Sector 100, the report notes.
A TO Z BARTER: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: M/s A to Z Barter Private Limited
Registered office:
310 C-1/A, 3rd Floor
M.S. Chamber, Aruna Park
Laxmi Nagar
East Delhi 110092
Corporate office:
C-14, Mansarovar Garden
New Delhi 110015
Insolvency Commencement Date: December 10, 2019
Court: National Company Law Tribunal, Court-III, New Delhi Bench
Estimated date of closure of
insolvency resolution process: June 7, 2020
Insolvency professional: Anoop Kumar Goyal
Interim Resolution
Professional: Anoop Kumar Goyal
Flat No. 403, B-20 Shiv Enclave
Shiv Marg, Bani Park
Jaipur 302016
(Rajasthan)
E-mail: doctor.anoop@gmail.com
cirp.atozbarter@gmail.com
Last date for
submission of claims: December 27, 2019
AMB FOOD: CARE Lowers Rating on INR5.25cr LT Loan to 'B'
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of AMB
Food Products (AFP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 5.25 CARE B; Stable; ISSUER NOT
Facility COOPERATING; Revised From
CARE B+; Stable on best
Available information
Detailed Rationale & Key rating Drivers
CARE has been seeking information from AFP to monitor the rating
vide e-mail communications/letters dated December 4, 2019, November
11,2019, November 5, 2019 and numerous phone calls. However,
despite CARE's repeated requests, the firm has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating. Further, the firm has
not paid the surveillance fees for the rating exercise as agreed to
in its Rating Agreement. The rating on AMB Food Products's bank
facilities will now be denoted as CARE B; Stable ; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating assigned to the bank facilities of AMB Food Products
(AFP) is constrained on account of its agro-based raw material
price fluctuation and availability risk. The rating, however,
derives strength from AFP's experienced partners, strategic
location of its proposed manufacturing unit and established
marketing network of other group entities. AFP's ability to
complete the project within envisaged time and cost parameters and
achievement of envisaged sales and profitability while managing its
working capital efficiently post completion of project would be key
rating sensitivity. Further, need based support from partners would
also be critical.
Detailed description of the key rating drivers
At the time of last rating on October 9, 2018 the following were
the rating strengths and weaknesses.
Key Rating Weakness
Agro-based raw material price fluctuation and availability risk
Agro-based commodities exhibit seasonality which affects the
availability of raw material. Further, perishable nature of
products and inconsistent demand pattern could result in bulk
purchase of the firm to maintain inventory and cater to demands
throughout the year. As the firm doesn't have any fixed price
contracts with its suppliers (till date), there pertains a risk for
any adverse movement in the prices which could impact the
profitability.
Key Rating Strengths
Experienced partners in the same line of industry
AFP has been formed by four partners viz. Mr. Prakash Joshi, Mr.
Shankar Joshi, Mr. Omprakash Joshi and Mr. Piyush Joshi, all having
an average experience of more than a decade in same line of
business through their association with associate concerns. Mr.
Prakash Joshi will manage overall operations of AFP.
Accessibility to existing selling and distribution network
AFB would be benefited from the existing selling and distribution
network of its associate company i.e. AMB Food Products Private
Limited (AFPPL) which is into similar line of business.
Location advantage
AFP has a locational advantage as its manufacturing facilities are
strategically located in terms of proximity to raw materials like
oil and grains, cheap labour as well as major consumption cities
i.e. Ujjain, Ratlam and Bhopal.
Indore-based (Madhya Pradesh) AFP was established in 2015 as a
partnership firm by four partners to undertake a green field
project for manufacturing of sweets, namkeen and fast food
primarily pizza, sandwich, franky and burger. AFP is setting-up a
new plant in Indore (Madhya Pradesh) with a proposed installed
capacity of manufacturing 1200 (MTPA) Metric Tonnes Per Annum of
sweets and namkeen.
BANSAL RICE: Ind-Ra Lowers LongTerm Issuer Rating to 'D'
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Bansal Rice
Mills' Long-Term Issuer Rating to 'IND D (ISSUER NOT COOPERATING)'
from 'IND B+ (ISSUER NOT COOPERATING)'. The issuer did not
participate in the rating exercise despite continuous requests and
follow-ups by the agency. Therefore, investors and other users are
advised to take appropriate caution while using these ratings. The
rating will now appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR120 mil. Fund based working capital limit (Long-term/
Short-term) downgraded with IND D (ISSUER NOT COOPERATING)
rating; and
-- INR24.40 mil. Term loan (Long term) downgraded with IND D
(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Based on the best available
information
KEY RATING DRIVERS
The downgrade reflects delays in debt serving by the company, the
details of which are not available.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months would be positive for the ratings.
COMPANY PROFILE
BRM is a partnership firm engaged in the rice milling business and
its final product is Basmati rice. The total daily paddy processing
installed capacity of its plant is 650 quintals.
BRIJ KISHORE: CARE Lowers Rating on INR8cr LT Loan to 'B'
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Brij
Kishore Prasad Exports Pvt. Ltd. (BKPEPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 8.00 CARE B; Stable; ISSUER NOT
Facility COOPERATING; Revised From
CARE B+; Stable on best
Available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from BKPEPL to monitor the
ratings vide e-mail communications/letters dated July 8, July 16
and August 28, 2019 and numerous phone calls. However, despite
CARE's repeated requests, the company has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the publicly available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating. The rating on
BKPEPL's bank facilities will now be denoted as CARE B; Stable;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in the rating takes into account the significant
decline in total operating income, deterioration in capital
structure and debt coverage indicators during FY19, Audited (refers
the period from April 1, to March 31). Further, the rating
continues to remain constrained by its small scale of operations
with moderate profit margins, geographical concentration and
Geo-Political risk, leveraged capital structure with moderate debt
coverage indicators, working capital intensive nature of operations
and presence in highly competitive & fragmented industry. The
rating, however, continues to derive strengths from the experience
of the promoters and long track record of operations.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operations with low profit margins: The scale of
operations of the company remained small marked by total operating
income (TOI) of INR10.95 crore (FY18: INR39.03 crore) with a PAT of
INR0.07 crore (FY18: INR0.23 crore) in FY19. The profitability
margins of the company remained low marked by PBILDT margin of
4.40% (FY18: 2.07%) and PAT margin of 0.63% (FY18: 0.58%) in FY19.
Geographical concentration and Geo-Political Risk: BKPEPL's entire
operating income is generated from export of food grains to
Bangladesh; hence any change in the political environment or any
government intervention may affect the company's operating income.
As such the company is also exposed to geographical concentration
risk.
Leveraged capital structure with weak debt coverage indicators: The
capital structure of the company deteriorated owing to high debt
level as on March 31, 2019 and the same remained leveraged marked
by overall gearing ratio of 1.30x (1.25x as on March 31, 2018) as
on March 31, 2019. Further, the debt coverage indicators of the
company remained weak marked by interest coverage ratio of 1.24x
(FY18: 1.62x) and total debt to GCA of 43.45x (FY18: 12.35x) in
FY19.
Presence in highly competitive & fragmented industry: BKPEPL
operates in highly fragmented and competitive market marked by the
presence of numerous organized as well as unorganized players in
India. Low entry barriers and low investment requirements makes the
industry highly lucrative and thus competitive. Smaller companies
in general are more vulnerable to intense competition due to their
limited pricing flexibility, which constrains their profitability
as compared to larger companies who have better efficiencies and
pricing power considering their scale of operations.
Key Rating Strengths
Experienced promoter with long track record of operations: BKPEPL
is into exports of food grains since 2008 and thus has around a
decade of operational track record. Currently the company is
managed by Mr. Rahul Raj Prasad who has around a decade of
experience in trading and export business. He looks after the
overall management of the company with adequate support from a team
of experienced personnel.
Liquidity Indicator: Comment on liquidity is not available due to
non-cooperation by the company.
Brij Kishore Prasad Exports Private Limited (BKPEPL) was
incorporated in 2008 by Mr. Rahul Raj Prasad and Mrs. Saraswati
Prasad based out of Siliguri, West Bengal. The company exports food
grains such as rice, pulses, flour, mustard oil cake, coal,
soyabeans etc. to Bangladesh only. BKPEPL procures its traded goods
mainly from Uttar Pradesh, Bihar and West Bengal etc.
CASTINGS INDIA: CARE Lowers Rating on INR7.76cr LT Loan to B
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Castings India Private Limited (CIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 7.76 CARE B; Stable; ISSUER NOT
Facility COOPERATING; Revised From
CARE B+; Stable on best
Available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from CIPL to monitor the ratings
vide e-mail communications/letters dated July 8, July 16 and August
28, 2019 and numerous phone calls. However, despite CARE's repeated
requests, the company has not provided the requisite information
for monitoring the ratings. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the
publicly available information which however, in CARE's opinion is
not sufficient to arrive at a fair rating. The rating on CIPL's
bank facilities will now be denoted as CARE B; Stable; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating has been revised by taking into account the
non-availability of information and no due diligence conducted due
to non-cooperation by Castings India Private Limited with CARE'S
efforts to undertake a review of the rating outstanding.
CARE views information non-availability risk as a key factor in its
assessment of credit risk.
Detailed description of the key rating drivers
At the time of last rating in October 8, 2018, the following were
the rating strengths and weaknesses: (Updated the information
available from Ministry of Corporate Affairs).
Key Rating Weaknesses
Small scale of operations with low profitability margins: The scale
of operations of the company remained small marked by total
operating income of INR27.57 crore (INR26.12 crore in FY17) with a
PAT of INR0.07 crore (INR0.02 crore in FY17) in FY18. Furthermore,
the total capital employed has also remained low at INR4.37 crore
as on March 31, 2018. Furthermore, the profit margins of the
company remained low marked by PBILDT margin of 4.81% and PAT
margin of 0.25% in FY18.
Volatility in raw material prices: CIPL does not have backward
integration for its basic raw-materials (ingots and coal) and it
procures the same from open market at spot prices. Since the
raw-material is the major cost driver and the prices of which are
volatile in nature, the profitability of the company is susceptible
to fluctuation in raw-material prices.
Working capital intensive nature of business: The company is into
manufacturing of iron and steel products. CIPL has to maintain a
large quantity of raw material inventory to mitigate the raw
material price fluctuations risk and smooth running of its
production process. Accordingly the average inventory period of the
company remained on around three months during last year. Further,
the company allows credit of more than a month to its clients which
also resulted into working capital intensive nature of its
operations. However, it receives credit of about a month from
suppliers due to its long presence in the industry, mitigated the
working capital intensity to a certain extent.
Moderate capital structure with moderate debt coverage indicators:
The capital structure of the company remained moderate marked by
debt equity and overall gearing ratios of 1.32x and 1.73x
respectively as on March 31, 2018. The debt coverage indicators of
the company also remained moderate marked by interest coverage of
1.54x and total debt to CGA of 13.73x in FY18.
Intensely competitive industry with sluggish growth in end user
industries and cyclical industry: CIPL is engaged in the
manufacturing of iron and steel products which is primarily
dominated by large players and characterized by high fragmentation
and competition due to the presence of numerous players in India
owing to relatively low entry barriers. High competitive pressure
limits the pricing flexibility of the industry participants which
induces pressure on profitability. The fortunes of companies like
CIPL from the iron & steel industry are heavily dependent on the
automotive, engineering and infrastructure industries. Steel
consumption and, in turn, production mainly depends upon the
economic activities in the country. Construction and infrastructure
sectors drive the consumption of steel. Slowdown in these sectors
may lead to decline in demand of steel& alloys. Furthermore, all
these industries are susceptible to economic scenarios and are
cyclical in nature.
Key Rating Strengths
Experienced promoters with long track record of operations: CIPL is
into manufacturing of Rolled iron, MS flat angles, sections, bars,
rods, H. R. Sheets, Guide channels etc. since 1974 and thus has
more than two decades of track record of operations. Being in the
same line of business since long period, the promoters have built
up established relationship with its clients and the company is
deriving benefits out of this. Mr. Surendra Kumar Shroff (aged, 67
years) has around three decades of experience in the same line of
business, looks after the day to day operations of the company
supported by Ms. Anju Shroff and a team of experienced
professionals.
Liquidity Indicator: Comment on liquidity is not available due to
non-cooperation by the company.
Castings India Private Limited (CIPL) was initially set up as a
partnership firm in 1974 by the Sharoff family based out of
Jharkhand and the same was converted into private limited company
in March 1996. Currently the company is managed by Mr. Surendra
Kumar Shroff and Ms. Mina Shroff. Since its inception the company
has been engaged in manufacturing rolled iron, MS flat angles, MS
sections, TMT bars, rods, Hot rolled sheets, guide channels etc.
The manufacturing facility of the company is located at industrial
area, Saraikela, Kharanwan, Jharkhand with an aggregate installed
capacity of 12000 metric ton per annum.
DEWAN HOUSING: CARE Cuts Rating on Assignee Payouts to 'D'
----------------------------------------------------------
CARE has downgraded the credit opinion equivalent to 'CARE D' to
the Assignee Payouts in Direct Assignment of Housing Loan
receivables originated by Dewan Housing Finance Corporation Limited
(DHFL).
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Assignee 20.13 CARE D Revised from CARE BBB (SO)
Payouts (Under Credit Watch with
Negative Implications)
Detailed description of the key rating drivers
The rating downgrade takes into account the inability of DHFL
(servicer) to fund the scheduled principal and interest payment to
the Collection and Payment Account (C&P account) on the payout date
i.e. 10th December 2019, towards the transaction "DHFL Direct
Assignment March 2012 – III", in spite of the collections from
the underlying loans being sufficient to honor the payout to the
assignee, based on the servicer reports received by CARE. CARE has
received the confirmation about non-payment from trustee on 12th
December 2019. Additionally, the investor for the above mentioned
transaction has adjusted the entire Cash Collateral in the form of
Fixed Deposit to the outstanding POS for the transaction, which is
not as per the waterfall mechanism / structure that was initially
rated.
CARE has also considered the recent event regarding the Appointment
of Administrator and Commencement of Corporate Insolvency
Resolution Process under the Insolvency and Bankruptcy Code, 2016
for DHFL. As per Rule 5 (b) of the notification issued by the
Central Government under the Insolvency and Bankruptcy Code, 2016,
an interim moratorium shall commence on and from the date of
initiation of Corporate Insolvency Resolution Process, till its
admission or rejection. However, under Rule 10 (1) of the
aforementioned notification, "the provisions of clause (b) of Rule
5 and section 14 shall not apply to any third-party assets or
properties in custody or possession of the financial service
provider, including any funds, securities and other assets required
to be held in trust for the benefit of third parties".
As per the waterfall mechanism, the priority of payment is
regulatory expenses, promised interest and principal & prepayments
to assignee and replenishment of cash collateral. Any surplus after
this was to be remitted to the residual beneficiary. According to
the structure Cash Collateral may be utilized only if there are
shortfalls in making payout to the assignee.
Key Rating Strengths:
1. Cumulative collection efficiency of the pool is at around
99.8%.
2. As on Nov'19, the 90+DPD (as % of Initial POS) and 180+DPD
(as % of Initial POS) is 0.2% and 0.1% respectively.
OD as % of Initial POS is 0.1%.
Key Rating Weaknesses:
1. Inability of DHFL (the originator) to fund the Collection and
Payment Account (C&P Account) to make scheduled principal and
interest payment on or before the scheduled payout date.
2. Servicer Risk - Continuous deterioration in credit profile of
the servicer (DHFL).
Liquidity Position:
The transaction structure provides for support in the form of Cash
Collateral. The executed documents empower the Assignee to utilize
the available Collateral, in case of any shortfall in collections,
to ensure monthly scheduled payouts to the Investor / Assignee.
Specifically, Credit Enhancement available for the transactions is
76.5% of Balance POS at the end of November 19. In the performance
so far, sufficient collections and adherence to the structure meant
that the Collateral was never utilized. However, due to the
uncertainty associated with the insolvency proceedings, there is
lack of clarity regarding the regularity of remittances in to the
structure and availability of credit collateral for utilization in
case of shortfalls.
Rating Sensitivities:
Positive Factors
1. Regularisation of the default
2. Funding in C&P Account in timely manner
Negative Factors - NA
Key Rating Assumptions - NA
Incorporated in 1984, DHFL is the third-largest housing finance
company in India with total AUM of INR 1,10,086 crore as on March
31, 2018. The company has a successful track record of over 30
years of lending in the low and middle income group in Tier II and
Tier III cities, primarily to salaried individuals. DHFL had a loan
portfolio of INR 91,932 crore as on March 31, 2018. The company
operates through a network of over 347 offices (incl. branches and
service centres). During FY18, DHFL earned consolidated PAT of INR
927 crore (INR 729 crore in FY16) on total income of INR 8,631
crore (INR 6,971 crore in FY16). As on March 31 2018, Net NPA ratio
was 0.56% (0.58% as on March 31, 2017). The Capital Adequacy Ratio
(CAR) was comfortable at 15.29% as on March 31, 2018, as compared
to 19.34% as on March 31, 2017. The Reserve Bank of India (RBI) has
filed insolvency proceeding against Dewan Housing Finance Limited
(DHFL) with NCLT on 29th November 2019. Mr. R Subramaniakumar,
ex-MD and CEO of Indian Overseas Bank, has been appointed as the
administrator of DHFL.
DISTRIBUTION LOGISTICS: CARE Hikes Rating on INR637.46cr Loan to B+
-------------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Distribution Logistics Infrastructure Private Ltd (DLI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 637.46 CARE B+; Stable Revised
from CARE D
Long term bank
facilities 29.97 CARE B+; Stable Revised
from CARE D
Short term Bank
Facilities 69.77 CARE A4 Revised from CARE D
Detailed Rationale & Key Rating Drivers
The revision in the ratings assigned to the bank facilities of DLI
is on account of its improved liquidity profile leading to regular
servicing of its debt obligations over the past six months. In
April 2019, DLI had received commitment for fund infusion in the
form of equity from its parent, Distribution Logistics
Infrastructure Limited, Mauritius (DLI, Mauritius) of US$ 75
million (approximately INR 540 crore) of which INR 243.66 crore has
been already received by DLI till September 30, 2019.
Further in July 2019, DLI has received a letter of financial
support from Infrastructure India PLC (IIP), the ultimate holding
company of the group for financial assistance to meet any shortfall
in its funding requirements, continue operations and meet its
liabilities, as they fall due for a period of not less than 12
months. The ratings continue to derive strength from strong
parentage, experienced management team, presence across various
verticals in the logistics industry, location advantage of the
terminals and strong infrastructure base.
The ratings however continue to remain constrained by delay in
completion of the ongoing capex projects resulting in weak
financial risk profile and continued losses, project execution risk
and competition from private and other established players.
Going ahead, the ability of the company to complete all the ongoing
capex activities within the envisaged cost and timelines, timely
infusion of the committed funds and the ability of the company to
profitably and efficiently scale up its operations shall be the key
rating sensitivities.
Key Rating Sensitivity:
Positive Sensitivity:
* Ability of the company to complete in the ongoing capex within
the envisaged cost and timelines
* Any further equity infusion above the committed funds of US$75
million on a sustained basis
* Ability of the company to profitability and efficiently scale
up its operations with positive PBILDT margins on a sustained
basis
Negative Sensitivity:
* Any delay in committed infusion of funds and non-availability
of the committed financial support from the ultimate holding
company IIP
* Delay in completion of projected Capex later than FY20
Detailed description of the key rating drivers
Key Rating Weaknesses
Delay in completion of the ongoing capex projects resulting in weak
financial risk profile and continued losses
DLI is developing three Logistic Parks at Nagpur, Palwal and
Bangalore along with a FTWZ (Free Trade Warehousing Zone) at
Chennai. Presently the Nagpur project is fully operational and the
construction work for the Phase II is under progress. However,
other projects are even though operational but balance components
of the project work are under progress. The heavy capex projects
got delayed due to land approvals and shortage of funds thus
resulting in liquidity issues in the company. In FY19, the total
operating income of the company witnessed a growth of 53% to reach
INR 173.60 crore vis-à-vis INR 113.50 crore in FY18. The increase
in revenue resulted in reduction in losses at EBITDA level from
INR103.20 crore in FY18 to INR 35.00 crore in FY19 showing an
improvement of 66%. However, the company continued to report PAT
loss in FY19 of INR 134.60 crore (PY: loss of INR 153.60 crore).
However, due to the fund infusion from the promoter, DLI is able to
meet its debt servicing obligations in a timely manner since May
2019. Further, in H1FY20 the total operating income increased by
55% to INR 106.30 crore vis-à-vis INR 68.75 crore in H1FY19 and
DLI reported gross profit of INR 11.10 crore in H1FY20. However,
DLI continued to report PBILDT loss in H1FY20 of INR 15.90 crore
(H1FY19: loss of INR 14.13 crore)
Competition from private and established players
The company faces competition from established ICD operators in
North India like CONCOR's ICDs at Tughlakabad and Dadri, Gateway
Distriparks ICD at Garhi Harsaru- Haryana, Adani Logistics Ltd ICD
at Patli, Gurgaon, WWIL (Worlds Window Infrastructure and Logistics
Pvt. Ltd) at Loni, Ghaziabad, Hind Terminals Pvt Ltd, Palwal and
Gateway Rail Freight Ltd, Ballabgarh. However, with its integrated
infrastructure, the company has been able to establish itself as
one of the leading ICD and cargo handling service provider.
Key Rating Strengths
Strong parentage marked by financial support extended by IIP and
equity infusion
Infrastructure India Plc (IIP), an associate company of GGIC
Limited (Guggenheim Global Infrastructure Company) is a close-ended
infrastructure fund, registered in the Isle of Man in UK and listed
on AIM London acquired 100% equity shareholding in DLI in 2011.
Further, in April 2018, IIP had sold the entire shareholding to
Distribution and Logistics Infrastructure India, Mauritius and DLI
has become its step down subsidiary. DLI has received a letter of
financial support dated July 8, 2019 from IIP, Isle of Man the
ultimate holding company for financial assistance to meet any
shortfall in its funding requirements, continue operations and meet
its liabilities, as they fall due for a period of not less than 12
months from the date of the letter.
Further, in FY20 the ultimate promoters/holding company decided to
provide financial assistance for completion of various projects and
for debt servicing obligations. Thus IIP Bridge Facility LLC an
affiliate of GGIC Ltd entered into a loan agreement, dated April 2,
2019 with Infrastructure India Holdco, a wholly owned subsidiary of
IIP. As per the terms of the loan agreement, a debt of US$ 105
million (~Rs. 735 crore) shall be provided to Infrastructure India
Holdco by IIP Bridge Facility LLP. Out of this, US$ 75 million
(~Rs. 540 crore), would be provided to DLI in the form of equity
from DLI, Mauritius. Out of this INR 243.66 crore is received by
DLI as on September 30, 2019. The Loan is expected to provide
sufficient capital to enable DLI to complete, commission and ramp
up all of its existing terminal facilities through to completion,
to meet other DLI lender requirements and provide additional
working capital for both DLI and the Group.
Experienced management team
The management team of the company includes professionals having
experience with Multi-model logistics and Freight Forwarding
companies. The company's chairman Mr. Rahul Lulla (representative
from IIP) is the CEO and Board member of IIP. As co-founder and Sr.
Vice President of GGIC, he was specifically responsible for the
operation of GGIC's Indian activities. Prior to co-founding GGIC,
he was employed by AES Corporation as President of AES
BrasilEnergia. He has also earlier held positions in power &
utilities financing at Morgan Stanley, CMS Energy Corp and Credit
Suisse First Boston. Mr. Vishal Lather, CEO, has recently joined
the company in 2019. He is a graduate in Economics and has
completed his PGDM from Institute of Management Technology,
Ghaziabad. He also holds a diploma in Applied Science, Logistics &
Maritime from North Metropolitan TAFE, Australia. Further he has 17
years of rich experience across various departments in logistics
sector. Mr. K. Sathianathan, Managing Director, has over three
decades of extensive experience in the logistics industry which
includes working with Indian Railways, CONCOR, Adani Logistics Ltd.
and ETA.
Presence across verticals in the logistics industry (including
category 1 license for Container Train Operator)
The company has the unique advantage of presence in all the
verticals of the logistics industry ranging from road
transportation (both domestic and EXIM), rail transportation, ICDs,
FTWZ to domestic terminals.
Presently, the company operates with 10 rakes (with Freight Star
brand) under category 1 license from Indian Railways to run
container trains on its entire network for 20 years. The company's
TMS (Transport Management System) includes road transportation
business and material handling. With the integrated model of
logistics infrastructure of rail, ICDs, trailers and equipment's,
the productivity of operations is expected to improve, resulting
into increased cargo volumes. Consequently, it would enable the
company to provide last mile connectivity and allow it to benefit
from the advantages of economies of scale.
Location advantage of its terminals and strong infrastructure base
DLI has acquired strategically located 70-100+ acres of land each
in Bengaluru, Chennai, Nagpur and Palwal with easy access to routes
in and out of the cities. All Integrated Logistics Parks (ILP's)
are road and rail linked and have one-of-akind ability to provide
dedicated warehousing facilities of 4 million sq ft. DLI is
developing bonded warehouse along with ICD for custom clearance of
EXIM cargo, Domestics warehouse, Auto Logistics Park, Liquid tank
farm and Private Freight Terminal (PFT). The ILP's will also have
railway siding, truck parking and empty yards for providing the
complete logistics solution.
Further, DLI has significant operational experience in managing
terminals and container transportation – originally for
Container Corporation of India Ltd (CONCOR) and Central Warehousing
Corporation (CWC).
DLI owns and operates a fleet of 88 trailers along with over 300
containers and 29 handling equipment like Reach stackers, RTGs,
Cranes, Forklifts.
Distribution Logistics Infrastructure Pvt Ltd (DLI), formerly
Vikram Logistics & Maritime Services Pvt Ltd. is a multimodal
integrated logistics service provider. DLI was originally promoted
as a partnership firm in 1972; it was converted to Private Limited
in 1992 as Vikram Associates Pvt Ltd. The name of the company was
changed to Vikram Logistic and Maritime Services Pvt Ltd in 2006
and then to Distribution Logistics Infrastructure Pvt Ltd with
effect from 12th September 2014. In 2011, Infrastructure India Plc
(IIP), an associate company of GGIC Limited (Guggenheim Global
Infrastructure Company) which is a close-ended infrastructure fund,
registered in the Isle of Man in UK and listed on AIM London
acquired 100% equity shareholding in DLI. Further, in 2019, IIP has
sold the entire shareholding to the other shareholder Distribution
and Logistics Infrastructure India, Mauritius (direct holding
company of DLI) The company is engaged mainly in developing,
operating and maintaining multimodal logistic park facilities
including Free Trade Warehousing Zone (FTWZ), Inland Container
Depot (ICD) and Domestic Terminals (DT), operating trailers and
handing equipment's to move and handle the containerized cargo. Its
terminals are located in Nagpur, Bangalore, Palwal (NCR) and
Chennai. DLI owns and operates a fleet of 88 trailers along with
over 300 containers and 29 handling equipment like Reach stackers,
RTGs, Cranes, Forklifts.
ELITE TRAEXIM: CARE Keeps B on INR7.2cr Debt in Not Cooperating
---------------------------------------------------------------
CARE has been seeking information from Elite Traexim Private
Limited (ETPL) to monitor the rating vide letters/e-mails
communications dated October 31, 2019, November 28, 2019, December
3, 2019 and numerous phone calls. However, despite CARE's repeated
requests, the entity has not provided the requisite information for
monitoring the ratings. In line with the extant SEBI guidelines,
CARE has reviewed the ratings on the basis of the publicly
available information which however, in CARE's opinion is not
sufficient to arrive at fair ratings. Elite Traexim Private Limited
(ETPL)'s bank facilities will now be denoted as 'CARE B; Stable;
ISSUER NOT COOPERATING'.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 7.20 CARE B; Stable; ISSUER NOT
Facilities COOPERATING
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating assigned to the bank facilities of Elite Traexim Private
Limited (ETPL) is constrained by its constitution as a small scale
of operation and low profitability margins, working capital intense
nature of business, volatility associated with fluctuation in input
prices, leveraged capital structure with moderate debt coverage
indicators and intensely competitive industry. However, the
aforesaid constraints are partially offset by its experienced
partners with satisfactory track record of
operations.
Going forward, the ability of the company to grow its scale of
operations and improve its profit margins and ability to manage
working capital effectively would be the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operation and low profitability margin
Elite Traexim Private Limited is a relatively small player in the
trading of coated synthetic and netted cotton fabrics with total
operating income and net loss of INR16.74 crore and INR0.78 crore,
respectively, in FY19. The net worth was at INR4.13 crore as on
March 31, 2019. The profitability margin of the company remained
low marked by PBILDT margin of 1.37%. Moreover, the PAT margin was
negative during FY19 due to huge fixed and capital charges. The
small size restricts the financial flexibility of the company in
times of stress and it suffers on account of economies of scale.
Working capital intensive nature of business
The operations of the entity remained working capital intensive
marked by its high inventory and collection period. The entity
allows credit of around six to seven months to its customers due to
its presence in an intensely competitive industry. The debtors and
inventory days stood at 166 days and 88 days respectively, in FY19,
as against 217 days and 82 days in FY18 with total operating cycle
standing at 178 days in FY19 against 236 days in FY18. However, the
entity receives credit of around one to two months from its
suppliers owing to its long presence in the industry which
mitigates its working capital intensity to a certain extent.
Accordingly, the average utilization of fund based limit remained
at around 95% during last 12 months ended November, 2019.
Volatility associated with fluctuations in input prices
The major traded materials required for the company are coated
synthetics, the prices of which are highly volatile. Thus there
remains a risk of increase in the prices of the materials thereby
putting a pressure on the margins of the company. This apart, any
increase in labour prices will also impact its profitability being
present in a highly labour intensive industry.
Leveraged capital structure with weak debt coverage indicators
ETPL has below average financial risk profile marked by moderate
net worth of INR 4.13 crore as on 31 March, 2019 compared to
INR4.92 crore as on 31 March, 2018. The overall gearing ratio of
the company has deteriorated over the period FY17 to FY19 and
remained high at 2.40x as on March 31, 2019. The debt coverage
indicators are weak marked by interest coverage ratio which
remained nil for FY19. Debt repayment was done partly through
infusion of unsecured loan by promoters and the remaining through
operating profit.
Intensely competitive industry: Trading industry is a highly
fragmented and competitive space with presence of huge small
players operating in the same region due to low capital
requirement. In such a competitive scenario smaller entities like
ETPL in general are more vulnerable on account of its limited
pricing flexibility.
Key Rating Strengths
Experienced promoters with satisfactory track record of operations
ETPL started its business from the year 2009 and thus has
satisfactory track record of operations. Since its inception the
company is engaged in to trading of coated synthetic and netted
cotton frabics. Mr. Pramod Kumar Lundia having more than two
decades of experience in similar line of business, he looks after
the day to day operations of the company along with other director
(Mr. Arun Kumar Lundia) and a team of experienced professionals who
are having long experience in this industry.
Liquidity: Adequate
The liquidity position of the company remained adequate marked by
current ratio of 1.28x and quick ratio of 0.94x as on March 31,
2019. The cash and bank balance amounting to INR 0.33 crore
remained outstanding as on March 31, 2019.
Kolkata (West Bengal) based Elite Traexim Private Limited (ETPL)
was incorporated in year 2009 by Mr. Pramod Kumar Lundia and Mr.
Arun Kumar Lundia. The company is primarily engaged in trading
ofcoated synthetic which consists of 90% of its total operating
income in FY19 and the balance 10% of its total operating income
was generated from trading of netted cotton fabrics. The company
imports its traded materials from China and Taiwan and sells its
products through wholesalers and retailers in and around West
Bengal. Mr. Pramod Kumar Lundia having more than two decades of
experience in similar line of business, he looks after the day to
day operations of the company along with other director (Mr. Arun
Kumar Lundia) and a team of experienced professionals who are
having long experience in this industry.
GLOBARENA TECHNOLOGIES: Ind-Ra Cuts LongTerm Issuer Rating to 'D'
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Globarena
Technologies Private Limited's (GTPL) Long-Term Issuer Rating to
'IND D (ISSUER NOT COOPERATING)' from 'IND B+ (ISSUER NOT
COOPERATING)'. The issuer did not participate in the rating
exercise despite continuous requests and follow-ups by the agency.
Thus, the rating is based on the best available information.
Therefore, investors and other users are advised to take
appropriate caution while using the rating.
The instrument-wise rating action is:
-- INR70 mil. Fund-based working capital limits (Long-term/Short-
term) downgraded with IND D (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
the best available information
KEY RATING DRIVERS
The downgrade reflects GTPL's continuous over-utilization of
fund-based limits for 60-89 days since October 2019.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months could result in an upgrade.
COMPANY PROFILE
Incorporated in April 2000, GTPL is an IT-enabled service
organization that offers a range of learning, examination and
assessment solutions.
GONTERMANN-PEIPERS: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: Gontermann-Peipers (India) Limited
Diamond Harbour Road
Post-Pailan, 24 Pags(S)
Kolkata 743512
West Bengal
Insolvency Commencement Date: December 11, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: June 7, 2020
(180 days from commencement)
Insolvency professional: Raj Singhania
Interim Resolution
Professional: Raj Singhania
Apex Insolvency Professionals LLP
Central Plaza
41 B.B. Ganguly Street
5th Floor, Room No. 5A
Kolkata 700012
E-mail: rajsinghania_ca@yahoo.co.in
gpil.cirp@gmail.com
Last date for
submission of claims: December 25, 2019
GUINEA MOTORS: CARE Lowers Rating on INR17cr LT Loan to 'B+'
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Guinea Motors Private Limited (GMPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 17.00 CARE B+; Stable; ISSUER NOT
Facility COOPERATING; Revised From
CARE BB-; Stable on best
Available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from GMPL to monitor the rating
vide letters/e-mails communications dated October 31, 2019,
November 28, 2019, December 3, 2019 and numerous phone calls.
However, despite CARE's repeated requests, the entity has not
provided the requisite information for monitoring the ratings. In
line with the extant SEBI guidelines, CARE has reviewed the ratings
on the basis of the publicly available information which however,
in CARE's opinion is not sufficient to arrive at fair ratings.
Guinea Motors Private Limited's bank facilities will now be denoted
as 'CARE B+; Stable; ISSUER NOT COOPERATING'. Further the banker
could not be contacted.
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 assigned to the bank facilities of Guinea Motors Private
Limited is continue to be constrained by its small scale of
operation, limited bargaining power with TATA Motors Limited and
dependence on volume momentum, renewal based dealership agreement,
automobile dealership business being less profitable and highly
working capital intensive leading to moderately leveraged capital
structure and increasing competition. However, the aforesaid
constraints are partially offset by its long track record and
experienced promoter and authorized dealer of Tata Motors Limited
in Bihar. Going forward, ability of the company to increase its
scale of operation, improve profitability margins and ability to
manage working capital effectively would remain as the key rating
sensitivities.
Detailed description of the key rating drivers
At the time of last rating in December 12, 2018, the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Relatively small scale of operation
The company is a relatively small player vis-a-vis other players in
the automobile dealership business marked by its total operating
income of INR51.49 crore (INR 77.89 crore in FY18) with a PAT of
INR -1.53 crore (INR 0.28 crore in FY18) in FY19. The tangible net
worth of the company was moderately low at INR13.31 crore as on
March 31, 2019. The small size restricts the financial flexibility
of the company in terms of stress and deprives it from benefits of
economies of scale. Due to its relatively small scale of
operations, the absolute profit levels of the company also remained
low. Furthermore, the profitability margins of the company remained
low marked by PBILDT margin of 8.21% (3.79%:FY18) and PAT margin
of2.97 % (0.36%: FY18) in FY19.
Limited bargaining power with Tata Motors Limited and dependence on
volume momentum
GMPL's automobile dealership model is purely in the nature of
trading wherein profit margins are very thin and bargaining power
over the principal manufacturer is also low. As GMPL's scale of
operations is relatively small in size and margin on products is
pre-decided at a particular level by the principal manufacturer, it
has a limited scope to enhance its profitability margins.
Renewal based dealership agreement
The dealership agreement with Tata Motors Limited is valid for 3
years, which was renewed in 2017. Though the nonrenewability of the
same would pose a risk to the business sustenance of the company,
the past track record on agreement renewability and satisfactory
performance of the company, mitigates the risk related to
renewability to an extent.
Automobile dealership business being less profitable and highly
working capital intensive, leading to moderately leveraged capital
structure
The business of automobile dealership is having inherent low
profitability and high working capital intensity due to large
inventory holding. GMPL's PBILDT margin remained low at 8.21% in
FY19. Further, the PAT margin too remained very low, an inherent
feature of the automobile dealership business. The overall gearing
ratio was deteriorated from the last year mainly on account of
availament of additional finance from Tata Motors Limited and
higher utilization of its working capital limit. The debt coverage
indicators marked by total debt to GCA was -17.74x in FY19, however
it was improved mainly on account of improvement in cash profit
levels during the year.
Moreover, majority debt comprises working capital borrowings to
fund inventory which are inherent in the automobile dealership
business. The company has to maintain the fixed level of inventory
for display and to guard against supply shortages. Further, the
company delivers the vehicle only after receipt of full payment or
against the release order from financial institution (funding the
vehicle) which takes around 10-15 days' time to release the funds.
Furthermore, the company follows monthly billing cycle (for claims
against free services under warranty period of Tata Motors Limited)
and receives payment within 15 days of billing.
Increasing competition
Going forward, with a view to provide increased access to its
customers, Tata Motors Limited is set to grow the dealership
network. While this would provide expansion opportunities to GMPL,
it would also expose the company to competition from other Tata
Motors Limited dealer. Moreover, in order to capture the market
share, the auto dealers offer better buying terms like providing
credit period or allowing discounts on the purchase. Such discounts
offered to the customers create margin pressure and negatively
impact the earning capacity of the company. Further, the
competition may intensify further with the presence of other
automobile companies like Toyota, Honda, Maruti Suzuki, Hyundai,
Chevrolet, Ford, Nissan etc., launching new models at competitive
prices, may result in decline of the market share of Tata Motors
Limited, which in turn also affects its dealers including GMPL.
Key Rating Strengths
Long track record and experienced promoter
The company has been in automobile dealership business since 2001,
thus having a track record of around 17 years. Mr. Arjun Kumar
Gupta, Mr. R. K. Singh and Mr. Anand Gupta are the directors of
GMPL and looks after the overall management of the company. Mr.
Arjun Kumar Gupta having around four decades of experience in the
automobile industry and are ably supported by other directors, Mr.
R. K. Singh and Mr. Anand Gupta along with the team of experienced
professional who have rich experience in the same line of
business.
Authorized dealer of Tata Motors Limited in Bihar
GMPL is getting a competitive advantage of being sole dealer of
Tata Motors Limited's passengers' vehicle in Patna.
Guinea Motors Private Limited (GMPL) was incorporated in February,
2000 by Shri Arjun Kumar Gupta, Shri R. K. Singh and Shri Anand
Gupta of Patna, Bihar. The company commenced operation from
January, 2001 as an authorized dealer of Tata Motors Ltd (TML) for
its passenger cars, spares & accessories for nine districts of
Bihar. At present, GMPL offers passenger vehicles of Tata Motors
Limited through its two showrooms (self-owned) equipped with 3-S
facilities (Sales, Service and Spare-parts) at Patna. Apart from
this, the company also purchases and sells pre-owned cars. It has
one stockyards (rented), having a capacity to store around 150
passenger cars each. The company also has the two workshops at
Patna. Mr. Arjun Kumar Gupta (Director), along with other directors
Mr. R. K. Singh and Mr. Anand Gupta who have significant experience
in the dealership business look after the day to day operation of
the company. They are further supported by a team of experienced
professionals.
HOTEL EAST PALACE: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Hotel East Palace Private Limited
84/4, Satyen Roy Road
2nd Floor, Kolkata
WB 700034
Insolvency Commencement Date: December 13, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: June 10, 2020
Insolvency professional: Yogesh Gupta
Interim Resolution
Professional: Yogesh Gupta
S Jaykishan
Chartered Accountants
12 Ho Chi Min Sarani
Suite No. 2D, 2nd Floor
Kolkata 700071
E-mail: yogeshgupta31@rediffmail.com
ip.hoteleastpalace@gmail.com
Last date for
submission of claims: December 27, 2019
INTEGRATED SPACES: CARE Assigns 'D' Rating to INR30cr LT Loan
-------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Integrated Spaces Limited (ISL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term bank
facilities 30.00 CARE D Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of ISL takes into
consideration the delay in debt servicing due to poor liquidity
position.
The rating derives strength from the experienced promoters.
Rating sensitives:
Positive factor
Ability of the company to timely service its debt obligation
Ability of the company to generate sufficient cash accruals and
timely service its debt obligation along with efficient utilization
of its working capital limits remains critical from credit
perspective.
Improvement in liquidity position
Better collection and timely receipt of advances from its
customers, efficient receivables management along with ensuring
sufficient cash cushion to improve liquidity position remains
critical from credit perspective.
Key updates
Rating weakness
Delay in debt servicing: As per banker interaction, there were
delays in debt servicing (interest and principal) till October 30,
2019 due to stretch liquidity position.
Poor liquidity: Poor liquidity marked by lower accruals when
compared to repayment obligations, and low cash balance which has
constrained the ability of the company to repay its debt
obligations on a timely basis.
Rating strength
Experienced promoters in real estate development: ISL is promoted
by Gala and Shah's family who have over two decades of experience
in construction and real estate industry which have helped to
developed strong and cordial business relations with customers. Mr.
Kantilal savla is a managing director of the company and have
associated with company since inception. He is pioneer of the
company and have more than 30 years of experience into
rehabilitation, redevelopment of projects and in overall real
estate business, under his guidance ISL have executed many projects
throughout Mumbai. He is ably supported by Mr. Nishit Savla and Ms.
Grishma Savla who are post graduate and have nearly 9 years of
experience in the similar line of business.
Integrated Spaces Limited (ISL) was a partnership firm was
established in 1995 as "Shah construction and company". Later in
May 2008 it has changed its constitution to Private Limited Company
and rename company as "Integrated Spaces Limited'. ISL is engaged
into development of residential, commercial and hybrid projects,
TDR (Transfer of development rights) in Mumbai. ISL undertook
development spectrum such as SRA rehabilitation, rehabilitation of
Tenants, and redevelopment of Housing societies. Integrated Space
limited is group company of INTEGRATED group wherein there are
other companies like Integrated Coreinfra Ltd and Integrated Esate
Management Pvt. Ltd which are also engaged into construction and
real estate activities.
JET AIRWAYS: NCLT Extends Resolution Process by 90 Days
-------------------------------------------------------
The Hindu BusinessLine reports that the Mumbai Bench of National
Company Law Tribunal (NCLT) on Dec. 20 approved the extension of
the Corporate Insolvency Resolution Process (CIRP) for Jet Airways
by 90 days.
BusinessLine relates that the extension came after the CIRP did not
make any headway during the mandated 180-day period. The Insolvency
and Bankruptcy Code permits one-time extension up to 90 days by the
NCLT in deserving cases.
Ashish Chhawchharia, the Resolution Professional (RP) for the
defunct Jet Airways, had filed a miscellaneous application before
the two-member Bench on December 13 where he also attached the
minutes of the Committee of Creditors (CoC) meeting, the report
says.
According to BusinessLine, the CoC passed a resolution with vote
share of 90.08 per cent for extension of the CIRP by 90 days.
Following the resolution passed by the CoC, the NCLT ordered
90-days extension for completion of CIRP.
During one of the recent hearings, the RP had informed the court
that he had received two early interests - one from an Indian
entity backed by a UK-based firm, and another from a West Asian
Fund - for picking up stake in the company, the report relays.
As per FDI rules, an overseas airline can hold only up to 49 per
cent stake in an Indian airline, with the balance being held by an
Indian partner.
According to BusinessLine, South American conglomerate Synergy
Group was the only company to place a formal EoI for Jet before the
deadline ended in October. Thereafter, Synergy asked for more time
to submit a formal bid.
BusinessLine relates that Chhawcharia also said that the CoC will
decide on another round of Expression of Interest (EoI) by December
21. What this essentially means is that Synergy, if interested,
will have to participate in a fresh EoI along with other potential
parties.
In the previous hearing held on December 17, a representative of
Synergy informed the Bench that it wanted another extension as it
had a few critical issues that needed to be resolved before it
could formally take over Jet Airways, the report says.
He also told the tribunal that Synergy had submitted a draft
business plan to Chhawchharia and they were to meet representatives
of the Directorate-General of Civil Aviation and Ministry of Civil
Aviation. The next hearing of the Jet Airways matter is listed for
January 8, the report notes.
About Jet Airways
Based in Mumbai, India, Jet Airways (India) Limited was one of
India's top airlines founded by Naresh Goyal. It provided
passenger and cargo air transportation services as well aircraft
leasing services. It operated flights to 66 destinations in India
and international countries.
On June 20, 2019, the National Company Law Tribunal (NCLT), Mumbai
Bench, accepted an insolvency petition against Jet Airways filed by
its creditors as they attempt to recover some of their dues.
Ashish Chhawchharia of Grant Thornton India has been named as the
resolution professional in the case. Law firm Cyril Amarchand
Mangaldas will represent the interests of the lenders' consortium,
according to a Reuters report.
Jet Airways on April 17 halted all flight operations after its
lenders rejected its plea for emergency funds.
Creditors have filed claims worth INR30,907 crore, according to
Financial Express. The RP has so far admitted claims worth over
INR14,000 crore.
JUMBO FINVEST: CARE Lowers Rating on INR525.03cr Loan to 'D'
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Jumbo Finvest (India) Limited (JFIL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 525.03 CARE D; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B; Stable; on the basis
of best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated November 8, 2019, placed the
rating of JFIL under the 'Issuer non-cooperating' category as JFIL
had failed to provide information for monitoring of the ratings
including no default statement for the month of October 2019. JFIL
continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated November 5, 2019, October 23, 2019, and August
26, 2019. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The revision of the ratings of bank facilities of JFIL is on
account of delays in debt serving of principal and interest payment
of term loan arising out of stressed liquidity. As per the written
feedback of the lender, lender indicated that there are ongoing
delays in the payment of principal and interest of term loan.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delay in debt servicing obligation
As per the written feedback of a lender of JFIL, there are ongoing
delays in debt servicing of principal and interest. The payment is
of principal and interest is outstanding for the month of November
30, 2019.
Liquidity analysis: Poor
The liquidity of JFIL continues to remains stressed as reflected by
the delays in debt servicing. The deterioration in asset quality
and dip in profitability could lead to further stress in
liquidity.
JFIL was promoted by Mr. Ajay Singh and his family members in 1998
for carrying on a tractor dealership in the name of Ajay Tractors
Pvt. Ltd. In 2003, its tractor dealership business was discontinued
and the company was registered as a non-deposit taking Non-Banking
Finance Company (NBFC) with Reserve Bank of India (RBI). JFIL is
engaged in secured and unsecured lending mainly for loan against
property, personal loans and vehicle financing through its 150
operational branches (as on June 30, 2018) in Rajasthan,
Maharashtra and Madhya Pradesh.
KALASHREEMUKHA: CARE Lowers Rating on INR15cr LT Loan to B+
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Kalashreemukha, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 15.00 CARE B+; Stable; ISSUER NOT
Facility COOPERATING; Revised From
CARE BB-; Stable on best
Available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking monthly No default statement (NDS) from
Kalashreemukha to monitor the ratings vide e-mail communications/
letters dated December 6, 2019, December 4, 2019, December 2 2019,
November 18, 2019, November 7, 2019, November 5, 2019, November 1,
2019, October 31, 2019, October 1, 2019, September 9, 2019 and
numerous phone calls. However, despite CARE's repeated requests,
the entity has not provided the monthly NDS for monitoring the
ratings. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the publicly available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating. The ratings on Kalashreemukha's bank facilities will now be
denoted as CARE B+; Stable; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The revision in the rating takes in account non-availability of
information due to non-cooperation by Kalashreemukha with CARE'S
efforts to undertake a review of the rating outstanding. CARE views
information non-availability risk as a key factor in its assessment
of credit risk.
Detailed description of the key rating drivers
At the time of last rating in October 1, 2018 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
Modest scale of operations with low profit margins: The scale of
operation of the firm was modest with total operating income of
INR88.07 crore (FY17: INR81.08 crore) with a PAT of INR0.45 crore
(FY17: INR0.40 crore) in FY18 (provisional). Moreover, the profit
margins of the firm also remained low marked by PBILDT margin of
2.67% (FY17: 2.13%) and PAT margin of 0.51% (FY17: 0.50%) in FY18
as per provisional financials.
Proprietorship nature of business: Kalashreemukha, being a
proprietorship firm, is exposed to inherent risk of the capital
being withdrawn at time of personal contingency and entity being
dissolved upon the death/insolvency of the proprietor. Further,
proprietorship firm has restricted access to external borrowing as
credit worthiness of the proprietor would be the key factors
affecting credit decision for the lenders.
Low bargaining power with the principal and reliance for volume for
growth: Kalashreemukha's business model is purely in the nature of
trading, wherein profit margins are very thin and bargaining power
over the principal is also low. As Kalashreemukha's margin on
products is pre-decided at a particular level by the principal
manufacturers, it has a limited scope to enhance its profitability
margins. Hence, the firm's growth prospects depend on the ability
to increase its sales volume.
Renewal based distributorship agreement: The redistribution
stockist agreement between Hindustan Unilever Limited (HUL) and
Kalashreemukha is valid for five years with effect from April 01,
2016, thereafter subject to automatic renewal unless it is
terminated due to breach of contract/fraud by the firm or it's
going into liquidation. Similarly the stockist agreement between
Dabur India Limited (Dabur) and Kalashreemukha is valid from
November 07, 2014 to December 31, 2019, thereafter subject to
automatic renewal unless it is terminated due to breach of
contract/fraud by the firm or it's going into liquidation. Moreover
Kalashreemukha has a wholesaler agreement with Parle Products
Private Limited (Parle) with effect from August 2017 and the same
agreement shall remain in force till the same is terminated by
Parle. In the event of the wholesaler committing any breach of
terms and conditions by the firm or its going into liquidation.
Going forward, the ability of the firm to meet the expectation of
the principal i.e. HUL, Dabur and Parle with regular renewal of the
redistribution stockist/wholesaler agreement with the principal
will be critical for the firm.
Leveraged capital structure with moderately weak debt coverage
indicators: The capital structure of the firm remained leveraged
with debt equity ratio of 0.43x (1.15x as on March 31, 2017) and
overall gearing ratio of 3.50x (4.12x as on March 31, 2017) as on
March 31, 2018 as per the provisional financials. Further the debt
coverage indicators of the firm remained moderately weak with
interest coverage ratio of 1.40x (FY17: 1.54x) and total debt to
GCA of 27.17x (FY17: 26.51x) in FY18 (provisional).
High competition amidst fragmented nature of industry: The firm is
into trading of all products segments of Hindustan Unilever Limited
(HUL), Dabur India Limited (Dabur) and Parle Products Private
Limited (Parle). HUL, Dabur and Parle continue to face stiff
competition in key segments, with the entry of new players,
including multinationals, in segments such as personal care
products, health care and packaged foods. The Indian FMCG industry
is very competitive marked by the presence of both organized and
unorganized players across various segments and product categories.
Moreover, in order to capture the market share, the distributors
offer better buying terms like providing credit period or allowing
discounts on the purchase. Such discounts offered to the customers
create a margin pressure and negatively impact the earning capacity
of the firm.
Key Rating Strengths
Experienced proprietor with long track record of operations: The
firm started its operation since 2005 and thus has satisfactory
track record of operations. Due to satisfactory track record of
operations, the proprietor has established relationship with its
clients. Furthermore, the proprietor, Mr. Niranjan Sahoo is having
around thirteen years of experience in trading business. He looks
after the day to day operations of the firm. He is further
supported by a team of experienced professionals.
Distributor of reputed brands: Kalashreemukha enjoys the leverage
of being a distributor of HUL, Dabur and Parle for its entire
products segment. The product segment includes soaps and
detergents, personal care products, health care products, food and
beverages etc. HUL is one of the largest players in the Fast Moving
Consumer Goods (FMCG) segment in India with strong brands across
categories and price points. Dabur is one of India's leading FMCG
companies and also it is the largest ayurvedic and natural health
care company. Moreover Parle is one of the leading biscuits and
confectionery manufacturer in India. The brands have high
visibility and have sustained their market leadership, backed by an
extensive distribution network and strong advertising and marketing
support. This insulates the firm from the effects of downturns in
individual segments.
Bhubaneswar (Odisha) based, Kalashreemukha was established as a
proprietorship firm by Mr. Niranjan Sahoo in 2005. The firm is a
redistribution stockist of Hindustan Unilever Limited (HUL),
stockist of Dabur India Limited (Dabur) and wholesaler of Parle
Products Private Limited (Parle) for all its products segments. The
product segments of the firm include soaps and detergents, personal
care products, health care products and food & beverages etc. The
firm is also engaged in trading of readymade garments and its shop
is located in Konark, Puri.
LAKEVIEW TECHSYSTEMS: Insolvency Resolution Process Case Summary
----------------------------------------------------------------
Debtor: Lakeview Techsystems Private Limited
5/003, Jaya Darshan Chs Ltd Geeta Nagar
Bhayandar (W)
Thane 401101
Insolvency Commencement Date: December 2, 2019
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: June 8, 2020
Insolvency professional: Mr. Bhavesh Rathod
Interim Resolution
Professional: Mr. Bhavesh Rathod
A/101, Shelter CHSL
CSC Road
Opp. Shakti Nagar
Dahisar (E)
Mumbai 400068
E-mail: bhavesh76@gmail.com
- and -
Address for Correspondence:
Office no. 144, First Floor
Raghuleela Mall
Off S V Road
Kandivali West
Mumbai 400068
E-mail: ip.bhavesh@gmail.com
Last date for
submission of claims: December 25, 2019
MA MONI: CARE Reaffirms B+ Rating on INR5.50cr LT Loan to B+
------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of Ma
Moni Cold Storage Private Limited (MCSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 5.50 CARE B+; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of MCSPL continues to be
constrained by its weak financial risk profile marked by small
scale of operation, leveraged capital structure with moderate debt
coverage indicators, regulated nature of business, seasonality of
business and susceptibility to vagaries of nature, risk of
delinquency in loans extended to farmers and competition from local
players. However, the aforesaid constraints are partially offset by
its experienced promoters with long track record of operations and
proximity to potato growing area. Going forward, ability to
increase its scale of operation and profitability margins and
ability to manage working capital effectively are the key rating
sensitivities.
Key Rating Sensitivities
Positive Factors
* Sizeable increase in scale of operations from present level
(Total Operating Income above INR20.00 crore) of the
entity on a sustainable basis.
* Improvement in capital structure with overall gearing ratio
reaching comfortable level of below 1.00x on a sustainable
basis.
Negative Factors
* Any sizeable de-growth in scale of operations from present
level and deterioration in profitability margins with PBILDT
margin below 9.00% and PAT margin below 3.00% on a sustained
basis.
* Deterioration in capital structure with overall gearing ratio
reaching leveraged of above 4.00x on a sustainable basis.
Detailed description of the key rating drivers
Key Rating Weaknesses
Weak financial risk profile marked by small scale of operation,
leveraged capital structure and moderate debt coverage indicators:
The scale of operations of MCSPL remained small marked by total
operating income of INR2.96 crore and a PAT of INR0.12 crore in
FY19. Further, the total capital employed and net worth of the
company was also low at INR2.75 and INR0.57 crore as on March.31,
2019. The profitability levels and margins of the company remained
on the lower side over the past years due to limited ability to
control the rental rates in a regulated industry with high
competition in the operating spectrum. The capital structure as
marked overall gearing ratio of the entity, although improved
significantly, however remained leveraged at 3.82x respectively as
on March 31, 2019 vis-à-vis 15.07x as on March 31, 2018.
Improvement in capital structure due repayment of unsecured loan
from promoter and lower working capital borrowings as on the
balance sheet date. The debt coverage indicators represented by
total debt to GCA has also improved in FY19 over FY18 and remained
moderately high at 11.89x as on March 31, 2019. The same has
improved mainly on account of lower debt levels as on balance sheet
date closing date. Furthermore, the interest coverage ratio
remained satisfactory at 3.02x during FY19.
Regulated nature of business
In West Bengal, the basic rental rate for cold storage operations
is regulated by the state government through West Bengal State
Marketing Board. The rent of these cold storages is decided by
taking into account political considerations, not economic
viability. Due to severe government intervention, the cold storage
facility providers cannot enhance rental charge commensurate with
increased power tariff and labour charge.
Seasonality of business with susceptibility to vagaries of nature
MCSPL's operation is seasonal in nature as potato is a winter
season crop with its harvesting period commencing in March. The
loading of potatoes in cold storages begins by the end of February
and lasts till March. Additionally, with potatoes having a
preservable life of around eight months in the cold storage,
farmers liquidate their stock from the cold storage by end of
season i.e., generally in the month of November. The unit remains
non-operational during the period between December to February.
Furthermore, lower agricultural output may have an adverse impact
on the rental collections as the cold storage units collect rent on
the basis of quantity stored and the production of potato is highly
dependent on vagaries of nature.
Risk of delinquency in loans extended to farmers
Against the pledge of cold storage receipts, MCSPL provides
interest bearing advances to the farmers & traders. Before the
closure of the season in November, the farmers & traders are
required to clear their outstanding dues with the interest. In view
of this, there exists a risk of delinquency in loans extended, in
case of downward correction in potato or other stored goods prices,
as all such goods are agro commodities.
Competition from other local players
In spite of being capital intensive, the entry barrier for new cold
storage is low, backed by capital subsidy schemes of the
government. As a result, the potato storage business in the region
has become competitive, forcing cold storage owners to lure farmers
by providing them interest bearing advances against stored potatoes
which augments the business risk profile of the companies involved
in the trade.
Key Rating Strengths
Experienced promoters with long track record of operations MCSPL
was incorporated in the year 1987 and thus has long track record of
operations. The board of MCSPL comprises six directors, belonging
to the promoter's family & relative who are having sufficient
experience in the similar line of business. The day to day
operations of the company are being managed by Mr. Bajradhari
Samanta with adequate support from the other co-directors.
Proximity to potato growing area
MCSPL's storing facility is situated in the Howrah district of West
Bengal which is one of the major potato growing regions of the
state. The favorable location of the storage unit, in close
proximity to the leading potato growing areas provides it with a
wide catchment and making it suitable for the farmers in terms of
transportation and connectivity.
Liquidity: Adequate
Liquidity is marked by sufficient cushion in accruals vis-a-vis
repayment obligations and modest cash balance of INR1.37 crore as
on March 31, 2019. The average utilization of working capital limit
remained 38% utilized during last 12 month ended on November 30,
2019 crore. The current ratio stood below unity at 0.95x as on
March 31, 2019.
Ma Moni Cold Storage Private Limited (MCSPL) was incorporated on
May 28, 1987 for setting up a cold storage facility by Samanta
family of Paschim Medinipur, West Bengal. MCSPL is engaged in the
business of providing cold storage services primarily for potatoes
to local farmers and traders on rental basis with an aggregate
storage capacity of 233,100 metric ton per annum (MTPA). The cold
storage is located at Paschim Medinipur district of West Bengal.
Besides providing cold storage facility, the company also provides
interest bearing advances to farmers & traders for potato farming &
storing purposes against potato stored. The board of MCSPL
comprises six directors, belonging to the promoter's family &
relative. The day to day operations of the company are being
managed by Mr. Bajradhari Samanta with adequate support from the
other co-directors.
MOUNTHILL REALTY: Insolvency Resolution Process Case Summary
------------------------------------------------------------
Debtor: Mounthill Realty Pvt Ltd
Salt Lake Stadium
Between Gate 1 & 2
1st Floor, Bhagwandas
Taxi Meter Testing Centre
Salt Lake Kolkata
WB 700098
India
Insolvency Commencement Date: December 9, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: June 6, 2020
Insolvency professional: Aditya Kumar Tibrewal
Interim Resolution
Professional: Aditya Kumar Tibrewal
7C, Kiran Shankar Roy Road
Hasting Chamber, Basement
Kolkata 700001
E-mail: adityatibre@gmail.com
cirp.mhr@gmail.com
Classes of creditors: Home Buyers
Insolvency
Professionals
Representative of
Creditors in a class: Kamal Prakash Singh
Central Plaza
41, B.B. Gnguly Street
5th Floor, Suite No. 5E
Kolkata 700012
E-mail: kamalprakashco@gmail.com
Chandra Kumar Jain
18, Rabindra Sarani
Poddar Court, Gate No. 1
8th Floor, Room no. 816
Kolkata 700001
E-mail: ckcacs@yahoo.co.in
Mr. Chhedi Rajbhar
C. Rajbhar & Co.
40 Strand Road
Model House
2nd Floor, Room No. 49
Kolkata 700001
West Bengal
E-mail: crajbharco.ca@gmail.com
Last date for
submission of claims: December 23, 2019
NILLTECH SOFTWARE: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Nilltech Software Private Limited
Shop No. 003, Ground Floor
Pooja Nagar, Building No. 2
CHS Ltd., Cabin Cross Road
Bhayander East Thane 401107
Insolvency Commencement Date: Otober 25, 2019
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: June 8, 2020
Insolvency professional: Mr. Bhavesh Rathod
Interim Resolution
Professional: Mr. Bhavesh Rathod
A/101, Shelter CHSL
CSC Road
Opp. Shakti Nagar
Dahisar (E)
Mumbai 400068
E-mail: bhavesh76@gmail.com
- and -
Address for Correspondence:
Office no. 144, First Floor
Raghuleela Mall
Off S V Road
Kandivali West
Mumbai 400068
E-mail: ip.bhavesh@gmail.com
Last date for
submission of claims: December 25, 2019
OMKAR GRATINGS: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Omkar Gratings Private Limited
Gala No. B-5, Hema Industrial Estate
Plot No. 4 Sarvodaya Nagar
Jogeshwari East
Mumbai 40006
Insolvency Commencement Date: December 11, 2019
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: June 8, 2020
Insolvency professional: Bhavi Shreyans Shah
Interim Resolution
Professional: Bhavi Shreyans Shah
C 201, Embassy Appt.
Near Ketav Petrol Pump
Dr. V.S. Road, Ahmedabad
Gujarat 380015
E-mail: ca.bhavishah@gmail.com
- and -
9/B, Vardan Complex
Nr. Vimal House
Lakhudi Circle, Navrangpura
Ahmedabad 380014
E-mail: ipbhavishah@gmail.com
Last date for
submission of claims: December 25, 2019
RYDAK SYNDICATE: Ind-Ra Cuts Issuer Rating to BB+, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Rydak Syndicate
Limited's (RSL) Long-Term Issuer Rating to 'IND BB+' from 'IND BBB-
(ISSUER NOT COOPERATING)'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR200 mil. (increased from INR158.2 mil.) Fund-based working
capital limits downgraded with IND BB+/Stable rating;
-- INR20 mil. (increased from INR11 mil.) Non-fund-based limits \
downgraded with IND A4+ rating; and
-- INR5 mil. Term loan due on March 2018 withdrawn (paid in
full).
KEY RATING DRIVERS
The downgrade reflects RSL's deteriorated credit profile and
continued small scale of operation. The company's gross interest
coverage (operating EBITDA/gross interest expense) fell to 1.89x in
FY19 (FY18: 2.48x) because of an increase in the gross interest
expense and net financial leverage (adjusted net debt/operating
EBITDAR) deteriorated to 3.73x (3.21x) due to higher debt level.
The company's operating EBITDA margins remained modest despite
improving to 8.53% in FY19 from 7.62% in FY18 due to a decline in
raw material prices in FY19. The return on capital employed was 10%
in FY19 (FY18: 13%). The company's revenue declined to INR901
million in FY19 (FY18: INR1,093 million) due to lower sales
realizations.
The ratings are constrained by RSL's presence in the highly
fragmented and intensely competitive tea industry, its
susceptibility to any change in climatic condition and raw material
price volatility.
The ratings are, however, supported by the two-decade-long
experience of RSL's promoters in the industry. The ratings are also
supported by the company's healthy relationship with its reputed
customers and suppliers.
Liquidity Indicator - Stretched: The firm's average maximum use of
its fund-based limits was 98.98% during the 12 months ended
November 2019. The company's cash flow from operations remained
positive at INR86.12 million in FY19 (FY18: INR88.05 million) due
to favorable change in working capital cycle. It's cash and cash
equivalents were INR8.15 million in FY19 (FY18: INR5.61 million).
RATING SENSITIVITIES
Positive: A substantial increase in the revenue while maintaining
operating profitability with interest coverage below 2.5x could
lead to a positive rating action.
Negative: Deterioration in the credit metrics with net leverage
above 4.0x or elongation of networking capital cycle could lead to
negative rating action.
COMPANY PROFILE
Incorporated in 1898, RSL has integrated tea manufacturing
operations, comprising cultivation of tea and manufacturing black
crush, tear, curl tea. It has six tea estates covering a total area
of 3,447 hectares in West Bengal and Assam and has a total tea
manufacturing capacity of 7 million kg per year. RSL is listed on
the Calcutta Stock Exchange.
SHREE NARMADA: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Shree Narmada Architectural Systems Limited
Plot No. 95/1
Paikiopp Apna Ghar Society
Bholav, Bharuch
Gujarat 392001
Insolvency Commencement Date: December 10, 2019
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: June 7, 2020
Insolvency professional: Manish Kumar Bhagat
Interim Resolution
Professional: Manish Kumar Bhagat
103-104, Panchdeep Complex
Mithakhali Six Road
Navrangpura
Ahmedabad 380009
E-mail: mbhagat2003@gmail.com
Last date for
submission of claims: December 27, 2019
SRI ARAVINDA: CARE Keeps B+ on INR7cr Debt in Not Cooperating
-------------------------------------------------------------
CARE has been seeking information from Sri Aravinda Steels to
monitor the rating vide e-mail communications dated June 25, 2019,
September 25, 2019, December 2, 2019 and numerous phone calls.
However, despite CARE's repeated requests, the company has not
provided the requisite information for monitoring the rating. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of best available information which however, in CARE's
opinion is not sufficient to arrive at fair rating. The rating on
Sri Aravinda Steels bank facilities will now be denoted as CARE B+;
Stable; ISSUER NOT COOPERATING.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 7.00 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING; Based on best
available information
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on October 23, 2018, the following were
the rating strengths and weaknesses
Key Rating Weaknesses
Modest scale of operations
Despite the long track record, the scale of operations of the firm
remained modest at INR 69.46 crore in FY18 (Prov.). The networth of
the firm was also small and stood at INR 2.14 crore as on March 31,
2018 (Prov.) as compared to other peers in the industry.
Weak financial position characterized by leveraged capital
structure and weak debt coverage indicators
The financial position of the firm stood weak marked by leveraged
gearing and weak debt coverage indicators during the review period.
The capital structure of the firm improved from 4.21x as on March
31, 2016 to 3.40x as on March 31, 2017 at the back of decrease in
debt levels. However, the same deteriorated to 3.69x as of March
31, 2018 (Prov.) on account of increase in utilization of working
capital facility along with increase in unsecured loans from
related parties. The debt protection metrics of the firm stood very
weak marked by TD/GCA of 47.36x in FY18 (Prov.) as compared to
31.45x in FY16 due to the increase in total debt and decrease in
gross cash accruals. Despite the increase in interest expense, the
interest coverage ratio improved from 1.11x in FY16 to 1.22x in
FY18 (Prov.) due to improvement in PBILDT levels in absolute terms;
however remained weak during the review period. Furthermore, the
total debt to cash flow from operations stood negative in FY18
(Prov.) due to negative cash flow from operations.
Thin profitability margins due to trading nature of business
The PBILDT margin of the firm remained thin and fluctuated in the
range of 1.70%-2.10% during the review period FY16 (A)-FY18 (Prov.)
as the firm is essentially engaged in the trading business. Due to
the presence of large number of players in the industry and cut
throat competition, the firm could not book greater sales
realizations. Further, the PAT margin of the firm was very thin,
marked at 0.43% in FY16 which decreased to 0.20% in FY18 (Prov.) on
account of decrease in PAT levels due to under absorption of
interest expenses which has been on an increasing trend during the
review period.
Partnership nature of constitution with inherent risk of withdrawal
of capital
The partners typically make all the decisions and lead the business
operations. If they become ill or disabled, there may not be
anybody else to step in and maintain the optimum functioning of
business. A business run by partners also poses a risk of heavy
burden, i.e. an inherent risk of capital withdrawal, at a time of
personal contingency which can adversely affect the capital
structure of the firm. Moreover, the partnership firms have
restricted access to external borrowing which limits their growth
opportunities to some extent.
Highly competitive and fragmented trading industry
The firm operates in highly fragmented and competitive industry
wherein the presence of large number of entities in the
un-organized sector and established players in the organized sector
which limits the bargaining power with the customers. Furthermore,
the firm is also exposed to competitive pressures from domestic
players as well as from big, well established players from abroad.
Key Rating Strengths
Long operational track record of the firm and experience of the
partners in steel industry
Vijawada based, SAS was established in 1994 as a partnership firm.
Mr. Srinivas Rao (Managing Partner) and Mr. Koteswara Rao (Managing
Partner), the key promoters of SAS, have more than two decades of
experience in the steel industry. Through their vast experience in
the steel industry, the firm is able to establish healthy
relationship with key suppliers, customers, local traders and
dealers facilitating the steel trading business within the state.
Increasing total operating income and satisfactory working capital
cycle during review period
The total operating income of the firm has increased at a CAGR of
29% from INR 41.83 crore in FY16 to INR 69.46 crore in FY18 (Prov.)
mainly on the back of increase in quantum of goods traded and
addition of new customers to the business. Furthermore, during
5MFY19 (Prov.), the firm has achieved a revenue of INR 27.87 crore.
The working capital cycle of the firm remained comfortable during
the review period on account of comfortable average collection
period and average creditor period. While some suppliers of the
firm take full upfront payment for the materials procured by SAS,
some extend a credit period of 10-30 days, based on their
respective credit policies. Most of the customers make 100% advance
payments while some are given a credit period of 30 days, based on
the long standing relationship with the firm.
Furthermore, the firm keeps an average inventory of 30 days in
order to meet the customer requirement on time. However, the
average utilization of the cash credit facility was 90-95% for the
last 12 months ended August 31, 2018.
Stable outlook of Steel industry
The growth in Indian steel demand lagged much behind expectations
due to subdue environment in infrastructure and Real Estate
Company. However, on back of various initiatives taken by the
government coupled by expected turnaround in real estate and
infrastructure sector, outlook of steel demand is expected to
remain stable for the medium term. For the next two years, India's
steel consumption is forecasted to grow annually by about 5%-6%.
Indian steel capacity is also expected to grow about 125 MT,
registering a growth of 8.8%. Further, the Government of India has
floated a target to produce 300 MT by 2025-26.
=====================
N E W Z E A L A N D
=====================
CRYPTOPIA LIMITED: Liquidators Retrieve Customer Info From Arizona
------------------------------------------------------------------
Radio New Zealand reports that liquidators of the hacked
cryptocurrency exchange Cryptopia have travelled to the United
States, to retrieve customers' information and certain
crypto-assets.
An Arizona-based data centre was the only place where liquidators
from the firm, Grant Thornton, were able to gather the material,
the report says.
Cryptopia was liquidated earlier this year, after it was hacked in
January and an unknown but "significant" amount of crypto-assets
were stolen, RNZ recalls.
According to RNZ, the Christchurch-based business grew rapidly last
year, which saw it invest heavily in technology infrastructure,
however when trading fell after the hack, it could not pay its
debts. At that time it had more than 2.2 million users and 37
staff.
RNZ says the liquidators are awaiting a High Court decision to
determine who owns the crypto-assets, which were mixed up
together.
They said the process to work out who owns what, was complex and
timely, with more than 900,000 active customers and 900 types of
crypto-assets involved, RNZ relays.
"Customers did not have individual wallets and it is impossible to
determine individual ownership," the liquidators' report, as cited
by RNZ, said. "While Cryptopia held details of customer holdings
and reported these on the exchange, the crypto-assets themselves
were pooled in coin wallets."
The wallets had been rebuilt to ensure no "malicious code" was
leftover from the hack, RNZ says.
Some money had been recovered and converted from Bitcoin to fund
the liquidation, leaving NZ$7.2 million on hand.
It owed NZ$3 million to 26 unsecured creditors, down from total
liabilities of NZ$4.2 million in May, the report discloses.
New Zealand Police and international authorities were still
investigating the hack, the report adds.
About Cryptopia Limited
Cryptopia Limited -- https://support.cryptopia.co.nz/csm -- is a
cryptocurrency exchange based in New Zealand.
On May 15, 2019, David Ruscoe and Russell Moore from Grant Thornton
were appointed as liquidators to wind up the company's affairs.
Cryptopia Limited filed a Chapter 15 petition (Bankr. S.D. New York
Case No. 19-11688) on May 24, 2019. Timothy E. Graulich, Esq.,
Davis Polk & Wardwell LLP, in New York, is the U.S. counsel.
EAST WIND: SFO Opens File on NZ$45-Mil. Ponzi Scheme
----------------------------------------------------
Matt Nippert at NZ Herald reports that a NZ$45 million Ponzi scheme
that unravelled after the sudden death in Auckland of its founder
in February is now being investigated by the Serious Fraud Office.
In September, the Herald broke news of the audacious fraud at East
Wind - understood to be the largest Ponzi scheme uncovered in New
Zealand since the David Ross affair in Wellington of a decade ago -
that largely targeted Japanese nationals with unregistered
immigration and financial advice.
On Dec. 19, the Serious Fraud Office - which had received, but
decided not to investigate, complaints about East Wind in 2014 -
announced it was stepping in to formally look at the matter, the
Herald says.
"The Serious Fraud Office has commenced a formal investigation into
East Wind Company Ltd and its affiliated entities," the Herald
quotes a spokesman as saying.
According to the report, the investigation has been initiated under
part 2 of the Serious Fraud Office Act where "the Director has
reasonable grounds to believe that an offence involving serious or
complex fraud may have been committed".
After Tom Tanaka, also known as Masatomo Ashikaga, died in his
Auckland apartment of complications from alcoholism, investors
seeking updates on their finances found his office and bank
accounts suddenly closed.
Liquidators Grant Thornton were appointed by investors in April,
eventually taking over a network of seven companies run by Mr.
Tanaka, the Herald recalls. Liquidators found "a number of
inconsistencies" in accounts, and a large gap between what
investors creditors were owed and assets held.
The Herald notes that the most recent liquidators report, dated
mid-December, lists creditors as being owed NZ$44.6 million, with
only NZ$1 million recovered to date.
Liquidators have been, unsuccessfully to date, seeking to interview
Mr. Tanaka's widow Sandy Tsai, who closed East Wind offices and
bank accounts and sold assets abroad after discovering the body of
her husband, the Herald relates.
===========
T A I W A N
===========
CHANG JUNG: MOE Probes Tainan Girls School's Insolvency
-------------------------------------------------------
Jake Chung at Taipei Times reports that the Ministry of Education
(MOE) has sent inspectors to investigate the finances of the Chang
Jung Girls' Senior High School in Tainan after school dean Tai
Chih-hsun confirmed that the school is on the brink of insolvency
and cannot pay its faculty.
In August, the school's board of directors declared a salary cut,
which led to the dismissal of two board members: Wang Chao-ching,
who doubled as the school's dean, and Chen Tsung-yen, the deputy
minister of the interior, Taipei Times recalls.
According to Taipei Times, Minister of Education Pan Wen-chung told
reporters on Dec. 19 that he and K-12 Education Administration
Director-General Peng Fu-yuan agreed to dispatch a task force to
the school as soon as possible.
Taipei Times relates that the school has a decent record and 3,000
students, Pan said, adding that the ministry hopes to bail out the
school after gaining a better understanding of the situation, as
high-school education is tuition-free.
The ministry sent a K-12 Education Administration official to the
school after receiving Tai's confirmation on Dec. 19.
According to the report, the school said enrollment has dropped
from 5,000 to 3,000 due the nation's falling birthrate, resulting
in reduced income.
The school was unable to repay NT$20 million (US$662,076) of loans
in the first half of this year, and needed to borrow another NT$40
million, it said.
While repaying NT$65 million after receiving NT$85 million of
student funds for this school year, personnel and administrative
costs quickly burned through the remaining funds, it added.
The school only has NT$10 million on hand, which is not enough to
cover personnel costs for one month, Tai, as cited by Taipei Times,
said.
"The school will not be able to pay faculty members this month's
salary on time," the report quotes Tai as saying, adding that the
school cannot, even though it wants to.
Taking out bank loans is not a long-term solution and, while the
school owns NT$40 million of real estate, its hands are tied by the
Private School Act, Tai said, Taipei Times relays.
"We hope the K-12 Education Administration will try to understand
the school's situation from all angles," Tai said.
Taipei Times adds that the teachers' union at the school had
threatened to take action if the school did not resolve matters by
Dec. 21, Tai said, adding that the school is in talks with the
union while meeting with the board to find a solution.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2019. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
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Information contained herein is obtained from sources believed
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thereof are US$25 each. For subscription information, contact
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*** End of Transmission ***