/raid1/www/Hosts/bankrupt/TCRAP_Public/200101.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, January 1, 2020, Vol. 23, No. 1
Headlines
A U S T R A L I A
PREMIER APPAREL: First Creditors' Meeting Set for Jan. 9
WHITES DIESELS: First Creditors' Meeting Set for Jan. 9
C H I N A
CHINA: Takes Aim at Murky Restructuring Process for Bond Defaults
HENGFENG BANK: Eastern Province Plans to Take Control of Bank
KWG GROUP: Fitch Affirms BB- LT IDR, Outlook Stable
I N D I A
ACCORD ELECTROPOWER: CARE Keeps B on INR3cr Debt in Non-Cooperating
ADHIKARI BROTHERS: Insolvency Resolution Process Case Summary
ALEKHYA DRUGS: Insolvency Resolution Process Case Summary
APPU HOTELS: CARE Lowers Rating on INR5cr LT Loan to 'D'
ARENA SUPERSTRUCTURES: CARE Cuts Rating on INR100cr Loan to B+
CHINAR FORGE: CARE Lowers Rating on INR30.75cr Loan to 'D'
DEHRADUN HIGHWAYS: CARE Keeps D on INR528cr Debt in Not Cooperating
GWALIOR BYPASS: CARE Keeps INR93cr Debentures in Not Cooperating
INDIA: RBI Sees Corporate Governance 'Fault Lines' at Some Lenders
MANIK COMMERCIAL: Ind-Ra Lowers LongTerm Issuer Rating to 'D'
NAZAR INT'L: Insolvency Resolution Process Case Summary
RCBS REALTY: Insolvency Resolution Process Case Summary
RITHWIK PROJECTS: CARE Lowers Rating on INR1624.45cr Loan to D
ROCKLAND CERAMIC: CARE Reaffirms D Rating on INR12.77cr LT Loan
SHAKUNTALA WAREHOUSE: Ind-Ra Lowers LongTerm Issuer Rating to 'D'
SHREE DOODHAGANGA: Ind-Ra Lowers LongTerm Issuer Rating to 'B+'
SHREE SACHIDANAND: Insolvency Resolution Process Case Summary
SONALI AUTOS: Ind-Ra Lowers LongTerm Issuer Rating to 'D'
STARKENN SPORTS: Insolvency Resolution Process Case Summary
VARDHMAN BUILDPROP: CARE Keeps D on INR35cr Debt in Non-Cooperating
VARDHMAN INFRAHEIGHTS: CARE Keeps D Debt Rating on Not Cooperating
M A L A Y S I A
FSBM HOLDINGS: Auditors' Disclaimer Opinion Triggers PN17 Status
S I N G A P O R E
HYFLUX LTD: Expects Adverse Impact From Ending Prior Tuasone Deal
HYFLUX LTD: SIAS Calls on Aqua Munda to Disclose Funding
LIBRA GROUP: Cyber Builders Appoints Provisional Liquidators
METECH INT'L: SGX RegCo Serves Notice to Reconvene EGM
V I E T N A M
ANZ BANK: Fitch Assigns 'BB' LongTerm Foreign Currency IDR
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A U S T R A L I A
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PREMIER APPAREL: First Creditors' Meeting Set for Jan. 9
--------------------------------------------------------
A first meeting of the creditors in the proceedings of Premier
Apparel Group Pty Ltd will be held on Jan. 9, 2020, at 10:30 a.m.
at the offices of APSO, Exchange Tower Melbourne, Level 1, at 530
Little Collins Street, in Melbourne, Victoria.
Laurence Fitzgerald and Michael Humphris of William Buck were
appointed as administrators of Premier Apparel on Dec. 30, 2019.
WHITES DIESELS: First Creditors' Meeting Set for Jan. 9
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Whites
Diesels Australia Pty Ltd will be held on Jan. 9, 2020, at 11:00
a.m. at the offices of BRI Ferrier, Level 30, Australia Square, at
264 George Street, in Sydney, NSW.
Andrew John Cummins & Peter Paul Krejci of BRI Ferrier were
appointed as administrators of Whites Diesels on Dec. 27, 2019.
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C H I N A
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CHINA: Takes Aim at Murky Restructuring Process for Bond Defaults
-----------------------------------------------------------------
Bloomberg News reports that as bond defaults become an accepted
norm in China, Beijing is shifting its focus to what happens next.
According to Bloomberg, China's regulators are pushing to improve
the debt restructuring process, currently notoriously opaque and
protracted. Senior officials from bodies including the central
bank and securities regulator last month urged that defaults be
handled more efficiently and transparently, saying action is needed
to restore investor confidence.
Bloomberg relates that the stakes are getting higher, with
corporate bond failures in China rising to a fresh record of more
than CNY131.1 billion (US$18.7 billion) this year. While that's
encouraging better pricing of risk, the lack of a reliable system
to clean up after a default has unsettled some investors and made
them reluctant to provide financing to lower-rated companies.
"A large market like China's will likely see more defaults each
year. At a time like this, regulators may have realized the need to
pay more attention to the issue of handling defaults," Bloomberg
quotes Qin Han, chief fixed income analyst at Guotai Junan
Securities, as saying.
Guidelines jointly drafted by China's central bank, economic
planning agency and securities regulator will soon be released, the
official Xinhua News Agency reported on Dec. 24, 2019, citing Liu
Guoqiang, a deputy governor of the People's Bank of China,
Bloomberg says. Watchdogs have already sought to unify the
fragmented regulatory framework for corporate bonds.
Given its $13 trillion bond market is the world's second largest,
China has a disproportionately short history of defaults. Since the
first onshore bond failure in 2014, Beijing has allowed more debt
to go bad to instill stronger discipline in a market long
accustomed to state-led bailouts, according to Bloomberg.
That's put bondholders in China on a steep learning curve - and
they're often finding themselves with little say in a murky
restructuring process, notes Bloomberg.
Bloomberg says opaque practices include prioritizing compensation
for individual investors over institutional creditors, or offshore
debt over onshore notes. Another strategy of concern to analysts is
that some debtors are negotiating payment extensions with creditors
privately instead of resolving their problems publicly through the
clearing house. That makes it harder for onlookers to track what's
happening, and for other creditors to ensure they're being treated
fairly.
Due to the lack of guidelines, creditors are "totally on their own"
when exploring different ways to deal with bond defaults, said Shen
Chen, a partner at Shanghai Maoliang Investment Management LLP,
Bloomberg relays.
The new policies to be released by regulators should help, Shen
said. "It's a positive signal and the handling of defaults will be
more orderly in the future," Bloomberg relays.
HENGFENG BANK: Eastern Province Plans to Take Control of Bank
-------------------------------------------------------------
Wu Hongyuran and Timmy Shen at Caixin Global reports that Hengfeng
Bank Co. Ltd.'s planned CNY100 billion (US$14.27 billion) private
placement will allow the Shandong provincial government to take
control of the troubled bank, thanks to a side deal with the
leading investor in the new shares. The deal indicates that the
Shandong government, rather than the central government, will take
the lead in the cleanup of the troubled bank, Caixin says.
Caixin, citing the private placement plan, says Central Huijin
Investment Ltd., an arm of China's sovereign fund, China Investment
Corp., has signed up to buy 60 billion of the 100 billion shares
that the struggling Shandong province-based lender announced it
would issue, giving Central Huijin a nearly 54% stake.
An asset management firm controlled by the provincial government
has subscribed to 36 billion shares, which would give it a 32.4%
stake, according to the private placement plan cited by Caixin.
Singapore's United Overseas Bank Ltd. and other investors have
agreed to buy the remaining 4 billion shares. The bank didn't
disclose the price of the private placement, but Caixin has learned
from multiple sources that the shares will be priced at CNY1 each.
Caixin notes that the plan is still subject to approval by the
China Banking and Insurance Regulatory Commission (CBIRC).
Under the plan, Central Huijin would hold a majority stake in
Hengfeng Bank. However, the Shandong asset management firm has made
a deal with Central Huijin to purchase half, or 30 billion, of the
latter's shares within three years, Caixin has learned from
multiple sources. The deal also allows the Shandong provincial
government to be the actual controller of the bank after the
private placement.
"The Shandong provincial government's capital injection into
Hengfeng Bank sets an example for how local governments can deal
with high-risk financial institutions," a senior Hengfeng Bank
executive told Caixin. "The key point is that local governments are
willing to take responsibility and move ahead with substantive
restructuring of Hengfeng."
Hengfeng Bank is the third commercial lender in China to receive
state assistance since May, following the takeover of Inner
Mongolia-based Baoshang Bank Co. Ltd. and the restructuring of
Liaoning-based Bank of Jinzhou Co. Ltd.
In October, the CBIRC gave Hengfeng Bank approval to increase its
registered capital to CNY11.2 billion from CNY1.7 billion in 2008,
Caixin discloses citing an October CBIRC release. The increase in
registered capital is a bookkeeping measure to officially recognize
the capital that Hengfeng Bank has received over the last 10 years.
According to the bank's plan, its final share capital will be
CNY111.21 billion after the private placement.
Hengfeng Bank ran into trouble in 2016 when several news
publications reported that an unnamed whistleblower had accused top
executives of embezzlement, according to Caixin. The whistleblower
accused Cai Guohua, who was the bank's chairman from 2013 to 2017,
and others of misappropriating millions of yuan, a charge later
repeated by the bank's former president, Luan Yongtai.
A senior official with the Shandong government told Caixin that
during Cai's tenure as chairman, he claimed an average of around
CNY400,000 in expenses for reimbursement each day, and the bank had
spent about CNY300 million to CNY400 million on this alone.
Hengfeng Bank had CNY1.2 trillion in total assets at the end of
2016, according to its annual report for the same year, the most
recent one it released, Caixin discloses. The bank now has nearly
CNY140 billion of nonperforming loans, from which it can probably
recover about CNY80 billion, Caixin has learned. The eventual loss
of around CNY60 billion is equivalent to the amount that Central
Huijin is set to inject into the bank.
To clean up the bank's bad assets and reorder its shareholding
structure, Hengfeng Bank has devalued its net asset value per share
to CNY1 from CNY5.6 in 2016, the sources said, adds Caixin.
The bank has also downsized, cutting the number of departments at
its headquarters to 32 from 67 in an effort to reduce redundancies,
Caixin has learned from a source at the bank.
KWG GROUP: Fitch Affirms BB- LT IDR, Outlook Stable
---------------------------------------------------
Fitch Ratings affirmed China-based KWG Group Holdings Limited's
Long-Term Issuer Default Rating at 'BB-'. The Outlook is Stable.
Fitch has also affirmed KWG's senior unsecured rating at 'BB-'.
KWG's ratings are supported by its quality and sufficient land
bank, strong brand recognition in higher-tier cities across China,
consistently robust profitability, strong liquidity and healthy
maturity profile. The ratings are constrained by the small scale of
the company's development-property business as well as weak sales
efficiency.
KEY RATING DRIVERS
Diverse Coverage; Strong Branding: KWG's land bank is diversified
across China's Greater Bay Area, which includes Guangzhou, Foshan,
Shenzhen and Hong Kong, as well as eastern and northern China. The
company had 17.8 million square metres (sq m) of attributable land
in 1H19, spread across 38 cities in mainland China and Hong Kong,
with an average cost of CNY5,000/sq m (excluding Hong Kong) and
sufficient for around five years of development. Over CNY200
billion of assets out of total sellable resources of CNY450 billion
are located in the Greater Bay Area, where the company has
extensive experience and established operations.
KWG has established strong brand recognition in its core cities by
focusing on first-time buyers and upgraders. It appeals to these
segments by engaging international architects and designers and
setting high building standards.
Robust Profitability Through Cycles: Fitch expects KWG's EBITDA
margin, excluding capitalised interest, to remain at 30% in the
next two years. Its consolidated EBITDA margin decreased to around
20% by end-2018, from around 34% at end-2017, mainly due to the
sale of an office building that was classified as disposal of a
subsidiary and was not included in the margin calculation. The
margin would have declined by only 1-2 percentage points, after
accounting for the asset sale in the calculation, due to higher
selling, general and administrative (SG&A) expenses and recognition
of lower-margin projects.
Profitability of KWG's development properties has remained strong
through business cycles and is one of the highest among Chinese
homebuilders. Protecting the margin is one of KWG's key objectives
and is achieved by maintaining higher-than-average selling prices
through consistently high-quality products. The company's
experienced project team also ensures strong execution capability
and strict cost control. Moreover, KWG has a low unit land cost of
around 25% of its average selling price due to its strong foothold
in Guangzhou, where land prices have not risen as much as in other
Tier 1 cities.
Leverage Under Control: Fitch expects leverage, measured by net
debt/adjusted inventory, to stay at around 35%-40% based on the
company's sales prospects and land-bank replenishment strategy.
KWG's leverage on an attributable basis was around 35% at end-2018
(2017: 34%). The cash collection rate decreased in 2018 due to a
tighter credit environment, but leverage remained stable because
the company slowed land acquisitions as it spent only 61% of sales
proceeds to purchase land compared with 93% in 2017.
JVs with Leading Peers: KWG's prudent expansion strategy has
created strong partnerships with leading industry peers, including
Sun Hung Kai Properties Limited (A/Stable), Hongkong Land Holdings
Limited, Shimao Property Holdings Limited (BBB-/Stable), China
Vanke Co., Ltd. (BBB+/Stable), China Resources Land Ltd
(BBB+/Stable) and Guangzhou R&F Properties Co. Ltd. (BB-/Stable).
These partnerships help KWG lower project-financing costs, reduce
competition in land bidding and improve operational efficiency.
Joint venture (JV) pre-sales made up 50% of KWG's total
attributable pre-sales in 2018 and 53% in 2017.
JV cash flow is well-managed and investments in new projects are
mainly funded by excess cash from mature JVs. Leverage is also
lower at the JV level because land premiums are usually funded at
the holding-company level and KWG pays construction costs only
after cash is collected from pre-sales.
Small Scale; Weak Churn: KWG's 2018 total pre-sales rose by 72% yoy
to CNY65.5 billion, but only 65% of total sales were attributable
to the company as around 50% of pre-sales in 2018 came from JVs.
KWG's sales target in 2019 of CNY85 billion, which will be
equivalent to an attributable sales scale of around CNY55 billion,
remains smaller than 'BB' peers that had contracted sales of over
CNY70 billion in 2018. KWG's sales efficiency, measured by
attributable contracted sales/gross debt, of 0.5x is slower than
most 'BB-' peers' of about 1.0x.
DERIVATION SUMMARY
KWG's ratings are supported by its established homebuilding
operations in Guangzhou and strong high-tier cities across China,
consistently robust profitability, strong liquidity and healthy
maturity profile. KWG has maintained one of the highest margins
among Chinese homebuilders throughout the cycle. Its EBITDA margin
is comparable with that of Logan Property Holdings Company Limited
(BB/Stable) and some investment-grade peers, such as Poly
Developments and Holdings Group Co., Ltd. (BBB+/Stable) and China
Jinmao Holdings Group Limited (BBB-/Stable), and is higher than
that of some 'BB' peers, including Seazen Group Limited
(BB/Stable), Yuzhou Properties Company Limited (BB-/Stable) and
CIFI Holdings (Group) Co. Ltd. (BB/Stable). However, its contracted
sales scale is small compared with that of these peers.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Contracted sales gross floor area (GFA) rising by more than 20%
from 2019
- Annual increase in average selling price of 5% from 2019
- EBITDA margin (exclude capitalised interest) maintained at
around 30% for 2019-2020
- Land replenishment rate at 1.3x contracted sales GFA
(attributable) in 2019-2021
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
Increase in scale without compromising financial metrics
EBITDA margin sustained above 30%
Net debt/adjusted inventory sustained below 35%
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
EBITDA margin below 25% for a sustained period
Net debt/adjusted inventory sustained above 45%
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: KWG has well-established diversified funding
channels and strong relationships with most offshore and onshore
banks. It has strong access to domestic and offshore bond markets
and was among the first companies to issue panda bonds. KWG had
available cash of CNY52.6 billion at end-2018, which was enough to
cover the repayment of CNY17.4 billion in short-term borrowings and
outstanding land premiums. Fitch believes the group maintained
sufficient liquidity to fund development costs, land premium
payments and debt obligations in 2019 due to its diversified
funding channels, healthy maturity profile and flexible
land-acquisition strategy.
Available cash increased further to CNY55.5 billion in 1H19, more
than sufficient to cover short-term liabilities of CNY12.3
billion.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the entity, either
due to their nature or the way in which they are being managed by
the entity.
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I N D I A
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ACCORD ELECTROPOWER: CARE Keeps B on INR3cr Debt in Non-Cooperating
-------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Accord
Electropower Private Limited continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 3.96 CARE B+; Stable; Issuer not
Facilities cooperating; Based on best
available information
Detailed Rationale and Key Rating Drivers
CARE has been seeking no default statement from Accord Electropower
Private Limited to monitor the ratings vide e-mail communications
dated November 18, 2019, November 29, 2019, December 6, 2019,
December 17, 2019 and numerous phone calls. However, despite CARE's
repeated requests, the firm has not provided no default statement
for monitoring the ratings. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the
publicly available information which however, in CARE's opinion is
not sufficient to arrive at a fair rating. The ratings of Accord
Electropower Private Limited bank facilities will now be denoted as
CARE B+; Stable ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
ADHIKARI BROTHERS: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Sri Adhikari Brothers Television Network Limited
6th Floor, Oberoi Chambers
Oberoi Complex
Next to Laxmi Industries Estate
Oshiwara, New Link Andheri West
Mumbai 400053
Insolvency Commencement Date: December 20, 2019
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: June1 17, 2020
Insolvency professional: Mr. Vijendra Kumar Jain
Interim Resolution
Professional: Mr. Vijendra Kumar Jain
401/402, Sai Trishul
Raviraj Oberoi Complex
Off New Link Road
Andheri West, Mumbai 400053
E-mail: vkj310@gmail.com
- and –
Kanchansobha Debt Resolution Advisors LLP
1507-Wing, One BKC
Plot No. C-66, G Block
Bandra Kurla Complex
Bandra East, Mumbai 400051
E-mail: sriadhikaribrothers@
kanchansobha.com
Last date for
submission of claims: January 4, 2020
ALEKHYA DRUGS: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Alkehya Drugs Private Limited
Flat No. E201, 7-2-1813/5/A/1
S.V.S.S. Nivas Czech Colony
Erragadda, Sanath Nagar
Hyderabad, Telangana 500018
India
Insolvency Commencement Date: December 11, 2019
Court: National Company Law Tribunal, Hyderabad Bench
Estimated date of closure of
insolvency resolution process: June 13, 2020
(180 days from commencement)
Insolvency professional: CA Ranga Rao Doradla
Interim Resolution
Professional: CA Ranga Rao Doradla
D. Siva Nageswara Rao & Co.
Chartered Accountants
H No. 3-6-111/5
Opp: Tata Motors
Liberty Road, Himayatnagar
Hyderabad 500029
Telangana, India
Tel.: +91-40-23221204
Mobile: +91-9848025125
E-mail: ranga_ca@rediffmail.com
Last date for
submission of claims: December 30, 2019
APPU HOTELS: CARE Lowers Rating on INR5cr LT Loan to 'D'
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Appu
Hotels Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 196.34 CARE D; Stable; Issuer not
Facilities cooperating; Based on best
available information
Long term Bank 5.00 CARE D; Stable; Issuer not
Facilities-Fund cooperating; Based on best
based (Cash Credit) available information;
Revised from CARE C; Stable
Long Term/Short 9.00 CARE D/CARE D; ISSUER NOT
Term Bank COOPERATING; Based on best
Facilities available Information;
(Non-Fund based) Revised from CARE C;
Stable/CARE A4
Non-Convertible 30.15 CARE D; ISSUER NOT COOPERATING;
Debenture (NCD) Based on best available
Issue Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking monthly No default statements from Appu
Hotels Limited to monitor the ratings vide e-mail communications
dated October 22, 2019, November 18, 2019 and December 13, 2019 and
a letter dated December 24, 2019 and numerous phone calls. However,
despite CARE's repeated requests, the company has not provided
the No Default statements 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.
Users of these ratings (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of delays in debt
servicing by the company ascertained by CARE as a part of its due
diligence exercise.
Detailed Description of the Key Rating Drivers
Key Rating Weaknesses
Instances of delays in repayment obligations: CARE as part of its
due diligence exercise interacts with various stakeholders of the
company including lenders to the company and as part of this
exercise has ascertained that there were instances of delays in
servicing the debt obligations with regards to term loans,
Non-Convertible Debenture and over drawal of CC facility.
Appu Hotels Limited' (AHL) is a Chennai-based public limited
company engaged in the hospitality business in the state of Tamil
Nadu. AHL is part of the PGP Group of Companies which has
diversified business interests in sugar, chemicals, finance,
hospitality, and real estate etc. AHL is founded and promoted by Dr
Palani G Periasamy, Chairman of the group. The group companies
include Dharani Sugar and Chemicals Limited, Dharani Finance
Limited, Ananthi Developers Limited, Dharani Developers Limited,
Dharani Credit and Finance Limited among others. AHL owns two
5-star deluxe category hotels in the name of 'Le Royal Méridien'
(LRM), situated in Chennai (240-rooms property) and 'Le Meridien'
Coimbatore (254-rooms property) respectively.
ARENA SUPERSTRUCTURES: CARE Cuts Rating on INR100cr Loan to B+
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Arena Superstructures Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 100.00 CARE B+; ISSUER NOT COOPERATING;
Facilities Revised from CARE BB+; on the
basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from Arena Superstructures
Private Limited to monitor the rating vide e-mail communications
dated Nov. 11, 2019, Nov. 5, 2019, Oct. 18, 2019, Oct. 3, 2019,
Aug. 2, 2019, July 22, 2019 and numerous phone calls. However,
despite CARE's repeated requests, the company has not provided
the requisite information for monitoring the ratings. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating. The rating on
Arena Superstructures Pvt Ltd.'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 ratings have been revised on account of non-receipt of no
default statements from the month of September 2019,
non-availability of FY19 financials and no recent updates on the
project "Lotus Arena".
Detailed Description of the Key Rating Drivers
At the time of last rating on Sep 21, 2018, the following were the
rating strengths and weaknesses:
Key Rating Weaknesses
Residual Project Execution Risk coupled with high dependence on
customer advances: ASPL is developing a residential group housing
project by the name of "Arena 1" with a total salable are of 19.29
lsf. The land and necessary approvals for the said project have
already been obtained. As on April 30, 2018, out of the total
project cost of INR545.49 cr, the company has incurred INR299.95
crore i.e. 58% of total project cost. Further, the company has
incurred 61% if the total construction cost till the same period.
With considerable project cost yet to be incurred; the project is
exposed to project execution risk. Further, the total project cost
is proposed to be funded through INR57.50 crore of promoter's fund,
100 crore of debt and the balance from the customer advances. As on
April 30, 2018, the promoters have infused INR55.96 cr and have
availed a debt of INR87 cr with balance funds from the customers.
Due to subdued demand scenario, in the last 12 months ending
Apr'18, the company has been able to sell 0.28 lsf and has
collected INR96.41 cr with an average monthly collection of ~INR8
cr. With 71% of the project cost being funded from the customer
advances; the timely receipt of customer advances becomes
quintessential in the execution of the project.
Financial support to group company: One of the group companies of
ASPL namely, Fest Home Developers Private Limited (FHDPL) has a
debt of INR135 cr which has been utilized in the infrastructure
development of its existing land bank in Noida. Presently, ASPL is
providing financial support to FHDPL for its debt servicing,
thereby putting pressure on its existing cash flows of ASPL. As on
Aug 31, 2018, ASPL has serviced debt obligations of ~INR21 cr
(including interest and principal). FHDPL intends to pay off the
debt by selling the land to other developers for the construction
of projects. Considering the uncertainty and time lag associated
with the sale of land parcels, the financial support to FHDPL will
continue to put pressure on the cash flows of ASPL.
Industry Risk: With the on-going economic conditions, the real
estate industry is currently facing issues on many fronts,
including subdued demand, curtailed funding options, rising costs,
restricted supply due to delays in approvals, etc. thereby
resulting in stress on cash flows of developers. The industry has
seen low demand in the recent past, primarily due to factors like
sustained high level of inflation leading to high interest rates
and adverse impact on the buying power and affordability for the
consumers.
Key Rating Strengths
Experienced Promoters: ASPL is part of the Lotus group being
promoted by Mr Nirmal Singh having experience of more than 20 years
in the real estate industry. Apart from Arena 1, the promoters of
ASPL are developing many other projects in other companies in Noida
and Gurgaon region. Presently Lotus Group is developing 5 projects
in Noida and Gurgaon with total saleable area of approximately
100.43 lsf. Apart from this Lotus Group has already delivered 17.70
lsf of area in other projects.
Healthy sale status: Out of the total salable area of 19.29 lsf,
the company has already sold 15.82 lsf till April 30, 2018 that is
82% of the total saleable area (PY: 83%). The significant parts of
the sales were done at the launch of the project during Sep'15.
Further the value of the area sold is INR754.60 cr of which the
company has already realized INR347.25 cr till Apr 30, 2018.
However, due to subdued demand scenario, in the last 12 months
ending Apr'18, the company has been able to sell 0.28 lsf and has
collected INR96.41 cr with an average monthly collection of ~INR8
cr. Thus, with significant portion of the salable area being sold;
the project salability risk has been eliminated to a large extent.
Arena Superstructures Pvt. Ltd. (ASPL) incorporated in June 2010 is
into real estate development. It is a part of Lotus group engaged
in real estate development in Noida and Gurgaon region. The group
has successfully executed a number of projects including
residential buildings, malls, office complex, etc. in Delhi NCR
with the total saleable area of 17.70 lsf. Ongoing projects of the
group include 5 residential projects with a total saleable area of
100.43 lsf. ASPL is currently developing residential project "Arena
1" located in sector-79, Noida with a total saleable area of 19.29
lsf.
CHINAR FORGE: CARE Lowers Rating on INR30.75cr Loan to 'D'
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Chinar Forge Limited (CFL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 30.75 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE B+; Stable;
ISSUER NOT COOPERATING on the
basis of best available
information
Short term Bank 20.00 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE A4; ISSUER
NOT COOPERATING on the basis
of best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated, placed the ratings of CFL
under the 'issuer non-cooperating' category as CFL had failed to
provide information for monitoring of the rating. CFL continues to
be non-cooperative despite repeated requests for submission of
information through phone calls and emails. 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 arrived at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The ratings have been revised on account of ongoing delays in
servicing of the debt obligations.
Detailed description of the key rating drivers
Ongoing delays in debt servicing: There are ongoing delays in
servicing of the term loan obligations, while the cash credit limit
has remained overdrawn for more than 30 days in the last three
months.
CFL was incorporated in the year 1992. In 2001, the company was
acquired by Mr Shital Vij (father of Mr Sheetesh Vij the Managing
Director of the company). Since then, CFL is engaged in the
manufacturing and sales of carpets, tufted mats, rugs, blankets
etc. CFL operates from its three manufacturing facilities, all
located in Jalandhar, at an installed capacity of 15 lakh square
meters/month, as on February 28, 2017. Other group concerns of the
company include Shital Spinning Mills Limited, Grace News and Media
Network Limited, Sav Heritage Hotels Private Limited.
DEHRADUN HIGHWAYS: CARE Keeps D on INR528cr Debt in Not Cooperating
-------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Dehradun
Highways Project Limited continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 528.45 CARE D; ISSUER NOT COOPERATING;
Facilities- Based on best available
(Term Loan) Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from Dehradun Highways Project
Limited to monitor the rating vide e-mail communications dated
December 3, 2019, December 9, 2019, December 11, 2019 and numerous
phone calls. However, despite CARE's repeated requests, the
company has not provided the requisite information for monitoring
the ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating. The rating on the bank facilities of Dehradun Highways
Project Limited will now be denoted as CARE D; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
The rating assigned to the bank facilities of Dehradun Highways
Project Limited continues to factor in delays in debt servicing by
the company.
At the time of last rating on January 31, 2019, the following were
the rating weaknesses and strengths:
Key Rating Weaknesses
Delay in Debt servicing obligations: The liquidity position of the
company continues to remain weak on account of significant delays
in completion of the project, leading to ongoing delays in debt
servicing.
Dehradun Highways Project Limited is a Special Purpose Vehicle
promoted by Era Infra Engineering Ltd (EIEL) and OJSCSIBMOST
(Sibmost) to undertake 4-laning of Haridwar-Dehradun section from
km 211.00 to km 218.20 of NH 58 and from km 165.00 to km 196.825 of
NH 72 (approximately 39.03 km) in the state of Uttarakhand on
BOT-Annuity basis on Design, Build, Finance, Operate & Transfer
(DBFOT) pattern under National Highways Development Programme Phase
III of National Highways Authority of India (NHAI). DHPL entered
into a Concession Agreement (CA) with NHAI on February 24, 2010 for
the project with a concession period of 20 years (including
construction period of two years) from the appointed date (November
01, 2011, revised from the original appointed date of August 23,
2010 due to delays in land acquisition on part of NHAI). The
original scheduled commercial operations date (SCOD) was November
1, 2013, which was revised to September 30, 2016 by NHAI (subject
to certain conditions). The total project cost was originally
envisaged at INR691.41 crore to be funded through term loan of
INR528.45 crore, equity of INR107.75 crore and subordinate debt of
INR55.21 crore from the promoters. The project had witnessed time
over-run due to various reasons leading to increase in the project
cost, which is INR1,020.91 crore now. Further due to delay, NHAI
has terminated the agreement in May 2018.
GWALIOR BYPASS: CARE Keeps INR93cr Debentures in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Gwalior
Bypass Project Limited continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non-Convertible 93.28 CARE D; ISSUER NOT COOPERATING;
Debenture Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from Gwalior Bypass Project
Limited to monitor the rating vide e-mail communications dated
December 3, 2019, December 9, 2019, December 11, 2019 and numerous
phone calls. However, despite CARE's repeated requests, the
company has not provided the requisite information for monitoring
the ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating. The rating on the bank facilities of Gwalior Bypass
Project Limited will now be denoted as CARE D; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
The rating assigned to the bank facilities of Gwalior Bypass
Project Limited (GBPL) continues to factor in the non-payment of
full amount of interest and principal due on NCDs on May 31, 2019,
as a result of company's admittance into NCLT on May 29, 2019.
At the time of last rating on June 5, 2019, the following were the
rating weaknesses and strengths:
Key Rating Weaknesses
Delay in servicing of debt obligation: GBPL has delayed in timely
servicing of its debt obligations towards the NCD issue due on May
31, 2019, as the company was admitted into NCLT on May 29, 2019 as
per order given by NCLT, New Delhi Principal Bench and
consequently, moratorium is declared in terms of Section 14 of the
Insolvency and Bankruptcy Code, 2016.
GBPL was incorporated in 2006 as Special Purpose Vehicle (SPV) by
consortium of Era Infra Engineering Ltd (EIEL and its group
companies with combined stake of 68.89%), Ramky Infrastructure Ltd
(RIL, 26.01% stake) and Shriram Chits (P) Ltd (SCPL) for
implementation of a new four-lane Gwalior Bypass from Km 103 on
NH-3 to Km 16 on NH75 (total length 42.03 km) in the State of
Madhya Pradesh on BOT-Annuity Basis. This project with total length
of 42.03 km is a part of National Highways Development Project
(NHDP-II). The concession period for the project is 20 years
(inclusive of a 30 months' construction period) from the appointed
date, which is April 9, 2007. The total project cost as per
original estimate was INR332.15 crore funded through equity of
INR92.15 crore and debt of INR240 crore. The project, initially
envisaged to be completed in October 2009, was delayed due to land
acquisition issues and achieved provisional commercial operation
date (COD) on November 15, 2011, and final COD with effect from
April 30, 2014. The project cost also underwent an overrun to
INR584.75 crore, funded through equity of INR92.15 crore, debt of
INR230 crore, unsecured loans from promoter group of INR184.13
crore and unpaid contract expenses of INR78.49 crore. The company
subsequently refinanced its term debt availed from IDFC through
NCDs of INR241.55 crore issued to L&T Infra Finance and L&T IDF.
INDIA: RBI Sees Corporate Governance 'Fault Lines' at Some Lenders
------------------------------------------------------------------
Reuters reports that growing problems of corporate governance are
emerging at India's private banks and all lenders are at risk of
rising default rates even though asset quality has improved
overall, the Reserve Bank of India said on Dec. 24.
In its annual report on Trends and Progress of Banking in India,
the central bank highlighted the possibility of defaults rising in
the retail lending space after the economy slowed to 4.5% in the
July-September quarter, its weakest pace since 2013, Reuters
relays.
According to Reuters, Indian banks have shifted towards the retail
market in recent years in response to a rise in soured corporate
loans.
"Over the last couple of years, the space vacated by risk-averse
public sector banks was taken up by the private banks; more
recently, however, fault lines are becoming evident in the latter's
corporate governance," the RBI said.
In financial year 2018-19, the proportion of gross non-performing
assets (NPAs) to total loans decreased to 9.1% compared to 11.2% in
2017/18, after having risen for seven consecutive years as
recognition of bad loans neared completion.
"Notwithstanding the improvement in 2018/19, the overhang of NPAs
remains high. Further reduction in NPAs through recoveries hinges
around a reversal of the downturn in the economy," the central
bank, as cited by Reuters, said.
It also raised red flags around large frauds which have rocked
Indian banks, including one exposed at Punjab and Maharashtra
Co-operative Bank (PMC) in September, Reuters relates.
Reuters says the urban co-operative bank (UCB), used more than
21,000 fictitious accounts to hide loans it made to one realty
company which had led to a loss of at least INR43.55 billion
($611.11 million).
Reuters relates that the central bank said it would focus on
improving supervision of around 1,500 UCBs across the country.
"Recently, the unearthing of irregularities in one of the UCBs has
brought to the forefront the issues relating to the low capital
base, weak corporate governance, inability to prevent frauds,
slower adoption of new technology and inadequate system of checks
and balances," the RBI said.
MANIK COMMERCIAL: Ind-Ra Lowers LongTerm Issuer Rating to 'D'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Manik Commercial
Pvt. Ltd.'s 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 these ratings. The
rating will now appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR30 mil. Fund-based limits (Long-term) downgraded with IND D
(ISSUER NOT COOPERATING) rating;
-- IND49 mil. Term loans (Long-term) due on September 2023
downgraded with IND D (ISSUER NOT COOPERATING) rating; and
-- IND2.46 mil. Non-fund-based limit (Short-term) downgraded with
IND D (ISSUER NOT COOPERATING) rating.
KEY RATING DRIVERS
The downgrade reflects delays in debt servicing for more than 180
days; additional details are unavailable.
COMPANY PROFILE
Incorporated in 1996, West Bengal-based Manik Commercial is a
trader of agro products. The company's day-to-day operations are
managed by Mithun Bose and Manik Chandra Bose.
NAZAR INT'L: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: M/s. Nazar International Private Limited
7-A, E.K. Guru Street
Periamet, Chennai-3
1153 PJ Nehru Road
Vaniyambadi 635751
Insolvency Commencement Date: December 13, 2019
Court: National Company Law Tribunal, Chennai Bench
Estimated date of closure of
insolvency resolution process: June 9, 2020
Insolvency professional: Ramachandran Subramanian
Interim Resolution
Professional: Ramachandran Subramanian
Old No. 29 Raju Naicken Street
West Mambalam, Chennai 33
E-mail: subraman267@yahoo.com
Last date for
submission of claims: December 27, 2019
RCBS REALTY: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: RCBS Realty Private Limited
111A, Shyama Prosad Mukherjee Road
2nd Floor, Kolkata
West Bengal 700026
Insolvency Commencement Date: December 13, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: June 10, 2020
(180 days from commencement)
Insolvency professional: Rajat Mukherjee
Interim Resolution
Professional: Rajat Mukherjee
302, Daga Complex II
103/5 B K Street
Uttarpara, Hugli
West Bengal 712258
- and -
Office No. 30, 2nd Floor
Lawyer Chamber
Picket Road, Marine Lines
Mumbai 400002
E-mail: irp.rcbs@gmail.com
Classes of creditors: Plot cum home buyers
Insolvency
Professionals
Representative of
Creditors in a class: Anil Seetaram Vaidya
Plot No. 107, S.N. 62/65
Mahatma Society
Bhusari Colony
Kothrud, Pune
Maharashtra 411038
E-mail: anilvaidya38@gmail.com
Ravi Bagri
Octacrest Complex
Wing-A, Flat No. 1101
Lokhandwala Township
Kandivali (East) 400101
Maharashtra
E-mail: ravibagri@yahoo.com
Subrata Monindranath Maity
B 202, Jai Gurudeo Complex
Plot 16-19 and 21-25
Sector 17, Kamothe
Navi Mumbai 410209
Maharashtra
E-mail: subrata.m@hotmail.com
Last date for
submission of claims: December 27, 2019
RITHWIK PROJECTS: CARE Lowers Rating on INR1624.45cr Loan to D
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Rithwik Projects Private Limited (RPPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 443.00 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE BBB-;
Negative on the basis of best
available information
Long-term/Short 1624.45 CARE D; ISSUER NOT COOPERATING;
term Bank Revised from CARE BBB-;
Facilities Negative/CARE A3 on the basis
of best available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from RPPL to monitor the ratings
vide e-mail communications/letters dated September 11, 2019,
October 1, 2019, November 29, 2019, December 12, 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 ratings 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 Rithwik Projects Private
Limited's bank facilities will now be denoted as CARE D/CARE D;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The ratings have been revised on account of stretched liquidity
position resulting in delays in debt servicing obligation.
Detailed description of the key rating drivers
At the time of last rating in April 2019, the following were the
rating strengths and weaknesses (updated for the information
available from bankers/lenders):
Key Rating Weaknesses
Stretched liquidity position with delays in debt servicing: The
company has been facing stretched liquidity due to pending
recievables from various State Government department which has
resulted in delays in debt servicing.
Key Rating Strengths
Experienced promoters with established track record: RPPL has been
promoted by Mr C M Ramesh along with family members as a closely
held public limited company in the year 1999. Over the years, RPPL
executed various infrastructure projects for state government and
public sectors units' viz. THDC India Ltd. (erstwhile Tehri Hydro
Power Development Corporation), Konkan Railway Corporation Ltd.,
National Projects & Construction Company Ltd. Steel Authority of
India Ltd, Government of Andhra Pradhesh (GoAP), Government of
Jammu and Kashmir (GoJ&K), besides others.
Incorporated in March 1999, Rithwik Projects Private Limited (RPPL)
is engaged in providing engineering, procurement and construction
(EPC) services for civil & structural construction and
infrastructure sector projects. Majority of projects of the company
are irrigation related projects spread across six states including
Andhra Pradesh, Madhya Pradesh, Chhattisgarh, Karnataka, Gujarat
and Uttarakhand. The promoters; Mr. CM Ramesh & Mr. CM Rajesh, hold
the majority shareholding. PE player, Baring Private Equity also
invested in the company during FY09 and holds equity stake of about
7.89% in the company.
ROCKLAND CERAMIC: CARE Reaffirms D Rating on INR12.77cr LT Loan
---------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Rockland Ceramic LLP (RCL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 12.77 CARE D Reaffirmed
Short Term Bank
Facilities 1.52 CARE D Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of RCL is primary
remained constrained on account of ongoing delays in debt services
due to poor liquidity.
Rating Sensitivities
Positive Factors
* Establishing clear repayment track record for debt servicing for
consecutive three months
Detailed description of the key rating drivers
Key Rating Weaknesses
On-going delays in Debt servicing: There are on-going delays in
repayment of its debt obligations of Rockland Ceramic LLP primarily
due to poor liquidity.
Liquidity Analysis: Poor Liquidity
The liquidity indicators of RCL remained poor marked by full
utilization of working capital bank borrowings for past 12 months
ending November 2019. Further, RCL reported cash losses of INR0.29
crore during FY19 while Cash and bank balance remained low at
INR0.35 crore as on March 31, 2019. However, cash flow from
operating activities remained positive at INR4.29 crore during
FY19. Further, current ratio deteriorated and remained weak at 0.90
times as on March 31, 2019 as compared with 1.02 times as on March
31, 2018. RCL's operating cycle remained elongated at 142 days
during FY19 due to high collection and inventory period as against
181 days during FY18.
Morbi(Gujarat)-based RCL, was incorporated in January 2016 as a
partnership firm by total fifteen partners. Overall management of
RCL is looked after by four key partners named Mr. Divyesh
Laljibhai Gami, Mr. Nitin Nandlal Dalsaniya, Mr. Ashokbhai
Nanjibhai Dalsania and Mr. Manish Bhudarbhai Mordiya. The firm had
commenced its operation from February 2017 onwards. The firm is
engaged in manufacturing of vitrified tiles. RCL is operating from
its sole manufacturing plant located in Morbi (Gujarat) with
installed capacity of 26 lakh square meter per annum of vitrified
tiles as on March 31, 2019. Roland Ceramic is a group entity of
RCL, which is engaged into manufacturing of wall tiles.
SHAKUNTALA WAREHOUSE: Ind-Ra Lowers LongTerm Issuer Rating to 'D'
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Shakuntala
Warehouse's 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 these
ratings.
The instrument-wise rating action is:
-- INR174 mil. Fund-based limits (Long-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 delays in debt servicing by Shakuntala
Warehouse, the details of which are not available.
RATING SENSITIVITIES
Incorporated in 2006, Shakuntala Warehouse is a partnership firm
that provides trading and warehousing services for rice and paddy
in Madhya Pradesh.
COMPANY PROFILE
Incorporated in 2006, Shakuntala Warehouse is a partnership firm
that provides trading and warehousing services for rice and paddy
in Madhya Pradesh.
SHREE DOODHAGANGA: Ind-Ra Lowers LongTerm Issuer Rating to 'B+'
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Shree
Doodhaganga Krishna Sahakari Sakkare Karkhane Niyamit's (SDKSSKN)
Long-Term Issuer Rating to 'IND B+' from 'IND BB-'. The Outlook is
Negative.
The instrument-wise actions are:
-- INR2.60 bil. (reduced from INR2.65 bil.) Fund-based working
capital limit downgraded with IND B+/Negative/IND A4 rating;
-- INR700 mil. (increased from INR290 mil.) Term loan due on
March 2022 downgraded with IND B+/Negative rating; and
-- INR300 mil. Proposed fund-based working capital facilities*
Withdrawn (the issuer did not proceed with the instrument as
envisaged).
KEY RATING DRIVERS
The Negative Outlook reflects the expected decline in the sugar
output in Karnataka, where SDKSSKNs integrated sugar plant is
located, for sugar season 2019-2020 on delayed commencement
triggered by a torrential monsoon. SDKSSKN's sugar season could
commence only from 17 November 2019 as against 28 October 2018 last
year.
The downgrade reflects the deterioration of SDKSSKN's working
capital cycle caused by an increase in inventory days to 311 days
in FY19 (FY18: 261 days) leading to elevated leverage (excluding
call money deposit from members) of more than 8x in FY19 (FY18:
6.5x). To fund the carrying cost of inventory, SDKSSKN had to
resort to higher working capital funding. The company's short-term
borrowings, and the harvesting and transportation loans (guaranteed
by SDKSSKN) increased to INR2,957 million in FY19 from INR1,929
million in FY18. Ind Ra believes as the government continues to
prescribe minimum sugar stock level for sugar mills, SDKSSKN's
inventory levels are likely to remain high in the medium term
leading to high working capital requirement.
The increase in working capital borrowing also resulted in weak
interest coverage despite an increase in non-sugar EBITDA.
SDKSSKN's interest coverage (interest expenses/EBITDA) came in at
1.1x in FY19 (FY18: 1.1x). SDKSSKN's moderate revenue declined to
INR4,406 million in FY19 (FY18: INR4,635 million), mainly on
account of a 28% fall in sugar revenue to INR3,554 million. Ind-Ra
believes revenue growth is likely to remain subdued in FY20 on
account of the delayed start of the sugar season. Moreover,
SDKSSKN's sugar production is also likely to be impacted by the
limited availability of sugar cane resulting from the heavy rains
in Karnataka and Maharashtra.
Ind-Ra also factors in the qualified auditor's report of FY19
containing qualifications under inventory valuation, revenue
recognition and the misappropriation of funds. The auditor has
stated that the closing stock has been valued at a selling price
higher than the production cost, thereby resulting in an
overstatement of FY19's profitability. SDKSSKN's operating profit
margin remained modest at 8.6% (INR378 million) in FY19 (FY18: 7.7%
(INR357 million)). The return on capital employed came in at 4.62%
in FY19 (FY18: 3%).
Liquidity Indicator - Poor: The co-operative's cash flow from
operation turned negative to INR828 million in FY19 (FY18: positive
INR1,353 million), mainly on the rise in inventory days. The
liquidity stretch is also evident from the fact that the company
could not pay the entire fair remunerative price fixed by the
central government for per metric ton (MT) of sugar cane. As
informed by the management, SDKSSKN could not pay the entire FRP of
INR3,163 per MT and there was a shortfall of INR197.23 per MT in
FY19, mainly on account of the limited available liquidity.
SDKSSKN's average peak use of working capital limits during the
non-sugar season stood an average of 92% in the six months ended
September 2019. Ind-Ra expects the co-operative's liquidity
position to remain tight in the near term on account of pressures
on operating profitability (due to weak sugar prices, higher cane
costs) and increased working capital requirements.
The ratings are, however, supported by SDKSSKN's fully integrated
nature of operations, which provides a cushion against any
volatility in the sugar segment and supports cash flows. The
co-operative has a medium-term power purchase agreement with five
distribution companies in Karnataka for the export of surplus power
and contracts with oil marketing companies to supply ethanol at
government-regulated rates.
The ratings are also supported by the co-operative's extensive
operational track record of over four decades in the sugar
industry, which has led to established relationships with suppliers
and customers. Moreover, the co-operative has taken various
initiatives such as implementing lift and drip irrigation, the
distribution of seeds, seedlings, compost, fertilizer and so on,
free soil and water testing to improve yields, recovery, command
area, and water availability.
RATING SENSITIVITIES
Negative: Further deterioration in the working capital cycle or
liquidity resulting in interest coverage falling below unity will
be negative for the ratings.
Positive: A significant improvement in the working capital cycle
along with operating profitability position leading to an
improvement in the credit metrics on a sustained basis will be
positive for the ratings.
COMPANY PROFILE
SDKSSKN has an integrated sugar plant with a cane crushing,
distillery and power generation capacity of 9,000 tons of cane
crushed/day, 30,000 liters/day and 28.7 megawatts (MW),
respectively, in Chikodi, Karanataka. The co-operative society has
an integrated sugar plant with a cane crushing, distillery and
power generation capacity of 9,000 tons crushed per day (TCD),
30-kilo liter per day (klpd) and 28.7MW in Chikodi, Karanataka.
Registered as a co-operative society under the Karanataka
Co-operative Societies Act in 1969, it began crushing operations
from its 1,250TCD plant in 1974-1975. Subsequently, the capacity of
the plant was increased to 9,000TCD in phases. The co-operative
also set up distillery and cogeneration units at the plant to make
optimum utilization of by-products and reduce dependence on the
sugar segment, where margins are volatile. The capacity of the
co-generation unit was increased in two phases to 28.7MW. The
distillery unit, which was set up with a capacity of 30klpd in
2002-2003, was modernized and upgraded to produce ethanol in 2011.
SHREE SACHIDANAND: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Shree Sachidanand Industries Private Limited
432, Golden Point
Nr. BSNL Office
Ring Road Surat
GJ 395002
IN
Insolvency Commencement Date: November 25, 2019
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: June 12, 2020
Insolvency professional: Sunit Jagdishchandra Shah
Interim Resolution
Professional: Sunit Jagdishchandra Shah
303, 3rd Floor, Abhijeet-1
Mithakhali Six Roads
Navrangpura, Ahmedabad 380006
E-mail: sunit78@gmail.com
cirp.ssipl@gmail.com
Last date for
submission of claims: December 30, 2019
SONALI AUTOS: Ind-Ra Lowers LongTerm Issuer Rating to 'D'
---------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Sonali Autos
Private Limited's (SAPL) 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
these ratings. The rating will now appear as 'IND D (ISSUER NOT
COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR430 mil. Fund-based working capital limit downgraded with
IND D (ISSUER NOT COOPERATING) rating; and
-- INR18.30 mil. Term loan downgraded with IND D (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: based on the best available
information
KEY RATING DRIVERS
The downgrade reflects SAPL's delays in debt servicing, 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
SAPL was incorporated in 2003, in Patna (Bihar), as a partnership
firm. Later it was converted into a private limited company in
2007, with Mr. Bidhan Chand Roy as the managing director. SAPL is
engaged in the vehicle dealership business of Mahindra & Mahindra
Limited ('IND AAA'/Stable).
STARKENN SPORTS: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Starkenn Sports Private Limited
Registered office as per ROC Company Master Data:
Bunglow-B22, Pinnacle Ridge
SN. 33/36 Kondhwa
KD Pune 411048 MH
Insolvency Commencement Date: December 24, 2019
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: June 20, 2020
Insolvency professional: Udyakumar Bhaskar Bhat
Interim Resolution
Professional: Udyakumar Bhaskar Bhat
B-304, Goldville
Aundh-Ravet Road
Dange Chowk, Theragon
Pune 411033
E-mail: udaybhat2805@gmail.com
irp.starkenn@gmail.com
Last date for
submission of claims: January 6, 2020
VARDHMAN BUILDPROP: CARE Keeps D on INR35cr Debt in Non-Cooperating
-------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Shree
Vardhman Buildprop Private Limited (SVBPL) continues to remain in
the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non-Convertible 35.00 CARE D; ISSUER NOT COOPERATING;
Debenture Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SVBPL to monitor the rating
vide e-mail communications dated Nov. 6, 2019, Nov. 13, 2019, Nov.
18, 2019, Dec. 16, 2019 and numerous phone calls. However, despite
CARE's repeated requests, the company has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating. The rating on Shree
Vardhman Buildprop Pvt. Ltd.'s instruments will now be denoted as
CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings assigned to the instruments of Shree Vardhman Buildprop
Private Limited (SVBPL) takes in to consideration the ongoing
delays in the debt servicing of the interest payments by the
company.
Detailed description of the key rating drivers
At the time of last rating on July 4, 2019, the following were the
rating strengths and weaknesses.
Key Rating Weaknesses
Ongoing delays in debt servicing: As per the information received
from the debenture trustee, the company has delayed in debt
servicing of the interest payments falling due on June 28, 2019.
Subdued industry scenario: With the on-going economic conditions,
the real estate industry is currently facing issues on many fronts,
including subdued demand, curtailed funding options, rising costs,
restricted supply due to delays in approvals, etc. thereby
resulting in stress on cash flows of developers. The industry has
seen low demand in the recent past, primarily due to factors like
sustained high level of inflation leading to high interest rates
and adverse impact on the buying power and affordability for the
consumers.
Key Rating Strengths
Experienced promoters with established track record of operations:
Shree Vardhman Buildprop Pvt. Ltd. is a real estate development
company, incorporated in 2010. It belongs to 'Shree Vardhman group'
and is promoted by Mr. Sandeep Jain who has an experience of about
two decades in the real estate industry. The promoter through other
group companies have launched and successfully delivered several
real estate development projects through different SPV's (Special
Purpose Vehicles) in Sonepat, Kurukshetra and Gurgaon (constituting
a total saleable area of 13.34 lsf).
Shree Vardhman Buildprop Private Limited (SVBPL), incorporated in
2010 is engaged in development of real estate through construction
of residential and commercial property in the Delhi/ NCR region.
SVBPL a part of 'Shree Vardhman group', is currently involved in
execution of a residential cum commercial project 'Mantra', with
the total saleable area of 9.95 lsf, located at Sector-67,
Gurgaon.
VARDHMAN INFRAHEIGHTS: CARE Keeps D Debt Rating on Not Cooperating
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Shree
Vardhman Infraheights Private Limited continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non-Convertible 140.00 CARE D; ISSUER NOT COOPERATING;
Debenture Based on best available
Information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from Shree Vardhman Infraheights
Private Limited to monitor the rating vide e-mail communications
dated Nov. 6, 2019, Nov. 13, 2019, Nov. 18, 2019, Dec. 16, 2019 and
numerous phone calls. However, despite CARE's repeated requests,
the company has not provided the requisite information for
monitoring the ratings. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating. The rating on Shree Vardhman Infraheights
Pvt Ltd.'s instruments will now be denoted as CARE D; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings assigned to the instruments of Shree Vardhman
Infraheights Private Limited (SVIPL) takes in to consideration the
ongoing delays in the debt servicing of the interest payments by
the company.
Detailed description of the key rating drivers
At the time of last rating on July 4, 2019, the following were the
rating strengths and weaknesses:
Key Rating Weaknesses
Ongoing delays in debt servicing: As per the information received
from the debenture trustee, the company has delayed in debt
servicing of the interest payments falling due on June 28, 2019.
Subdued industry scenario: With the on-going economic conditions,
the real estate industry is currently facing issues on many fronts,
including subdued demand, curtailed funding options, rising costs,
restricted supply due to delays in approvals, etc. thereby
resulting in stress on cash flows of developers. The industry has
seen low demand in the recent past, primarily due to factors like
sustained high level of inflation leading to high interest rates
and adverse impact on the buying power and affordability for the
consumers.
Key Rating Strengths
Experienced promoters: Shree Vardhman Infraheights Pvt Ltd is a
real estate development firm, incorporated in 2011, and is part of
'Shree Vardhman group'. The company was founded by Mr Sandeep Jain
& Mr Sachin Jain, who have experience in the real estate industry.
'Shree Vardhman' group has been engaged in real estate development
and is developing several projects through different SPV (Special
Purpose Vehicle).
Shree Vardhman Infraheights Pvt Ltd is a real estate development
company, incorporated in 2011. It belongs to 'Shree Vardhman group'
and is incorporated for the residential project 'Victoria' located
in Gurgaon, having total saleable are of 13.42 lsf (SVIPL's share
of 11.73 lsf). The company was founded by Mr. Sandeep Jain & Mr.
Sachin Jain, who have experience in the real estate industry.
===============
M A L A Y S I A
===============
FSBM HOLDINGS: Auditors' Disclaimer Opinion Triggers PN17 Status
----------------------------------------------------------------
The Sun Daily reports that FSBM Holdings Bhd has triggered the
Practice Note 17 (PN 17) criteria, following a report issued by its
auditors expressing a disclaimer of opinion on the group's audited
financial statements for the financial year ended June 30, 2018.
According to the report, the information technology service and
systems provider is required to submit a regularisation plan to the
Securities Commission Malaysia or Bursa Securities Bhd within 12
months.
"The company is looking into formulating a regularisation plan to
address its PN17 status. The company will make the necessary
announcement on the regularisation plan in due course," it said in
a Bursa filing.
In a separate filing, FSBM's auditors Moore Stephens Associates PLT
said it had been appointed to audit the group's financial
statements on Oct. 21 upon the resignation of the previous auditors
on Sept. 13, Sun Daily reports.
However, it said it was not able to obtain enough appropriate audit
evidence to provide a basis for an audit opinion.
"During the course of the audit, the group and company's management
represented they did not have sufficient time to locate the very
old historical records to provide us with the requisite
documentation and information.
"Consequently, we were unable to perform the opening balances
verification of the group and company which had resulted in the
inability to obtain sufficient audit evidence of the following
account balances, transactions and related disclosures as at July
1, 2017," it said, Sun Daily relays.
Sun Daily relates that Moore Stephens also noted that it was unable
to obtain sufficient audit evidence on the carrying amounts on the
items specified under the opening balances paragraph of the group
and company for its financial statements for FY18.
Sun Daily says other items the auditor said it did not have
adequate audit evidence for included: amounts due from Technitium
Sdn Bhd, unreconciled differences, recoverability of amounts due
from Technitium, recoverability of other receivables, and
liabilities, contingent liabilities & commitments.
Stephen Moores also said the financial statements for the group and
company were prepared on the assumption that it would continue to
operate as going concerns, despite the group and company incurring
a net loss of MYR669,000 and MYR4.66 million respectively for the
year ended June 30, 2018, Sun Daily adds.
The company's current liabilities also exceeded its current assets
by MYR8.23 million, while its shareholders' equity posted a deficit
of MYR8.17 million, the report discloses.
"The ability of the group and company to continue as going concerns
is dependent on the formalisation and successful implementation of
the regularisation plan of the company to restore its financial
position and achieve sustainable and viable operations," said Moore
Stephens.
FSBM Holdings Berhad distributes computers, computer related
products, education related products and provides installation and
maintenance services. Through its subsidiaries, the Group develops
software applications and systems integration, provides data
warehousing systems, and smart community solutions. FSBM also has
operations in multimedia production and communication services.
=================
S I N G A P O R E
=================
HYFLUX LTD: Expects Adverse Impact From Ending Prior Tuasone Deal
-----------------------------------------------------------------
Rachel Mui at The Business Times reports that Hyflux Ltd is
expecting the axing of a previous settlement agreement with
Mitsubishi Heavy Industries (MHI) to result in an "overall material
adverse financial impact to its financial performance", the
embattled water treatment firm announced on Monday.
In December 2019, BT reported that Hyflux has signed a new
agreement in relation to its TuasOne waste-to-energy project, which
novated the engineering, procurement and construction (EPC)
contract to MHI.
While the termination of the settlement agreement would discharge
certain liabilities, the novation of the EPC contract and the
division of the remaining payments are expected to result in the
group giving up certain rights to some proceeds from the
construction revenue, Hyflux said, BT relays.
However, the new agreement would resolve uncertainties and "create
a more stable condition" for the group's ongoing debt restructuring
exercise, it added, according to BT.
About Hyflux
Singapore-based Hyflux Ltd -- https://www.hyflux.com/ -- provides
various solutions in water and energy areas worldwide. The company
operates through two segments, Municipal and Industrial. The
Municipal segment supplies a range of infrastructure solutions,
including water, power, and waste-to-energy to municipalities and
governments. The Industrial segment supplies infrastructure
solutions for water to industrial customers. It has business
operations across Asia, Middle East and Africa.
As reported in the Troubled Company Reporter-Asia Pacific on May
24, 2018, Hyflux Ltd. said that the Company and five of its
subsidiaries, namely Hydrochem (S) Pte Ltd, Hyflux Engineering Pte
Ltd, Hyflux Membrane Manufacturing (S) Pte. Ltd., Hyflux Innovation
Centre Pte. Ltd. and Tuaspring Pte. Ltd. have applied to the High
Court of the Republic of Singapore pursuant to Section 211B(1) of
the Singapore Companies Act to commence a court supervised process
to reorganize their liabilities and businesses. The Company said
it is taking this step in order to protect the value of its
businesses while it reorganises its liabilities.
The Company has engaged WongPartnership LLP as legal advisors and
Ernst & Young Solutions LLP as financial advisors in this process.
HYFLUX LTD: SIAS Calls on Aqua Munda to Disclose Funding
--------------------------------------------------------
Sharanya Pillai at The Business Times reports that the Securities
Investors Association (Singapore) (SIAS) has requested Aqua Munda,
which is looking to buy over some of Hyflux's debt, to disclose
more details on its source of funding and intentions.
Aqua Munda, a Singapore-registered company, has invited Hyflux's
medium-term noteholders and senior unsecured creditors to tender
their debts for purchase at a minimum 85 per cent discount, BT
relates. The invitation, which kicked off on Dec. 30, 2019, expires
at 5:00 p.m. on Jan. 23, 2020.
According to BT, SIAS president David Gerald said in a statement on
Dec. 30, 2019, that creditors have raised queries on the "identity
of Aqua Munda and its director and sole shareholder and whether
Aqua Munda has the necessary funds to complete their proposed
reverse Dutch auction".
"SIAS calls on Aqua Munda, in the interest of transparency, to
disclose its funding and the entities related to Aqua Munda and its
intention with respect to restructuring process as soon as
possible," Mr. Gerald said in the statement.
SIAS has been advised that Hyflux is not obliged to conduct any due
diligence on Aqua Munda, he added. This is because the invitation
is solely between Aqua Munda and the relevant creditors, while
Hyflux is only facilitating the dissemination of details, he added,
BT relays.
About Hyflux
Singapore-based Hyflux Ltd -- https://www.hyflux.com/ -- provides
various solutions in water and energy areas worldwide. The company
operates through two segments, Municipal and Industrial. The
Municipal segment supplies a range of infrastructure solutions,
including water, power, and waste-to-energy to municipalities and
governments. The Industrial segment supplies infrastructure
solutions for water to industrial customers. It has business
operations across Asia, Middle East and Africa.
As reported in the Troubled Company Reporter-Asia Pacific on May
24, 2018, Hyflux Ltd. said that the Company and five of its
subsidiaries, namely Hydrochem (S) Pte Ltd, Hyflux Engineering Pte
Ltd, Hyflux Membrane Manufacturing (S) Pte. Ltd., Hyflux Innovation
Centre Pte. Ltd. and Tuaspring Pte. Ltd. have applied to the High
Court of the Republic of Singapore pursuant to Section 211B(1) of
the Singapore Companies Act to commence a court supervised process
to reorganize their liabilities and businesses. The Company said
it is taking this step in order to protect the value of its
businesses while it reorganises its liabilities.
The Company has engaged WongPartnership LLP as legal advisors and
Ernst & Young Solutions LLP as financial advisors in this process.
LIBRA GROUP: Cyber Builders Appoints Provisional Liquidators
------------------------------------------------------------
The Business Times reports that Libra Group's wholly-owned
subsidiary, Cyber Builders, has appointed joint and several
provisional liquidators for the creditor's voluntary winding up of
Cyber Builders.
The provisional liquidators are Lim Loo Khoon and Tan Wei Cheong
from Deloitte & Touche LLP, the group said on Dec. 31, BT
discloses.
According to the report, Libra on Sept. 20 said the company and
Cyber Builders are being sued by insurer Great American Insurance
over a claim of S$180,000. On Sept. 3, Maybank Singapore sent a
letter of demand to Cyber Builders, seeking to possess a property
at 34 Sungei Kadut Loop within a month from the letter being
served.
The Singapore High Court granted Libra a six-month debt moratorium
on Oct. 14. Libra suspended trading in August when it said it could
no longer continue as a going concern due to the various claims
filed against two of the company's subsidiaries.
About Libra Group
Libra Group Limited provides integrated M&E services as a
sub-contractor. The Company's services include the contracting and
installation of ACMV systems, fire alarms and fire protection
systems, electrical systems as well as sanitary and plumbing
services. Libra also manufactures and sells ACMV related products.
As reported in the Troubled Company Reporter-Asia Pacific on Oct.
18, 2019, The Business Times said the Singapore High Court has
granted Libra Group a six-month reprieve against its creditors.
Libra's creditors include UOB, which issued a letter of demand on
Oct. 8 for US$18.8 million, and Maybank Singapore, which on Sept.
3 issued a letter of demand to possess Libra's property at 34
Sungei Kadut Loop.
METECH INT'L: SGX RegCo Serves Notice to Reconvene EGM
------------------------------------------------------
Vivien Shiao at The Business Times reports that the Singapore
Exchange Regulation (SGX RegCo) served notice to Catalist-listed
Metech International on Dec. 27, 2019, after trading hours,
requiring the company to reconvene an extraordinary general meeting
(EGM) to vote on the resolution to re-elect group CEO and
controlling shareholder Simon Eng as its director.
BT relates that the SGX has deemed that the earlier reappointment
of Mr. Eng on Oct. 29, 2019 that was approved by shareholders
during its FY2019 annual general meeting was based on inaccurate
and incomplete information.
In the re-election of Mr. Eng, the company failed to disclose in
its annual report that he had previously been reprimanded or issued
a warning by regulatory authorities, a move which was required
under listing rules, the report says.
According to the report, Mr. Eng had been publicly reprimanded by
SGX on Oct. 30, 2015 for various breaches of the listing rules in
his previous role as chairman and CEO of Advance SCT, now known as
Citicode Limited. They include failing to promptly disclose
material information on certain transactions and for failing to act
in the interests of shareholders.
In addition, in 2014, Mr. Eng received a warning letter from the
Monetary Authority of Singapore for late disclosure of the change
of interest in Teledata Limited (which since has been delisted) as
a result of a placement by the company, BT relays.
BT says SGX RegCo will be investigating the circumstances resulting
in the non-disclosure of the public reprimand in the company's
FY2019 annual report.
It will also review the company and its continuing sponsor's
compliance with Catalist rules, and the discharge of their duties
and obligations. It added that it will take appropriate action if
any breaches are found.
To allow shareholders to make an informed decision on Mr. Eng's
re-election, an EGM has to be reconvened, said SGX RegCo, BT
relays. The company has been ordered to include details of the
public reprimand against Mr. Eng in the circular to the EGM and to
provide disclosures required under Catalist rules, the report
relates.
In response, Metech has submitted a correction to its annual report
with the required information on Mr. Eng in a filing to the SGX,
the report adds.
The company stated that Mr. Eng had inadvertently omitted the
information as the Catalist rules were amended with effect from Jan
1, 2019 and that its annual report was the first since then, BT
relays.
"Mr. Eng has noted the oversight and will be mindful of regulatory
changes when clearing future annual reports of the company," said
the statement. The company also said that it is reviewing its
internal process to ensure that all departments involved are
familiar with the regulatory requirements and changes.
Metech International Limited, an investment holding company,
engages in the supply-chain management and services business in the
People's Republic of China. It is involved in the general wholesale
trading of copper cathode and other products, as well as repair and
maintenance of computer hardware, data processing equipment, and
computer peripherals. The company was formerly known as Centillion
Environment & Recycling Limited and changed its name to Metech
International Limited in May 2012. Metech International Limited was
incorporated in 2001 and is based in Singapore.
Metech posted SGD7.68 million and SGD824,000 net losses for the
financial year ended June 30, 2018 and 2019, respectively.
Metech International Limited --
https://www.metechinternational.com/html/index.php -- is an
investment holding company. The principal activities of its
subsidiaries are the provision of a one-stop recycling and
processing service center for the electronics industry and the
trading of plastics and non-precious metal materials. The Company
operates through four segments: United States of America,
Singapore, China and Malaysia.
=============
V I E T N A M
=============
ANZ BANK: Fitch Assigns 'BB' LongTerm Foreign Currency IDR
----------------------------------------------------------
Fitch Ratings assigned a first-time Long-Term Foreign-Currency
Issuer Default Rating of 'BB' and Long-Term Local-Currency IDR of
'BBB-' to ANZ Bank Limited. The Outlook is Positive.
The Positive Outlook reflects the Outlook on the Vietnam sovereign
(BB/Positive).
KEY RATING DRIVERS
IDRS, SUPPORT RATING
ANZV's ratings are support driven. Fitch believes that the bank's
parent Australia and New Zealand Banking Group Limited (ANZ,
AA-/Negative/aa-) has a strong ability to extend extraordinary
support to its Vietnam subsidiary - given the parent's credit
profile, and ANZV's small asset base that accounted for only around
0.2% of the parent's total assets at end-2018.
Nevertheless, Fitch believes that currency transfer and
convertibility risks, as reflected in Vietnam's Country Ceiling of
'BB', could represent a significant constraint on ANZV's ability to
receive support from its Australia-based parent. This is reflected
in the Support Rating of '3' that indicates a moderate probability
of support from its higher-rated Australia-based parent, in times
of need. ANZV's Long-Term Foreign Currency IDR is capped at the
Vietnamese Country Ceiling.
Fitch regards the risk of sovereign restrictions on local-currency
repayments as lower than that of foreign-currency restrictions.
Fitch also expects parental support to be robust, assuming no very
high levels of sovereign or macroeconomic stress. Hence, ANZV's
Long-Term Local-Currency IDR is rated two notches above Vietnam's
sovereign rating.
Its view on ANZ's propensity to provide support to ANZV is based on
ANZV's relatively limited role in the group, compared with larger
subsidiaries in more strategically important markets.
Fitch has not assigned a Viability Rating to ANZV due to its high
level of management and operational linkages with its parent and
the absence of a meaningful standalone franchise. ANZV has a small
asset base, constituting a mere 0.3% of Vietnam banking system
assets at end-2018.
RATING SENSITIVITIES
IDRS, SUPPORT RATING
The bank's ratings are currently constrained by the country's
sovereign rating and Country Ceiling. An upgrade in the sovereign
rating and Country Ceiling would therefore be likely to lead to an
upward revision in the bank's IDRs, assuming that the parent's
ability and propensity to support the bank remain intact.
Fitch may take negative rating action if there is a change in
Fitch's assessment of ANZ's propensity and ability to extend
extraordinary support in a timely manner. For example, a
significant dilution in ANZ's stake in the bank could be indicative
of a reduced propensity to support, though Fitch believes this is
unlikely in the near term.
There would have to be very significant rating changes at both
entities for there to be any impact on Fitch's assessment of ANZ's
ability to support ANZV, in light of the large gap between the
Long-Term IDRs of ANZ and Vietnam.
The rating actions are as follows:
Long-Term IDR assigned at 'BB'; Outlook Positive
Long-Term Local Currency IDR assigned at 'BBB-'; Outlook Positive
Short-Term IDR assigned at 'B'
Short-Term Local Currency IDR assigned at 'F3'
Support Rating assigned at '3'
*********
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 2020. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
to be reliable, but is not guaranteed.
TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***