/raid1/www/Hosts/bankrupt/TCRAP_Public/200122.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 22, 2020, Vol. 23, No. 16
Headlines
A U S T R A L I A
QUALITY TYRE: Second Creditors' Meeting Set for Jan. 28
[*] AUSTRALIA: High Number of Store Closures Could Hit Landlords
C H I N A
CHINA: Most of Provinces See Economy Slowing in 2020
DEXIN CHINA: Moody's Assigns B3 Rating on New Sr. Unsec. Notes
HENGDA REAL ESTATE: S&P Rates Proposed USD Sr. Unsec. Notes 'B'
IDEANOMICS INC: Falls Short of Nasdaq Bid Price Requirement
WANDA PROPERTIES: Moody's Assigns Ba3 Rating to Proposed Notes
WEST CHINA CEMENT: S&P Withdraws 'BB-' LT Issuer Credit Rating
XINYI CITY: Fitch Affirms BB- LT FC & LC IDRs, Outlook Stable
I N D I A
AGRON INDIA: Insolvency Resolution Process Case Summary
ALTICO CAPITAL: Creditors Sought Loan Swap Bids on January 20
AUTO PROFILES: Ind-Ra Affirms BB+ Issuer Rating, Outlook Negative
AUTONEEDS (INDIA): Insolvency Resolution Process Case Summary
AVIRAL EDUCATION: CARE Assigns B Rating to INR27.72cr LT Loan
B S BUILDTECH: CARE Maintains B+ Rating in Not Cooperating
CHABBRA'S ASSOCIATES: Ind-Ra Migrates BB Rating to Non-Cooperating
ELECTRO POLES: Insolvency Resolution Process Case Summary
GEOTRIX BUILDING: CARE Assigns B+ Rating to INR0.50cr LT Loan
HARIOM INGOTS: Ind-Ra Raises Long Term Issuer Rating to 'BB+'
JAIN SARVODAYA: Ind-Ra Maintains D Bank Rating in Non-Cooperating
JET AIRWAYS: To Sell Netherlands Business to KLM
JHARKHAND MEGA: Insolvency Resolution Process Case Summary
JRK INDUSTRIES: CARE Lowers Rating on INR11.96cr Loan to 'D'
KALYAN VAIJINATHRAO: CARE Cuts Rating on INR3.73cr Loan to D
M.P ENGINEERING: CARE Assigns B+ Rating to INR0.50cr LT Loan
MANGALAYATAN UNIVERSITY: Ind-Ra Keeps B+ Rating in Non-Cooperating
MATASHREE SNACKS: Insolvency Resolution Process Case Summary
O K ENTERPRISE: CARE Withdraws B+/A4 Rating on Bank Facilities
PANKAJ ISPAT: CARE Maintains B- Rating in Not Cooperating
PARVIN EXIM: Insolvency Resolution Process Case Summary
PREMIER DISTILLERIES: Insolvency Resolution Process Case Summary
R&M INTERNATIONAL: Insolvency Resolution Process Case Summary
RADHARANI HIMGHAR: CARE Reaffirms B+ Rating on INR7.63cr Loan
RANGOLI WOOD: CARE Maintains 'B+' Rating in Not Cooperating
RELIANCE COMM: Creditors' Vote on Plan Delayed by Chinese New Year
RELIANCE NAVAL: NCLT Admits Firm for Insolvency
SIGMA C: CARE Maintains 'D' Rating in Not Cooperating
SILK WOVEN: Insolvency Resolution Process Case Summary
SREE LAKSHMI: CARE Lowers Rating on INR160cr LT Loan to 'D'
UNIVERSAL TRADERS: CARE Assigns B+ Rating to INR10cr LT Loan
UPPER INDIA: CARE Maintains 'D' Rating in Not Cooperating
UTTARAYAN FOODS: CARE Maintains 'B' Rating in Not Cooperating
VEER BHADRA: CARE Assigns B+ Rating to INR10cr Long Term Loan
VEGA JEWELDIAM: CARE Lowers Rating on INR27cr LT Loan to 'D'
VIJAI ELECTRICALS: Ind-Ra Lowers Long Term Issuer Rating to 'BB+'
VIKRAM IRON: Insolvency Resolution Process Case Summary
I N D O N E S I A
GLOBAL PRIME: Moody's Assigns Ba3 Rating to New Sr. Unsec. Notes
N E W Z E A L A N D
CULLEN GROUP: 10 More Eric Watson Companies Moved Into Liquidation
S I N G A P O R E
HYFLUX LTD: Aqua Munda Commits SGD208MM to Debt Buyout
PACIFIC RADIANCE: Debt Moratorium Extended to February 28
PACIFIC RADIANCE: Talks 'Stalled' for US$180MM Debt Funding
- - - - -
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A U S T R A L I A
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QUALITY TYRE: Second Creditors' Meeting Set for Jan. 28
-------------------------------------------------------
A second meeting of creditors in the proceedings of Quality Tyre
Distributors Pty Ltd, trading as Trade Tyre Distributors, has been
set for Jan. 28, 2020, at 11:00 a.m. at Level 12, 210 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. 28, 2020, at 9:00 a.m.
Andrew James Barnden of Rodgers Reidy was appointed as
administrator of Quality Tyre on Dec. 13, 2019.
[*] AUSTRALIA: High Number of Store Closures Could Hit Landlords
----------------------------------------------------------------
Dominic Powell at The Sydney Morning Herald reports that an
unusually high number of store closures and retail collapses in the
first weeks of 2020 has prompted concern over the impact on
Australia's major landlords, with one expert warning the closures
could have a flow on effect for the local retail market.
And there were further signs of weakness for the retail sector on
Jan. 20 with shares of online retailer Kogan (down 20 per cent) and
discount retailer Super Retail Group (down 4 per cent) sliding
after updates to the sharemarket warned of a slow Christmas sales
period and impacts from bushfires, SMH relates.
Since the new year, a total of 169 closures have been announced at
retail locations around the country as a slew of high-profile
merchants raise the white flag in the face of a persistently
challenging trading environment, SMH discloses.
These include womenswear chain Bardot (58 stores), science retailer
Curious Planet (63 stores), discount department store Harris Scarfe
(21 stores), games seller EB Games (19 stores) and audio retailer
Bose (around 8 stores).
Fashion retailer Jeanswest has also announced its administration,
with many of its 146 stores likely to close.
According to SMH, administrations just after Christmas are a
somewhat common occurrence, as companies often trade through the
key Christmas period in the hope of preventing a potential
collapse.
However, retail expert and professor at Queensland University of
Technology, Gary Mortimer said he had never seen this many store
closures and collapses announced at the beginning of the year, the
report relays.
"I think there were certainly retailers banking on a strong
Christmas to get them home," he said. "So I suspect December
trade's been flat, so they didn't get as much as they needed."
SMH notes that sales data for the month of November saw an
unexpected 0.9 per cent lift to retail trade, reflecting the
stronger than ever Black Friday weekend. But analysts are concerned
trade for December may be lacklustre as the success of the sales
weekend draws consumers away from Christmas and Boxing Day
spending.
In a note to clients, analysts at investment bank Morgan Stanley,
pointed to the collapses and store closures as a "bad sign for
retail", echoing Dr Mortimer's comments that conditions were worse
than normal, relays SMH.
"It is somewhat normal to see a number of retailers fail early in
the year . . . however, 2020 has been a notably bad year," the
report quotes analyst Lauren Berry as saying, referring to the
bushfire crisis as a potential catalyst for the difficult
conditions.
Assessing the potential fallout from the Jeanswest collapse, Ms
Berry said major listed real estate investment trusts such as
Vicinity, Scentre and Stockland were most exposed to the retailer
and therefore most at risk from its administration and potential
store closures, SMH relays.
"It is common practice for administrators to renegotiate leases
with every landlord once a retailer has been placed into
administration. Therefore, even if the stores remain open, it's
likely that rents may be revised downwards to ensure viability,"
SMH quotes Ms. Berry as saying.
SMH adds that Morgan Stanley said it maintained an overall cautious
outlook for the landlords, saying there was an "ongoing downside
risk" due to shuttered stores and weak sales figures.
However, Dr. Mortimer said the consequences from the spate of store
closures could reach much further than the country's major
landlords, with tenants in smaller shopping centres potentially hit
by a domino effect.
"Centres will react with short-term fixes, which is filling the gap
with another retailer, another massage clinic or nail salon,
without thinking much about the overall retail offer at the
centre," Dr. Mortimer, as cited by SMH, said.
"That's problematic because replicating a retail offer over and
over again will cannibalise the existing sales of existing
retailers, who then might go out of business."
Dr. Mortimer also warned numerous store closures at one centre
could increase the rent for existing tenants at the location as
landlords look to subsidise the cost of the empty lots, SMH
relays.
A spokesperson for Stockland said the company would seek to fill
vacant spaces "as quickly as possible", and noted it had already
received interest from other retailers for the soon-to-be empty
Bardot and Harris Scarfe sites across its portfolio, adds SMH.
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C H I N A
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CHINA: Most of Provinces See Economy Slowing in 2020
----------------------------------------------------
Bloomberg News reports that most of China's provinces are expecting
slower economic growth in 2020, underlining the nationwide trend
which is expected to result in a tweaking of the formal goal when
the legislature meets in March.
Twenty-two of 31 major cities, provinces and autonomous regions
have so far cut their 2020 target for gross domestic product
expansion, Bloomberg discloses citing their work reports which lay
out plans for this year. Twelve provinces, which made up 42% of
China's economic output at the end of September last year, expect
growth at around 6% or lower this year. Another nine provinces
forecast their economy would expand between 6%-6.5% this year. The
nation's economy is on a gradual slowing trajectory, and the
National People's Congress is expected to approve that the 2020
target be set at "around 6%" in March, lower than the 6.1% result
for 2019 announced last week.
According to Bloomberg, the nation's economy is on a gradual
slowing trajectory, and the National People's Congress is expected
to approve that the 2020 target be set at "around 6%" in March,
lower than the 6.1% result for 2019 announced last week. Even with
the slowdown, output grew CNY5 trillion ($729 billion) last year,
an increase bigger than Switzerland's GDP.
However, there's substantial regional variation, with
less-developed Jiangxi growing around 8.5% last year, while
Tianjin, near Beijing, eked out a 4.5% expansion. That beat only
Jilin, in the struggling rust belt in the north-east of the
country, Bloomberg says.
Tianjin, which has been plagued by debt problems, defaults, and
misstatement of its economic data, expects its woes to continue,
according to Bloomberg. The province's growth went from the fastest
in China at the end of 2013 to the slowest in 2018. It's
forecasting growth at around 5% this year.
Bloomberg notes that even with the cuts in their targets, that
doesn't mean it's assured that provinces will hit that number. At
least 9 provinces didn't meet their targets in 2019, including
Jiangsu, Jilin, and neighboring Heilongjiang.
Bloomberg says the overall growth target is usually delivered along
with detailed economic plans at the annual legislative meeting.
There are 31 administrative regions in China, not including the
Special Administrative Regions of Hong Kong and Macau. Sichuan and
Yunnan haven't yet announced their growth target for 2020,
Bloomberg notes.
DEXIN CHINA: Moody's Assigns B3 Rating on New Sr. Unsec. Notes
--------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to the proposed
senior unsecured USD notes to be issued by Dexin China Holdings
Company Limited (B2 stable).
Dexin plans to use the proceeds from the proposed notes to
refinance existing debt and for working capital purposes.
RATINGS RATIONALE
"The proposed bond issuance will improve Dexin's liquidity profile
and will not materially affect its credit metrics, because the
company will use the proceeds mainly to refinance existing debt,"
says Josephine Ho, a Moody's Vice President and Senior Analyst, and
also Moody's Lead Analyst for Dexin.
Moody's expects that Dexin's debt leverage - as measured by
revenue/adjusted debt - will decline to 48%-50% over the next 12-18
months from 54% in 2018, and adjusted EBIT/interest coverage to
2.2x from 2.9x over the same period.
This mild deterioration in the company's projected credit metrics
reflects Moody's expectation that Dexin's growth will be partly
debt-funded. In particular, Moody's expects that Dexin will spend
60%-70% of the cash it collects from contracted sales to acquire
land over the next 12-18 months to support its business expansion.
Dexin's liquidity is adequate. Its cash balance of RMB7.6 billion
at June 30, 2019 was more than its short-term debt of RMB5.0
billion. Moody's expects that the company's cash holdings, along
with its contracted sales proceeds after deducting basic operating
cash flow items, will be sufficient over the next 12 months to
cover its short-term debt, committed land premiums and dividend
payments.
Dexin's B2 corporate family rating reflects its long track record
of developing properties in Zhejiang Province, as well as its
quality land bank and adequate liquidity, driven by its strong cash
collections from contracted sales.
However, its credit profile is constrained by its growing operating
scale, developing funding channels, mildly deteriorating credit
metrics, and high exposure to joint venture businesses, with the
last factor lowering the transparency of its credit metrics.
The B3 senior unsecured debt rating is one notch lower than the
corporate family rating due to structural subordination risk. This
risk reflects the fact that the majority of claims are at the
operating subsidiaries and have priority over Dexin'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.
In terms of governance considerations, the CFR takes into account
the concentrated ownership by Dexin's key shareholder, Mr. Hu
Yiping, who held a total 73% stake at March 31, 2019. This risk is
partly mitigated by the presence of three independent non-executive
directors out of a total of seven, with the audit and remuneration
committees chaired by the independent non-executive directors, and
the presence of other internal governance structures and standards,
as required under the Corporate Governance Code for companies
listed on the Hong Kong Stock Exchange.
The stable ratings outlook reflects Moody's expectation that Dexin
will maintain adequate liquidity and grow in scale as planned.
Moody's could upgrade Dexin's ratings if the company: (1) executes
its business plans and grows its operating scale; (2) strengthens
its financial profile, with revenue/adjusted debt exceeding 70% and
EBIT/interest above 2.5x-3.0x; (3) maintains adequate liquidity,
with cash/short-term debt consistently above 1.5x; and (4)
diversifies its funding channels.
On the other hand, Moody's could downgrade the ratings if (1)
Dexin's contracted sales weaken; or (2) the company accelerates
land acquisitions beyond Moody's expectations, thereby weakening
its financial metrics and liquidity.
Financial metrics indicative of a ratings downgrade include: (1)
EBIT/interest below 1.5x; or (2) revenue/adjusted debt below
50%-55%; or (3) a weaker liquidity position or higher refinancing
risk, such that cash/short-term debt falls below 1.0x on a
sustained basis.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
Dexin China Holdings Company Limited is a Zhejiang-based
residential property developer. At December 31, 2018, its land
reserves totaled 6.8 million square meters in gross floor area. Its
key operating cities include Wenzhou, Hangzhou, Nanjing and Ningbo.
At March 31, 2019, Dexin was 73% owned by its founder and chairman,
Mr. Hu Yiping.
HENGDA REAL ESTATE: S&P Rates Proposed USD Sr. Unsec. Notes 'B'
---------------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issue rating to
Scenery Journey Ltd.'s proposed U.S. dollar-denominated senior
unsecured notes. Under the current issuance structure, the notes
are guaranteed by Tianji Holding Ltd. (B+/Stable/--), with Hengda
Real Estate Group Co. Ltd. (B+/Stable/--) providing support via a
keepwell agreement. Tianji is Hengda's core offshore operating and
financing platform. The issue rating is subject to S&P's review of
the final issuance documentation.
S&P rates the notes one notch below the issuer credit rating on
Tianji to reflect significant structural subordination risk. As of
June 30, 2019, Tianji's capital structure consists of about Chinese
renminbi (RMB) 23 billion of unsecured debt at the Tianji group
level. It also has RMB110 billion of priority debt, which is either
secured debt at the group level or debt at the project level. As
such, Tianji's priority debt ratio is slightly over 82%,
substantially above S&P's notching-down threshold of 50%.
In S&P's view, the new issuance should not significantly affect
Hengda's leverage profile because the company intends to use the
proceeds mainly for refinancing and general corporate purposes.
Hengda may adjust the foregoing plans in response to changing
market conditions and reallocate the use of the proceeds, as the
issuance is under the quota approved before the tightening on use
of proceeds in July 2019. That said, due to the sheer size of
Hengda's gross debt level, the new issuance is unlikely to have a
material impact even if the final use differs from the initial
plan.
Similar to its parent China Evergrande Group (B+/Stable/--),
Hengda's weaker-than-peer liquidity profile and suboptimal capital
structure remain key rating constraints. However, S&P believes the
downside risk on liquidity is still manageable, given the company's
satisfactory contracted sales performance and lower spending on new
land acquisitions. This is reflected in our stable outlook on both
Hengda and Evergrande.
IDEANOMICS INC: Falls Short of Nasdaq Bid Price Requirement
-----------------------------------------------------------
Ideanomics, Inc. received a letter from the Listing Qualifications
Staff of The Nasdaq Stock Market LLC on Jan. 10, 2020, indicating
that the bid price for the Company's common stock for the last 30
consecutive business days had closed below the minimum $1.00 per
share required for continued listing under Nasdaq Listing Rule
5550(a)(2).
Under Nasdaq Listing Rule 5810(c)(3)(A), the Company has been
granted a 180 calendar day grace period, or until July 8, 2020, to
regain compliance with the minimum bid price requirement. The
continued listing standard will be met if the Company evidences a
closing bid price of at least $1.00 per share for a minimum of 10
consecutive business days during the 180 calendar day grace
period.
In order for Nasdaq to consider granting the Company additional
time beyond July 8, 2020, the Company would be required, among
other things, to meet the continued listing requirement for market
value of publicly held shares as well as all other standards for
initial listing on Nasdaq, with the exception of the minimum bid
price requirement. If measured today, the Company would qualify
for Nasdaq's consideration of an extension because the Company
currently has stockholders' equity of at least $5 million. In the
event the Company does not regain compliance with the $1.00 bid
price requirement by July 8, 2020, eligibility for Nasdaq's
consideration of a second 180 day grace period would be determined
on the Company's compliance with the above referenced criteria on
July 8, 2020.
The Company is diligently working to evidence compliance with the
minimum bid price requirement for continued listing on Nasdaq;
however, there can be no assurance that the Company will be able to
regain compliance or that Nasdaq will grant the Company a further
extension of time to regain compliance, if necessary. If the
Company fails to regain compliance with the Nasdaq continued
listing standards, its common stock will be subject to delisting
from Nasdaq.
About Ideanomics
Ideanomics, formerly known as Seven Stars Cloud Group, Inc., is a
global fintech advisory and Platform-as-a-Service company.
Ideanomics combines deal origination and enablement with the
application of blockchain and artificial intelligence technologies
as part of the next-generation of financial services. The company
is headquartered in New York, NY, and has offices in Beijing,
China. It also has a planned global center for technology and
innovation in West Hartford, CT, named Fintech Village.
Ideanomics reported a net loss of $28.42 million for the year ended
Dec. 31, 2018, compared to a net loss of $10.86 million for the
year ended Dec. 31, 2017. As of Sept. 30, 2019, Ideanomics had
$164.76 million in total assets, $47.26 million in total
liabilities, $1.26 million in convertible redeemable preferred
stock, and $116.24 million in total equity.
B F Borgers CPA PC, in Lakewood, Colorado, the Company's auditor
since 2018, issued a "going concern" opinion in its report dated
April 1, 2019, on the Company's consolidated financial statements
for the year ended Dec. 31, 2018, citing that the Company incurred
recurring losses from operations, has net current liabilities and
an accumulated deficit that raise substantial doubt about its
ability to continue as a going concern.
WANDA PROPERTIES: Moody's Assigns Ba3 Rating to Proposed Notes
--------------------------------------------------------------
Moody's Investors Service assigned a Ba3 senior unsecured rating to
the proposed notes to be issued by Wanda Properties Overseas
Limited, a wholly owned subsidiary of Wanda Commercial Properties
(Hong Kong) Co. Limited (Ba3 stable).
The proposed notes will be guaranteed by Wanda HK, which is a
wholly-owned subsidiary of Dalian Wanda Commercial Management Group
Co., Ltd. (Ba1 stable). Wanda HK and its parent are together known
as Dalian Wanda Group.
The proposed notes will also be supported by a deed of equity
interest purchase undertaking and a keepwell deed between DWCM,
Wanda HK, Wanda Properties Overseas Limited and the bond trustee.
The note proceeds will be used mainly to refinance Dalian Wanda
Group's existing debt and for general corporate purposes.
RATINGS RATIONALE
"The proposed note issuance will slightly lengthen Dalian Wanda
Group's debt maturity profile without materially affecting the two
companies' credit metrics, because they plan to use the proceeds
mainly to refinance existing debt," says Kaven Tsang, a Moody's
Senior Vice President.
Wanda HK's Ba3 corporate family rating (CFR) incorporates the
company's standalone credit profile and a two-notch uplift,
reflecting Moody's expectation that DWCM will provide financial
support to Wanda HK in times of need.
Moody's assumption of support reflects (1) Wanda HK's 100%
ownership by DWCM and the parent's management control over the
company; (2) Wanda HK's role as the primary platform for DWCM's
offshore funding and international expansion; and (3) the parent's
track record of extending support to Wanda HK's offshore financing,
through deeds of equity interest purchase undertakings and keepwell
deeds for its bonds, guarantees to its bank loans, and funding for
its debt repayment.
Wanda HK's standalone credit profile reflects its small scale, weak
credit metrics and thin equity base, given its role as the group's
core platform for offshore funding and overseas investment. These
risks are partly mitigated by the fact that the company's
operations and financial management are directly controlled and
managed by DWCM.
The stable outlook on Wanda HK's rating primarily reflects Moody's
expectation that DWCM will provide financial support to Wanda HK in
times of stress, given the close links between the two companies.
Moody's also expects that DWCM will have the ability to provide
support, if needed, as reflected by its Ba1 CFR.
DWCM's Ba1 CFR reflects its strong brand and track record of
developing and managing commercial properties in China. The CFR
also considers its declining business risk, given that by the end
of 2019 the company had exited the more volatile residential
property development business.
Additionally, the Ba1 CFR reflects the execution risks associated
with DWCM's transformation into an asset-light business model. This
risk is partly mitigated by its strong cash position and high
recurring income, which provide a healthy financial buffer.
Moody's expects DWCM's debt/EBITDA will rise to 5.5x-6.5x over the
next 12-18 months from 5.6x for the 12 months ended June 30, 2019,
while EBIT/interest should be at 3.0x-3.5x from 3.2x. The projected
metrics are appropriate for its Ba1 CFR.
In terms of environmental, social and governance factors, the Ba1
CFR also considers DWCM's corporate governance and transparency,
given its private company status. This risk is partly mitigated by
the presence of independent directors and reputable shareholders,
such as Tencent Holdings Limited (A1 stable) and other investors,
who appoint their representatives to the board of directors to
balance the interests of the shareholders, creditors and other
stakeholders.
DWCM's liquidity is adequate. As of September 30, 2019, DWCM's
RMB60.1 billion in cash on hand could fully cover its RMB43.3
billion in short-term debt. Moody's expects that over the next 12
months, DWCM's cash and operating cash flow will be sufficient to
cover its short-term debt, committed land payments and capital
spending.
DWCM's stable outlook reflects Moody's expectation that the company
will maintain stable financial metrics and have adequate cash
resources to support its operating and refinancing needs.
The Ba3 senior unsecured rating of the proposed notes reflects
Moody's expectation that DWCM will provide financial support by
honoring its obligations under the deed of equity interest purchase
undertaking and keepwell deed rather than through a payment
guarantee.
The Ba3 senior unsecured rating is also unaffected by subordination
to claims at the operating companies because Moody's expects
support from DWCM to flow through the holding company rather than
directly to the main operating companies; thereby mitigating any
differences in expected loss that could result from structural
subordination.
Upward pressure on Wanda HK's CFR and on the senior unsecured
ratings of its guaranteed bonds could develop if (1) Moody's
upgrades DWCM's CFR, and (2) the company maintains its strategic
and economic importance to the parent.
However, a downgrade of DWCM's CFR will result in a downgrade of
Wanda HK's CFR and the ratings of its guaranteed bonds.
Furthermore, Wanda HK's rating could face downgrade pressure if its
standalone credit profile deteriorates, or if there is a reduction
in (1) the level of ownership by DWCM, or (2) the strategic and
economic importance of the company to DWCM.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
Wanda Commercial Properties (Hong Kong) Co. Limited was
incorporated on February 6, 2013 as the sole offshore funding and
investment platform for Dalian Wanda Commercial Management Group
Co., Ltd. It is also a wholly-owned subsidiary of Dalian Wanda
Commercial Management Group Co., Ltd.
Dalian Wanda Commercial Management Group Co., Ltd. develops,
operates and sells integrated properties -- including shopping
malls, offices, residential houses, and hotels -- in China. As of
June 30, 2019, the company operated 289 Wanda Plaza retail malls
across more than 160 cities in China.
WEST CHINA CEMENT: S&P Withdraws 'BB-' LT Issuer Credit Rating
--------------------------------------------------------------
S&P Global Ratings withdrew its 'BB-' long-term issuer credit
rating on West China Cement Ltd. (WCC) at the company's request.
The stable outlook at the time of withdrawal reflected S&P's
expectation that WCC would maintain its debt-to-EBITDA ratio below
3.0x in the next 12 months. Continued moderate increase in cement
prices because of ongoing off-peak production and stable demand
growth will keep the ratio low.
XINYI CITY: Fitch Affirms BB- LT FC & LC IDRs, Outlook Stable
-------------------------------------------------------------
Fitch Ratings affirmed China-based Xinyi City Investment &
Development Co., Ltd.'s Long-Term Foreign- and Local-Currency
Issuer Default Ratings at 'BB-'. The Outlook is Stable. Fitch has
also affirmed the 'BB-' rating on the USD100 million 7.0% senior
unsecured notes due 2022 issued by Xingang International Holding
Limited, which are unconditionally and irrevocably guaranteed by
XCID.
XCID is the largest urban developer in Xinyi city, which is in
Jiangsu province on China's eastern coast. It is involved in
infrastructure construction, primary land development as well as
water supply and commodity sales.
KEY RATING DRIVERS
'Very Strong' Status, Ownership and Control: XCID was established
as a state-owned limited liability company under Chinese company
law. The Xinyi government maintains full ownership and exerts
strong control over the company through the Xinyi State-owned
Assets Supervision and Administration Commission (Xinyi SASAC), by
appointing senior management, approving major investment and
financing plans, and closely monitoring operating and financial
performance.
'Strong' Support Track Record and Expectations: XCID has received
consistent and substantial cash and asset injections, as well as
regular operating subsidies from the government of the city.
Accumulated capital injections during 2016-2018 amounted to CNY7.6
billion, equivalent to 42% of 2018 shareholder equity. The annual
operating subsidy was around CNY300 million, or about one-fourth of
annual revenue.
'Moderate' Socio-Political Implications of Default: XCID provides a
wide range of public services, including infrastructure
development, resettlement-housing construction, primary-land
development and water supply. However, Fitch assesses the
socio-political implications of its default to be 'Moderate' as
most services are conducted through various subsidiaries, which
would not be materially affected by an XCID default.
'Very Strong' Financial Implications of Default: XCID is the
largest government-related entity (GRE) by total assets at end-2018
in the city, accounting for more than 60% of the total assets of
local GREs. Most of its debt is raised to finance key local
infrastructure projects that serve the public. Fitch believes a
default would severely damage the local government's reputation and
constrain its financing capability.
'b-' Standalone Credit Profile: Fitch assesses XCID revenue
defensibility at 'Weaker' and operating risk at 'Midrange', as its
core business is concentrated in a county-level city that has a
relatively small fiscal budget. Its Fitch-adjusted net debt to
EBITDA rose to 49.2x by end-2018 from 41.5x at end-2017, and Fitch
expects it continue to rise in the next two to three years.
DERIVATION SUMMARY
XCID ratings are assessed under Fitch's Government-Related Entities
Rating Criteria, reflecting Xinyi city's strong control and
historical support of the company. Fitch has also factored in the
importance of XCID to the city as a primary urban developer. XCID's
Standalone Credit Profile is 'b-' under its Public Sector,
Revenue-Supported Entities Rating Criteria.
RATING SENSITIVITIES
A revision in Fitch's perception of Xinyi city's ability to provide
subsidies, grants or other legitimate resources allowed under
China's policies and regulations would lead to a change in
ratings.
Positive rating action may be triggered by a revised assessment of
the socio-political implications of a default, enhancing Xinyi
city's incentive to provide legitimate support, or an improvement
of XCID's Standalone Credit Profile.
A downgrade may result from a significant weakening of the
assessment of the socio-political or financial implications of a
XCID default, or the assessment of the city's support record, or a
dilution of the local government's shareholding or control.
A rating action on the company would also lead to similar action on
the rating of the US dollar notes.
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.
=========
I N D I A
=========
AGRON INDIA: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: Agron India Limited
301, Anna Bhavan
Broach Street
D.R. Marg
Masjid Bunder (East)
Mumbai, MH 400009
Insolvency Commencement Date: December 20, 2019
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: June 16, 2020
(180 days from commencement)
Insolvency professional: Sanjay Shrivastava
Interim Resolution
Professional: Sanjay Shrivastava
205-B, Suraksha Apartment
Hindustan Colony
Amravati Road, Nagpur
Maharashtra 440033
E-mail: casanjayshrivastava@gmail.com
- and -
E-10A, Kailash Colony
Greater Kailash
New Delhi 110048
E-mail: agronindia@aaainsolvency.com
sanjay.shrivastava@
aaainsolvency.com
Last date for
submission of claims: January 26, 2020
ALTICO CAPITAL: Creditors Sought Loan Swap Bids on January 20
-------------------------------------------------------------
Bijou George and Rahul Satija at Bloomberg News report that lenders
to Altico Capital India Ltd. are trying an unusual method to cut
debt at the shadow lender, as attempts to sell the company or
restructure the loans face challenges including swelling soured
credit and a funding squeeze.
Creditors have asked each other to bid for an asset swap that would
make real estate firms, until now funded by Altico, liable to
directly repay the debt, Bloomberg relates citing people familiar
with the matter. This approach would inject some cash into Altico
while isolating its viable projects from poorer quality ones, the
people said, asking not to be identified as the details are
private.
Bloomberg relates that under the proposed deal, creditors will bid
for loans to at least five earmarked projects by the end of Jan.
20. They can choose the mix of Altico debt and cash they are
willing to swap for new property-company debt, with indicative
levels set at 65:35, the people said.
As many as a third of Altico's creditors have indicated interest in
the plan, the people said, betting that they have a better chance
of recouping their investments from good-quality property projects
rather than the struggling financier, according to Bloomberg.
This is the third step lenders are trying, together with attempts
to sell Altico as well as a shareholder-sponsored restructuring
plan, Bloomberg notes. The firm is seen as a barometer in India's
evolving shadow bank crisis that has helped push the nation's
economic growth to the slowest since 2009.
Altico's soured debt was provisionally estimated at close to 40% of
total credit end-December, up from 23.8% in September, the people
said. The final number will likely be shared with creditors this
week, Bloomberg says. The real estate financier had reported a 1.8%
ratio as recently as June.
Three potential bidders have already pulled out of the race to buy
Altico, leaving only Cerberus Capital Management LP and SSG Capital
Management, which have both submitted indicative bids, Bloomberg
discloses. The deadline for binding bids was recently extended by a
week to Jan. 24, the people said.
Altico was established in 2004 by the funds managed by Clearwater
Capital Partners as Clearwater Capital Partners India Private
Limited for wholesale lending to capital-constrained Indian small
and medium enterprises. It was registered as a
non-deposit-accepting non-banking finance company with the Reserve
Bank of India in January 2005. Its business strategy initially
focused on special situation opportunities across the capital
structure. In FY15, the company was renamed Altico Capital India
Limited, and its business strategy was changed. Altico is focused
on high-yield asset-backed senior secured credit opportunities in
the real estate sector.
AUTO PROFILES: Ind-Ra Affirms BB+ Issuer Rating, Outlook Negative
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has revised Auto Profiles
Limited's (APL) Outlook to Negative from Stable while affirming its
Long-Term Issuer Rating at 'IND BB+'.
The instrument-wise rating actions are:
-- INR304 mil. Fund-based working capital limit affirmed; Outlook
revised to Negative from Stable with IND BB+/Negative/IND A4+
rating;
-- INR15 mil. Non-fund-based working capital limit assigned with
IND A4+ rating;
-- INR291.35 mil. (increased from INR236.64 mil.) Term loan due
on August 2024 affirmed; Outlook revised to Negative from
Stable with IND BB+/Negative rating; and
-- INR58.8 mil. Proposed fund-based working capital limit
withdrawn (the company is no longer proceeding with the
an instrument as envisaged).
The Outlook revision reflects Ind-Ra's expectation that APL's
operating performance would deteriorate in FY20 owing to the
slowdown in the auto industry (commercial vehicle). The decline in
revenue would lead to a fall in the EBITDA, and this along with the
incurring of debt-led CAPEX is likely to cause deterioration in
APL's credit metrics during the year. The rating action also
reflects the likelihood of the company's liquidity position
remaining stretched over the short-to-medium term.
KEY RATING DRIVERS
Ind-Ra believes APL's revenue would decline by double-digit
percentage points on a YoY basis during FY20 due to the slowdown in
the automobile sector. The company's revenue had increased by
26.59% YoY to INR5,367.01 million in FY19, backed by a rise in
order flow from its largest customer, Tata Motors Ltd (TML). As per
the interim numbers, APL achieved a top-line of INR1,712.75 million
during 8MFY20. The company's scale of operations continues to be
medium.
In addition, APL's credit metrics are likely to deteriorate in FY20
due to a decline in EBITDA and incurring of debt-led CAPEX. During
April-December 2019, the company incurred a debt-led CAPEX of
INR67.7 million to set up a new unit in Jamshedpur and enhance the
capacity of existing units. In FY19, the company's credit metrics
had remained moderate but improved due to a significant increase in
absolute EBITDA INR232.91 million (FY18: INR187.73 million) on the
back of revenue growth. APL's gross interest coverage (operating
EBITDA/gross interest expense) was 3.47x in FY19 (FY18: 2.82x) and
net financial leverage (total adjusted net debt/operating EBITDAR)
was 2.59x (3.21x).
Liquidity Indicator – Stretched: APL's average maximum
utilization of fund-based limits was 93.6% for the 12 months ended
December 2019. The net cash cycle improved to 22 days in FY19
(FY18: 28 days) on account of a decline in inventory days and
receivable days during the period. Additionally, the company had
unencumbered cash of INR38.05 million in FY19 (FY18: INR42.50
million). However, the company's cash flow from operations declined
to INR121.49 million in FY19 (FY18: INR221.29 million) on account
of unfavorable changes in the working capital requirements.
Moreover, APL's free cash flow turned negative at INR48.76 million
in FY19 (FY18: INR15.74 million) on account of higher CAPEX and a
decline in the cash flow operations. Ind-Ra expects the liquidity
position to remain stretched over the short-to-medium term on
account of higher working capital requirements. Furthermore, the
company does not have any capital market exposure and relies on
banks and financial institutions to meet its funding requirements.
The ratings reflect the APL's modest EBITDA margins due to the
steady increase in raw material prices since FY17 and the company's
inability to pass on the same to customers. The margin decreased to
4.34% in FY19 (FY18: 4.43%) on account of an increase in raw
material prices. The return on capital employed stood at 11% in
FY19 (FY18: 10%).
The ratings are also constrained by APL's customer concentration
risk, with TML contributing 75% to the company's revenue in FY19
(FY18: 73%).
The ratings, however, derive comfort from APL's long-standing
associations with reputed customers such as TML and Daimler India
Commercial Private Ltd, among others.
The ratings are also supported by APL's promoters' experience of
over three decades in manufacturing sheet metal pressed auto
components.
RATING SENSITIVITIES
Negative: Lower-than-expected operating profitability or interest
coverage falling below 1.7x or deterioration in liquidity profile
would lead to negative rating action.
Positive: Sustaining of the scale of operations, or an improvement
in the same, and an increase in the EBITDA margins, along with an
improvement in the liquidity position and credit metrics, indicated
by interest coverage remaining above 1.7x, on a sustained basis,
would lead to positive rating action.
COMPANY PROFILE
Incorporated in 1989, APL manufactures sheet metal pressed auto
components and has a total production capacity of 86,400 metric
tons per annum. The company is promoted by Mr. Bikash Mukherjee
AUTONEEDS (INDIA): Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: AutoNeeds (India) Private Limited
E-1/4, Pandav Nagar
Opp. Mother Dairy
Hero Honda Showroom
Delhi DL 110092
Insolvency Commencement Date: December 20, 2019
Court: National Company Law Tribunal, (New Delhi) C-VI Bench
Estimated date of closure of
insolvency resolution process: June 17, 2020
(180 days from commencement)
Insolvency professional: Vinay Kumar Jairath
Interim Resolution
Professional: Vinay Kumar Jairath
GH-13, Flat No. 916
Paschim Vihar
New Delhi 110087
E-mail: vinayjairath916@gmail.com
cirp.autoneed@gmail.com
Last date for
submission of claims: January 24, 2020
AVIRAL EDUCATION: CARE Assigns B Rating to INR27.72cr LT Loan
-------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Aviral
Education Welfare and Cultural Society, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 27.72 CARE B; Stable Assigned
Detailed Rationale and key rating drivers
The rating assigned to the bank facilities of Aviral Education is
constrained by short track record with small scale of operations,
weak financial risk profile, operations concentrated to a single
geographical area with increasing competition from established and
upcoming educational institutes, regulatory risk associated with
the education sector and stretched liquidity position. The ratings,
however, draw comfort from experienced and well qualified members
of the society, well established infrastructure coupled with
qualified teaching staff and favorable demographic & socio-
economic factors.
Rating Sensitivities
Positive Factors
* Increase in the scale of operations as marked by total operating
income to around INR5 crore on sustained basis.
* Improvement in profitability margins marked by PBILDT and PAT
margins to around 12% and 4% respectively on sustained basis
Negative Factors
* Any incremental debt leads to deterioration in the capital
structure which in turn further deteriorate the gearing to above 2
times.
Detailed description of the key rating drivers
Key Rating Weakness
Short track record with small scale of operations
As the operations were started in April 2017, the scale of
operations of the society remained small marked by total operating
income of INR1.25 crore during FY19 as against INR0.05 crore during
FY18. The small scale limits the society’s financial flexibility
in times of stress and deprives it from scale benefits. Further, it
has achieved TOI of INR1.45 crore in 9MFY20. AEWCS has a total
strength of 186 students in school in the current academic session
AS2019-20.
Weak financial risk profile
As the society is in initial stage of operations and high cost
incurred leads to weak profitability margins of the society in
FY19. The PBILDT margin stood weak at 9.44% in FY19. The
deterioration in the PAT margin was on account of higher interest.
As on March 31, 2019 the capital structure of the society comprises
of vehicle loan, term loan and unsecured loans of INR0.42 crore,
INR25.05 crore and INR10.86 crore respectively. The coverage
indicators of the company stood weak as marked by interest coverage
of 0.04x for FY19. However, the debt servicing is done through
unsecured loans of INR10.86 crores.
Operations concentrated to a single geographical area with
increasing competition from established and upcoming educational
institutes
AEWCS has its school within a single campus located in Ghaziabad,
U.P which limits the reach penetration level for the society to tap
opportunities. Further, due to increasing focus on education in
India, a number of schools have been opened up in close proximity.
This exposes the revenue of AEWCS to competition from other
schools. The ability of AEWCS to enroll the projected number of
students at a competitive fee structure depends on its capability
to distinguish itself and leverage on its established brand name in
the market.
Regulatory risk associated with the education sector
Despite the increasing trend of privatization of the education
sector in India, regulatory challenges continue to pose a
significant threat to the educational institutes. The regulatory
authority for the schools, CBSE, functions under the supervision of
the Controlling Authority, which is vested with the Secretary
(Education), Government of India, and Ministry of Human Resource
Development.
Key Rating Strengths
Experienced and qualified members of the society
Mr. Ramandeep Singh is the current president of the society and has
around one decade of experience in running education institution.
Mr. Panchanan Mali (Manager Accounts) is a Post graduate by
education and has an experience more than a decade in education
industry. Further, they get support from other qualified members in
the field of social work to carry out the day-to-day operations.
Well established infrastructure coupled with qualified teaching
staff
The school has modern infrastructure featured with smart
classrooms, computer laboratories, library, auditoriums, resource
center etc. This helps the school in offering all round development
to the students. Further, AEWCS has employed experience teaching
and administrative staff to support day to day operations.
Favorable demographic & socio- economic factors
In terms of demographic profile, India remains one of the youngest
nations in the world with 37.9% of its population in the 5-24 years
age bracket i.e. the age group comprising the student population.
In addition, other socio-economic factors such as growing personal
disposable income of the Indian households, growing contribution of
the services sector to India’s GDP thereby requiring greater
number of qualified youths has further provided an impetus to the
growth of educational institutes in the country.
Aviral Education Welfare and Cultural Society (AEWCS) was
registered as an educational society in July, 2007 under Societies
Registration Act, 1860 with an objective to provide education
services by establishing and operating an educational institution
and started its commercial operations in April, 2018. The society
operates a school under the name of Delhi Public School (DPS) with
a single campus spread over at 1.089 acre of land located at
Ghaziabad, Uttar Pradesh. AEWCS located in Ghaziabad, Uttar Pradesh
was established for providing primary and secondary education from
Nursery to standard XII. The campus of the society is well equipped
with modern classrooms, auditorium, library, computer centres, and
resource centre etc. The school is affiliated to Central Board of
Secondary Education (CBSE). The society has around 30 teaching
staff and 30 administrative & supportive staff. AEWCS has a total
strength of 186 students in school in the current academic session
AS2019-20.
B S BUILDTECH: CARE Maintains B+ Rating in Not Cooperating
----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of B S
Buildtech continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 45.00 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING; Based on best
Available information
Detailed Rationale and key rating drivers
CARE had, vide its press release dated July 31, 2018 placed the
ratings of B S Buildtech under the 'issuer non-cooperating'
category as the firm had failed to provide information for
monitoring of the rating. B S Buildtech continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter dated
November 11, 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).
Detailed description of the key rating drivers
At the time of last rating on July 31, 2018, the following were the
ratings strengths and weaknesses.
Key Rating Weaknesses
Project Construction Risk
The construction of the project commenced in Q3FY14 and currently
around 50% of the project is completed in physical terms with
almost all the necessary approvals in place. The firm has expended
around INR149.60 crores till 31.3.2016(~54%, against total project
cost of INR280.40 crores)Till 31.3.2016, the firm has sold 425
flats (~44% of the total saleable area) and with the repayment of
the term loan commencing form Q3FY17, there persists the risks/
concerns like liquidity issues, project delays, and cost
over-runs.
Greater reliance on customer advances and average sales
Around 53% of the project cost is being financed through customer
advances thereby exposing the project to risks/concerns like
liquidity issues, project delays and cost over-runs. Moreover, the
firm has only booked ~44% of total saleable area [advance received
79.98 crore till March 2016]; thereby adding to the risk of timely
and successful completion of the project. The promoters have
however infused its entire share of contribution (i.e INR29.64
crore) and has availed term loan of INR40.0 crore (Rs. 45.0
sanctioned) till March 2016.
Financial closure
The total cost of the Project is INR280.40 crore, being financed
through promoter contribution of INR29.16 crore, debt of INR45.00
crore and customer advances of INR206.24 crore. Debt portion has
already tied up and the firm has already drawn INR40.0 crore for
the project. However, till March 31, 2016, the firm has sold ~44%
of total saleable area at an aggregate value of INR154.35 crore
(with customer advances received: INR79.98 crore) against project
cost of INR280.40 crore. Till March 31, 2016, M/s BS Buildtech has
incurred INR149.6 on the project, which is mainly being financed
through promoter’s contribution of INR29.64 crores,
customer advance of INR79.98 cr and debt to the tune of INR40
crore.
Increasing competition
Real estate sector in Noida is highly fragmented .With plethora of
on-going large size projects in and around Greater Noida and in the
vicinity of the project, the firm faces strong competition.
Key Rating Strengths
Experienced promoters and satisfactory track record of the group in
real estate development
BCPL was incorporated in the year 1987 by Mr. Braj Kishor Singh.
BCPL has participated in the construction of various civil and road
construction works. Mr Braj Kishor Singh (Chairman of BS Buildtech)
possesses an experience of more than 35 years in the field of civil
construction and real estate development. Mr Abhay Kumar Singh
(Managing Director of BS Buildtech) is a qualified engineer and has
over 15 years of experience in handling infrastructure projects
across Bihar, Jharkhand and Chattisgarh. SCTPL is a partnership
firm incorporated in the year 2000 by Mr. Rakesh Ranjan. Mr. Ranjan
(Managing Director of BS Buildtech) is a civil engineer and has an
experience of more than 15 years in the field of civil, road and
building construction.
Association with renowned architects and consultants
The firm is associated with renowned architects, consultants and
contractors. These architects and consultants have sound track
record and execution capabilities.
Major regulatory approvals already in place for the Project
The project plan has a total constructed area of 12.06lsf with
saleable area of 11.85 lsf over a land of 5 acres. Lease Agreement
with the GNIDA (Greater Noida Development Authority) has already
been executed and building permit has been obtained. The firm has
received all the major approvals from the appropriate authority(s)
(such as police department, airport authority, urban land ceiling,
height clearance, microwave, water, electricity, fire & emergency,
environmental clearance).
Favorable location of the Project, equipped with all the modern
amenities
The proposed residential project is located in Greater Noida which
is considered to be a posh hub for residential and commercial
activities. Many premium category residential and commercial
projects of renowned builders are coming up in the same location.
Further the project has good road connectivity. The proposed
project is full of modern facilities and the project will have an
excellent view of the landscape and plains. The facilities proposed
to be provided in the project include landscaped garden, beautiful
park, and swimming pool with deck, commercial complex with front
plaza, sand pit and children ply park. The project will also
include jogging track, skating rink, tennis court, badminton court,
basketball and volley ball court, cricket pitch , exercise station
and yoga station coupled with 24hour water supply and 24-hour power
back-up etc. The apartments have been designed having modular
kitchens, fire detection and warning units.
M/s BS Buildtech, incorporated in 2011 is a joint venture between
Baibhaw Construction Pvt. Ltd (BCPL)-70% and M/s Seimens
Construction Tech Private Limited (SCTPL) -30%. M/s BS Buildtech is
constructing a Group Housing Residential Township real estate
project Vaibhav Heritage Height at Greater Noida (West). The
residential township project comprising of seven high rise towers
(B+22), spreading over 5 acres of land, involving 819 flats with
super built-up area of 11.85lsf is being developed at a total
project cost of INR280.40 crore. The project is expected to be
completed by Sept.2018. The project cost is being financed through
promoter contribution of INR29.16 crore, debt of INR45.00 crore and
customer advances of INR206.24 crore.
Till March 31, 2016, the firm has sold off around 420 flats (area
– 5.16lsf) comprising around 43.55% of total saleable area for
total consideration of INR154.35 crore. The firm has received
INR79.98 crore as advances from customers till March 2016 and has
expended around INR149.60 crore (~53% of the total project cost) on
the project.
CHABBRA'S ASSOCIATES: Ind-Ra Migrates BB Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Chabbra's
Associates' (CA) Long-Term Issuer Rating to the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will now
appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR200 mil. Fund-based limits migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) rating; and
-- INR385.0 mil. Non-fund-based limits migrated to non-
cooperating category with IND A4+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
January 29, 2019. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in February 1997, Chabbra's Associates is a partnership
firm based in Secunderabad, Hyderabad. The firm is primarily
involved in civil construction. It also operates a toll plaza.
ELECTRO POLES: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Electro Poles Products Private Limited
1B, Ramlochan Mullick Street
Kolkata 700073
Insolvency Commencement Date: December 13, 2019
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: June 9, 2020
Insolvency professional: Jayshree Bhandari
Interim Resolution
Professional: Jayshree Bhandari
Sunrise Towers, Flat 5L
134B Beliaghala Road
Kolkata 700015
E-mail: ip.bhandarijayshree@gmail.com
- and -
Diamond Prestige
Room No. 113, 41A
AJC Bose Road
Kolkata 700017
E-mail: cirp.epppl@gmail.com
Last date for
submission of claims: January 17, 2020
GEOTRIX BUILDING: CARE Assigns B+ Rating to INR0.50cr LT Loan
-------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Geotrix
Building Envelope Private Limited (GBEPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 0.50 CARE B+; Stable Assigned
Short term Bank
Facilities 19.50 CARE A4 Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of GBEPL is tempered by
Small scale of operations with declining total operating income,
thin and fluctuating profitability margins indicators, Working
capital intensive nature of operations, Customer concentration risk
and susceptibility to fluctuation in raw material prices, highly
fragmented and competitive industry along with large number of
players. The rating takes into account experienced promoter for
more than two decades in facade tools industry, financial risk
profile marked by improving and satisfactory capital structure and
weak debt coverage, moderate order book position and stable outlook
for façade tools industry.
Key Rating Sensitivity
Positive Factors
* Reduction in the debt levels to improve Total debt to gross cash
accruals below 3.50 times.
* Increase in the gross cash accruals by 30% on a sustained basis
Negative Factors
* Decline in profitability margin marked by PBILDT margin falling
below 200 bps
* Any major debt funded capex resulting to deterioration in capital
structure with overall gearing leveraging beyond 3.50
times.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operations with declining total operating income
The scale of operations stood relatively small and declining marked
by total operating income (TOI) of INR28.51 crore in FY19 as
compared to INR31.33 crore. Furthermore, the total operating income
has been declining during the review period FY17- 19. The total
operating income stood at INR53.77 crore in FY17 and then decreased
to INR31.33 crore in FY18 due to low number of orders executed as
the company diversified its customer base from existing customer to
many new customers. Further it reduced to INR28.51 crore in FY19 on
the back of lower undertaking and execution of orders. However, out
of the total operating income of FY19, Income from manufacturing
constituted the highest portion with 95% i.e INR27.06 crore
including the export sales of 5.5% and sale of services
constituting to 3% i.e INR0.73 crore and other incomes contributing
the remaining portion whereas in FY18 income from manufacturing
constituted to 20.45 crore, sale of services constituted to 9.11
crore and the remaining through other incomes. The company is
receiving regular orders from Larsen & Toubro limited, Prestige
Estates Projects Ltd, P&C Projects Pvt Ltd and others. Further in
8MFY20, the company has achieved TOI of INR24.89 crore with export
sales amounting to 45% during the current year.
Thin and fluctuating profitability margins
The profitability margins of the company remained thin and
fluctuating during the review period FY17-FY19. The PBILDT margin
has improved from 4.44% in FY17 to 5.27% in FY18 due to decrease in
the material costs on the back of low sales. Further it decreased
to 3.55% in FY19 due to decline in the TOI coupled with increase in
employee costs. The PAT margin also declined and stood at 0.47% in
FY19 as compared to 1.74% in FY18 and 0.96% in FY17 on the account
of low PBILDT margins.
Working capital intensive nature of operations
The company operates in working capital intensive nature of
business. GBEPL receives payment from its clientele in 60-90 days
and makes payment to its suppliers within 60-90 days. Apart, the
company maintains inventory of raw-material used in manufacturing
for a period of 30-60 days. However, In FY19 the average collection
period stood at 126 days from 149 days in FY18. The average
collection period stood at 126 days mainly consisting of retention
money. Also, half of retention money is received after completion
of project and the remaining half is received one year after the
completion of project thereby increasing the debtors. However, the
Average creditor’s period stood at 171 days backed by Letter of
credit and the outstanding as of March 31, 2019 was INR2.82 crore.
Due to the above reason, the operating cycle has increased from 32
days in FY18 to 52 days in FY19. To bridge the gap between the
receivable and payables, the company is dependent on working
capital bank borrowings. Hence the average utilization of the
working capital facility was 80-85% for the last twelve months
ended November, 2019.
Customer concentration risk and susceptibility to fluctuation in
raw material prices
The client base of the company is concentrated since GBEPL
generating 85%-90% majority of its income from 3-4 major customers.
Further, the major orders are received from Larsen & Toubro
limited, Prestige Estates Projects Ltd and P&C Projects Pvt Ltd.
Also it exports its products to other countries namely Sri Lanka
i.e Capitol Towers Ltd (Project: Capitol Twin Peaks), Colombo.
However, the company also undertakes subcontracting from other
players. This makes it dependent on opportunities with the existing
clients which is saddled with increased execution challenges.
Moreover, the company being a small player depends more on its
relations with existing clients. The basic input materials for
execution of contracts are Aluminum, glass and steel and prices of
these are volatile. Hence, the operating margin of the company is
exposed to any sudden spurt in the input material prices along with
increase in labour prices being in labour intensive industry.
Highly fragmented and competitive industry with large number of
players
The company is operating in highly competitive and fragmented
industry. It witnesses intense competition from largely unorganized
players as the projects are tender-based and the revenues are
dependent on the company’s ability to bid successfully for these
tenders. This fragmented and highly competitive industry results
into price competition thereby affecting the profitability margins
of the company’s operating in the industry.
Key rating strengths
Experienced promoter for more than two decades in Façade tools
industry
Geotrix Building Envelope private limited was incorporated in 2011,
hence has the track record of eight years. Also, Mr. Selvam
Ramanathan, aged 49 years, managing director of the company has the
experience of more than two decades in façade industry. Also, the
other director Mr. Khalid Mohsin also fetches an experience of 25
years in façade tools industry. The directors are actively
involved in day to day operations of the company. Due to long term
presence in the market, the promoters have established relations
with customer and suppliers which enable the company to get
repeated orders from existing customers and addition of new
customers. The major orders are received from Larsen & Toubro
limited, Prestige Estates Projects Ltd, P&C Projects Pvt Ltd. Also
it exports its products to other countries namely Sri Lanka i.e
Capitol Towers Ltd (Project: Capitol Twin Peaks), Colombo. However,
the company also undertakes subcontracting works from other
players.
Financial risk profile marked by satisfactory capital structure and
weak debt coverage indicators
The capital structure of the company marked by debt equity ratio
and overall gearing remained satisfactory during review period. The
debt equity ratio of the company remained nil as the company
doesn’t possess any long term debt as on March 31, 2019. Also,
the overall gearing ratio of the company remained improving during
the review period. The overall gearing ratio including acceptances
and creditors on LC improved from 3.78x as on March 31st 2017 to
3.20x as on March 31st 2018 on the back of repayment of term loans
and unsecured loans from directors besides LC limit availed by the
company. Further, it improved to 2.23x as on March 31, 2019 on the
back of lower utilization of LC backed creditors thereby decreasing
the total debt levels during FY19. Also, the overall gearing
excluding LC stood at 0.66x as on March 31, 2019 deteriorating from
0.30x as on March 31, 2018 due to unsecured loans from director.
The debt coverage indicators remained satisfactory during review
period. Total debt/GCA improved from 5.18x in FY17 to 4.70x in FY18
due to decrease in the total debt levels on the back of repayments.
However, total debt/GCA deteriorated significantly to 8.20x in FY19
due to decrease in gross cash accruals and increased total debt
levels during FY19. Furthermore, Interest coverage ratio improved
from 2.92x in FY17 to 6.94x in FY18 due to decrease in Interest
expenses. Further, interest coverage ratio deteriorated to 4.59x in
FY19 due to decrease in PBILDT in absolute terms due to decreased
turnover.
Moderate order book position
Till December 15, 2019, the order book position of the company
stood at INR113.82 crore which is 3.99 times of TOI in FY19 which
is expected to be completed by August 2020 showing medium term
revenue visibility. Also, there are no price escalation clauses in
majority of orders undertaken and also the orders are undertaken
considering the material costs included in it.
Stable outlook of façade tools industry
The Indian façade and fenestration industry is directly linked to
the construction and real-estate industry’s performance. The
Indian real estate market size is expected to reach USD180 billion
by 2020. The housing sector alone contributes 5-6 per cent to the
country’s Gross Domestic Product (GDP). The growth of this sector
is well complemented by the growth of the corporate environment and
the demand for office space as well as urban and semi-urban
accommodations. Indian façade and fenestration industry is
directly linked to the construction industry’s performance. The
slowdown in the construction industry in recent times have resulted
in a setback in the window and facade industry. The overall growth
is around 20 per cent annually. But this is just for the interim.
The global facades market size is expected to reach USD 339.46
billion (Rs. 1.7 lakh crore) by 2024.
Liquidity Analysis- stretched
Liquidity: Stretched - Liquidity is marked by highly utilized bank
limits 90% and modest cash balance of INR4.01 Crore as on March 31,
2019. Further, current ratio stood below unity at 0.87x as on March
31, 2019.
Geotrix Building Envelope Private Limited (GBEPL) was established
in April, 2011 as a private limited company. The key directors
include Mr. Selvam Ramanatham as the managing director, Mr. Khalid
Mohsin as the other director and Mr. Sridhar as independent
director. GBEPL is engaged in designing and manufacturing of
Architectural Aluminum and Glass unitized curtain walls, ACP
cladding and Allied works including Installation. The managing
Director Mr. Selvam Ramanatham has 25 years of work experience in
the Façade industry and is engaged in daily operations. The Key
raw materials include Aluminium, glass, cement and other hardware
components which are procured from domestic market across the
country. The company caters its products domestically across the
country and also exports to other countries like Sri Lanka etc.
Also, the company is ISO 9001:2015 Certification from TUV Intercert
and has a capacity of manufacturing 10,000 sq. meters of panels per
month.
HARIOM INGOTS: Ind-Ra Raises Long Term Issuer Rating to 'BB+'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Hariom Ingots &
Power Private Limited's (HIPPL) Long-Term Issuer Rating to 'IND
BB+' from 'IND BB (ISSUER NOT COOPERATING)'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR270 mil. (increased from INR200 mil.) Fund-based-limits
upgraded with IND BB+/Stable rating;
-- INR50 mil. Non-fund-based limits withdrawn (paid in full); and
-- INR26.51 mil. Term loan due on September 2021 withdrawn (paid
in full).
KEY RATING DRIVERS
The upgrade reflects the growth in the company's revenue to
INR3,154.75 million in FY19 (FY18: INR2,351.51 million), driven
mainly by an increase in capacity utilization and a rise in the
prices of thermomechanical treatment (TMT) bars. However, the scale
of operations continues to be medium.
Liquidity Indicator- Stretched: HIPPL's average maximum use of its
fund-based limits was around 94% during the 12 months ended
December 2019. The company's cash flow from operations turned
positive at INR10.87 million in FY19 (FY18: negative INR4.04
million) due to an improvement in the working capital cycle to 30
days (39 days). The working capital cycle improved due to timely
realizations from debtors. HIPPL's cash and cash equivalents
amounted to INR11.28 million at FYE19 (FYE18: INR11.99 million).
The ratings reflect the company's modest EBITDA margins owing to
the highly fragmented and competitive nature of the industry.
Furthermore, the company's profitability is vulnerable to
volatility in raw material prices. The margins fell to 3.52% in
FY19 (FY18: 4.51%) due to an increase in raw material costs.
HIPPL's return on capital employed was 10.56% in FY19 (FY18:
10.73%).
The rating factor in SJNS's moderate credit metrics due to the
modest EBITDA margins. The metrics improved in FY19 owing to the
increase in the absolute EBITDA to INR111.38 million (FY18:
INR105.89 million). The net financial leverage (total adjusted net
debt / operating EBITDAR) was 3.57x in FY19 (FY18: 3.64x) and gross
interest coverage (operating EBITDA/gross interest expense) was
2.72x (2.58x).
The ratings, however, are supported by HIPPL's promoters'
experience of two decades in the steel industry.
RATING SENSITIVITIES
Negative: A decline in the revenue, leading to deterioration in the
credit metrics and liquidity position, leading to interest coverage
falling below 2x, on a sustained basis, would lead to negative
rating action.
Positive: An improvement in the operating profitability along with
an improvement in the credit metrics and liquidity position, on a
sustained basis, could lead to positive rating action.
COMPANY PROFILE
Incorporated in 2004 in Bhilai, Chhattisgarh, HIPPL manufactures
mild steel ingots and thermo-mechanically-treated (TMT) bars. The
company's manufacturing unit has a production capacity of 70,000
metric tons per annum. It sells TMT bars under the name of Hariom
TMT. In 2016, HIPPL began the production of epoxy-coated bars,
which are more durable than the normal TMT bars; these are sold
under the brand name Hriom Epoxy Shield. The company is also
engaged in trading of steel products.
JAIN SARVODAYA: Ind-Ra Maintains D Bank Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Jain Sarvodaya
Vidhya Gyanpith Samiti's bank loan rating in the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The detailed rating action is:
-- INR1.041 bil. Term loans (long-term) due on June 30, 2026
maintained in the non-cooperating category with IND D (ISSUER
NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
January 17, 2018. Ind-Ra is unable to provide an update as the
agency does not have adequate information to review the rating.
COMPANY PROFILE
Registered under Madhya Pradesh Societies Registration Adhiniyam,
1973, Jain Sarvodaya Vidhya Gyanpith Samiti manages and operates a
300-bed hospital in Bhopal, Madhya Pradesh.
JET AIRWAYS: To Sell Netherlands Business to KLM
------------------------------------------------
Reuters reports that Jet Airways Ltd said it had agreed to sell its
assets in Netherlands to Dutch airline KLM.
If the deal is finalised, it will only involve a sale of part of
the company's business and not impact the shareholding pattern, Jet
said in a statement dated Jan. 16, Reuters relays. It did not
detail the assets held in Netherlands.
KLM, a part of Air France KLM, was once codeshare partners with the
defunct airline and in the wake of Jet's collapse had added flights
to India, Reuters says.
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.
JHARKHAND MEGA: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Jharkhand Mega Food Park Private Limited
Plot No. 1596, Road No. 7
Hawai Nagar, Muaza-Hinoo
P.S. Jagannathpur
Ranchi, Jharkhand 834003
Insolvency Commencement Date: January 10, 2020
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: July 7, 2020
(180 days from commencement)
Insolvency professional: Niraj Agrawal
Interim Resolution
Professional: Niraj Agrawal
C/o M/s H.K. Agrawal & Co.
125, Netaji Subhas Road
5th Floor, Room No. 52
Kolkata 700001
West Bengal
E-mail: niraj@execonservices.com
- and -
Apex Insolvency Professionals LLP
Central Plaza, 41 B.B. Ganguly Street
5th Floor, Room No. 5A
Kolkata 700012
E-mail: jmfp.cirp@gmail.com
Last date for
submission of claims: January 27, 2020
JRK INDUSTRIES: CARE Lowers Rating on INR11.96cr Loan to 'D'
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of JRK
Industries Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 11.96 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE B-; Stable;
on the basis of best available
information
Short term Bank 1.00 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE A4; on the
basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from JRK Industries to monitor
the rating(s) vide e-mail communications/letters dated January 2,
2020, November 14, 2019, November 7, 2019, November 6, 2019,
November 5, 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. Further, JRK Industries
Private Limited has not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. The rating on JRK
Industries Private Limited’s bank facilities will now be denoted
as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of delay in repayment of
interest and installment of term loan.
Detailed description of the key rating drivers
Key Rating Weaknesses
Delay in debt servicing owing to stretched liquidity position
There are ongoing delays in debt servicing owing to stretched
liquidity position.
Jaipur (Rajasthan) based JRK Industries Private Limited (JRKIPL)
was incorporated in 1997 by Mr. Bharat Kumar Poddar, Mr Radha
Krishna Jalan, Mr. Rajesh Kumar Jalan and their family members.
JRKIPL is engaged in the business of manufacturing and supplying of
steel wires, galvanized wires, binding wires and strip for the
armoring of land cables. It has installed manufacturing capacity of
32400 MT per annum for HB wire, Binding wire and GI wires as on
March 31, 2018.
KALYAN VAIJINATHRAO: CARE Cuts Rating on INR3.73cr Loan to D
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Kalyan Vaijinathrao Kale (KVK), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 3.73 CARE D Revised from CARE B+;
Facilities Stable
Detailed Rationale & Key Rating Drivers
The revision in the rating assigned to the bank facilities of KVK
factors delays in debt service obligations.
Rating Sensitivities
Positive factors
* Repayment of debt obligations on timely manner and demonstration
of default free track record of more than 90 days
Key Rating Weaknesses
Delay in servicing of debt obligations: There have been delays in
repayment of term loans and overdrawals in cash credit account for
more than 30 days. The delays were on account of poor
Liquidity position
Liquidity analysis: Poor
Liquidity is poor marked by lower accruals when compared to
repayment obligations. This has constrained the ability of the firm
to repay its debt obligations on a timely basis.
Established in 2016, Dr. Kalyan Viajinathrao Kale (KVK) is an
Aurangabad (Maharashtra) based firm promoted by Mr. Kalyan
Vaijinathrao Kale. The firmis in the process to set up a milk
processing and packaging unit for supply of processed milk and milk
based products such as ghee, paneer, curd and others.
M.P ENGINEERING: CARE Assigns B+ Rating to INR0.50cr LT Loan
------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of M.P
Engineering (MPE), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 0.50 CARE B+; Stable Assigned
Short-term Bank
Facilities 4.75 CARE A4 Assigned
Detailed Rationale, Key Rating Drivers
The rating assigned of bank facilities of MPE is primarily
constrained on account of its financial risk profile marked by
modest scale of operations with small order book position, moderate
profitability margins and stretched liquidity position. The
ratings, further continues to be constrained on account of
geographical and customer concentration of order book and high
competitive intensity in the government civil construction segment
and constitution as a partnership concern. The rating is however
favorable, on account of experienced partners and comfortable
solvency position.
Rating Sensitivities
Positive Factors
* Increase in scale of operation above INR25 crore on sustained
basis.
* Maintaining of profitability margins at same level.
* Increase in order book position with timely execution of the same
and timely receipt of payment from government
departments.
Negative Factors
* Deterioration in capital structure marked by overall gearing of
more than 1.5 times owing to debt funded project.
* Any restrictions imposed by government which adversely affects
the scale of operations of the firm.
* Deterioration of liquidity position owing to delay in payment
from government departments.
Detailed description of the key rating drivers
Key Rating Weakness
Modest Scale of Operations and constitution as a partnership
concern
MPE’s scale of operations remained modest marked by Total
Operating Income (TOI) in last three financial years during FY17 to
FY19 and the firm has reported TOI of INR16.44 crore in FY19 as
against INR15.27 crore in FY17. Further, till November 30, 2019,
MPE has achieved TOI of INR11.00 crore. however, MPE’s
constitution as a partnership concern restricts its overall
financial flexibility in terms of limited access to external funds
for any future expansion plans. There is inherent risk of
possibility of withdrawal of capital and dissolution of
the firm in case of death/insolvency of the partners.
Small order book position
As on November 30, 2019, MPE has small order book position of
INR6.14 crore which consist of 2 order which will be executed by
January 2020. The projects mainly comprise of construction of roads
and buildings. MPE mainly executes the project for Public Works
Department (PWD), M.P Police Housing and Infrastructure Development
Corporation Limited. The on-going projects of the firm are likely
to be executed within 12- 36 months, providing medium term revenue
visibility.
Moderate Profitability margins
The profitability margins of the firm stood moderate marked by
PBILDT and PAT margin of 5.97% and 3.81% respectively in FY19 as
against 7.16% and 4.14% respectively in FY18. During FY19, PBILDT
margin of the firm has dipped by 119 bps over FY18 mainly on
account of increase in cost of material consumed. Further, PAT
margin of firm has also declined by 33 bps in FY19 over FY18 owing
to decline in PBILDT margin. Furthermore, GCA level of the firm
stood at INR0.64 crore in FY19 declined by 5.96% in FY19 over FY18
owing to decline in PAT.
Geographical and customer concentration of order book
The client base of the firm is skewed towards government
departments in Madhya Pradesh with firm generating majority of its
income from this Madhya Pradesh Housing and Infrastructure
Development Corporation Limited Housing Board and PWD. Moreover,
the firm being a regional player and all the projects are executed
in Madhya Pradesh only, also reflects geographical concentration
risk.
High competitive intensity in the government civil construction
segment and vulnerability of margins to volatile raw material
prices
The construction industry is highly fragmented in nature with
presence of large number of unorganized players and a few large
organized players coupled with the tender driven nature of
construction contracts poses huge competition and puts pressure on
the profitability margins of the players. Further, as the firm
participates in tenders invited by government departments, high
competition and lower bargaining power restricts its profitability
margins.
Key Rating Strength
Experienced Partners
Mr. Romesh Gupta, Partner, has around a decade of experience in the
industry and look after the overall affairs of the firm. Further He
is assisted by his wife Mrs Ritu Gupta, who also has experience of
around one decade in the industry. Since present in the industry
more than a decade, the firm has established relations with
government departments and has successfully executed several
projects.
Comfortable solvency position
The capital structure of the firm stood comfortable marked by
overall gearing of 0.19 times as on March 31, 2019 however,
marginally deteriorated from 0.17 times as on March 31, 2018 owing
to higher utilization of working capital bank borrowing which was
further offset by profit accretion to reserves. Further, the debt
coverage indicators stood comfortable with total debt to GCA of
0.88 times as on March 31, 2019, however deteriorated from 0.59
times as on March 31, 2018 owing to increase in total debt and
decline in GCA level. Furthermore, interest coverage also stood
comfortable at 18.10 times in FY19 as against 6.04 in FY18.
Liquidity: Stretched
Liquidity position of the firm stood stretched marked by full
utilization of fund based limit during past 12 months ended
November 2019. However, the working capital cycle of the firm
remained comfortable at negative of 23 days owing to higher average
creditor’s period than average collection and inventory period.
Further, current ratio and quick ratio stood comfortable at 2.01
times and 1.88 times respectively as on March 31, 2019. The cash
flow from operating activities stood at INR0.20 crore in FY19 as
against negative of INR0.17 crore in FY18 owing to lower working
capital gap. Furthermore, MPE had low cash and bank balance of
INR0.23 crore as on March 31, 2019 and projected GCA of INR0.69
crore in FY20 as against no long term debt repayment.
Umaria (Madhya Pradesh) based M.P Engineering (MPE) was formed in
2009 as a partnership firm by Mr Romesh Gupta and Mr Ambrish Kumar
Tripathi. Later, in November 2013, Mr Ambrish Kumar retired from
the firm and Mrs. Ritu Gupta entered into the firm. MPE is engaged
in Government civil construction for construction of roads and
buildings. The firm mainly executes civil construction contract of
Public Works Department (PWD), M.P Police Housing and
Infrastructure Development Corporation Limited.
MANGALAYATAN UNIVERSITY: Ind-Ra Keeps B+ Rating in Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Mangalayatan
University's bank facilities in the non-cooperating category. The
issuer did not participate in the rating exercise despite
continuous requests and follow-ups by the agency. Therefore,
investors and other users are advised to take appropriate caution
while using these ratings. The rating will continue to appear as
'IND B+ (ISSUER NOT COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR54.79 mil. Term loan I due on March 2020 maintained in non-
cooperating category with IND B+ (ISSUER NOT COOPERATING)
rating; and
-- INR260.46 mil. Term loan II due on July 2024 maintained in
non-cooperating category with IND B+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
January 4, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Mangalayatan University offers undergraduate and postgraduate
courses in engineering, management, architecture, law, humanities,
and others.
MATASHREE SNACKS: Insolvency Resolution Process Case Summary
------------------------------------------------------------
Debtor: Matashree Snacks Private Limited
Village-South Kumarkhali (Karbala)
Rajpur Sonarpur Municipality
Narendrapur, Kolkata 700103
Insolvency Commencement Date: January 2, 2020
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: June 30, 2020
Insolvency professional: Mahesh Chand Gupta
Interim Resolution
Professional: Mahesh Chand Gupta
FE-202, Salt Lake City
1st Floor, Sector-III
Kolkata 700106
E-mail: mcgupta90@gmail.com
- and -
11/1, B.B. Ganguly Street
1st floor, Room No. 1
Kolkata 700012
Above Thakkar Opticals
Near Lalbazar Police Head Quarters
E-mail: cirp.matashree@gmail.com
Last date for
submission of claims: January 16, 2020
O K ENTERPRISE: CARE Withdraws B+/A4 Rating on Bank Facilities
--------------------------------------------------------------
CARE has reaffirmed and withdrawn the outstanding rating of 'CARE
B+; Stable/A4; issuer Not Cooperating' assigned to the bank
facilities of Ok Enterprise with immediate effect. The above action
has been taken at the request of Ok Enterprise and ‘No Objection
Certificate’ received from the bank that has extended the
facilities rated by CARE.
Detailed description of the key rating drivers
Key Rating Weaknesses
Constitution as a proprietorship entity
O K Enterprise being a proprietorship entity is exposed to inherent
risk of the proprietor’s capital being withdrawn at time of
personal contingency and entity being dissolved upon the
death/insolvency of the proprietor. Furthermore, proprietorship
entities have restricted access to external borrowing as credit
worthiness of proprietor would be the key factors affecting credit
decision for the lenders. Small scale of operation with moderate
profitability margin O K Enterprise is a small player in
construction industry with a PAT of INR3.08 crore (Rs.1.64 crore in
FY18) on total operating income of INR37.37 crore (Rs.14.94 crore
in FY18) in FY19. Net worth of the entity was INR6.99 crore as on
March 31, 2019. The small size restricts the financial flexibility
of the entity in terms of stress and deprives it from benefits of
economies of scale. Due to its small scale of operations, the
absolute profit levels of the entity also remained low. The
profitability margins remained moderate marked by PBILDT and PAT
margins of 9.34% (FY18: 12.15%) and 8.25% (FY18: 10.95%),
respectively, in FY19.
Risk associated with participating in tenders and intense
competition in the industry
The entity has to bid for the contracts based on tenders opened by
the various governments and public sector units. Upon successful
technical evaluation of various bidders, the lowest bid is awarded
the contract. The entity receives projects which majorly are of a
short to medium tenure (i.e. to be completed within maximum period
of one to two years). Furthermore, orders are generally tender
driven floated by government units indicating a risk of non-receipt
of contract in a competitive industry. The outlook of construction
sector appears challenging in view of slow execution of the
existing order book in view of hindrances related to land
acquisition, obtaining requisite clearances, labour shortage and
liquidity issues with the clients, etc. Additionally, the sector is
plagued with elongated working capital cycle leading to increase in
debt level of construction companies.
Working capital intensive nature of business
The operations of the entity remained working capital intensive as
the entity executes orders mainly for public sector units and
government departments. Due to its working capital intensive nature
of operations, the entity stretches its payments to its suppliers.
Accordingly, the average utilisation of working capital was high at
around 70% during last 12 months ended June, 2018.
Volatility associated with fluctuations in input prices
The major input materials for the entity are cement, steel
structures, iron structures, angles, bricks, sand, rods etc., the
prices of which are volatile. Further the orders executed by the
entity contain price escalation clause on some of the orders and
thus the entity mitigates price volatility of the input materials
to some extent. This apart, any increase in labour prices will also
impact its profitability being present in a highly labour intensive
industry.
Key Rating Strengths
Experienced management & satisfactory track record of operations
O K Enterprise started its business from April 1989 and thus has
satisfactory track record of operations. Mr. Atulananda Barman
(Proprietor) who has around 28 years of experience respectively in
civil construction industry looks after the day to day operations
of the entity. He is also supported by other technical and
non-technical professionals who are having long experience in this
industry.
Satisfactory leverage ratios and debt coverage indicators
Capital structure of the entity remained satisfactory as marked by
overall gearing ratio of 0.75x (0.43x as on March 31, 2018) as on
March 31, 2019. Furthermore, long term debt equity ratio was at
0.05x as on March 31, 2019. Moreover, the debt coverage indicators
also remained comfortable as marked by total debt to GCA ratio of
1.67x (1.22x in FY18) in FY19. Moreover, interest coverage ratio
remained comfortable at 9.45x (14.41 in FY18) in FY19.
O K Enterprise was established in April 1989 with an objective to
enter into undertaking electrical and other civil construction
business. It is a class-1 category of contractor. Since its
inception, the entity has been engaged in carrying out electrical
work contract which includes executing turnkey contracts for power
department, supply, erection & commissioning of electrical
equipment. Mr. Atulananda Barman (Proprietor) who has more than two
decades of experience respectively in civil construction industry
looks after the day to day operations of the entity. He is also
supported by other technical and non-technical professionals who
are having long experience in this industry.
PANKAJ ISPAT: CARE Maintains B- Rating in Not Cooperating
---------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Pankaj
Ispat Limited(PIL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 15.00 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Based on best
Available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from Pankaj Ispat Limited(PIL) to
monitor the rating vide e-mail communications dated November 19,
2019, December 5, 2019, December 9, 2019 and January 6, 2020 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. Further, Pankaj Ispat Limited has not paid
the surveillance fees for the rating exercise as agreed to in its
Rating Agreement. The rating on Pankaj Ispat Limited’s bank
facilities will continue to be denoted as CARE B-; 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 bank facilities of Pankaj Ispat Limited
remain constrained by moderate capacity utilization, Lack of
backward integration vis-à-vis volatility in prices, fragmented
industry leading to intense competition, Moderate financial
performance in FY19 (refers to the period April 1 to March 31) and
Working capital intensive nature of operations. The ratings,
however, derive strength from long experience of the promoters in
steel industry and strategic location of the plant.
Going forward, the ability of the company to improve the capacity
utilization & profitability margin and efficient management of
working capital would remain the key rating sensitivities.
Detailed description of the key rating drivers
At the time of last rating on July 31, 2018 the following were the
rating strengths and weaknesses (updated for the information
available from MCA website):
Key Rating Weaknesses
Moderate Capacity Utilization
Capacity utilization of the company though remained moderate,
deteriorated in FY14 vis-à-vis FY13. The deterioration was mainly
on account of closure of the operations in the factory since June
2013 due to raid conducted by Steel Authority of India (SAIL) along
with the local police in April 2013. However in FY15, the capacity
utilisation improved. The effective capacity utilisation of TMT
Bars and M S Ingots stood at 79.33% and 96.10% respectively in FY15
vis-à-vis 57.98% & 69.26% in FY14.
Lack of backward integration vis-à-vis volatility in prices
Raw material cost is the single largest cost component for PIL.
With company lacking backward integration for its primary raw
materials (such as coal, sponge iron), it has to resort to open
market purchases at the prevailing market prices. Hence, any
adverse movement in raw material price without any corresponding
movement in finished good price might affect the performance of the
company. Though, the prices of finished goods generally move in
tandem with that of raw materials; but with a time lag which
exposes the company to risk arising on account of volatility in the
raw material prices. Further, the company does not have the captive
power plant resulting in dependence on the grid so as to meet its
power requirement.
Fragmented industry leading to intense competition
PIL is engaged in the manufacturing of TMT bars and ingots, the
industry of which is characterized by high fragmentation mainly due
to presence of a large number of unorganized players. The company
markets its products in Central India, which is a hub of steel
plants, on account of proximity to the mineral rich states of
Chhattisgarh. Low level of product differentiation further
intensifies the competition, leading to lower bargaining power
vis-a-vis the customers.
Moderate financial performance
The total operating income of the company increased in FY17 and
stood at INR99.58 crore in FY17 vis-à-vis INR88.52 crore in FY16.
The PBILDT level and margin of the company deteriorated in FY17
vis-à-vis FY16 on account of higher material cost. Further, the
PAT level and margin of the company also deteriorated in FY17 on
account of higher interest cost. Total operating income increased
from INR115.24 crore in FY18 to INR157.84 crore in FY19. The PBILDT
margin improved from 4.11% in FY18 to 4.65% in FY19. Overall
gearing improved from 1.54x in FY18 to 1.24x in FY19.
Working capital intensive nature of operations
PIL’s operation is working capital intensive in nature as it has
to hold inventory of more than one month of raw materials so as to
ensure uninterrupted production and also stocks finished goods
inventory which is used for trading. Further as a result of intense
competition in the industry, the company has to provide extended
credit days to its customers. On the other hand creditors have to
be paid within a very short span of time as a result of which the
liquidity remains stretched. Hence, the company has to rely upon
the bank borrowings to fund its working capital requirement.
Key Rating Strengths
Long track record of the company
PIL, belonging to Agrawal family of Chhattisgarh, is promoted by
Mr. Lalit Agrawal and Mr. Pankaj Agrawal. The promoters of the
company have an experience of a decade as a manufacturer of steel
products. Mr Lalit Agrawal earlier was into trading of steel
products and has an overall experience of more than three decades
in the steel industry.
Strategic location of manufacturing unit
The company’s unit is located at mineral rich state of Raipur,
Chhattisgarh. The company avails operational advantages from its
strategic location due to proximity to source of raw-materials
(sponge iron, coal). Sponge Iron and coal are procured from local
players. Further, its customers are also located in and around
Raipur. Therefore, proximity to the raw materials and customers
leads to substantial savings in the freight cost.
Pankaj Ispat Limited (PIL) was originally set up in 2006 as a
Private Limited company (Pankaj Ispat Private Limited) which was
reconstituted as a public limited company on October 5, 2011. PIL
commenced its production in 2007-08. The company has a capacity of
24,000 MTPA each of MS ingots and TMT Bar. The manufacturing
facility of the company is located in Gogaon Industrial Area,
Raipur.
PARVIN EXIM: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: Parvin Exim Private Limited
Office No. 507, Block-A
Safal Solitaire Park
Nr Divyabhaskar Press
S.G. Highway
Makarba, Ahmedabad
Gujarat 380051
Insolvency Commencement Date: January 1, 2020
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: June 28, 2020
Insolvency professional: Mr. Sanjay Gupta
Interim Resolution
Professional: Mr. Sanjay Gupta
AAA Insolvency Professionals LLP
E-10A, Kailash Colony
Greater Kailash-I
New Delhi
Delhi 110048
E-mail: sanjaygupta@aaainsolvency.com
parvinexim@aaainsolvency.com
Last date for
submission of claims: January 24, 2020
PREMIER DISTILLERIES: Insolvency Resolution Process Case Summary
----------------------------------------------------------------
Debtor: Premier Distilleries Private Limited
377, Anna Salai
Pondicherry 605001
Insolvency Commencement Date: January 8, 2020
Court: National Company Law Tribunal, Division Bench-I, Chennai
Estimated date of closure of
insolvency resolution process: July 6, 2020
(180 days from commencement)
Insolvency professional: P. Sriram
Interim Resolution
Professional: P. Sriram
No. 10/17, Anandam Colony
South Canal Bank Road
Mandaveli, Chennai 600028
E-mail: srirampcs@gmail.com
Last date for
submission of claims: January 24, 2020
R&M INTERNATIONAL: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: R&M International Private Limited
A-3027, Oberoi Garden Estate
Off Saki Vihar Road
Chandivali, Andheri East
Mumbai 400072
Insolvency Commencement Date: January 7, 2020
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: July 5, 2020
(180 days from commencement)
Insolvency professional: Miss Nayana Premji Savala
Interim Resolution
Professional: Miss Nayana Premji Savala
1/101-A, Vishal Susheel CHS
Nariman Road, Vile Parle East
Mumbai 400057
E-mail: nalinisavala@gmail.com
Last date for
submission of claims: January 24, 2020
RADHARANI HIMGHAR: CARE Reaffirms B+ Rating on INR7.63cr Loan
-------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Radharani Himghar Private Limited (RHPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 7.63 CARE B+; Stable Reaffirmed
Short term Bank
Facilities 0.30 CARE A4 Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of RHPL continue to
remain constrained by small scale of operations, regulated nature
of business, seasonality of business with susceptibility to
vagaries of nature, risk of delinquency in loans extended to
farmers, competition from other local players and moderately
leveraged capital structure. The ratings, however, continue to
derive strength from experienced promoters with long track record
of operations, healthy profitability margins with satisfactory debt
coverage indicators and its close proximity to potato growing
area.
Rating Sensitivities
Positive factors
* Increase in turnover beyond INR15.00 crore and cash accruals
beyond INR1.50 crore on a sustained basis.
* Improvement in overall gearing to below 1.00x on a long term
basis with reduced reliance on external borrowings to fund working
capital requirements.
Negative factors
* Any sizeable decline in total operating income (TOI lower than
INR2.00 crore) on a sustained basis.
* Deterioration in overall gearing beyond 2.50x with increased
reliance on external borrowings to fund working capital
requirements on a sustained basis.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operations: RHPL is a small player in the cold
storage industry marked by total operating income of INR3.79 crore
(Rs.3.49 crore in FY18) with a PAT of INR0.07 crore (Rs.0.08 crore
in FY18) in FY19. Moreover, the net worth base and total capital
employed was low at INR2.19 crore and INR6.65 crore, respectively,
as on March 31, 2019. During 8MFY20, the company has clocked a
turnover of INR3.10 crore. 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:
RHPL’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
perceivable 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 from December to January.
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, RHPL 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.
Moderate leveraged capital structure: The capital structure though
improved as on March 31, 2019 on account of repayment of term loans
and accumulation of profit into reserves but the same remained
moderately leveraged marked by overall gearing ratio of 2.04x
(FY17:2.84x) as on March 31, 2019.
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: Mr.
Nemai Roy and Mr. Sanat Kumar Roy are having over three decades of
experience in the cold storage industry and they look after the
overall management of the company. Ms. Rituparna Roy has also more
than a decade of experience in the same line of business. They are
further supported by a team of experienced professionals.
Furthermore, RHPL commenced commercial operation since June 1987
and accordingly has a long track record of operations.
Healthy profitability margins with satisfactory debt coverage
indicators: The profitability margin of the company was healthy
marked by PBILDT margin of 29.38% (FY18: 34.43%) and PAT margin of
1.74% (FY18: 2.33%) in FY19. Marginal deterioration in PBILDT
margin and PAT margin was due to high cost of operations during
FY19. The debt coverage indicators remained satisfactory marked by
interest coverage of 1.88x (FY18: 2.00x) and total debt to GCA of
9.28x (FY18: 10.81x) in FY19.
Close proximity to potato growing area: RHPL’s plant is located
in the potato growing belt of the Bankura district of West Bengal,
having a large network of potato growers along with potato traders,
thereby making it suitable for the farmers and traders in terms of
transportation and connectivity and ensures company’s higher
level of capacity utilization.
Liquidity:
Liquidity: Stretched - Liquidity is marked by tightly matched
accruals to repayment obligations, highly utilized bank limits and
modest cash balance. The current ratio stood at 0.96x as on March
31, 2019. The cash and bank balance stood modest at INR0.34 crore
as on March 31, 2019. The company has reported gross cash accruals
of INR0.48 crore during FY19 as against repayment obligations of
INR0.46 crore for FY20. However, the average utilisation of the
bank limits was around 56% during last 12 months ended on November
30, 2019.
Radharani Himghar Private Limited (RHPL) was incorporated in June
1987 to set up a cold storage facility and its registered office is
situated at Hooghly district of West Bengal. Since its inception,
the company has been engaged in the business of providing cold
storage facility primarily for potatoes to farmers and traders with
a storage capacity of 25,660 metric tonnes in Bankura district of
West Bengal. Besides providing cold storage facility, the company
also provides interest bearing advances to farmers for their
agricultural activities against the receipts of potato stored.
RANGOLI WOOD: CARE Maintains 'B+' Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Rangoli
Wood Private Limited (RWPL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 6.25 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING; Based on best
Available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from RWPL to monitor the ratings
vide e-mail communications/letters dated September 5, 2019,
September 30, 2019, October 24, 2019, December 9, 2019, December
25, 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 best
available information which however, in CARE’s opinion is not
sufficient to arrive at a fair rating. The ratings on RWPL’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 ratings.
The ratings assigned to the bank facilities of RWPL takes into
account its small scale of operations with modest profitability,
moderate capital structure and debt coverage indicators as well as
stretched liquidity position during FY19 (FY; refers to the period
April 1 to March 31). The ratings, further, continue to remain
constrained due to susceptibility of profit margins to volatility
in raw material prices and foreign exchange fluctuation risk
coupled with presence in highly fragmented and competitive wood
industry. The ratings, however, continue to derive strength from
the vast experience of RWPL’s promoters along with location
advantage.
Detailed description of the key rating drivers
At the time of last rating on November 27, 2018 the following were
the rating strengths and weaknesses (Updated for the information
from publically available information)
Detailed description of key rating drivers
Key Rating Weaknesses
Small scale of operations and modest profitability
The scale of operations of RWPL marked by Total Operating Income
(TOI) declined by 19.13% on y-o-y basis and remained small at
INR9.49 crore during FY19. However, despite decrease in TOI,
RWPL’s PBILDT margin increased by 242 bps and remained moderate
at 12.24% during FY19. PAT margin of the company continued to
remain low at 0.41% during FY19 as against 0.01% in FY18.
Moderate capital structure and debt coverage indicators
The capital structure of RWPL continued to remain moderate marked
by an overall gearing ratio of 2.11 times as on March 31, 2019
(2.21 times as on March 31, 2018) owing to decrease in the total
debt level. The debt coverage indicators of RWPL continued to
remain moderate marked by total debt to gross cash accruals (TDGCA)
of 10.21 years and interest coverage ratio remained at 2.05 times
in FY19.
Susceptibility of profit margins to volatility in raw material
prices and foreign exchange fluctuation risk coupled with presence
in highly fragmented and competitive wood industry RWPL is engaged
in the business of manufacturing plywood, block boards and flush
doors for which it imports wood from countries like Indonesia,
Malaysia, Vietnam and China for manufacturing its products. Also,
timber prices are volatile in nature. Hence, the profitability of
the company is susceptible to the fluctuations in timber prices and
any adverse fluctuation in the raw material price is likely to
impact the profit margins of the company. Hence, ability of the
company to pass on fluctuations in the raw material price to its
customers will remain crucial. Furthermore, profitability is
exposed to foreign exchange fluctuation risk in absence of any
hedging policy. Moreover, wood industry is highly unorganized and
witnesses intense competition due to low entry barriers. Hence the
profit margins of the company remain under pressure.
Key Rating Strengths
Vast experience of promoters in the same line of business
The key promoter Mr. Kantilal Devrajbhai Patel has an experience of
around 17 years in the business of manufacturing and trading in
laminates and related products from imported timber. Mr.
Dineshkumar Bhagvanjibhai Patel has an experience of around 18
years in the same line of business. The long standing industry
experience of the promoters and relationship with the suppliers
provides an edge to RWPL for easy availability of main raw material
i.e. timber and establishing the customer base.
Location advantage
The manufacturing facility of RWPL is located in Chopadava,
Gandhidham-Gujarat. Gandhidham is located in close proximity to
Kandla port which has one of the largest stock-yard of imported
timber in Asia and hence has become a hub for timber and wood
processing based units. This results in benefits of easy
availability of raw material, lower logistics cost and labour.
Liquidity Analysis: Stretched
Liquidity position of RWPL remained stretched as marked by moderate
current ratio of 1.15 times as on March 31, 2019 while the
operating cycle remained elongated at 198 days. Unencumbered cash
and bank balance remained at INR0.02 crore as on March 31, 2019,
while net cash flow from operations remained at INR1.14 crore
during FY19.
Morbi-based (Gujarat) RWPL was incorporated in June, 2013 as a
Private Limited Company by the Patel and Pandya families. Mr.
Dineshkumar Bhagvanjibhai Patel, Mr. Kantilal Devrajbhai Patel and
Mr. Bhavnesh Dinubhai Pandya are the directors in RWPL. The Company
is into business of manufacturing different composition, size,
grades and thickness of plywood, block boards, flush doors and core
veneer which find application in the furniture industry. The
company operates from its manufacturing facilities located at
Chopdava, Gandhidham- Gujarat with an installed capacity of 10 Lakh
Square Meters Per Annum (LSMPA) as on March 31, 2018. RWPL imports
its primary raw materials from countries like Indonesia, Malaysia,
Vietnam and China while it purchases other materials from local
market and sells the finished goods directly or via. dealers to
various states in India.
RELIANCE COMM: Creditors' Vote on Plan Delayed by Chinese New Year
------------------------------------------------------------------
Livemint.com reports that the upcoming celebrations for the Chinese
New Year, that begin on January 25, have stalled a final decision
on the insolvency resolution of Anil Ambani's Reliance
Communications (RCom). RCom's Chinese lenders, who hold about a
third of the company's bad debt, will be unavailable to vote while
the festivities are on.
To accommodate these lenders, the CoC is now extending by 2 weeks
the deadline for RCom's insolvency proceedings, the report says.
A member of RCom's committee of creditors (CoC) told Mint, on
condition of anonymity, that the preferred resolution plan was
originally scheduled to be put to vote on January 30, so that a
winning bidder could be decided before February 3, the deadline for
the 270-day Insolvency and Bankruptcy Code (IBC) process for the
company.
"China starts to shut down from January 23 onwards to about
February 4," the CoC member told Mint. "So we won't be able to meet
the 270-day deadline. We will need 2 more weeks. The Chinese
lenders account for 32% of the overall financial creditors."
Chinese lenders to RCom include China Development Bank, Exim Bank
of China and Industrial & Commercial Bank of China, to whom RCom
owes about INR15,053 crore of its total INR49,233 crore in
outstanding dues.
Mint had reported on January 15 that the creditors' group of
bankrupt RCom appears split down the middle on how to go about the
resolution process. While domestic banks have leaned in favor of
selling the assets in parts to Reliance Jio and UV Asset
Reconstruction Co. (ARC) to quickly complete the resolution process
and meet the insolvency deadline, foreign lenders want to negotiate
harder with bidders to recover a higher value from the sale of
assets.
Over the last five days, the CoC has been working closely with
resolution applicants to improve the terms of their offers, the
report says. So far, Mukesh Ambani's Reliance Jio has made the
highest offer of INR3720 crore for Reliance Infratel, which houses
RCom's tower and optic fibre assets. Jio has also made a
conditional offer of INR800 crore for Reliance Infratel's holding
in Dhirubhai Ambani Knowledge City (DAKC), subject to the sale of
the property going through. Delhi-based UV Asset Reconstruction
Company (UVARC) has offered staggered payments of INR16,000 crore
for the spectrum, real estate (including DAKC), media convergence
nodes, enterprise, and data centre businesses of RCom. Both
resolution applicants marginally improved on their original offers
after last week's meetings with the CoC, the report notes.
Through last week's discussions, the CoC saw deep rifts emerging on
how to resolve RCom bankruptcy proceedings. A second member of the
CoC, that Mint spoke with, said they would prefer pushing
resolution applicants to improve further on their offers.
RELIANCE NAVAL: NCLT Admits Firm for Insolvency
-----------------------------------------------
The Hindu reports that the Ahmedabad bench of the National Company
Law Tribunal (NCLT) has admitted an application against Reliance
Naval and Engineering Limited (R-Naval) for insolvency.
"The application by IDBI Bank Ltd. for a claim of INR1,159.43 crore
before the NCLT Ahmedabad bench has been admitted," R-Naval said in
a filing with the exchanges.
This is the second Reliance Group firm to go for insolvency after
Reliance Communications, the Hindu discloses. The company had total
outstanding dues of INR9,534 crore as on December 31, 2019. It
reported a net loss of INR340 crore on net sales of INR20.5 crore
for the second quarter ended September 30, 2019.
The promoters own 29.84% stake in the company; 61.94% is held by
non-institutional investors, while 7.93% stake is held by insurance
companies.
Anil Ambani had bought over Pipavav Defence, a struggling firm in
2015, and renamed it Reliance Naval, hoping to bag big defence
contracts, especially to make submarines, the Hindu notes.
Reliance Naval and Engineering Limited (NSE:RDEL) designs and
constructs warships and submarines. The Company offers offshore
patrol and research vessels, frigates, corvettes, aircraft
carriers, and destroyers, as well as piping, propeller, trilshaft,
rudder, coating, and machinery repair and maintenance services.
Reliance Naval and Engineering serves oil and gas sectors
worldwide.
SIGMA C: CARE Maintains 'D' Rating in Not Cooperating
-----------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sigma C
Infrastructure Private Limited (SCIPL) continues to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 32.00 CARE D; Stable; ISSUER NOT
Facilities COOPERATING; Based on best
Available information
Detailed Rationale and key rating drivers
CARE had, vide its press release dated July 30, 2018 placed the
ratings of SCIPL under the 'issuer non-cooperating' category as
SCIPL had failed to provide information for monitoring of the
rating.
SCIPL continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a letter
dated September 27, 2019. In line with the extant SEBI guidelines,
CARE has reviewed the rating on the basis of the best available
information which however, in CARE's opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on July 30, 2018, the following were the
ratings strengths and weaknesses (updated for the information
available from Registrar of Companies).
Key Rating Weaknesses
Ongoing delays in debt servicing
There are ongoing delays in debt servicing of bank facilities.
Small scale of operations:
SCIPL's operates at a relatively small scale with total operating
income of around INR17.76 crore in FY18. Relatively small scale of
operation restricts the financial flexibility of SCIPL in time of
stress and hinders the benefits of economies of scale.
Working capital intensive nature operations
The operations of the company are working capital intensive in
nature marked by operating cycle of 314 days in FY18. The operating
cycle was high mainly due to high collection and inventory period
of 311 days and 70 days respectively in FY18.
Weak financial performance
The financial performance of the company continued to remain weak
with total operating income of INR17.76 crore in FY18 vis-à-vis
INR42.99 crore in FY17. The company reported loss at PBILDT level
in FY17 and FY18.
High concentration of water infrastructure projects
The order book (as on November 30, 2015) is skewed towards water
infrastructure projects to the extent of 69%.
Intense competition
The construction industry is characterized by large number of small
and medium-sized players working at the regional level and orders
are generally tender driven.
Key Rating Strengths
Experience of the promoters
Mr. A. K. Bhasin, the promoter of SCIPL, is highly experienced with
more than 50 years of experience in the power industry.
SCIPL was established as a sole proprietorship firm, Sigma
Construction, in 1993 by Mr A K Bhasin (Chairman) and the same was
later reconstituted as a private limited company in September 2012,
whereby its name was changed to its current name. SCIPL is engaged
in the execution of turnkey contracts for the power industry
whereby it undertakes supply, erection, testing, and installation
of equipment, auxiliaries, and motors for generating stations and
switch yards and also undertakes the civil works. The company is
also involved into underground cable laying and jointing works,
installation of third rail and traction substations for the Metro
Railways and diversified into water distribution and drainage
projects in Assam since FY14. The company has been executing power
projects across various locations in India and has been carrying
out construction work primarily for various government entities.
The power sector continued to remain the core area of operation for
SCIPL accounting for about 85% of its total revenue in FY15.
SILK WOVEN: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: Silk Woven Sack Private Limited
Survey No. 121
Rajkot Morbi Highway
Opp Khodiyar Dham
Chhattar, Tal-tankara Bedi Rajkot
Gj 363650
IN
Insolvency Commencement Date: January 6, 2020
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: July 4, 2020
(180 days from commencement)
Insolvency professional: Mr. Anish B. Shah
Interim Resolution
Professional: Mr. Anish B. Shah
D/413, Shiromani Complex
Opp. Ocean Park
Nehrunagar, Satellite Rd
Ahmedabad 15
E-mail: anishshahcs@gmail.com
cirp.silkwoven@gmail.com
Last date for
submission of claims: January 24, 2020
SREE LAKSHMI: CARE Lowers Rating on INR160cr LT Loan to 'D'
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Sree
Lakshmi Gayatri Hospitals Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 160.00 CARE D Revised from CARE BB;
Facilities Stable
Detailed Rationale & Key Rating Drivers
The revision in the rating assigned to the bank facilities of Sree
Lakshmi Gayatri Hospitals Private Limited is primarily on account
of delays in meeting the debt obligations on time.
Detailed description of the key rating drivers
Key Rating Weakness
Delay in meeting the debt obligations
On account of liquidity strain due to the nascent stage of the
operations leading to cash flow mismatches, the hospital has
delayed in meeting its debt obligations on time.
Sree Lakshmi Gayatri Hospitals Private Limited (SLGH) was
incorporated on June 10, 2011 by Mr Dandu Sivarama Raju and belongs
to Sri Lakshmi Gayatri Hotels Private Limited. SLGH has undertaken
project to set up 775 beds Multi-Specialty Hospital at Bachupally,
Hyderabad, to promote medical tourism and to facilitate longer stay
requirements it is also setting up 120 rooms' hotel in the same
premises. The hospital has started the commercial operation from
April 01, 2019.The hospital is offering wide spectrum of
specialties like Cardiology, Nephrology, Pulmonology, Trauma and
Orthopedics, Plastic Surgery, Neurology, Gastro Entomology,
Gynecology, Urology, Oncology, ENT and dental etc.
The total project cost is INR235.00 crore which is to be funded by
debt of INR160.00 crore and remaining INR75.00 crore to be funded
by the promoters (Rs. 67.00 as equity share capital and INR8.00
crore as unsecured loans). As on April 30, 2019, the company has
incurred Rs 216.40 crore for the project which includes the
promoters' contribution of INR67.00 as equity and Rs 10.10 crore as
unsecured loans (which forms more than 100% of promoter's funding
commitments), INR133.70 as term loans and remaining from creditors.
UNIVERSAL TRADERS: CARE Assigns B+ Rating to INR10cr LT Loan
------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Universal Traders (UT), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 10.00 CARE B+; Stable Assigned
Detailed Rationale and key rating drivers
The ratings assigned to the bank facilities of UT are constrained
by stabilization risk of operations coupled with highly regulated
liquor industry and uncertainty in liquor trading. The rating,
however, draws comfort from experienced promoter.
Positive Factors:
* Stabilization of business profile followed by consistent increase
in operating income of around 100 crore and above on
sustained basis.
* Improvement in profitability margins to around 5 percent and
above on sustained basis.
Negative Factors:
* Any further debt funded caped leads to further deterioration of
overall gearing to around above 2.50 times
* Any adverse regulatory change could affect players across the
value chain
Detailed description of the key rating drivers
Key Rating Weaknesses
Stabilization risk regarding operations
The firm has commenced its commercial operations from April, 2019.
The cost of setting up warehouse and obtaining licences amounted to
~INR0.60 crores which is fully incurred and was funded through
partner's capital. Firm has commenced its commercial operations
from April 2019 and recorded total operating income of ~INR37.52
crores in 6MFY20. However, stabilization of unit remains a
concern.
Highly regulated Liquor Industry with increased competition
Liquor industry in India is highly government-controlled with high
level of taxes and levies, regulations for procuring license,
creating or expanding distilling/brewing capacities as well as
regulations on advertising of the liquor. Any adverse regulatory
change could affect players across the value chain. The duty and
tax structure is complex and varies across states. Any change in
the duty structure can also hit the demand-supply dynamics in a
region. In addition to above, due to the presence of many players,
the liquor industry suffers from limited pricing flexibility
resulting in low margins.
Uncertainty with Liquor Trading
Every year the state government allocates licensing units to the
liquor traders for the operations of the liquor whole seller. The
licensing units are allotted only for a period of 12 months. As a
result, the liquor traders have to apply for fresh allocation of
licensing units each year.
Key Rating Strengths
Experienced partners
Mr. Vishnu Kumar Sraswat and Mr. Abhishek Gautam (s/o Mrs. Lata
Devi) and Mr. Punit Kumar who are graduates by qualification and
have an overall experience of around decade in the liquor trading
industry through their association with other family run business
who were engaged in retail selling of liquors and had operated
through numerous liquor vends all over the Mathura region of Uttar
Pradesh which helps them in better understanding of working of the
industry.
Liquidity Position: NA; firm started its operation in April 2019
Uttar Pradesh based, Universal Traders was incorporated in April,
2019. The company is currently being managed by Mr. Vishnu Kumar
Sraswat, Mr. Abhishek Gautam (S/O Mrs. Lata Devi) and Mr. Punit
Kumar. Firm is involved in authorized wholesale of foreign liquor
and beer. Firm purchases liquor from different liquor companies by
placing its order through Central Excise Portal and receives the
stock in span of 3 to 4 days. Firm can only sell liquor to
authorized liquor retailers and Bars (post inspecting their
respective licenses).
UPPER INDIA: CARE Maintains 'D' Rating in Not Cooperating
---------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Upper India
Steel Manufacturing & Engineering Company Limited (UIS) continues
to remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 44.70 CARE D; ISSUER NOT COOPERATING;
Facilities on the basis of best available
information
Short term Bank 19.90 CARE D; ISSUER NOT COOPERATING;
Facilities on the basis of best available
information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from UIS to monitor the rating(s)
vide e-mail communications/letters dated October 4, 2019; October
7, 2019; October 11, 2019; October 14, 2019; October 18, 2019;
October 21, 2019; October 30, 2019; November 4, 2019; November 08,
2019; November 11, 2019; November 15, 2019; November 18, 2019;
November 25, 2019; November 29, 2019; December 2, 2019; December 6,
2019; December 9, 2019; December 13, 2019;
December 18, 2019; December 19, 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 best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
rating on Upper India Steel Manufacturing & Engineering Company
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 rating(s).
The ratings take into account delays in the servicing of the debt
obligation of the company.
Detailed description of the key rating drivers
At the time of last rating on June 3, 2019, the following was the
rating weakness:
Key rating weakness
Ongoing delays in debt servicing: There are ongoing delays in the
servicing of the debt obligation for the bank facilities availed by
the company.
Upper India Steel Manufacturing & Engineering Company Ltd (UIS) was
incorporated in 1961 as a private limited company and was
subsequently converted to a closely held public limited company in
1983. The company is promoted and managed by Mr. Pritpal Singh
Grewal and Mr. Gursimran Singh Grewal and is engaged in the
manufacturing of specialized steel products for various automotive
ancillaries, Indian railways and engineering goods industry, at its
manufacturing facility situated at Ludhiana, with an installed
capacity of 65,000 MT for steel ingots/billets. The company also
has an installed capacity of 93,300 MT for rolling bars & rounds
and a capacity of 18,000 MT for annealing and drawing process. On
account of decline in the scale of operations and continued losses
in the past, the debt of the company was restructured in June 2014.
UTTARAYAN FOODS: CARE Maintains 'B' Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Uttarayan
Foods Private Limited (UFPL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 4.86 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Based on best
Available information
Short-term Bank 0.16 CARE A4; ISSUER NOT
Facilities COOPERATING; Based on best
Available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from UFPL to monitor the ratings
vide e-mail communications/letters dated July 5, July 16, 2019,
September 30, 2019 and December 13, 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 UFPL's bank facilities will now be denoted as CARE B;
Stable; ISSUER NOT COOPERATING/CARE A4; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating in October 1, 2018 the following were
the rating weaknesses and strengths:
Key Rating Weaknesses
Small scale of operations with low profitability margins: UFPL is a
small player vis-a-vis other players in the domestic cold storage
industry marked by total operating income of INR1.80 crore (Rs.1.86
crore in FY17) with a loss of INR0.01 crore (Rs.0.10 crore in FY17)
in FY18. Furthermore, the total capital employed also remained low
at INR5.26 crore (Rs.5.84 crore as on March 31, 2017) as on March
31, 2018. The small size restricts the financial flexibility of the
company in times of stress and it suffers on account of economies
of scale. The profitability margins of the company remained low
marked by PBILDT margin of 42.51% (FY17: 50.37%) and PAT margin of
0.10% (FY17: 0.51%) in FY18. Further, the PBILDT margin has
deteriorated by 786 bps in FY18 due to increase in cost of
operations. Furthermore the PAT margin also moved in line with
PBILDT margin during the aforesaid period and the same has
deteriorated by 41 bps in FY18. Moreover, the company has achieved
revenue of around INR0.10 crore during Q1FY19.
Seasonality of business with susceptibility to vagaries of nature:
The cold storage business is seasonal in nature as beat, carrot,
apple and dry fruits are a winter season crop with its harvesting
period commencing in February. The loading of these products in
cold storages begins by the end of February and lasts till March.
Additionally, with these products having a perceivable 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 August. The unit remains non-operational during the period
from December to January. Moreover, 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 these products is highly dependent on vagaries of
nature.
Leveraged capital structure and weak debt coverage indicators: The
capital structure of the company remained highly leveraged marked
by overall gearing ratio of 22.08x (24.95x as on March 31, 2017) as
on March 31, 2018. However, the overall gearing ratio has improved
as on March 31, 2018 on account of scheduled repayment of term
loans and lower utilization of working capital limit. The debt
coverage indicators remained weak marked by interest coverage of
1.47x and total debt to GCA of 19.31x in FY18. Furthermore, the
interest coverage ratio deteriorated in FY18 due to high interest
expenses.
Competitive and fragmented nature of industry: 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 beat, carrot, apple and dry fruits 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. UFPL is mainly into storage of these
products which is highly fragmented and competitive in nature due
to presence of many small players with low entry barriers. In such
a competitive scenario smaller companies like UFPL in general are
more vulnerable on account of its limited pricing flexibility.
Key Rating Strengths
Long track record of operations and experienced promoters: UFPL is
into cold storage services since 2008 and thus has long operational
track record of around a decade. Further, the key promoter, Mr.
Madhab Chandra Pal has more than three decades of experience in
cold storage business, looks after the overall management of the
company supported by other directors.
Proximity to vegetable, fruits and dry fruits growing area: UFPL's
storage facility is located at Nadia, West Bengal which is one of
the major vegetable, fruits and dry fruits growing regions of the
state. The favourable location of the storage unit, in close
proximity to the leading vegetable, fruits and dry fruits growing
areas provides it with a wide catchment and making it suitable for
the farmers in terms of transportation and connectivity.
Incorporated in December 2008, Uttarayan Foods Private Limited
(UFPL) was promoted by Mr. Madhab Chandra Pal, Mr. Uttam Kumar Das,
Mr. Anil Paul and Mr. Amit Baran Pramanick for setting up a cold
storage facility. The company has been engaged in cold storage
services for beat root, carrot, apple and dry fruits (like date,
raisins etc.) to farmers and traders on a rental basis. The
cold-storage facility of the company is located at Nadia, West
Bengal with a storage capacity of 5000 MTPA (metric tonne per
annum).
VEER BHADRA: CARE Assigns B+ Rating to INR10cr Long Term Loan
-------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Veer
Bhadra Enterprises (VBE), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 10.00 CARE B+; Stable Assigned
Detailed Rationale and key rating drivers
The ratings assigned to the bank facilities of VBE is constrained
by stabilization risk of operations coupled with highly regulated
liquor industry and uncertainty in liquor trading. The rating,
however, draws comfort from experienced promoter.
Positive Factors:
* Stabilization of business profile followed by consistent increase
in operating income of around 100 crore and above on
sustained basis.
* Improvement in profitability margins to around 5 percent and
above on sustained basis.
Negative Factors:
* Any further debt funded caped leads to further deterioration of
overall gearing to around above 2.50 times
*Any adverse regulatory change could affect players across the
value chain
Detailed description of the key rating drivers
Key Rating Weakness
Stabilization risk regarding operations
The firm has commenced its commercial operations from April, 2019.
The cost of setting up warehouse and obtaining licences amounted to
~Rs. 0.60 crores which is fully incurred and was funded through
proprietor's capital. Firm has commenced its commercial operations
from April 2019 and recorded total operating income of ~Rs. 22.22
crores in 6MFY20. However, stabilization of unit remains a
concern.
Highly regulated Liquor Industry with increased competition
Liquor industry in India is highly government-controlled with high
level of taxes and levies, regulations for procuring license,
creating or expanding distilling/brewing capacities as well as
regulations on advertising of the liquor. Any adverse regulatory
change could affect players across the value chain. The duty and
tax structure is complex and varies across states. Any change in
the duty structure can also hit the demand-supply dynamics in a
region. In addition to above, due to the presence of many players,
the liquor industry suffers from limited pricing flexibility
resulting in low margins.
Uncertainty with Liquor Trading
Every year the state government allocates licensing units to the
liquor traders for the operations of the liquor whole seller. The
licensing units are allotted only for a period of 12 months. As a
result, the liquor traders have to apply for fresh allocation of
licensing units each year. This leads to a factor of uncertainty of
whether the licensing unit will be allotted to the liquor trader or
not, thereby leading to uncertainty about the income coming from
the liquor trading.
Key Rating Strengths
Experienced partners
Mr. Shailendra Kumar Sharma and his son Mr. Punit Kumar; both are
and graduates by qualification and collectively look after the
overall operations of the firm. Mr. Shailendra Kumar and Mr. Punit
have an experience of around a decade in the liquor trading
industry through their association with other family run business
who were engaged in retail selling of liquors and had operated
through numerous liquor vends all over the Mathura region of Uttar
Pradesh which helps them in better understanding of working of the
industry.
Veer Bhadra Enterprises was constituted in 2019 as a proprietorship
firm and is currently managed by Mr. Shailendra Kumar Sharma and
his son Mr. Punit Kumar; both are and graduates by qualification
and collectively look after the overall operations of the firm.
Firm is involved in authorized wholesale of foreign liquor and
beer. Firm purchases liquor from different liquor companies by
placing its order through Central Excise Portal and receives the
stock in span of 3 to 4 days. Firm can only sell liquor to
authorized liquor retailers and Bars (post inspecting their
respective licenses).
VEGA JEWELDIAM: CARE Lowers Rating on INR27cr LT Loan to 'D'
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Vega
Jeweldiam Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 27.00 CARE D; Issuer not cooperating;
Facilities Revised from CARE BB; ISSUER NOT
COOPERATING on the basis of
best available information
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated May 30, 2019, placed the
rating(s) of Vega Jeweldiam Private Limited under the 'issuer
non-cooperating' category as Vega Jeweldiam Private Limited had
failed to provide information for monitoring of the rating. Vega
Jeweldiam Private Limited continues to be non-cooperative despite
repeated requests for submission of information through e-mails and
phone calls. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion it is not sufficient to arrive at
a fair rating. The rating on Vega Jeweldiam Private Limited's bank
facilities will now be denoted as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The revision in the rating assigned to the bank facilities of Vega
Jeweldiam Private Limited (VJPL) factors in on-going delays in debt
servicing led by overdrawals in the packing credit account and
stretched liquidity position. However, the rating continues to
derive strength from experienced promoters.
Detailed description of the key rating drivers
At the time of last rating on May 30, 2019, the following were the
rating strengths and weaknesses (Updated for details available on
public domain).
Key Rating Weaknesses
Delay in debt servicing: As per the publicy available data and
interaction with the management, it was known that packing credit
facility of Vega Jeweldiam Private Limited has remained overdue for
more than 30 days due to delay in realization of export bills.
Stretched liquidity: The liquidity position of VJPL is marked by
tightly matched accruals to repayment obligations, highly utilized
bank limits and modest cash balance.
Key rating strengths
Experienced promoters: Mr. Jitendra Shah, promoter director, has an
extensive experience of around four decades in the industry.
Moreover, the promoters are also ably supported by experienced
management of the firm to carry day to day activities. In addition
to that, the promoters have been providing financial support to run
the operations of the firm.
Incorporated in 2008, Vega Jeweldiam Private Limited (VJPL,
erstwhile Amy Diam Creation Pvt. Ltd. (ACPL) which was the holding
company of Amy Diam Vega Jewellery Pvt. Ltd. (AVPL) was merged with
ACPL in Feb 2013) is engaged in business of exporting cut and
polished diamonds (up to 5 carat in size). The company, till FY14,
was also engaged in manufacturing of diamond studded jewellery,
however in FY14, has ceased operations therein, to focus on the
diamond polishing segment. Though the company was incorporated in
2008, the promoters were engaged in the business since the last
four decades in the industry through their partnership firms (viz.
Kailash Bros., Tirath Exports and Vega Jewellery), operations of
which have been transferred to this entity. Moreover, earlier the
promoters were engaged in diamond trading, wherein they procured
diamonds from various domestic players and got the diamonds
polished on contract basis. However in January 2014, the company
has commenced its captive diamond cutting and polishing unit in
Surat. Furthermore, VJPL's associate company Amy Diam Limited (ADL)
is situated in Hong Kong and acts as the primary distributor for
VJPL for South East Asia and Middle Eastern markets.
VIJAI ELECTRICALS: Ind-Ra Lowers Long Term Issuer Rating to 'BB+'
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Vijai
Electricals Limited's (VEL) Long-Term Issuer Rating to 'IND BB+'
from 'IND BBB'. The Outlook is Negative.
The instrument-wise rating actions are:
-- INR1,178.4 bil. Fund-based facilities downgraded with IND
BB+/Negative/IND A4+ rating;
-- INR11.774 bil. Non-fund-based facilities downgraded with IND
A4+ rating;
-- INR150 mil. Proposed fund-based facilities withdrawn (the
company did not proceed with the instrument as envisaged);
and
-- INR640.9 mil. Proposed non-fund-based facilities withdrawn
(the company did not proceed with the instrument as
envisaged).
Ind-Ra has considered VEL's standalone financials for arriving at
its ratings while adjusting them for the equity required to be
infused by the company in its under-construction joint venture at
Algeria where VEL holds 40% of the overall shareholding.
The downgrade reflects VEL's weaker-than-expected credit profile
and deterioration in its liquidity profile due to a
longer-than-expected working capital cycle, resulting in rising net
debt levels. The Negative Outlook factors in the likely weak
coverage ratios for FY20 and FY21, in view of the high working
capital requirements, and a decline in revenue visibility, which
would impair its operational performance.
KEY RATING DRIVERS
Liquidity Indicator- Stretched: VEL's average fund-based working
capital utilization stood at 94.3% in the 12 months ended December
2019, with an overall fund-based limit of INR1,178.4 million. This
high utilization was due to VEL's increase in the networking
capital cycle to 275 days in FY19 (FY18: 262 days). It was due to
an increase in debtor days to around 295 in FY19 (FY18: 282 days),
as the counterparties are majorly government entities operating in
the power sector The company's reliance on government entities, in
relation to exports (which have a lower number of receivable days),
has increased manifold as its contribution to revenue increased to
100% in FY19 (FY18: 89:11; FY17: 52:48).
VEL's debtor days increased further to around 440 in 1HFY20, which
led to cash balance declining to INR13 million (1HFY19: INR253.7
million; FY19: INR240.2 million). As of December 2019, the top five
counterparties delaying receivables were Jharkhand Bijli Vitran
Nigam Limited, Power Grid Corporation of India Limited, Andhra
Pradesh Eastern Power Distribution Company Limited and NTPC Limited
('IND AAA'/Stable). Debtors outstanding from the above
counterparties amounted to INR6,285.9 million at end-December 2019
(FY19: INR5,291.9 million) out of overall INR7,176.7 million (FY19:
INR6,831.8 million). However, the company has intimated Ind-Ra that
out of overall receivables at end-December 2019, around INR2,500
million will be recovered in the next six months, thereby providing
a much-needed liquidity cushion to the company. Thus, this recovery
in debtors remains a key monitorable for the agency. Furthermore,
VEL has nil term loan obligations to be serviced in FY20 and FY21.
Declined Revenue Visibility: VEL received low fresh order inflows,
amounting to only INR3,186.0 million in FY19 and 9MFY20 (FY18:
INR12,966.6 million) due to the election season prevailing across
the country. The low order inflow, coupled with VEL's strategy of
bidding for orders that meet its minimum gross margins threshold,
has declined its revenue visibility. Resultantly, the order book
declined to INR9,521.4 million in September 2019 (1.1x FY19
revenue) from INR20,068.9 million (2.6x times FY18 revenue) in
March 2018.
The lower revenue visibility has resulted in delays in tying up the
fresh working capital limits including non-fund based limits from
the lenders, and as such average utilization of the existing bank
guarantee (BG) limits was high at around 82% during the last 12
months ended December 2019. Furthermore, considering the longer
tenure of BG facilities where the lock-up period would be 15-18
months post the completion of the projects, lower availability of
free BGs would have hampered the bidding ability of VEL.
In September 2019, 97% of orders from the outstanding order book
were from the company's project division, which is majorly into the
electrification of rural villages and other related works. The
company is planning to increase exports of its transformers and
conductor divisions in FY21 and FY22. This is because the
restriction clause as per the sale transaction entered in FY14
between Terra Transmission and Distribution India Private Limited
(Terra; a wholly-owned subsidiary of Toshiba Corporation) and VEL
expired in FY19.
Deteriorated Operational Performance: VEL's profitability started
declining from FY19 due to a lack of export orders. Its FY19 and
1HFY20 operational performance were further adversely impacted by
the slow order execution due to delayed receivables from the
counterparties and low order intake. 1HFY20 revenue declined to
INR3,149.4 million (FY19: INR8,453.1 million) and EBIDTA margin
contracted to 12.3% (13.1%). Based on the 1HFY20 performance,
Ind-Ra expects VEL to clock revenue of INR6,000 million-6,200
million with an EBIDTA margin of 12% in FY20.
VEL posted a weak EBITDA margin of 5.1% in FY18 on account of
INR995 million back-dated debtors that were written off. These
debtors appertained to a settlement transaction between VEL and
Terra for the sale of VEL's Rudraram plant to Terra in FY14.
Adjusting for this write off, VEL's FY18 EBITDA margin stood at
17.6%.
Deteriorated Credit Profile: The decline in the scale of
operations, coupled with an increase in working capital utilization
(fund and non-fund based), led to increased finance costs and
hence, deteriorated credit metrics in 1HFY20. The interest coverage
ratio (EBITDA/interest) stood at 2.2x in 1HFY20 (FY19: 2.1x; FY18:
3.2x; EBITDA calculated after excluding the write off from Terra)
and net leverage (net debt/ EBITDA) was 3.1x (2.0x; 1.0x).
Ind-Ra expects VEL's FY20 interest coverage ratio to fall below
1.5x and the net leverage to deteriorate to 3.0x. However, with the
likely recovery in debtors, the credit profile may sustain at this
level. A further delay in the receivable collection will be credit
negative and remain a monitorable trigger for the agency.
Elongated Working Capital Cycle: VEL registered negative cash flow
from operations (CFO) of INR532 million in FY19 against the
agency's expectation of positive CFO, owing to the elongated
working capital cycle. Ind-Ra expects the company to register a
negative CFO in FY20 as well, considering the increase in debtor
collection period and lower scale of operations registered till
9MFY20.
In FY18, VEL had invested around INR81.0 million in the JV with the
Algerian-based partners, namely Electro-Industries SPA, M/s Sonel
GAZ SPA, where VEL holds 40% of the overall shareholding. Ind-Ra
expects VEL to infuse its pending commitment of INR360 million in
the JV by FY21-FY22 where it had extended the investment bank
guarantee to back its investment commitment. Given FY19's and
FY20's likely negative cash flows, timely recovery in the working
capital cycle is critical for the existing rating level.
Experienced Promoter: VEL's promoter has a long track record of
over four decades of experience in the manufacture of electrical
equipment with a specialization in transformer design.
RATING SENSITIVITIES
Outlook Revision to Stable: The following collective developments,
on a sustained basis, may result in VEL's Outlook being revised
back to Stable:
- ability to improve its existing liquidity profile through a
recovery of debtors and tying fresh working capital limits;
- ability to increase its revenue visibility through fresh order
inflows; and
- ability to improve its credit profile through an increase in its
scale of operations while maintaining the s existing margins
resulting in interest coverage of more than 2.5x FY21 onwards.
Negative: The following developments may individually or
collectively, all on a sustained basis, result in a rating
downgrade:
- inability to improve its revenue visibility due to lack of fresh
orders
- the lower-than-expected scale of operations and/or, delays in
the recovery of a working capital cycle and/or lower margins
resulting in interest coverage ratio remaining below 2.5x from
FY21.
COMPANY PROFILE
VEL manufactures electricity distribution transformers. In 2005, it
entered the business of execution of rural electrification
projects. It has a transformer production site in Haridwar and a
conductor manufacturing facility in Roorkee.
VIKRAM IRON: Insolvency Resolution Process Case Summary
-------------------------------------------------------
Debtor: Vikram Iron and Steel Company Private Ltd
Registered office:
524/525 New Timber Market Road
Opp Sonmarg Talkies
Pune 411042
Insolvency Commencement Date: January 10, 2020
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: July 8, 2020
Insolvency professional: Mr. Uday Shreeram Sakrikar
Interim Resolution
Professional: Mr. Uday Shreeram Sakrikar
303, Rahul Vihar A
Lane 8 Dahanukar Colony
Kothrud, Pune
Maharashtra 411038
E-mail: ipudaysakrikar@gmail.com
Last date for
submission of claims: January 24, 2020
=================
I N D O N E S I A
=================
GLOBAL PRIME: Moody's Assigns Ba3 Rating to New Sr. Unsec. Notes
----------------------------------------------------------------
Moody's Investors Service assigned a backed senior unsecured rating
of Ba3 to the proposed senior unsecured notes to be issued by
Global Prime Capital Pte. Ltd. The proposed notes are guaranteed by
Bumi Serpong Damai TBK (P.T.) (BSD, Ba3 stable) and some of its
subsidiaries, and rank pari passu with the 2021 and 2023 notes.
The rating outlook is stable.
BSD will use some of the net proceeds from the proposed issuance to
repay existing indebtedness and the remaining for working capital
and other general corporate purposes.
RATINGS RATIONALE
"The proposed notes are not exposed to either legal or structural
subordination risk," says Jacintha Poh, a Moody's Vice President
and Senior Credit Officer. "The rating is therefore aligned with
BSD's Ba3 corporate family rating."
At September 30, 2019, around 62% of BSD's total debt was
unsecured. Moody's points out that the majority of BSD's earnings
and borrowings are held at the holding company, which is a
guarantor to the notes.
"We view BSD's use of the net proceeds from the proposed notes to
refinance its 2021 notes as credit positive, because the new
issuance will extend its weighted-average debt maturity," adds Poh,
who is also Moody's Lead Analyst for BSD.
Moody's expects that BSD's credit metrics will remain within the
thresholds for its Ba3 rating over the next 12-18 months, with
adjusted debt/homebuilding EBITDA at around 3.5x and homebuilding
EBIT/interest expense at around 3.1x.
Moody's also expects BSD's liquidity to remain very good over the
next 12-18 months, supported by the company's large cash holdings.
At September 30, 2019, BSD had cash and cash equivalents of IDR6.9
trillion. Moody's expects the company to generate around IDR1.8
trillion of operating cash flow from September 30, 2019 through to
December 31, 2020, which will be sufficient to cover (1) projected
dividend payout of around IDR200 billion, (2) maturing debt
obligations of around IDR600 billion; and (2) projected capital
spending of around IDR2.5 trillion.
BSD's Ba3 rating reflects its established position as one of the
largest property developers in Indonesia, with diversification
across multiple projects and property segments. BSD's scale and
diversification also provide the company with the flexibility to
alter its product offerings and cater to changing market demand.
The rating incorporates BSD's focus on the sale of land lots and
the development of low-rise commercial and residential properties,
which entail lower development risks and support its strong gross
margins.
BSD's rating is constrained by the company's (1) small scale when
compared with its global industry peers, (2) complex corporate
structure, and (3) concentration in the Greater Jakarta region. The
company is also exposed to the volatile property sector and the
evolving regulatory environment in Indonesia.
With respect to Environmental, Social and Governance risks, Moody's
has considered the founding family's concentrated ownership of BSD,
through Sinarmas Land Limited and its board composition that only
has two independent commissioners out of a five-member board.
However, the company's strong execution track record, healthy
credit metrics along with robust liquidity partially mitigates any
potential governance risks.
The stable rating outlook reflects Moody's expectation that BSD
will achieve at least IDR5 trillion of marketing sales each year
and maintain financial discipline as it pursues growth.
An upgrade of BSD's rating is unlikely over the next 12-18 months,
but upward momentum could emerge, if the company successfully
executes its business plans while maintaining healthy credit
metrics and good liquidity.
Credit metrics that would support an upgrade include adjusted
debt/homebuilding EBITDA below 2.5x, and adjusted homebuilding
EBIT/interest expense above 5.0x. An upgrade will also require that
the recurring cash flow to cover at least 1.0x of interest
expense.
Moody's could downgrade BSD's ratings if (1) the company fails to
implement its business plans; (2) there is a deterioration in the
property market, leading to protracted weakness in the company's
operations and credit quality; or (3) there is evidence of cash
leaking from BSD to fund affiliated companies, for example, through
intercompany loans, aggressive cash dividends or investments in
affiliates.
Metrics indicative of a potential downgrade include (1) adjusted
debt/homebuilding EBITDA above 4.0x; and (2) adjusted homebuilding
EBIT/interest expense below 3.0x on a sustained basis.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
Established in 1984, Bumi Serpong Damai TBK (P.T.) (BSD) is the
largest developer listed on the Indonesia Stock Exchange by market
capitalization. The company and its subsidiaries are engaged in the
development, management and operation of residential townships,
condominium towers, office buildings, retail malls and hotel
properties. The company is sponsored by Sinarmas Land Limited,
which held an approximate 60% stake in BSD at September 30, 2019.
=====================
N E W Z E A L A N D
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CULLEN GROUP: 10 More Eric Watson Companies Moved Into Liquidation
------------------------------------------------------------------
NZ Herald reports that more Eric Watson-linked companies, including
the shell of Bendon Group, have been placed in liquidation
following the collapse of Cullen Group.
Vivian Judith Fatupaito and Luke Norman of KPMG were appointed as
joint liquidators of ten Cullen-owned companies by special
shareholder resolutions on January 15, NZ Herald discloses citing
public notices.
The companies, which largely appear dormant, include: Cullen
Equities Ltd, Cullen FX Ltd, Bendon Group, Cullen Equities UK Ltd,
IP Holdings No.1 Ltd, Bendon Investments Ltd, IP Holdings No.2 Ltd,
EPartners Ltd and Knockout Boxing Ltd.
According to NZ Herald, Bendon Group was home to the lingerie
company that Cullen bought in 2002 for NZD58.7 million. In 2018,
Mr. Watson merged the business with US sleepwear company Naked
Brand Group and later sold down his shareholding.
NZ Herald relates that the merged company, listed on the Nasdaq
stock exchange, has struggled and recently has been unable to rely
on funding from Mr. Watson's Cullen group of companies after losing
major battles with Inland Revenue and former business partner Sir
Owen Glenn.
According to court documents, Mr. Watson owes the tax department
and Glenn a combined NZD200 million, NZ Herald relays.
Ms. Fatupaito and Mr. Norman were previously appointed to 11 other
Watson-linked companies after the High Court in December declined
to halt insolvency proceedings against Cullen Group brought by
Inland Revenue.
IRD had been pursuing the liquidation after Justice Matthew Palmer
ruled last March that Cullen Group was part of Watson's "web of
entities" designed to avoid paying non-resident withholding tax, NZ
Herald notes.
In their first report published on Christmas Eve, the liquidators
said they were "still working to understand the extent of the
assets held within the group".
A list of secured creditors in the Cullen liquidation includes the
Bank of New Zealand, although the liquidators have established the
bank has no amounts outstanding, NZ Herald discloses.
BNZ is still owed around NZD20 million from Naked after it absorbed
Bendon's debt to the bank.
According to NZ Herald, the lingerie firm has been in breach of its
banking covenants since December 2016 and had been relying on a
guarantee from Watson's Cullen Group to keep the bank at bay.
It has since raised money from investors to help pay down debt, the
report notes.
Naked's latest financial statements showed a net loss of NZD28.7
million in the first half of the financial year, from NZD26.1
million in the previous corresponding period, NZ Herald discloses.
Sales sank 26 per cent to NZD42.1 million.
As reported in the Troubled Company Reporter-Asia Pacific on Dec.
25, 2019, BusinessDesk said nine other Eric Watson-linked companies
have been moved into liquidation following the collapse of Cullen
Group. According to BusinessDesk, Cullen Group was moved into
liquidation by court order earlier in December after a High Court
judge refused to halt insolvency proceedings against it. KPMG's
Vivian Fatupaito was appointed liquidator by associate judge Hannah
Sargisson on December 17. Since then nine other entities linked to
Watson have also gone under.
=================
S I N G A P O R E
=================
HYFLUX LTD: Aqua Munda Commits SGD208MM to Debt Buyout
------------------------------------------------------
Leila Lai at The Business Times reports that Aqua Munda is
committing SGD208 million to fund a debt buyout offer for Hyflux
Ltd noteholders and unsecured creditors, the investor said in a
press statement on Jan. 18.
It is also extending the expiration deadline for the offer to 5:00
p.m. on Jan. 31, and the acceptance deadline to April 3, the report
says.
According to BT, Aqua Munda said the SGD208 million may be used to
fund Hyflux's working capital requirements in addition to the debt
buyout, if agreed. The total principal amount of debt eligible for
the buyout is about SGD1.8 billion, or nearly two-thirds of
Hyflux's total SGD2.8 billion debt.
BT relates that the offer, which began on Dec. 30, invites holders
of Hyflux's 4.25 per cent notes due 2018 and its 4.6 per cent and
4.2 per cent notes due 2019 to submit bids for some or all of their
debt, with a minimum discount of 85 per cent on the offered debt.
Holders of other senior unsecured debts, contingent debts, and
trade and other debts of Hyflux and its subsidiaries Hydrochem,
Hyflux Membrane Manufacturing and Hyflux Engineering are also
eligible to apply, the report states.
Hyflux acknowledged the Aqua Munda press statement on the same day
it was released, and said it would make appropriate announcements
as and when there are further material developments on the matter,
BT adds.
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.
In November 2019, Hyflux entered into a restructuring deal with
United Arab Emirates-based utility Utico FZC, according to Reuters.
PACIFIC RADIANCE: Debt Moratorium Extended to February 28
---------------------------------------------------------
Fiona Lam at The Business Times reports that the High Court of
Singapore has extended the debt moratoria to Feb. 28 for Pacific
Radiance and two of its units, Pacific Crest and CSI Offshore. The
three firms had requested the further extension before the
moratoria were to expire on Oct. 17, 2019.
BT says the companies will convene their respective court meetings
by Feb. 18 to consider and, if thought fit, approve their proposed
schemes of arrangement.
Drew & Napier and KPMG Services are Pacific Radiance's legal and
financial advisers respectively for the debt restructuring, the
report discloses.
Trading in Pacific Radiance shares has been voluntarily suspended
since Feb. 28, 2018, BT notes.
About Pacific Radiance
Headquartered in Singapore, Pacific Radiance Ltd. --
http://www.pacificradiance.com/-- an investment holding company,
owns, manages, and operates offshore vessels in Asia, Africa,
Australia, and South America. It operates through three divisions:
Offshore Support Services, Subsea Business, and Complementary
Businesses. The company operates a fleet of 139 offshore vessels
comprising subsea vessels, anchor handling tugs, platform supply
vessels, ocean tugs and supply vessels, offshore barges,
accommodation and maintenance support vessels, and other
specialized vessels for the offshore oil and gas industry.
Pacific Radiance applied for debt restructuring with a Singaporean
court in May 2018 and has been granted several moratorium. The
company has been undergoing restructuring talks and is carrying
debt of more than $500 million.
PACIFIC RADIANCE: Talks 'Stalled' for US$180MM Debt Funding
-----------------------------------------------------------
Fiona Lam at The Business Times reports that discussions with a
financier who was planning to extend at least US$180 million in new
debt to Pacific Radiance have come to a halt.
BT relates that the mainboard-listed offshore marine services firm,
which is coming up with a debt restructuring plan, on Jan. 20 said
the talks have "stalled" due to "certain difficulties" which arose
in the course of discussions around December 2019.
According to BT, the debt funding as well as new equity via a share
placement were meant to finance Pacific Radiance's proposed US$180
million acquisition of Abu Dhabi-based Allianz Marine and Logistics
Services (AMLS) and to repay the group's existing debts by way of
schemes of arrangement.
If the new debt funding had come through, the group would have
proposed schemes that included a cash payment of about US$175.6
million to discharge the group's bank debt, the report relays.
BT adds that Pacific Radiance on Jan. 20 said it has approached
other potential funders who had submitted indicative proposals to
the company last year.
One of them, a global asset management firm with more than US$100
billion assets under management, has shown "keen interest" in
extending debt financing, Pacific Radiance said.
Pacific Radiance and AMLS are at an "advanced stage" of their
initial discussions with this potential financier, and aim to enter
into a term sheet for the proposed debt financing, Pacific Radiance
said.
About Pacific Radiance
Headquartered in Singapore, Pacific Radiance Ltd. --
http://www.pacificradiance.com/-- an investment holding company,
owns, manages, and operates offshore vessels in Asia, Africa,
Australia, and South America. It operates through three divisions:
Offshore Support Services, Subsea Business, and Complementary
Businesses. The company operates a fleet of 139 offshore vessels
comprising subsea vessels, anchor handling tugs, platform supply
vessels, ocean tugs and supply vessels, offshore barges,
accommodation and maintenance support vessels, and other
specialized vessels for the offshore oil and gas industry.
Pacific Radiance applied for debt restructuring with a Singaporean
court in May 2018 and has been granted several moratorium. The
company has been undergoing restructuring talks and is carrying
debt of more than $500 million.
*********
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
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thereof are US$25 each. For subscription information, contact
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*** End of Transmission ***