/raid1/www/Hosts/bankrupt/TCRAP_Public/200203.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, February 3, 2020, Vol. 23, No. 24
Headlines
A U S T R A L I A
DELTA LAW: Second Creditors' Meeting Set for Feb. 7
ELITE BUILDING: Second Creditors' Meeting Set for Feb. 11
JEANSWEST CORP: Owes AUD50MM; Expression of Interest Close
M & A POLIMENI: Second Creditors' Meeting Set for Feb. 10
MCM ENTERTAINMENT: First Creditors' Meeting Set for Feb. 11
RALAN GROUP: Director Partners With Jean Nassif
STS HOLDINGS: First Creditors' Meeting Set for Feb. 10
STS OPERATIONS: First Creditors' Meeting Set for Feb. 10
TDAB PROJECTS: First Creditors' Meeting Set for Feb. 10
WALKER GRAPHICS: Second Creditors' Meeting Set for Feb. 10
WOODY EMU: First Creditors' Meeting Set for Feb. 7
I N D I A
5 CORE: CARE Lowers Rating on INR15cr LT Loan to 'D'
ANNADA COLD: CARE Reaffirms B+ Rating on INR5.60cr LT Loan
BHANDARI FOILS: CARE Reaffirms D Rating on INR90cr Loan
BLUE WHEEL: Ind-Ra Withdraws 'BB-' Bank Loan Rating
DALMIA CEMENT: NCLT Orders Insolvency Proceedings Against Unit
DSR INDIA INFRACON: Insolvency Resolution Process Case Summary
EMPERIA REALTY: CARE Lowers Rating on INR13.75cr Loan to 'D'
EUROTEK ENGINEERING: CARE Keeps 'B+' Rating in Not Cooperating
GOPALSONS STEELS: Insolvency Resolution Process Case Summary
INDIAN TECHNICAL: CARE Assigns B- Rating to INR10cr LT Loan
K.R.C. CONSTRUCTIONS: Ind-Ra Moves 'BB-' Rating to Non-Cooperating
KRROME GLASS: Insolvency Resolution Process Case Summary
KRUSHNA COTEX: CARE Reaffirms B+ Rating on INR8.0cr LT Loan
KVK ENERGY: Insolvency Resolution Process Case Summary
LAKSHMI COTFAB: CARE Keeps 'D' Rating in Not Cooperating
M.M. PATEL: CARE Ups Rating on INR63.91cr Loan to 'B'
MANGALORE FISHMEAL: CARE Lowers Rating on INR11.67cr Loan to D
MYSORE TIMBER: Ind-Ra Assigns B- LT Issuer Rating, Outlook Stable
POLLEN COMPUTER: Insolvency Resolution Process Case Summary
POOJA MINI: CARE Lowers Rating on INR9.86c LT Loan to B+
PRAKASH HI-TECH: CARE Lowers Rating on INR5.0cr Loan to B-
RELIANCE NAVAL: Insolvency Resolution Process Case Summary
ROCANA INRASTRUCTURE: Insolvency Resolution Process Case Summary
S K DYEING: Insolvency Resolution Process Case Summary
S. M. COLD: CARE Reaffirms B+ Rating on INR6.0cr LT Loan
SARAVANA STORES: Ind-Ra Lowers Long Term Issuer Rating to 'D'
SAVA HEALTHCARE: CARE Withdraws B+/A4 Rating on Bank Facilities
SHAKAMBARI RUBBER: Insolvency Resolution Process Case Summary
SHRI DHANALAKSHMI: CARE Lowers Rating on INR32.85cr LT Loan
SHRIKISHAN & COMPANY PRIVATE: Ind-Ra Assigns 'BB' LT Issuer Rating
SHRIKISHAN & COMPANY: Ind-Ra Assigns BB LT Rating, Outlook Stable
SINGOLI (CHARBHUJA): CARE Withdraws B+ Rating on Bank Facilities
SRI PALANI: CARE Assigns B+ Rating to INR8.73cr LT Loan
SWIM CERAMIC: CARE Lowers Rating on INR5.14cr LT Loan to B+
UNIROYAL STHAPTYA: CARE Assigns B+ Rating to INR0.30cr LT Loan
VIDEOCON INDUSTRIES: Insolvency Process Extended for 90 Days
YASHICA ELECTRONICS: Insolvency Resolution Process Case Summary
S I N G A P O R E
BM MOBILITY: Silk Routes Offers Restructuring Lifeline
CREATIVE TECHNOLOGY: Q2 Net Loss Narrows to US$2.8 Million
HYFLUX LTD: Bond Investors Lose Hope of Recovering Any Money
- - - - -
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A U S T R A L I A
=================
DELTA LAW: Second Creditors' Meeting Set for Feb. 7
---------------------------------------------------
A second meeting of creditors in the proceedings of Delta Law Pty
Ltd has been set for Feb. 7, 2020, at 10:00 a.m. at the offices of
Robson Cotter Insolvency Group, Unit 1, 78 Logan Rd, in
Woolloongabba, Queensland.
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 Feb. 6, 2020, at 4:00 p.m.
Bill Cotter of Robson Cotter Insolvency Group was appointed as
administrator of Delta Law on
July 29, 2019.
ELITE BUILDING: Second Creditors' Meeting Set for Feb. 11
---------------------------------------------------------
A second meeting of creditors in the proceedings of Elite Building
and Renovations Pty Limited has been set for Feb. 11, 2020, at
10:00 a.m. at the offices of Bernardi Martin, at 195 Victoria
Square, in Adelaide, SA.
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 Feb. 11, 2020, at 9:00 a.m.
Hugh Sutcliffe Martin of Bernardi Martin was appointed as
administrator of Elite Building on Jan. 7, 2020.
JEANSWEST CORP: Owes AUD50MM; Expression of Interest Close
----------------------------------------------------------
Inside Retail reports that Jeanswest is said to owe creditors at
least AUD50 million, with around AUD2.6 million owed to the casual
clothing chain's nearly 1,000 staff members.
Employees will be first to be paid, according to KPMG's James
Stewart, one of the administrators who was appointed on Jan. 15,
the report relates.
"Employees first, secured creditors get paid second," Mr. Stewart
told Inside Retail.
Inside Retail says the administrators last month announced the
closure of 37 Jeanswest stores and redundancy of 263 employees,
including 21 from the head office, in an attempt to secure a
buyer.
"Expressions of interest [to buy the business] close today, so
sometime next week we'll have a good idea of where we stand,"
Inside Retail quotes Mr. Stewart as saying, "but we won't be in a
position to talk about that publicly."
The extent of the casual clothing chain's debt was revealed at the
first meeting of creditors, held on Jan. 28, the report notes. The
next creditors' meeting will take place in the next four to five
weeks, and the administrators will release a detailed report with
their recommendations in the week prior.
About Jeanswest
Established in 1972, Jeanswest is one of Australia's most
well-known retail brands. Jeanswest is currently owned by the
Hong-Kong-based Yeung family's investment vehicle, HOWSEA Limited,
which acquired the business as part of an HK$220 million deal with
publicly-listed Glorious Sun Enterprises in 2017.
On Jan. 15, 2020, James Stewart and Peter Gothard of KPMG were
appointed as Joint and Several Administrators of Glorious Sun
(Australia) Pty Ltd, Glorious Sun Corporate Services Pty Ltd,
Jeanswest Investments (Australia) Pty Ltd, Jeanswest Wholesale Pty
Ltd and Jeanswest Corporation Pty Ltd (trading as "Jeanswest")
(collectively "the Companies") by the respective boards of
directors.
M & A POLIMENI: Second Creditors' Meeting Set for Feb. 10
---------------------------------------------------------
A second meeting of creditors in the proceedings of M & A Polimeni
Plumbing Pty Ltd in its own right and ATF M & A Polimeni Family
Trust has been set for Feb. 10, 2020, at 10:00 a.m. at the offices
of BRI Ferrier, Level 10, at 45 William Street, in Melbourne,
Victoria.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 7, 2020, at 4:00 p.m.
David Coyne and James Koutsoukos of BRI Ferrier were appointed as
administrators of M & A Polimeni on Dec. 24, 2019.
MCM ENTERTAINMENT: First Creditors' Meeting Set for Feb. 11
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of MCM
Entertainment Group Limited will be held on Feb. 11, 2020, at 10:00
a.m. at the offices of Hamilton Murphy, Level 1, at 255 Mary
Street, in Richmond, Victoria.
Richard Rohrt of Hamilton Murphy was appointed as administrator of
MCM Entertainment on Jan. 30, 2020.
RALAN GROUP: Director Partners With Jean Nassif
-----------------------------------------------
The Urban Developer reports that developer Ralan Group's sole
director William O'Dwyer has partnered with an established Sydney
developer in order to offer its 1,600 unsecured creditors new
apartments.
Following the company's dramatic AUD550 million collapse, which
left hundreds of Gold Coast and Sydney off-the-plan apartment
buyers out of pocket, Mr. O'Dwyer has been working to
course-correct with the Sydney developer entering voluntary
administration at the end of July last year, The Urban Developer
relates.
In December, Ralan's creditors voted to put a 318-apartment project
in the Sydney suburb of Arncliffe into liquidation while creditors
who placed deposits for the group's Gold Coast developments
accepted Mr. O'Dwyer's controversial deed of company arrangement
(DOCA), according to The Urban Developer.
Under the deed, creditors will be offered discounts on prime Sydney
apartments that equate to the full amount of the funds owed to each
creditor. The arrangement will enable a creditor who is owed
AUD50,000 to buy an apartment valued at AUD500,000 for AUD450,000.
The Urban Developer says Mr. O'Dwyer revealed the identity of his
new business partner to the Australian Financial Review, until now
known as "Mr X", as controversial Sydney developer Jean Nassif of
Toplace Group.
The Urban Developer relates that Nassif will commit to a five-year
business plan with Mr. O'Dwyer to enable Ralan's creditors to use
their deposits to buy more apartments he plans to develop under the
deed.
Toplace, which holds a multi-billion-dollar pipeline of projects,
will launch several new apartment towers in Sydney before
mid-February—the first of which a new 300-unit apartment complex
located within six minutes drive from the Sydney CBD.
In order for the deed to be upheld, Mr. O'Dwyer will have to sell
500 apartments per year over the next three years at discounted
rates to its unsecured creditors, the report relays.
According to The Urban Developer, the deed will also be subject to
termination if Ralan Group is found to be in breach of yearly sales
targets and discounts, or is found to be bankrupt or subject to
court action by creditors.
Nassif, who has worked with Mr. O'Dwyer in the past, was
incentivised by the ability to access 1,600 new clients yet stated
in legal documents that only 50 per cent of each development would
be available as Ralan "discount units".
The Urban Developer notes that Ralan voluntary administrator Grant
Thornton has stood by its recommendation as the DOCA was predicated
on "too many conditions" to work.
The report says the administrators highlighted to creditors in its
investigation that the collapsed group had exhibited "numerous
breaches of the Corporation Act" and had been running insolvent
since 2014.
It was also found through an analysis of cashflow that O'Dwyer had
been siphoning funds out of the company between 2016 and 2019 to
spend on personal expenses, holidays and bitcoin, relates The Urban
Developer.
Ralan's major funders include major banks such as Westpac, NAB and
St George, along with mezzanine financiers such as Balmain and
Wingate.
Mr. O'Dwyers lawyers Johnson Winter & Slattery said the Ralan
director will be appointed as the "exclusive selling agent" to
market pre-sale units on upcoming Toplace developers within Sydney,
the report adds.
About Ralan Group
The Ralan Group specializes in the development, marketing and
management of residential and commercial property.
Said Jahani, Philip Campbell-Wilson and Graham Killer were
appointed Voluntary Administrators of the Group by a resolution of
the Group's directors on July 30, 2019.
On Aug. 1, 2019, Jason Tracey, Timothy Heenan and Salvatore Algeri
of Deloitte were appointed Joint and Several Receivers and Managers
of Ralan Paradise Holdings Pty Ltd, Ralan Paradise No. 1 Pty Ltd,
Ralan Paradise No. 2 Pty Ltd, Ralan Paradise No. 3 Pty Ltd, Ralan
Budds Beach No 1 Pty Ltd and Ruby Apartments Pty Ltd.
On Aug. 5, 2019, Ken Whittingham was appointed Receiver and Manager
of Ralan Paradise Resort Pty Ltd and Ralan Paradise No 4 Pty Ltd.
STS HOLDINGS: First Creditors' Meeting Set for Feb. 10
------------------------------------------------------
A first meeting of the creditors in the proceedings of STS Holdings
No.1 Pty Ltd will be held on Feb. 10, 2020, at 10:00 a.m. Level 2,
at 10 Bridge Street, in Sydney, NSW.
Domenico Alessandro Calabretta and Thyge Trafford-Jones of Mackay
Goodwin were appointed as administrators of STS Holdings on Jan.
29, 2020.
STS OPERATIONS: First Creditors' Meeting Set for Feb. 10
--------------------------------------------------------
A first meeting of the creditors in the proceedings of STS
Operations Ltd will be held on Feb. 10, 2020, at 10:30 a.m. at
Level 2, at 10 Bridge Street, in Sydney, NSW.
Domenico Alessandro Calabretta and Thyge Trafford-Jones of Mackay
Goodwin were appointed as administrators of STS Operations on Jan.
29, 2020.
TDAB PROJECTS: First Creditors' Meeting Set for Feb. 10
-------------------------------------------------------
A first meeting of the creditors in the proceedings of TDAB
Projects Pty Ltd will be held on Feb. 10, 2020, at 10:00 a.m. at
the offices of Mackay Goodwin, Suite D, Level 14, at 241 Adelaide
Street, in Brisbane, Queensland.
Thyge Trafford Jones and Domenic Calabretta of Mackay Goodwin were
appointed as administrators of TDAB Projects on Jan. 30, 2020.
WALKER GRAPHICS: Second Creditors' Meeting Set for Feb. 10
----------------------------------------------------------
A second meeting of creditors in the proceedings of Walker Graphics
Pty Ltd, trading as 'canned Heat Media & Marketing', 'Inky Tee',
'vivid Print Services' and 'worldwide Online Printing - Fyshwick',
has been set for Feb. 10, 2020, at 12:00 p.m. at Ground Floor, at
15 National Circuit, in Barton, ACT.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 7, 2020, at 4:00 p.m.
Grahame Robert Ward and Domenic Calabretta of Mackay Goodwin were
appointed as administrators of Walker Graphics on Jan. 6, 2020.
WOODY EMU: First Creditors' Meeting Set for Feb. 7
--------------------------------------------------
A first meeting of the creditors in the proceedings of Woody Emu
Investments Pty Ltd will be held simultaneously on Feb. 7, 2020, at
the offices of:
Worrells Solvency & Forensic Accountants
Suite 601B, Level 6, 91 Phillip Street
Parramatta, NSW
Time: 11:00 a.m.
- and -
Worrells Solvency & Forensic Accountants
Level 8, 102 Adelaide Street
Brisbane, Queensland
Time: 10:00 a.m.
Graeme Robert Beattie of Worrells was appointed as administrator of
Woody Emu on Jan. 28, 2020.
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I N D I A
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5 CORE: CARE Lowers Rating on INR15cr LT Loan to 'D'
----------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of 5
Core Acoustics Private Limited (FCAPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 15.00 CARE D; Revised from
Facilities CARE A4; on the basis
on best available information
Short Term Bank 0.42 CARE A4; Issuer not
Facilities cooperating; Based on
best available information
Short term Bank 15.00 CARE D; Issuer Not
Facilities Cooperating; Revised
from CARE A4; Issuer Not
Cooperating based on best
Available information
Detailed Rationale & Key Rating Drivers
CARE has revised the rating of FCAPL to CARE D; ISSUER NOT
COOPERATING from CARE A4; ISSUER NOT COOPERATING based on best
available information on account ongoing delays in repayment of
debt as per publically available information. In line with the
extant SEBI guidelines, CARE has reviewed the ratings on the basis
of the publicly available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating. The rating
on FCAPL's bank facilities will 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 ratings.
5 Core Acoustics Private Limited (FCAPL) was incorporated in
September, 1995 under the name of Rajindra Mattresses Private
Limited (RMPL) with the main purpose of manufacturing car seats,
bedding, etc. However in 2014, RMPL was acquired by the promoters
of the '5 Core' group, Mr. Amarjit Singh Kalra and his wife, Ms.
Surinder Kaur Kalra and the name of the company was changed to 5
Core Acoustics Private Limited in December, 2014. Presently, the
company is involved in the manufacturing and assembling of public
address (PA) systems and components, including loud speakers,
amplifiers, microphones, and woofers, and related electronic and
electrical equipment. The company commenced operations in November,
2014 and its manufacturing facility is located in Bhiwadi,
Rajasthan.
FCAPL belongs to the 5 core group, based in New Delhi. The 5 core
group was established in 1983 and apart from FCAPL, the group has
six other companies namely, Indian Acoustics Private Limited,
Visual & Acoustics Corporation LLP, EMS & Exports, Happy Acoustics
Private Limited, Five Core Electronics Limited and Digi Export
Venture Private Limited which are all involved in the same line of
business.
ANNADA COLD: CARE Reaffirms B+ Rating on INR5.60cr LT Loan
----------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Annada Cold Storage Private Limited (ACSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 5.60 CARE B+; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of ACSPL continues to be
constrained by its small size of operations with moderate
profitability margins, regulated nature of business, seasonality of
business and susceptibility to vagaries of nature, risk of
delinquency in loans extended to farmers, competition from local
players, working capital intensive nature of business resulting in
leveraged capital structure. However, the aforesaid constraints are
partially offset by its experienced management and long track
record of operations, proximity to potato growing area.
Key Rating Sensitivities
Positives
* Increase in turnover beyond INR15 crore and cash accruals beyond
INR1.50 crore on a sustained basis.
* Improvement in working capital cycle below 100 days with reduced
inventory period.
Negatives
* Any sizeable decline in scale of operation (turnover below
INR1.50 crore and cash accruals below INR0.10 crore) on a
sustained basis.
* Elongation in gross current assets days beyond 700 days and
increase in external borrowings to fund these requirements on a
sustained basis.
Key Rating Weaknesses
Small Scale of operation with moderate profitability margins Annada
Cold Storage Pvt. Ltd. is a relatively small player in the cold
storage business having total operating income and PAT of INR1.96
crore and INR0.12 crore, respectively, in FY19. This apart, the
company has achieved sale of INR0.90 crore during 9MFY20. The total
capital employed was also low at around INR2.23 crore as on March
31, 2019. Small scale of operations with low net worth base limits
the credit risk profile of the company in an adverse scenario.
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
ACSPL'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 between December to February.
Furthermore, lower agricultural output may have an adverse impact
on the rental collections as the cold storage units collect rent on
the basis of quantity stored and the production of potato is highly
dependent on vagaries of nature.
Risk of delinquency in loans extended to farmers
Against the pledge of cold storage receipts, ACSPL provides
interest bearing advances to the farmers & traders. Before the
closure of the season in November, the farmers & traders are
required to clear their outstanding dues with the interest. In view
of this, there exists a risk of delinquency in loans extended, in
case of downward correction in potato or other stored goods prices,
as all such goods are agro commodities.
Competition from other local players
In spite of being capital intensive, the entry barrier for new cold
storage is low, backed by capital subsidy schemes of the
government. As a result, the potato storage business in the region
has become competitive, forcing cold storage owners to lure farmers
by providing them interest bearing advances against stored potatoes
which augments the business risk profile of the companies involved
in the trade.
Working capital intensive nature of business resulting in leveraged
capital structure
ACSPL is engaged in the cold storage business, accordingly its
operation is working capital intensive. The same is reflected by
the higher working capital requirement for the company and the
average utilization for the same remained at about 80% during the
last 12 months ended December, 2019.
Key Rating Strengths
Experienced management and long track record of operations
ACSPL is into cold storage services since 1997 and thus has long
operational track record. Due to long track record of operations of
the company, the promoters have gained significant experience in
the cold storage industry. The Key promoter, Mr. Ajoy Kundu has 27
years of experience in cold storage business, looks after the
overall management of the company supported by other directors.
Proximity to potato growing area
ACSPL's storing facility is situated in the Hooghly district of
West Bengal which is one of the major potato growing regions of the
state. The favorable location of the storage unit, in close
proximity to the leading potato growing areas provides it with a
wide catchment and making it suitable for the farmers in terms of
transportation and connectivity.
Satisfactory leverage ratios with satisfactory debt protection
metrics
The leverage ratios of the company have improved as on Mar.31, 2019
as against Mar.31, 2018 and remained comfortable with overall
gearing ratio being at 0.38x as on March 31, 2019. Total debt to
GCA also remained moderate at 0.16x in FY19. However, the interest
coverage ratio remained comfortable at 1.39x in FY19.
Annada Cold Storage Private Limited (ACSPL) was incorporated in
1997. The company is promoted by Mr. Ajoy Kundu. The company
provides cold storage services primarily for potatoes to the
farmers and traders on a rental basis. The cold storage unit of the
company is located at vill- Sahalalpur, PO-Naisarai, PS-Arambagh,
Hooghly- 712601, West Bengal with a storage capacity of 14000
metric tons. Besides providing cold storage facility, the unit also
works as a mediator between the farmers and marketers of potato, to
facilitate sale of potatoes stored and it also provides interest
bearing advances to farmers for farming purpose against potatoes
stored. The day to day operations of the company are looked after
by Mr. Ajoy Kundu (Promoter) along with Mr. Niranjan Kundu, Mr.
Bhudev Kundu, Mr. Swapan Mondal, Mr. Arun Kanti Mondal, who have
experience around 37 years, 12 years, 27 years, 27 years
respectively, in similar line of business.
Liquidity
The liquidity position of the company remained moderate marked by
current ratio remaining at 2.42x and quick ratio at 0.59x as on
March 31, 2019. The balance sheet shows cash and bank balance
amounting to INR 0.36 crore as on March 31, 2019. The Gross cash
accruals also remained moderate at INR0.16 crore as on March 31,
2019.
BHANDARI FOILS: CARE Reaffirms D Rating on INR90cr Loan
-------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Bhandari Foils and Tubes Limited (BFTL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 90.00 CARE D Reaffirmed and removed
Facilities From Issuer not cooperating
Short-term Bank 103.26 CARE D Reaffirmed and removed
Facilities From Issuer not cooperating
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of BFTL continue to
remain constrained on account of continuous overdrawal in cash
credit account for more than 30 days, devolvement of letter of
credit and ongoing delays in repayment of term loan.
Rating Sensitivity
Positive Factor
* Track record of timely servicing of the debt obligation for at
least 90 days from the date of last delay/default
Detailed description of the key rating drivers
Key Rating Weakness
Continuous overdrawal in cash credit account, devolvement of LC and
default in repayment of term loan: Due to poor liquidity BFTL has
continuous overdrawals from cash credit account beyond 30 days and
devolvement of letter of credit.
Further there are on-going delays in repayment of term loans.
Liquidity Analysis: Poor
BFTL has poor liquidity marked by negative cash accruals compared
to high debt obligations and fully utilized bank limits, affecting
the company's ability to service its debt obligations on a timely
basis. Further, operating cycle elongated from 136 days in FY18 to
224 days in FY19 on account of inventory pile-up due to lower
off-take from the customers.
Analytical Approach: Standalone along with factoring in the
corporate guarantee extended by the company.
BFTL has extended unconditional and irrevocable corporate guarantee
for the bank facilities of INR49.50 crore availed by Resurgent
Power Projects Ltd. (RSPL; erstwhile Enmas GB Power Systems Project
Ltd.; rated CARE D; ISSUER NOT CO-OPERATING). The obligations
towards the corporate guarantee have been suitably factored in the
analysis.
Incorporated in 1993, BFTL is promoted by the Bhandari group based
out of Chennai. BFTL is engaged into the business of manufacturing
stainless steel (SS) welded tubes and pipes, bright annealing
tubes, cold rolled SS coils, strips and foils and pipe fittings.
BFTL's manufacturing unit is located at Dewas, Madhya Pradesh and
had an installed capacity for manufacturing of 15,000 metric tons
per annum (MTPA) of SS tubes, strips, section/components and bright
annealing tubes along with 8,000 MTPA for cold-rolled SS (CRSS)
coils, strips and foils as on March 31, 2019.
BLUE WHEEL: Ind-Ra Withdraws 'BB-' Bank Loan Rating
---------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Blue Wheel
National Health Care & Educational Trust's bank loan rating in the
non-cooperating category and has simultaneously withdrawn it. The
detailed rating action is given below:
-- INR540 mil. Bank loans* maintained in non-cooperating category
and withdrawn.
*Maintained at 'IND BB- (ISSUER NOT COOPERATING)' before being
withdrawn
KEY RATING DRIVERS
The rating has been maintained in the non-cooperating category as
the issuer did not participate in the rating exercise despite
continuous requests and follow-ups by Ind-Ra.
Ind-Ra is no longer required to maintain the rating, as it has
received a no-objection certificate from the lender. This is
consistent with the Securities and Exchange Board of India's
circular dated March 31, 2017, for credit rating agencies.
COMPANY PROFILE
Blue Wheel National Health Care & Educational Trust was established
as a public charitable trust in 1999.
DALMIA CEMENT: NCLT Orders Insolvency Proceedings Against Unit
--------------------------------------------------------------
The Financial Express reports that the Guwahati Bench of the
National Company Law Tribunal (NCLT) has given its approval to
start insolvency proceedings against Calcom Cement India, a
subsidiary of Dalmia Cement (Bharat), admitting an insolvency
petition filed by Mauritius-based GuarantCo. Dalmia Cement said it
would move the National Company Law Appellate Tribunal (NCLAT)
against this judgment, the report says.
According to the report, GuarantCo, a financial creditor to Calcom
Cement, had filed the insolvency petition last year at the NCLT
against the company under Section 7 of the Insolvency and
Bankruptcy Code. According to the petition, there was a total
"default" of around INR100 crore by the cement manufacturing firm
as on September last year.
The petition filed by the financial creditor under Section 7 of the
Insolvency & Bankruptcy Code, 2016 is hereby admitted for
initiating the Corporate Insolvency Resolution Process in respect
of Calcom Cement India," Justice Hari Venkata Subba Rao of the NCLT
said while pronouncing the order on January 29, FE relates.
In its petition, GuarantCo had said, "In and around 2007, Calcom
Cement India approached the financial creditor to stand as
guarantor for the loan facility(ies) it had availed from various
Indian banks. The financial creditor agreed to execute guarantee(s)
in favour of the Indian banks w.r.t loan facilities availed by the
corporate debtor from the Indian banks (Axis Bank and HDFC Bank),"
the report relays.
On the basis of demand notices issued by Axis Bank and HDFC Bank,
GuarantCo had paid $10,842,267.16 and $11,221,084.9 to the banks,
respectively. "Thereafter, the financial creditor demanded the
payment be made to Axis Bank and HDFC Bank pursuant to their
invocation of guarantee from the corporate debtor in terms of the
amended and restated recourse agreement. However, the corporate
debtor failed to honour its commitment in terms of the amended and
restated recourse agreement," according to the petition cited by
FE.
In July 2012, the Mauritius-based company had entered into an MoU
with Calcom Cement, wherein apart from other conditions, the former
had agreed to the request of the corporate debtor to settle and
restructure its dues under the amended and restated recourse
agreement into long-tenor loans subject to certain conditions, FE
recalls. According to the petition, one of the important terms of
the MoU was, "Calcom agrees to fully cooperate with GuarantCo and
use its best endeavours to obtain all regulatory approvals,
including approaching the RBI, MoF or other authorities for
restructuring the total liability into the GuarantCo USD loan".
Dalmia Cement (Bharat) Limited manufactures construction materials.
The Company markets cement and other allied products for oil wells,
railway sleepers, air strips, and road construction projects.
Dalmia Cement serves customers in India.
DSR INDIA INFRACON: Insolvency Resolution Process Case Summary
--------------------------------------------------------------
Debtor: DSR India Infracon Private Limited
H No. 34, Out of Khasra No. 109/2 Gali No. 16
Wazirabad Extn. Delhi North West 110084
IN
Insolvency Commencement Date: January 21, 2020
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: July 18, 2020
(180 days from commencement)
Insolvency professional: Harish Taneja
Interim Resolution
Professional: Harish Taneja
236-L, Model Town
Near Mukhija Hospital
Sonipat 131001
E-mail: harishtaneja78@gmail.com
606, Anushka Tower
Garg Trade Centre
Sec-11, Rohini
New Delhi 110085
E-mail: cirp.dsr@gmail.com
- and -
Insolvency & Bankruptcy Board of India
7th Floor, Mayur Bhawan
Shankar Market, Connaught Circus
New Delhi 110001
2nd Floor, Jeevan Vihar Building
Parliament Street
New Delhi 110001
Last date for
submission of claims: February 4, 2020
EMPERIA REALTY: CARE Lowers Rating on INR13.75cr Loan to 'D'
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Emperia Realty (ER), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 13.75 CARE D; Revised from
Facilities CARE BB-; Stable
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of ER takes into account
the on-going delays in the servicing of debt obligations in the
term loan account for both principal & interest since November 2019
owing to stretched liquidity due to low booking status of saleable
units.
Rating Sensitivities
Positive Factors
* Regularization of the debt servicing track record by timely
repayments of principal and interest
Detailed description of the key rating drivers
Key Rating Weaknesses
Delays in debt servicing: As per the interaction with the banker of
ER on January 21, 2020, it was known that there are ongoing delays
in the servicing of debt obligations in its term loan account for
both principal & interest since November 2019 owing to stretched
liquidity due to low booking status of saleable units. The entire
installment (principal + interest) due on November 30, 2019 was
serviced on December 26, 2019, whereas the due amount as on
December 31, 2019 is still remains overdue as on January 21, 2020.
Established in March 2015 by Mr. Govind Patel with his relatives,
Emperia Realty (ER) is engaged in real estate development &
construction of residential as well as commercial spaces. The firm
forms part of the renowned Akshar Group (AG), with Akshar
Developers (AD) being the flagship firm. AG, founded in 1995, has
developed a number of residential & commercial spaces across Navi
Mumbai.
ER is currently developing its maiden project namely Akshar Emperia
Garden (EG) at Panvel in Navi Mumbai, Maharashtra, a residential
project spanning across a total saleable area of 1,72,460 Sq. Ft.
The said complex comprises 4 buildings with 77 1 BHK/1 RK flats
each, with each building comprising G+7 floors, coupled with a club
house. The amenities of the project comprise play area, jogging
track, gymnasium, advanced security, community hall, internal roads
and gardens. The aforementioned project is estimated to cost
INR31.54 crore proposed to be funded by way of promoters'
contribution to the tune of INR8.50 crore, bank term loan worth
INR15 crore and the balance by way of receipts from customers. The
said project is registered by Real Estate Regulatory Authority
(RERA) (RERA ID: P52000011872).
EUROTEK ENGINEERING: CARE Keeps 'B+' Rating in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Eurotek
Engineering Enterprises (EEE) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.75 CARE B+; Stable Issuer Not
Facilities Cooperating; Based on best
available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from EEE to monitor the rating
vide e-mail communications/letters dated September 4, 2019,
September 6, 2019, November 8, 2019, & December 12, 2019 and
numerous phone calls. However, despite CARE's repeated requests,
the firm has not provided the requisite information for monitoring
the rating. In the absence of minimum information required for the
purpose of rating, CARE is unable to express opinion on the rating.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of best available information which however, in
CARE's opinion is not sufficient to arrive at fair rating. The
rating on Eurotek Engineering Enterprises' bank facilities will now
be denoted as CARE B+;Stable; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on November 23, 2018 the following were
the rating strengths and weaknesses:
Key rating drivers
Key Rating Weaknesses
Small scale of operations with fluctuating total operating income
Despite having a track record close to two decades, the total
operating income (TOI) has been fluctuating due to fluctuation
in orders from its customer and remained small at INR14.00 crore in
FY18(Provisional) with low net worth base of INR4.16 crore as on
March 31, 2018(Provisional) as compared to other peers in the
industry. The TOI declined from INR 12.60 crore in FY16 to INR 7.83
crore in FY17 as the firm received less orders from its most
important client- BHEL firm However, the firm has achieved total
operating income of INR6.5 crore in 5MFY19 (Prov.).
Fluctuation of PBILDT margins albeit consistency in PAT margins
The PBILDT of the firm has been fluctuating during the review
period although remained satisfactory. The PBILDT margin improved
from 5.55% in FY16 to 6.89% in FY18 (provisional) due to decrease
in material cost and overheads. However PAT margins of the firm
improved y-o-y from 0.66% in FY15 to 1.62% in FY18 (provisional) at
the back of absorption of financial expenses and depreciation
provision from operating profits.
Moderate capital structure and weak debt coverage indicators
The firm has moderate capital structure during the review period.
However, the debt equity ratio of the firm remained nil for the
last three balance sheet date ended March 31, 2018 (Prov.) The
overall gearing has been deteriorated year-on-year from 1.54x as on
March 31, 2016 to 1.63x as on March 31, 2018(provisional) due to
higher working capital utilizations. The debt coverage indicators
of the firm also remained weak during the review period. Total
debt/GCA although improved from 25.38x in FY16 to 22.05x in FY18
(provisional) due to increase in cash accruals. The PBILDT interest
coverage ratio of the firm improved from 1.39x in FY16 to 1.59x in
FY18 (provisional) due to increase in PBILDT.
Working capital intensive nature of operations
The operating cycle of the firm was elongated during review period
and stood at 261 days in FY17 due to high inventory period of 133
days on account of its nature of business operations. The firm
maintains average level of raw materials and WIP inventory of
around 3 months due to the nature of business i.e. order based
works executed by the firm. The manufacturing undergoes various
stages and time depends upon the level of customization and
capacity of the finished product. The firm collects the payments
from its customers within 60-90 months from the date of billing but
in FY18, the average debtor period improved on the back of increase
in TOI. The firm further receives a credit period of one month from
its suppliers. To bridge the working capital requirement gap, the
firm utilizes sanctioned overdraft facilities of INR6.75crore. The
average utilization of working capital facility stood at 95% for
the last 12 months ended August 31, 2018.
High customer concentration risk with total sales made to single
customer
The firm's entire supplies are being done to BHEL; despite of the
reputed and corporate client of the firm, the entire revenues of
the firm are dependent on the single customer. Hence due to the
concentrated revenues of the firm from single customer, lack of
orders or reduction in volumes demanded by BHEL would directly
impact the revenues and margins of the firm.
Constitution of the entity as partnership firm with inherent risk
of withdrawal of capital
Constitution as a partnership has the inherent risk of possibility
of withdrawal of the capital at the time of personal contingency
which can adversely affect its capital structure. Furthermore,
partnership firms have restricted access to external borrowings as
credit worthiness of the partners would be key factors affecting
credit decision for the lenders.
Key Rating Strengths
Long track record of the firm with experience of the partner for
more than two decades in fabrication industry
EEE was established in 1998 by Mr. Baburaj and Mrs. Saraswathi. Mr.
Baburaj is a Diploma in civil engineering (DCE). He is the Managing
Partner of the firm who takes care of day to day operations and has
more than two decades of experience in the fabrication of boiler
components since inception of the business. The other partner is
well qualified and has more than two decades of experience in the
industry. Mr Settu, H/o Mrs. Saraswathi assists Mr Baburaj in
managing the day to day activities of the firm. The firm has
established good relationship with suppliers and customers due to
established track record and presence in the business for a longer
period of time.
Government initiative in Power sector
The government initiatives and investments can be attributed as the
key market drivers. As a result of increased government spending on
electrification and rising power demands, the electrical equipment
manufacturers are likely to get benefitted. Programmes such as
RGGVY (Rajiv Gandhi Grameen Vidyutikaran Yojana) and R-APDRP
(Revised Accelerated Power Development and Reforms Program) are
bolstering the demand for electrical equipments such as switch
gears, conductors, capacitors and transformers. Transformers being
used in generation, transmission as well as distribution network
has experienced healthy growth over the last few years and the
market is further set to rise as a result of increased governmental
focus towards rural electrification.
Association with reputed corporate i.e. BHEL from past 20 years
with current order worth INR 15.5 crore The firm is majorly
supplying all of its materials to Bharat Heavy Electricals Limited
(BHEL) only. With the established relation with BHEL, the promoters
are being able to get repeated orders from them and realization of
receivables of the firm on time. The firm has current orders worth
around INR 15.50crore from BHEL as on
April 4, 2018 for supply of Boilers and Supporting Components and
which is likely to execute by December.
M/s. Eurotek Engineering Enterprises (EEE) was established in the
year 1996 as a partnership firm by Mr. Baburaj (Managing Partner)
and Mrs. Saraswathi as a partner. The firm is engaged in
manufacturing of boiler related ancillaries and components at
Trichy, Tamil Nadu. The firm sells its final product to Bharat
Heavy Electrical Limited.
GOPALSONS STEELS: Insolvency Resolution Process Case Summary
------------------------------------------------------------
Debtor: Gopalsons Steels Private Limited
31/6, New Rohtak Road
New Delhi 110005
Insolvency Commencement Date: January 20, 2020
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: July 18, 2020
Insolvency professional: Mr. Kanti Mohan Rustagi
Interim Resolution
Professional: Mr. Kanti Mohan Rustagi
E-7, Kailash Colony
New Delhi 110048
E-mail:
kanti.rustagi@patanjaliassociates.com
- and -
Resurgent Resolution Professionals LLP
905, 9th Floor, Tower C
Unitech Business Zone
Nirvana Country Sector-50
Gurgaon 122018
E-mail: cirp.gopalsons@gmail.com
Last date for
submission of claims: February 3, 2020
INDIAN TECHNICAL: CARE Assigns B- Rating to INR10cr LT Loan
-----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Indian
Technical and Computer Institute (ITCI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 10.00 CARE B-; Stable Assigned
Detailed Rationale & Key rating drivers
The rating assigned to the bank facilities of ITCI is constrained
by small scale of operations with modest corpus fund, leveraged
capital structure coupled with weak debt coverage indicators and
project stabilization risk arising from pending completion of
construction of the school and stretched liquidity position. The
rating is further constrained by pending affiliations from CBSE
board and intense competition accompanied by susceptibility of the
trust to adverse regulatory changes in the educational sector.
The above constraints outweigh the comfort derived from vast
experience of trustees in the education sector, healthy SBID and
Surplus margins of the trust along with satisfactory student
enrollment ratio.
Key Rating Sensitivity
Positive Factors
* Improvement in gross receipts on account of higher student
enrollment ratios along with sustained improvement in its
surplus margins
* Affiliation from CBSE board along with commencement of intake for
Ninth & tenth standard for academic year 2020-21
* Improvement in overall gearing ratio less than 3x
Negative Factors
* Decline in the gross receipts and resultant decline in surplus
levels
* Any debt funded capex leading to deterioration in capital
structure
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operations with modest corpus fund
Despite more than a decade of operations, the gross receipts of the
ITCI remained small at INR4.83 crore with a corpus fund of INR1.75
crore as on March 31, 2019. However, the gross receipts has
improved by Compound annual growth rate(CAGR) of approximately 40%
during the last three years ended FY19 mainly on account of growth
in enrollment and also due to marginal increase in fee structure.
Further, the gross receipts during 9MFY20 ended December 31, 2019
is INR3.50 crore.
Uneven cash-flow associated with educational Institutes: The
revenue stream of the society is skewed towards the beginning of
the academic year (normally between June-August) when the bulk of
the tuition fees, and other related income is collected whereas the
society incurs regular stream of payments for meeting staff salary,
maintenance activities, interest expenses amongst others.
Leveraged capital structure and weak debt coverage indicator
ITCI's capital structure is leveraged marked by overall gearing of
6.12x as on March 31, 2019 as against 3.14x as on March 31, 2018.
The deterioration is mainly on account of CAPEX undertaken towards
construction of building and other facilities which was funded
majorly through debt.. Moreover, with high leverage levels coupled
with lower cash accruals, the debt coverage indicators stood weak
during the period.
Project stabilization and execution risk
The trust has recently completed the construction of owned building
premises and internal fixtures and the operations at the new
vicinity has commenced in June 2019. As on January 14, 2020, the
society has incurred approximately 74% of the total project cost.
However, minor works related to furniture and other facilities are
pending and the same is expected to be completed by March 2020.
Timely completion of the project within budgeted cost will be
crucial for the financial risk profile of the trust.
Pending CBSE Board affiliations
ICTI operates Cambridge International School at Pune which offers
education from Nursery to Eight standard with total intake capacity
of 1300 students. It has applied for the affiliation from CBSE
Board for ninth and tenth standard; however the same is not yet
approved. Going forward, approval from CBSE board will be the
critical point for the growth of ITCI and also for the students in
eighth standard to continue their admissions in the school.
Intense competition along with susceptibility to adverse regulatory
changes in the educational sector
ITCI faces intense competition from various government and private
institutes in the vicinity offering primary/secondary/higher
education. Also, operations of the school remain exposed to strict
regulatory guidelines related to student strength, teacher student
ratio, infrastructure etc. Any violation of guidelines issued by
the CBSE board and other local regulations may result in
restriction of new admissions impacting revenue.
Key Rating Strengths
Established track record and experienced management in the
education sector
The trust has an operational track record of around a decade in the
educational sector. Currently, the trust is managed by Mr.Dhananjay
Varnekar(President), Mr. Dyaneshwar Kalbhor(Secretary), Mrs.Sheetal
Varnekar(Member), Mrs.Rajashree Kalbhor(Member). The trustees have
an average experience of more than 20 years in education sector and
are well versed about the regulatory guidelines and norms
pertaining to educational sector. Moreover, Mr. Dhananjay Varnekar
is also the chairman of IIBM (International institute of Business
Management) group of institutes offering varied courses affiliated
to Savitribai Phule Pune University. Long experience of the
trustees in education sector benefits in smooth running of ITCI.
Healthy SBID and surplus margins
The SBID margin of ITCI has been highly volatile and stood in the
range of 15% - 29% during the last three years ended FY19. Further,
growth in TOI for FY19 has helped ITCI to generate healthy SBID
margins during FY19. Further, surplus margin of the trust stood
healthy in the range of 8%-16% during the last three years ended
FY19.
Satisfactory enrollment ratio
ITCI has consistently increased the intake capacity of the school
since its commencement in 2008 to meet the increase in student's
strength. Also, enrollment ratio has remained healthy in the ratio
of 85% to 95% over the last three academic years ended 2018-19. The
improvement in enrollment is on account of steps taken by the
school management on quality education using the state of the art
facilities, extracurricular activities for students etc.
Liquidity: Stretched
Liquidity is stretched marked by tightly matched accruals against
repayment obligations. The capex requirements are modular and is
expected to be funded using debt.
ITCI is registered under the Bombay Public Trust Act, 1950 and was
founded in 2008 by Mr.Dhananjay Varnekar. ITCI operates Cambridge
International School, Pune under its umbrella which offers
education from Nursery to Eighth standards.
K.R.C. CONSTRUCTIONS: Ind-Ra Moves 'BB-' Rating to Non-Cooperating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated K.R.C.
Constructions Private Limited's (KRCCPL) 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:
-- INR60 mil. Fund-based working capital limits migrated to non-
cooperating category with IND BB- (ISSUER NOT COOPERATING)
rating; and
-- INR185 mil. Non-fund-based working capital limits migrated to
non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 18, 2019. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in August 2016, KRCCPL acquired a partnership firm, KR
Constructions, during the same month and commenced commercial
operations thereafter. KCPL is engaged in the installation and
construction of new lines and substations in Chhattisgarh.
KRROME GLASS: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Krrome Glass Private Limited
Orbit House, Garstin Place
2nd Floor, Room No. 2C
Kolkata, West Bengal 700001
IN
Insolvency Commencement Date: January 17, 2020
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: July 14, 2020
Insolvency professional: Ramchandra Dallaram Choudhary
Interim Resolution
Professional: Ramchandra Dallaram Choudhary
Sun Resolution Professional Pvt Ltd
9B, Vardan Tower
Nr. Vimal House
Lakhudi Circle
Navrangpura
Ahmedabad 380014
E-mail: rdc_rca@yahoo.com
cirp.krrome@gmail.com
Last date for
submission of claims: February 3, 2020
KRUSHNA COTEX: CARE Reaffirms B+ Rating on INR8.0cr LT Loan
-----------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Krushna Cotex Private Limited (KCPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 8.00 CARE B+; Stable Reaffirmed
Short-term Bank
Facilities 5.68 CARE A4 Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of KCPL continues to be
constrained by modest scale of operation, low and fluctuating
profitability margins, moderate capital structure and weak debt
coverage indicators, working capital intensive nature of
operations. The ratings further continues to be constrained by its
presence in the highly competitive and fragmented textile industry,
susceptibility of operating margins to the raw material price
fluctuation and foreign exchange fluctuation risk.
The ratings, however, continue to derive strength from experienced
and resourceful promoters, operational support from group entities
with presence across textile value chain and location advantage.
Key Ratings Sensitivities
Positive Factors
* Improvement in scale of operation despite high competition:
Improvement in scale of operation to a level of
around INR75-100 crore on sustained basis.
* Improvement in profitability margins: Improvement in operating
margin to remain in range of 7-10% and net profit
margin to remain in range of 4-6% considering competition and
slowdown in textile industry.
* Improvement in debt protection matrix: Ability of the company to
keep its interest ratio in range of 3-4x times and
total debt /GCA in range of 5-7x times.
Negative Factors
* Elongation in collection period: Deterioration in collection
period beyond 150 days.
* Elongation in inventory period: Deterioration in inventory period
beyond 150 days.
Detailed description of Key rating drivers
Key rating Weakness
Modest scale of operations: The total operating income of KCPL
marginally declined by 2.72% from INR52.66 crore in FY18 to
INR51.23 crore in FY19 on account of lower demand received from the
overseas customers. Further during 9MFY20 (period refers from April
1, 2018 to December 30, 2019), KCPL posted a total operating income
of approx. INR45.00 crore and it possesses an order book position
worth INR2.80 crore as on January 13, 2020, to be executed by
February 15 2020. Thus the modest scale limits the company's
financial flexibility in times of stress and deprives it from scale
benefits.
Low and fluctuating profitability margin: The operating margin of
KCPL continues to remain fluctuating in the range of 6.29 – 7.62%
during last three years ending FY19 on account of volatility in raw
material prices and high competition. Further PBILDT margin
declined by 52 bps and stood at 7.10% in FY19 (vis-à-vis 7.62% in
FY18) on account of increase in raw material cost coupled with
increase in stores and consumables cost. The net profit continues
to remain low in the range of 0.26% – 0.72% during last three
years ended as on March 31, 2019 owing to high interest &
depreciation expenses. Further PAT margin improved by 9 bps and
stood at 0.35% in FY19 (vis-à-vis 0.26% in FY18) primarily on
account of decline in interest cost due to lower utilization of
working capital limits coupled with repayment of vehicle loans.
Moderate capital structure and weak debt coverage indicators: The
capital structure of the KCPL has marginally improved and stood
comfortable as indicated by overall gearing of 0.88x times as on
March 31, 2019 (vis-à-vis 1.14x times as on March 31, 2018) on
account of issue of equity shares and premium amounting to INR3.13
crore coupled with timely repayment of vehicle loan and accretion
of profits to reserves. Owing to above, total debt to GCA also
improved and stood at 15.63x times during FY19 (vis-à-vis 17.03x
times during FY18). Further interest coverage has also marginally
improved and stood at 1.71x times during FY19 (vis-à-vis 1.59x
times during FY18) owing to savings in interest cost due to lower
utilization of working capital limits coupled with repayment of
vehicle loans. However the debt coverage indicators continues to
remain weak.
Working capital intensive nature of operations: The operations
continue to remain working capital intensive in nature with funds
blocked in receivables as KCPL offers its customers an extended
credit period owing to an established relationship as well as
intense competition prevalent in the industry and inventory as KCPL
uses yarn as a raw material whose prices fluctuates and also they
have to maintain the stock in order to avoid the shortage. On
account of this, the average utilization of its working capital
limit remained high at around 98% during the last twelve months
ended as on December, 2019.
Stretched liquidity position: The liquidity position of the KCPL
remained stretched marked by tightly matched accruals to repayment
obligations, highly utilized bank limits and modest cash balance of
INR1.69 crore as on March 31, 2019 (vis-à-vis INR0.85 crore as on
March 31, 2018). Further current ratio remains at above unity level
during FY19.
Presence in the highly competitive and fragmented textile industry:
KCPL is into manufacturing of terry towel which are dominated by
numerous independent players which lead to high degree of
fragmentation resulting into high level of competition in the
segment. Due to high competition in the industry, the players in
the industry do not have bargaining power with their customers and
hence, players in this industry are operating at low margin.
Profit margins susceptible to fluctuations in raw material prices:
The prices of raw materials i.e. cotton yarn is determined by the
demand-supply scenario in domestic market. Furthermore the
demand-supply scenario of cotton witnesses a significant volatility
due to various reasons, such as government policies, effects of
monsoon, and others. Thus, aggregate effect of above factors
results in exposure of KCPL to price volatility risk.
Foreign exchange fluctuation risk: KCPL is highly dependent on
exports, with ~51% of its revenues generated from exports during
FY19 (vis-à-vis 72.24% in FY18), however it procures majority of
its raw materials from the domestic markets, thereby exposing to
fluctuation in raw material prices, as the company does not
undertake hedging.
Key rating Strengths
Experienced and resourceful promoters: KCPL is promoted by Mrs.
Jayshree Patel, Mrs. Hiral Patel, Mrs. Ketki Patel and Mrs. Kruti
Patel, all of them having experience more than decade respectively
in the textile industry. Further the company belongs to the Deesan
group having nine companies operating under it and has presence
across all value chain right from cultivation of cotton to
manufacturing of garments.
Operational support from group entities: KCPL is a part of the
Deesan group which has been in the business of textile
manufacturing since 1996 and has various companies operating under
it (including KCPL). It has presence in all segments of cotton
textiles starting from cultivation of cotton to manufacturing of
garments & terry towels. KCPL receives operational support from the
other group companies in terms of procurement of materials and
building customers.
Location advantage: KCPL's manufacturing facility is located at the
Integrated Textile Park in Shirpur, Dhule, Maharashtra which is in
close proximity to cotton producing belts of Dhule, Amravati and
Parbhani and is surrounded by multiple yarn and textile
manufacturing units within the textile park thereby facilitating in
procurement of raw materials.
Incorporated in 2007, Krushna Cotex Private Limited (KCPL) is
engaged in the manufacturing of terry towels with plant located at
Shirpur, Maharashtra. During FY19 KCPL exported around 51.00%
(vis-à-vis 72.24% in FY18) of its total production primarily to
USA and other countries and procured raw material from domestic
market.
KCPL's plant is established under the "Group Work Shed Scheme"
(Scheme of Integrated Textile Park (SITP) of Ministry of Textile,
the Government of India) promoted by Deesan Infrastructure Private
Limited (part of Deesan group). GWSS consist of several SSI units
within it out of which around 18 SSI units have installed capacity
of 30 looms with capacity to manufacture around 300 tonnes of yarn
will provide job work services only to KCPL.
KVK ENERGY: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: KVK Energy and Infrastructure Private Limited
Registered office address:
6-3-1109/A/1, 3rd floor
Navabharat Chambers
Raj Bhavan Road, Somajiguda
Hyderabad 500082
Telangana, India
Insolvency Commencement Date: January 22, 2020
Court: National Company Law Tribunal, Hyderabad Bench
Estimated date of closure of
insolvency resolution process: July 20, 2020
Insolvency professional: Mahadev Tirunagari
Interim Resolution
Professional: Mahadev Tirunagari
Sri Venkateswara Nilayam
Plot No. 10, 2nd Floor
Krishnapuram, Road No. 10
Banjara Hills, Hyderabad 500034
Telangana
E-mail: mahadev.pcs@gmail.com
cirp.kvkenergy@gmail.com
Classes of creditors: Classes of creditors-Debentures
Insolvency
Professionals
Representative of
Creditors in a class: Sai Ramesh Kanuparthi
Plot 6 B, Beside TDP Office
Road No. 2, Banjara Hills
Hyderabad, West Marredpally
Telangana 500034
E-mail: info@ksrfms.com
Manjeet Butcha
5-9-91 93, D.No. 204
2nd Floor, Shakti Sai Complex
Beside Udai Omni Clinic
Chapel Road, Abids
Other, Telangana 500001
E-mail: manjeetbucha@gmail.com
Padmasri Appana
1-1-711/1, Gandhi Nagar
Hyderabad, Telangana 500080
E-mail: padmaappana@yahoo.co.in
Last date for
submission of claims: February 5, 2020
LAKSHMI COTFAB: CARE Keeps 'D' Rating in Not Cooperating
--------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Lakshmi
Cotfab Private Limited (LCFPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 13.10 CARE D; Stable Issuer Not
Facilities Cooperating; Based on best
available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from LCFPL 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 LCFPL'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 ratings.
The ratings assigned to the bank facilities of LCFPL takes into
account on-going delays in servicing term loan principal
installment and interest obligations.
Detailed description of the key rating drivers
At the time of last rating on June 5, 2019 the following were the
rating strengths and weaknesses (Updated for the information from
publically available information).
Key Rating Weaknesses
Ongoing delay in debt servicing
The ratings assigned to the bank facilities of LCFPL takes into
account on-going delays in servicing term loan principal
installment and interest obligations.
Rajkot-based (Gujarat) LCFPL was incorporated in September, 2013 by
Mr. Nimish Lotiya, Mr. Vishal Lotiya and Mr. Harilal Khakhar. LCFPL
is engaged into cotton ginning, cleaning and bailing process having
an installed capacity of 350 full pressed cotton bales per day (165
kg each) as on March 31, 2018. The company procures raw cotton from
farmers and sells its final products in domestic market to the
states like Gujarat, Maharashtra, Tamil Nadu etc.
M.M. PATEL: CARE Ups Rating on INR63.91cr Loan to 'B'
-----------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of M.M.
Patel Public Charitable Trust (MMPPCT), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 11.58 CARE B; Stable Revised
Facilities From CARE D
Long term Bank 63.91 CARE B; Stable Revised
Facilities from CARE C; Stable
Short term Bank 9.35 CARE A4 Reaffirmed
Facilities
Detailed Rationale & Key Rating Drivers
The revision in the ratings to the bank facilities of MMPPCT takes
into account the regularization in the repayment of debt
obligations and interest servicing.
The ratings continue to take note of leveraged capital structure
and moderate debt servicing parameters owing to unsecured loans and
high loan repayments vis-à-vis gross cash accruals, moderation in
financial performance in FY19 as against that in FY18, limited
track record of the medical college and regulatory risk associated
with the regulations governing the education and healthcare
sector.
However, the ratings of MMPPCT derive comfort from resourceful
trustees with experience from diverse fields, healthy occupancy
ratio for the hospital and healthy enrollment ratio for the
college.
Rating Sensitivities
Positive factors
* Improvement in the trust's scale of operations leading to
sustained growth in TOI and improvement in liquidity buffer.
Negative factors
* Deterioration in debt servicing parameters and profitability
margins.
* Non-achievability of profitability margins of current financial
year, FY20, as envisaged.
Detailed description of the key rating drivers
Key Rating Weaknesses
Leveraged capital structure and weak debt coverage indicators
The overall gearing of the trust improved with scheduled repayment
of term loan but remained constrained on account of unsecured loans
from group companies and term loans from banks and stood at 1.95x
as on March 31, 2019 as against 2.34x as on March 31, 2018. The
total debt to GCA deteriorated to 12.52x as on March 31, 2019 as
against 10.41x on March 31, 2018 on account of fall in GCA to
INR8.92 cr in FY19 as against INR11.59 cr in FY18. The PBILDT and
PBIT interest coverage ratios also deteriorated to 1.77x and 1.09x
in FY19 as against 1.84x and 1.27x in FY18 respectively.
Decline in financial performance marked by moderate scale of
operations
Total operating income of MMPPCT remained stable with INR63.80
crore in FY19 as against INR64.03 crore in FY18. The SBILDT margin
declined to 31.41% in FY19 from 38.53% in FY18 on account of
increase in employee cost, power and fuel expenses and other
expenses which aggregately stood 50.82% of TOI in FY19 as against
44.72% in FY18. Also, the surplus margin declined to 1.86% of TOI
in FY19 as against 6.26% of TOI in FY18. Further, the gross cash
accruals reduced to INR8.92 crore in FY19 from INR11.59 crore in
FY18. However, the operating surplus remained moderate considering
enrollment ratio for the college and occupancy for the hospital.
Key Rating Strengths
Regularization in the repayment debt and interest servicing on
account of receipts from Medical Hospital and College The Trust
since June, 2019 has been regular in servicing the interest amount
and principal repayments. The term loan repayments have been timely
mainly on account of receipts from medical hospital and fee from
medical college.
Resourceful trustees
MM Patel Public Charitable Trust was established in the year 2008
by Mr. Bipinbhai Patel (Chief trustee) and his family members. The
trustees have vast entrepreneurial experience in fields of
textiles, dye cream, civil construction, transportation,
construction and petrol pumps. The chief trustee is also the active
Director & present Chairman of Ashwini Sahakari Rugnalaya Ani
Sanshodhan Kendra Nyt, Solapur which is a multistate Co-operative
Society having 520 bedded Hospital providing multi super specialty,
services from 2003.
Healthy occupancy ratio for the hospital
The hospital of the trust i.e. Ashwini Hospital, (520 bedded) is
situated at the village Kumbhari which is 10 km away from main
Solapur city. Considering limited competition in the Solapur
region, the occupancy level remained around ~85% over past 3 years
ended FY19.
Healthy enrollment ratios for the college
The college started the admissions during the academic year
2012-13. Though the operations of the Medical College has limited
track record, the trust has been able to achieve healthy enrollment
ratio for its medical college of ~100% for the past years. Three
batches of MBBS students have graduated by academic year 2018-19.
Liquidity-Stretched
Liquidity is marked by tightly matched gross cash accruals of
INR8.92 cr as on in FY19 to repayment obligations of INR14.76 crore
as on March 31, 2019, however the utilized bank limits remain
moderate and the cash balance as on March 31, 2019 and November 30,
2019 was INR0.92 crore and INR3.18 crore respectively. The maximum
CC utilization remained at 98.20% however; the average CC
utilization of the trust remained comfortable at 27.90% for past
twelve months ended November 30, 2019.
Industry Outlook
The sector was estimated at ~USD 101 billion in FY19, a growth of
10% over the previous year. The enrolment ratio grew by 24.50% in
last three years compared to 11%, a decade back. The sector is also
benefited from increased investments in recent years with 100% FDI
allowed in Indian Education sector. Also, the Healthcare sector in
India has become one of the largest sectors - both in terms of
revenue and employment. There are extensive opportunities for the
investments to be made in healthcare infrastructure in both the
urban and rural India. However, MMPPCT faces regulatory risk
associated with the regulations governing the education sector such
as cap on fees, courses and certification changes etc. and also
regulations governing the healthcare sector.
M.M. Patel Public Charitable Trust (MMPPCT) was established in the
year 2008 by Mr Bipinbhai M. Patel and his family. MMPPCT is a
public charitable trust which is currently managing a 520-beded
hospital, namely, 'Ashwini Rural Hospital' at Solapur and also
operates a medical college-namely 'Ashwini Rural Medical College'
which is the first rural medical college in Solapur district,
Maharashtra. The medical college offers MBBS and post graduate
courses.
MANGALORE FISHMEAL: CARE Lowers Rating on INR11.67cr Loan to D
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Mangalore Fishmeal and Oil Company (MFMO), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 11.67 CARE D; Revised from
Facilities CARE C; on the basis
on best available
information
Detailed Rationale & Key Rating Drivers
The revision in the rating assigned to the bank facilities of MFMO
is on account of classification of account as non-performing asset
(NPA) by the banker.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
Key Rating Weakness
Delays in serving debt obligations
The banker has classified account as non-performing asset (NPA).
Key Rating Strengths
Experience of the Promoters
Mr Iqbal Ahmed, the Managing Director, is a B.E (Civil) graduate,
has more than 22 years of experience in the construction business
and has about six years of experience in the current firm. He is
actively involved in the day to day operations of the firm with
support from his wife Mrs Mumtaz Sahul, a B.Com graduate, having
experience of more than one and half decade in construction
business. She handles the operations and administration functions
of the firm.
Mangalore Fish Meal and Oil (MFMO) is a partnership firm started in
2008 by 4 partners namely, Mr Mohammed Mustafa and Mr. B M Mumtaz
Ali, Mr A K Faisal, and Mr B A Moidin Bava. The partnership was
reconstituted and the firm was acquired by Mr Iqbal Ahmed and his
wife Mrs Mumtaz Sahul in 2010. The firm is engaged in manufacturing
of Fish Meal, Fish Oil, Allied-Fish Products and Concentrated fish
soluble. The firm has an installed capacity for processing the fish
of 250 MT per day.
Status of non-cooperation with previous CRA: Brickwork Ratings,
vide its press release dated January 16, 2020, continued its rating
in the Issuer Not Cooperating Category due to the non-availability
of requisite information for monitoring the rating.
MYSORE TIMBER: Ind-Ra Assigns B- LT Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Mysore Timber
Trading Co. (MTTC) a Long-Term Issuer Rating of 'IND B-'. The
Outlook is Stable.
The instrument-wise rating actions are:
-- INR50 mil. Fund-based facilities assigned with IND B-
/Stable/IND A4 rating; and
-- INR100 mil. Non-fund-based facilities assigned with IND A4
rating.
KEY RATING DRIVERS
The ratings reflect MTTC's small scale of operations, as indicated
by revenue of INR144 million in FY19 (FY18: INR241 million). The
revenue decreased on account of a slowdown in the real estate
industry and a decline in orders. The company had booked gross
sales of INR130 million until December 2019.
The ratings reflect MTTC's modest EBITDA margins owing to the
trading nature of the business. The margin improved to 4.0% in FY19
(FY18: 1.5%) on account of a fall in operating expenses. The
company's return on capital employed was 4% in FY19 (FY18: 2%).
The ratings reflect the weak credit metrics. The metrics improved
in FY19 due to an increase in the absolute EBITDA to INR6 million
in FY19 (FY18: INR4 million). The gross interest coverage
(operating EBITDAR/gross interest expense) was 1.0x in FY19 (FY18:
0.8x) and net leverage (total adjusted net debt/operating EBITDAR)
was 11.20x (11.8x).
Liquidity Indicator-Poor: MTTC's average utilization of fund-based
and non-fund-based facilities was 97% and 88%, respectively, for
the 12 months ended December 2019. The cash flow from operations
turned negative at INR23 million in FY19 (FY18: INR14 million) due
to unfavorable changes in the working capital. The cash and cash
equivalents amounted to INR3 million in FY19 (FY18: INR4 million)
against a total debt of INR68 million.
The ratings, however, are supported by the promoters' experience of
four decades in the trading of timber.
RATING SENSITIVITIES
Negative: Any further deterioration in liquidity will lead to a
negative rating action.
Positive: An improvement in the scale of operations and operating
margins, along with further improvement in liquidity, will lead to
a positive rating action.
COMPANY PROFILE
Mysore Timber Trading Co. was incorporated in 1974 as partnership
firm. The firm is engaged in trading of timber in Bangalore.
POLLEN COMPUTER: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Pollen Computer Private Limited
Shop No. 003, Ground Floor
Pooja Nagar, Building No. 2
CHS Ltd., Cabin Cross Road
Bhayander East Thane 401107
Insolvency Commencement Date: January 6, 2020
Court: National Company Law Tribunal, Mumbai Bench
Estimated date of closure of
insolvency resolution process: July 4, 2020
Insolvency professional: Mr. Bhavesh Rathod
Interim Resolution
Professional: Mr. Bhavesh Rathod
A/101, Shelter CHSL
CSC Road, Opp. Shakti Nagar
Dahisar (E), Mumbai 400068
E-mail: bhavesh76@gmail.com
- and -
Office No. 144, First Floor
Raghuleela Mall
Off S V Road
Kandivali West
Mumbai 400068
E-mail: ip.bhavesh@gmail.com
Last date for
submission of claims: February 1, 2020
POOJA MINI: CARE Lowers Rating on INR9.86c LT Loan to B+
--------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Pooja Mini Modern Rice Mill (PMRM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 9.86 CARE B+; Stable Revised
Facilities From CARE BB-; Stable
On the basis on best
available information
Short Term Bank 0.42 CARE A4; Issuer not
Facilities cooperating; Based on
best available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from PMRM to monitor the ratings
vide e-mail communications/letters dated January 8,2020 , January
7,2020, January 6, 2020, November 6, 2019, October 16, 2019 and
numerous phone calls. However, despite CARE's repeated requests,
the firm has not provided the requisite information for monitoring
the ratings. In line with the extant SEBI guidelines, CARE has
reviewed the rating on the basis of the best available information
which however, in CARE's opinion is not sufficient to arrive at a
fair rating. The rating on PMRM's bank facilities will now be
denoted as CARE B+; Stable/ CARE A4; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating has been revised by taking into account no due-diligence
conducted due to non-cooperation by PMRM with CARE'S efforts to
undertake a review of the rating outstanding. CARE views
information availability risk as a key factor in its assessment of
credit risk.
Detailed description of the key rating drivers
At the time of last rating on December 31, 2018 the following were
the rating weaknesses and strengths:
Key Rating Weakness
Modest scale of operations
The scale of operations of the firm remained small as marked by
total operating income and gross cash accrual at INR64.25 crore and
INR2.42 crore respectively for FY18 (FY refers to period April 1 to
March 31). Further, the capital base of the firm stood modest at
INR9.95 crore as on March 31, 2018. The small scale limits the
company's financial flexibility in times of stress and deprives it
from scale benefits.
Working capital intensive nature of operations
Rice is a kharif crop and the production of paddy came in the
market from October to January. Hence, the firm maintains average
inventory to meet its requirement in non-season period. The firm
gets the payment from customers within 20-25 days and gets credit
period from suppliers around 5-10 days. The average utilization of
working capital limits remained almost full for the past 12 months
ended November, 2018. The liquidity indicators stood moderate as
marked by current and quick ratio of 1.31x and 0.17x respectively
as on March 31, 2018. However, almost full utilization of working
capital borrowings indicates weak liquidity position of the firm.
The cash and bank balances stood at INR0.12 crore as on March 31,
2018.
Seasonality associated with agro commodities in highly fragmented
and government regulated industry and constitution as a partnership
concern
As the firm is engaged in the business of trading and processing of
agriculture commodities, the prices of agriculture commodities
remained fluctuating and depend on production yield, demand of the
commodities and vagaries of weather. Hence, profitability of the
firm is exposed to vulnerability in prices of agriculture
commodities. The rice milling industry is characterized by limited
value addition, highly fragmented and competitive in nature as
evident by the presence of numerous unorganized and few organized
players. The entry barriers in this industry are very low on
account of low capital investment and technological requirement.
Due to this, the players in the industry do not have any pricing
power.
Further, the industry is characterized by high degree of government
control both in procurement and sales for rice.
Government of India (GoI) decides the Minimum Support Price (MSP)
payable to farmers and also procures rice under the levy route from
rice mills.
The low net worth base makes its operations highly susceptible to
any business shock, thereby limiting its ability to absorb losses
or financial exigencies. Further, its constitution as a partnership
concern led to risk of withdrawal of capital.
Key Rating Strengths
Long track record of operations with experienced partners
The firm was formed in 2000, hence, has a track record of more than
a decade in the industry. Mr. Mewa Lal Rathore, key partner, have
more than three decade of experience in the processing and trading
of agricultural commodities industry and looks after overall
affairs of the firm. Mr. Amar Singh Rathore, partner, have more
than a decade of experience in the industry and looks after sales
and purchase of the firm. Further the partners are assisted by
experienced management team. With the long-standing presence in the
industry, the firm has established relationship with customers as
well as suppliers.
Growth in scale of operations
The scale of operation is growing continuously. For the period
FY16-FY18, PMMR's total operating income grew from INR23.90 crore
to INR64.25 crore reflecting a compounded annual growth rate (CAGR)
of 63.96% owing to on account of higher quantity sold.
Improvement in profitability margin, capital structure and coverage
indicators
The profitability margins of the firm remained thin for the past
three financial years, i.e., FY16–FY18. PBILDT and PAT margin
stood at 4.45% and 3.01% respectively for FY18 as against 4.24% and
2.12% respectively for FY17.
Further, the capital structure of the firm stood leveraged as
marked by overall gearing of 1.45x respectively as on March 31,
2018, as against 2.33x respectively for FY17 owing to infusion of
capital by partners along with repayment of term loan and unsecured
loans along with accretion of profits to reserves.
Further, owing to improvement in profitability margins; the
coverage indicators marked by interest coverage and total debt to
GCA improved and stood 6.31x and 5.97x resp for FY18 as against
4.46x and 6.63x respectively for FY17.
Kanpur (Uttar Pradesh) based Pooja Mini Modern Rice Mill (PMRM) was
formed in 2000 as a proprietorship concern by Mr. Mewa Lal Rathore.
However, from October, 2017, the constitution of the firm was
changed to partnership concern among four partners viz. Mr. Mewa
Lal Rathore, Mr. Amar Singh Rathore, Mrs. Pooja Rathore and Mrs.
Sharda Devi Rathore and share equal and profit loss. PMRM is mainly
engaged in the processing of arwa rice and steamed rice and is also
engaged in trading of agricultural commodities such as makka and
wheat. The processing plant of the firm has total installed
capacity of 22 Ton per Day (TPD) for processing of rice as on March
31, 2018. The firm purchases paddy and other agricultural
commodities from traders as well as mandis and sells rice and other
agro commodities to traders all over India. It also sells its
product through dealers and third party for indirect export.
PRAKASH HI-TECH: CARE Lowers Rating on INR5.0cr Loan to B-
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Prakash Hi-Tech Developers and Constructions Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 5.00 CARE B-; Stable Revised
Facilities From CARE B; Stable
On the basis on best
available information
Short Term Bank 0.42 CARE A4; Issuer not
Facilities cooperating; Based on
best available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from Prakash Hi-Tech Developers
and Constructions Private Limited to monitor the ratings vide
e-mail communications/letters dated January 8, 2020, January 7,
2020, January 6,2020, November 27,2019, November 6, 2019, October
16, 2019 and numerous phone calls. However, despite CARE's repeated
requests, the company has not provided the requisite information
for monitoring the ratings. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. The rating on Prakash
Hi-Tech Developers and Constructions Private Limited bank
facilities will now be denoted as CARE B-; Stable; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The rating has been revised by taking into account non-availability
of information due to non-cooperation by Prakash HiTech Developers
and Constructions Private Limited with CARE'S efforts to undertake
a review of the rating outstanding.
CARE views information non-availability risk as a key factor in its
assessment of credit risk.
Detailed description of the key rating drivers
At the time of last rating on April 9, 2019 the following were the
rating weaknesses and strengths:
Detailed description of the key rating drivers
Key Rating Weaknesses
Very small scale of operations with fluctuating profit margins:
Despite more than a decade of existence, the overall scale of
operations of PHTDCPL remained small with total operating income
stood in the range of INR0.56 crore to INR3.15 crore during
FY16-FY18. Moreover, the tangible net-worth of the company also
remained very small at INR1.97 crore as on March 31, 2018.
Moreover, the profit margins of the company also remained moderate
and the same stood fluctuating with PAT margin stood in the range
of 0.21%-3.07% during FY16- FY18.
Leveraged capital structure and weak debt coverage indicators:
The capital structure of PHDCPL remained leveraged during last
three balance sheet dates with overall gearing stood at 3.42x as on
March 31, 2018. Furthermore, the debt coverage indicators remained
weak during FY16-FY18 with interest coverage and total debt to GCA
at 1.23x and 55.37x in FY18 respectively.
Working capital intensive nature of operations with stretched
liquidity position:
The operations of PHDCPL are working capital intensive in nature
with considerable amount of funds being blocked in Inventory.
Overall, the liquidity position remained stretched with working
capital cycle stood at 1238 days in FY18. Moreover, the working
capital limit has been fully utilized during past 12 months ended
November 2018.
Operations in highly competitive and fragmented industry: The
construction industry is fragmented in nature with large number of
medium and small scale players present at regional level. This
coupled with the tender-driven nature of construction contracts
poses huge competition and puts pressure on the profit margins of
the players.
Key Rating Strengths
Established track record of operations with experienced promoters:
PHTDCPL has been in existence for more than three decades and is
managed by Mr. Sunil Kumar and Mr. Surendar Gupta who has total
experience of 34 years in construction industry. Since the
establishment, the company has successfully constructed various
buildings and raw houses as per the clientele requirement across
Bareilly district.
Liquidity Analysis:
The liquidity position of the company is marked by moderate current
ratio and weak quick ratio at 1.49 times and 0.32 times as on Mar
31, 2018 respectively (vis-à-vis 1.46 times and 0.28 times as on
March 31, 2017 respectively). Further, cash flow from operating
activities stood positive of INR0.64 crore as on March 31, 2018.
The utilization of working capital limits remained almost full
during past 12 months ended November, 2018. The cash and bank
balance stood at INR0.14 crore as on March 31, 2018 (vis-à-vis
INR0.11 crore as on March 31, 2017).
Prakash Hi Tech Developers & construction Private Limited was
established in 1989 as a partnership firm, later in 1999 is
converted into private limited company. PHDCPL is engaged in
construction services which primarily include construction of
Buildings, Raw house, Roads and other construction services across
Bareilly, Uttar Pradesh. Further, the company also works on
contract basis where it gets specific work contract for 1-2 story
residential and commercial buildings. The key raw materials Stone
Chips, Sand, Bricks, irin pillars, rode etc. are sourced from local
suppliers across Uttar Pradesh. It operates its registered office
in Bareilly, Uttar Pradesh.
RELIANCE NAVAL: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Reliance Naval and Engineering Limited
Pipavav Port, Post Ucchaiya
Via Rajula, Dist. Amreli
Gujarat 365560
Insolvency Commencement Date: January 15, 2020
Court: National Company Law Tribunal, Mumbai, Maharashtra Bench
Estimated date of closure of
insolvency resolution process: July 15, 2020
(180 days from commencement)
Insolvency professional: Mr. Rajeev Bal Sawangikar
Interim Resolution
Professional: Mr. Rajeev Bal Sawangikar
475, Professors Colony
Hanuman Nagar, Nagpur
Maharashtra 440024
E-mail: rajeev_sawangikar@yahoo.co.in
- and -
EY Restructuring LLP, 17th Floor
The Ruby, 29 Senapati Bapat Marg
Dadar, Mumbai 400028
E-mail: rbsmel.cirp@gmail.com
Last date for
submission of claims: January 31, 2020
ROCANA INRASTRUCTURE: Insolvency Resolution Process Case Summary
----------------------------------------------------------------
Debtor: Rocana Infrastructure Private Limited
New No. 21, Old No. 23
Padmanabhan Street
T.Nagar, Chennai 600017
Insolvency Commencement Date: January 20, 2020
Court: National Company Law Tribunal, Coimbatore Bench
Estimated date of closure of
insolvency resolution process: July 18, 2020
Insolvency professional: Renuka Devi Rangaswamy
Interim Resolution
Professional: Renuka Devi Rangaswamy
Arthi Illam, #9
Jodi Nagar, 3rd Street
Uppilipalayam Post
Coimbatore 641015
E-mail: jrassociatescbe@gmail.com
Last date for
submission of claims: February 6, 2020
S K DYEING: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: S K Dyeing and Finishing Mills Private Limited
D-1010, New Friends Colony
New Delhi 110065
Insolvency Commencement Date: January 16, 2020
Court: National Company Law Tribunal, New Delhi Bench
Estimated date of closure of
insolvency resolution process: July 14, 2020
Insolvency professional: Rajeev Lochan
Interim Resolution
Professional: Rajeev Lochan
243, Ist Floor
AGCR Enclave
New Delhi
E-mail: csrajeevlochan@gmail.com
- and -
1203, Vijaya Building
17, Barakhamba Road
Connaught Place
New Delhi 110001
E-mail: ip.skydyeing@gmail.com
Last date for
submission of claims: February 3, 2020
S. M. COLD: CARE Reaffirms B+ Rating on INR6.0cr LT Loan
--------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of S. M.
Cold Storage Private Limited (SMCSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 6.00 CARE B+; Stable Reaffirmed
Short-term Bank
Facilities 0.26 CARE A4 Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of SMCSPL continue to
be constrained by its small scale of operations along with low
profit margins, seasonality of business with susceptibility to
vagaries of nature, risk of delinquency in loans extended to
farmers and competition from other local players, working. However,
the aforesaid constraints are partially offset by its experienced
promoter and long track record of operations, proximity to potato
growing area and comfortable leverage ratios with moderate interest
coverage indicators.
Key Rating Sensitivities
Positive Factors
* Sizeable increase in scale of operations from present level
(Total Operating Income above INR15.00 crore) of the entity on a
sustained basis.
Negative Factors
* Any sizeable de-growth in scale of operations from present level
(total operating income below INR2.00 crore with cash accruals
below INR0.10 crore) on a sustained basis.
* Deterioration in capital structure with overall gearing ratio
reaching l higher than the level of 2.00x on a sustained basis.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operation along with moderate profit margins
S.M. Cold Storage Private Limited continues to be a small player in
the cold storage industry with a PAT of INR0.10 crore on total
operating income of INR2.68 crore in FY19. The moderate size
restricts the financial flexibility of the company in times of
stress and deprives it from economies of scale. The profitability
margins remained moderate marked by PBILDT and PAT margins of
27.91% and 3.79%, respectively, in FY18. Further the company has
achieved revenue of INR2.05 crore during 8MFY19.
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
SMCSPL's operation is seasonal in nature as potato is a winter
season crop with its harvesting period commencing in March. The
loading of potatoes in cold storages begins by the end of February
and lasts till March. Additionally, with potatoes having a
preservable life of around eight months in the cold storage,
farmers liquidate their stock from the cold storage by end of
season i.e., generally in the month of November. The unit remains
non-operational during the period between December to February.
Furthermore, lower agricultural output may have an adverse impact
on the rental collections as the cold storage units collect rent on
the basis of quantity stored and the production of potato is highly
dependent on vagaries of nature.
Risk of delinquency in loans extended to farmers
Against the pledge of cold storage receipts, SMCSPL provides
interest bearing advances to the farmers & traders. Before the
closure of the season in November, the farmers & traders are
required to clear their outstanding dues with the interest. In view
of this, there exists a risk of delinquency in loans extended, in
case of downward correction in potato or other stored goods prices,
as all such goods are agro commodities.
Competition from other local players
In spite of being capital intensive, the entry barrier for new cold
storage is low, backed by capital subsidy schemes of the
government. As a result, the potato storage business in the region
has become competitive, forcing cold storage owners to lure farmers
by providing them interest bearing advances against stored potatoes
which augments the business risk profile of the companies involved
in the trade.
Key Rating Strengths
Experienced Promoters and long track record of operations
The company is into cold storage business since 1986 and thus has
long track record of operations of around 33 years. Mr. Arindam
Mondal (Director) and Mrs. Kajal Mondal (Director) looks after
overall management of the company. Mrs. Kajal Mondal has more than
two decades of experience in cold storage business and is supported
by a team of experienced professionals who have rich experience in
the same line of business.
Proximity to potato growing area
SMCSPL's storage facility is located at Bankura, West Bengal, which
is one of the major potato growing regions of the state. The
favourable location of the storage unit, in close proximity to the
leading potato growing areas provides it with a wide catchment and
making it suitable for the farmers in terms of transportation and
connectivity.
Comfortable leverage ratios with moderate interest coverage
indicators
The capital structure of the company continues to remain
comfortable as marked by nil long term debt-equity ratio and
comfortable overall gearing ratio of 0.29x, respectively, as on
March 31, 2019. The improvement in overall gearing is mainly on
account of lower utilization of working capital limits and
repayment of unsecured loan from promoter as on balance sheet date.
The debt coverage indicators represented by total debt to GCA has
also improved in FY19 over FY18 and remained moderate at 4.21x as
on March 31, 2019. The same has improved mainly on account of lower
debt levels as on balance sheet date closing date. Furthermore, the
interest coverage ratio remained moderate at 1.39x during FY19.
Liquidity: Adequate
Liquidity is marked by sufficient cushion in accruals vis-a-vis
repayment obligations and modest cash balance of INR0.83 crore as
on March 31, 2019. The average utilization of working capital limit
remained 90% utilized during last 12 month ended on November 30,
2019. The current ratio remained satisfactory at 2.21x as on March
31, 2019.
S.M. Cold Storage Private Limited. (SMCSPL), incorporated in the
year 1986, is a Kolkata (West Bengal) based company, promoted by
the Mondal family. It is engaged in the business of providing cold
storage services to potato growing farmers and potato traders,
having an installed storage capacity of 170,000 quintals in Katora,
Bankura district of West Bengal. Mr. Arindam Mondal (Director) and
Mrs. Kajal Mondal looks after overall management of the company.
Mrs. Kajal Mondal has more than two decades of experience in cold
storage business and is supported by a team of experienced
professionals who have rich experience in the same line of
business.
SARAVANA STORES: Ind-Ra Lowers Long Term Issuer Rating to 'D'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Saravana Stores'
(Gold Palace) Long-Term Issuer Rating to 'IND D (ISSUER NOT
COOPERATING)' from 'IND BBB- (ISSUER NOT COOPERATING)'. The issuer
did not participate in the rating exercise despite continuous
requests and follow-ups by the agency. Thus, the rating is based on
the best available information. Therefore, investors and other
users are advised to take appropriate caution while using the
rating. The rating will now appear as 'IND D (ISSUER NOT
COOPERATING)' on the agency's website.
The instrument-wise rating actions are:
-- INR1,753.5 bil. Term loans (Long-term) due on December 2019 –
March 2027 downgraded with IND D (ISSUER NOT COOPERATING)
rating; and
-- INR1,820.0 bil. Fund-based working capital limits (Long-
term/Short-term) downgraded with IND D (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
the best-available information.
KEY RATING DRIVERS
The downgrade reflects delays in debt servicing by the company, the
details of which are unavailable.
RATING SENSITIVITIES
Positive: Timely debt servicing for three consecutive months could
result in a rating upgrade.
COMPANY PROFILE
Formed in 2006, SSGP is engaged in the retailing of jewelry,
textiles and household items among others in Chennai.
SAVA HEALTHCARE: CARE Withdraws B+/A4 Rating on Bank Facilities
---------------------------------------------------------------
CARE has reaffirmed and withdrawn the outstanding ratings of 'CARE
B+/ CARE A4; ISSUER NOT COOPERATING' assigned to the Bank
facilities of Sava Healthcare Limited with immediate effect. The
rating continues to take into account the small scale of
operations, moderate profit margins, stretched liquidity position,
and foreign exchange fluctuation risk. The ratings, further,
continue to remain constrained on account of dependence on export
and presence in highly fragmented industry with limited value
addition. The ratings also factor in experienced promoters in the
healthcare business and comfortable capital structure.
The rating withdrawal is at the request of Sava Healthcare Limited
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
Small scale of operations with moderate profit margins: The total
operating income of the company has seen a y-o-y growth of
approximately 13.38% to INR100.66 crore in FY19. The PBILDT and PAT
margins stood at 11.25% and 2.88% in FY19 as against 14.38% and
2.95% in FY18.
Foreign Exchange fluctuation risk: SHL imports about 27% of its raw
materials and while around 63% of the income is generated from
export market in FY15. The imports of the company are hedged
naturally. However, the company does not employ any hedging policy
therefore leaving its margins susceptible to volatility in exchange
rates.
Dependence on export and presence in highly fragmented industry
with limited value addition: Since, SHL has forayed into
manufacturing of pharmaceutical products; the scope of value
addition has increased tremendously which has shown positive impact
on its profitability margins. However, the company is operating in
a highly fragmented industry.
Key Rating Strengths
Experience of promoters in the healthcare business: Though SHL was
incorporated in 2004, Mr. Vinod Jadhav, Managing Director, has been
in the business of trading, manufacturing of pharmaceutical
products and herbal products for the last two decades. The Sava
group has been involved in the trading and manufacturing of
pharmaceutical products since more than a decade. The same has
enabled the group to grow and establish presence in the segment.
Comfortable Capital Structure: The capital structure of the entity
remained comfortable marked by overall gearings of 0.79x as on
March 31, 2019 on account of lower debt levels.
Liquidity: Stretched
The liquidity position of SHL remains stretched during FY19. The
current ratio of the company as on March 31, 2019 remained at 1.20x
as against 1.05x as on March 31, 2018. The operating cycle remained
at 137 days during FY19. Also the cash and bank balance remained
low at INR 0.25 crore as on March 31, 2019.
Sava Healthcare Limited (SHL; formerly known as Anagha Pharma
Private Limited) was incorporated in October 2004 in the name of
Anagha Intertrade Services Private Limited (later name changed to
Anagha Pharma Private Limited). SHL, promoted by Mr. Vinod Jadhav
and Mrs. Suvarna Jadhav, is primarily engaged into trading,
manufacturing of pharmaceutical products and herbal products. The
company has its manufacturing facilities at Surendranagar (Gujarat)
and Kolar (Karnataka).
SHAKAMBARI RUBBER: Insolvency Resolution Process Case Summary
-------------------------------------------------------------
Debtor: Shakambari Rubber Private Ltd.
Room No. 320, Bala Bhawani Bhawan
3rd Floor, 51 Vivekananda Road
Kolkata 700007
Insolvency Commencement Date: January 14, 2020
Court: National Company Law Tribunal, Kolkata Bench
Estimated date of closure of
insolvency resolution process: July 11, 2020
Insolvency professional: CA. Sonu Jain
Interim Resolution
Professional: CA. Sonu Jain
Poddar Court
Gate No. 2 Room No. 327
3rd Floor, 18 Rabindra Sarani
Kolkata 700001
E-mail: casonujain@gmail.com
cirp.shakambari@gmail.com
Last date for
submission of claims: January 28, 2020
SHRI DHANALAKSHMI: CARE Lowers Rating on INR32.85cr LT Loan
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Shri
Dhanalakshmi Green Energy Pvt Ltd (SDGE), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 32.85 CARE D; Revised from
Facilities CARE B+; on the basis
on best available
information
Detailed Rationale & Key Rating Drivers
CARE had vide its press release dated July 29, 2019 placed the
rating of SDGE under the issuer non cooperating category as it had
failed to provide information for monitoring of the rating. SDGE
continues to be non-cooperative and 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.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The ratings have been revised on account of delays in servicing of
the term loan obligations by the company ascertained by CARE as
part of its due diligence exercise.
Detailed description of the key rating drivers
Key Rating Weakness
Delay in Servicing of Debt Obligations:
CARE as part of its due diligence exercise interacts with various
stakeholders of the company including lenders to the company and as
part of this exercise has ascertained that there are delays in debt
servicing of the term loan obligations.
Shri Dhanalakshmi Green Energy Pvt Ltd (SDGE) is a private limited
company incorporated in February 2013 and promoted by Mr. C.
Natrajan and Mrs. N. Leelavathy (W/o Mr. C Natrajan). SDGE operates
9 windmills and sells the entire generated power to various group
captive companies in and around Coimbatore who are shareholders in
SDGE.
SHRIKISHAN & COMPANY PRIVATE: Ind-Ra Assigns 'BB' LT Issuer Rating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shrikishan &
Company Private Limited (SKCPL) a Long-Term Issuer Rating of 'IND
BB'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR30 mil. Fund-based limit assigned with IND BB/Stable
rating; and
-- INR200 mil. Non-fund-based limit assigned with IND A4+ rating.
KEY RATING DRIVERS
The ratings reflect SKCPL's volatile scale of operations, as
indicated by revenue of INR765 million in FY19 (FY18: INR199
million). Revenue increased significantly in FY19 due to
higher-order inflows as well as increased order execution. The
company's order book, as of January 1, 2020, stood at about
INR1,270 million (1.66x of FY19 revenue).
The rating factor in the company's volatile, although healthy,
operating margin, which declined to 5.27% in FY19 (FY18: 8.26%) due
to the increase in raw material prices. Its return on capital
employed stood at 28.60% in FY19 (FY18: 13.50%).
The ratings also take into consideration the company's high
susceptibility to government regulations due to its tender-based
business, working capital-intensive operations, and high
competition. The ratings are further constrained by SKCPL's high
geographical risk, as most of its project portfolio is concentrated
in Chhattisgarh.
The ratings, however, are supported by the company's strong credit
metrics, which improved in FY19 on an increase in absolute EBITDA
to INR40.38 million (FY18: INR16.46 million). Interest coverage
(operating EBITDA/gross interest expense) stood at 12.16x (FY18:
3.84x) and net leverage at 0.32x (2.16x). The company's absolute
EBITDA increased due to higher revenue and lower utilization of
working capital limits.
Liquidity Indicator- Adequate: The average maximum utilization of
fund-based facilities was 37% in the last 12 months ending December
2019. The cash flow from operations remained positive and improved
marginally to INR67 million in FY19 (FY18: INR56 million), and the
free cash flows also improved marginally to INR56 million (INR42
million). The improvement in cash flow from operations and free
cash flows was driven by improvement in absolute EBITDA and
favorable changes in the working capital. The year-end cash balance
stood at FY19 to INR29 million (FY18: INR3 million).
The ratings are further supported by the promoter's extensive
experience of more than a decade in the construction business.
RATING SENSITIVITIES
Positive: Sustained growth in the revenue and improvement in order
book position, while maintaining the credit metrics, along with an
improvement in the liquidity position could be positive for the
ratings.
Negative: Lower-than-expected revenue, along with any deterioration
in the working capital cycle and overall credit metrics, leading to
the interest coverage falling below 2.5x, on a sustained basis
could be negative for the ratings.
COMPANY PROFILE
Established in 2005 and promoted by Mr. Sharad Goyal and Ms. Sarita
Agrawal, SKCPL is engaged in the construction and maintenance of
roads and bridges for government bodies in Chhattisgarh. The
company is registered as a Class-A contractor by the government of
Chhattisgarh with the Public Works Department, Chhattisgarh.
SHRIKISHAN & COMPANY: Ind-Ra Assigns BB LT Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Shrikishan &
Company (Proprietorship) (SKC) a Long-Term Issuer Rating of 'IND
BB'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR20 mil. Fund-based limit assigned with IND BB/Stable
rating; and
-- INR230 mil. Non-fund-based limit assigned with IND A4+ rating.
KEY RATING DRIVERS
The ratings reflect SKC's modest scale of operations. Its
fluctuating revenue surged to INR1,150 million in FY19 (FY18:
INR535 million; FY17: INR633.57 million; FY16: INR862.36 million
due to an increase in the inflow of orders and execution of more
orders. As of 9MFY20, the order book stood at about INR1,380
million (1.19x of the FY19 revenue).
The ratings are constrained by SKC's high geographical risk, as
most of its projects are concentrated in Chhattisgarh. High
susceptibility to government regulations due to the company's
tender-based business and high competition further constrain the
ratings.
Liquidity Indicator- Adequate: SKC's average maximum utilization of
fund-based facilities was 39% in the last 12 months ending December
2019. The cash flow from operations remained positive and improved
significantly to INR174.25 million (FY18: INR12.47 million) as did
free cash flows to INR163.70 million (INR13.16 million), due to the
improvement in absolute EBITDA and decrease in receivables to INR20
million (INR100 million). The year-end cash balance in FY19 stood
at INR155 million (FY18: INR30 million).
The ratings, however, factor in SKC's healthy, but volatile
operating margin, which contracted to 6.41% in FY19 (FY18: 8.92%;
FY17: 8.96%; FY16: 9.94%) due to the increase in raw material
prices. The company's return on capital employed stood at 18.83% in
FY19 (FY18: 9.89%).
The ratings also factor in SKC's strong credit metrics. The
company's interest coverage (operating EBITDA/gross interest
expense) improved to 9.28x in FY19 (FY18:7.30x) and the company was
net cash positive due to better cash realization. The improved
credit metrics were due to an increase in absolute EBITDA to
INR73.69 million in FY19 (FY18: INR47.77 million) owing to higher
revenue and lower utilization of working capital limits.
The ratings are also supported by the proprietor's (Sushil Kumar)
over two decades of experience in the construction business.
RATING SENSITIVITIES
Positive: Sustained growth in the revenue and improvement in the
order book position while maintaining the credit metrics, along
with an improvement in the liquidity position could be positive for
the ratings.
Negative: Lower-than-expected revenue, along with any deterioration
in the working capital cycle and overall credit metrics, leading to
the interest coverage reducing below 2.5x, on a sustained basis
could be negative for the ratings
COMPANY PROFILE
Shrikishan & Company, incorporated in 1994, is a sole
proprietorship firm promoted by Mr. Sushil Agarwal. It is a Class-I
civil contractor for the Public Works Department in Chhattisgarh,
which is engaged in the construction and maintenance of roads and
bridges for government bodies in Chhattisgarh.
SINGOLI (CHARBHUJA): CARE Withdraws B+ Rating on Bank Facilities
----------------------------------------------------------------
CARE has reaffirmed and withdrawn the outstanding rating of CARE
B+; Stable' assigned to the bank facilities of Singoli (Charbhuja)
Krishak Sewa Sahakari Sanstha Limited (SCKSSSL) with immediate
effect.
The rating assigned to the bank facilities of SCKSSSL continues to
remain constrained on account of its modest scale of operation with
low PAT margin, limited resource profile, leveraged capital
structure and stretched liquidity position.
The rating, however, derives strength from the experience
management with long track record of operations and established
supplier base. The rating, further, derives strength on account of
satisfactory asset quality with minimum regulatory norms. Hence,
CARE has reaffirmed and withdrawn the outstanding rating of CARE
B+; Stable' assigned to the bank facilities of with immediate
effect. The above action has been taken at the request of SCKSSSL
and 'No Objection Certificate' received from the bank that has
extended the facilities rated by CARE.
Detailed description of the key rating drivers
Modest scale of operations along with low PAT margin
During FY19, Total Operating Income (TOI) has declined by 8.16%
over FY18 and stood at INR3.79 crore. The operating profitability
margins of the society stood healthy at 30.43% in FY19 as against
22.62% in FY18. While it has reported net profit of INR0.02 crore
in FY19 as against net loss of INR0.21 crore.
Leveraged Capital structure
The capital structure of the society stood comfortable with an
overall gearing of 6.10 times as on March 31, 2019, deteriorated
from 5.66 times as on March 31, 2018. Debt coverage indicators
stood weak marked by total debt to GCA of 769.44 times as on March
31, 2019. Further, Interest Coverage stood moderate at 0.98 times
in FY19.
Stretched Liquidity Position
The liquidity position of the SCKSSSL stood stressed marked by
working capital cycle of 63 days in FY10. Further, it has utilized
around fully its working capital bank borrowings in last twelve
month ended December 2019.
Key Rating Strengths
Experienced management with long track record of operation
With presence in the industry since 1975, and sponsor by Bank of
Baroda, the management of the society has established strong
supplier base. The overall affairs of SCKSSSL are managed by its
managing board. Mr. Gopal Lal Jat, (Chairman) and Mr. Durga Shankar
Gatyani (Vice chairman) both, has two decade of experience in the
marketing and management work.
Satisfactory asset quality
As on March 31, 2019, the society has reported NIL number of NPA
accounts. The loans extended by SCKSSSL are based upon the deposits
made by the members of the society which was funded through
short-term loan and working capital bank borrowings. The society
will not have any NPA's as the society undertakes surety from the
other members of the society along with PDC and the loan is secured
by the investment by the member.
Singoli (Rajasthan) based Singoli (Charbhuja) Krishak Sewa Sahkari
Sanstha Limited (SCKSSSL) was formed as a cooperative society by
its members in 1975 and sponsor by Bank of Baroda with an aim to
take care of all the requirement of small farmers in rural areas.
SCKSSSL covers Singoli, Barundani, Dhhakad, Khedi, Jojava, Sarana
and Motaron ka Kheda Gram Panchayats.
It is engaged in purchase, distribution and collection of chemical
fertilizers, organic seeds, equipment, pesticides, insecticides,
sugar, kerosene and other required material to its members.
SRI PALANI: CARE Assigns B+ Rating to INR8.73cr LT Loan
-------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Sri
Palani Murugan Modern Rice Mill (SPMMRM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 8.73 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of SPMMRM tempered by
financial risk profile marked by thin profitability margins,
Leveraged capital structure and weak debt protection metrics,
working capital intensive nature of operations, partnership nature
of Constitution with inherent risk of withdrawal of capital, and
presence in highly fragmented, competitive, seasonal agro and
regulated nature of industry.
However, ratings of the SPMMRM derives strength from experienced
partners and long track record of operations, modest albeit
year-on-year growth in total operating income (TOI) and proximity
to raw material and labor resources.
Key Rating Sensitivities
Positive Factors
* Consistent increase in the scale of operations marked by total
operating income on a sustained basis along with sustained
improvement in its profitability margins i.e. PBILDT margin and
maintaining of overall gearing below 1.00 times.
Negative Factors
* Any sizeable decline in scale of operation on a sustained basis.
* Any further deterioration in capital structure from the existing
level, on a sustained basis consequent to increase in external
borrowings to fund its requirements.
* Any change in the government regulation that limits the
bargaining power of the miller's and traders of pulses
Detailed description of the key rating drivers
Key Rating Weaknesses
Financial risk profile marked by thin profitability margins,
Leveraged capital structure and weak debt protection metrics The
profitability margins of the firm stood thin and fluctuating in
trend during the review period, due to firm's presence in a highly
competitive and fragmented industry. However the same has been
improved in FY19. The operating profit margin has improved by
385bps and stood at 3.27% as against 2.36% in FY18. Though the
operating profit margin improved in FY19, the
PAT margin continues to be at stable at 0.30% compare to previous
fiscal.
The capital structure of the firm stood leveraged marked by its
overall gearing ratio at 4.20x as on March 31, 2019 viz a viz 3.74x
during FY18 due to high debt quantum of the firm. The debt portion
of the firm primarily consists of working capital facility
sanctioned by the bank which occupies around 87% of portion, and
the rest is the term loan availed for purchase of machinery. The
debt coverage indicators of the firm also stood weak marked by its
total debt to gross cash accruals at 17.40x owing to high outside
borrowings as against minimal cash accruals generated. The same has
been improved though, compared to previous year (33.67x during
FY18) owing to repayment on loans along with increase in gross cash
accruals generated. Further, interest coverage ratio also stood at
1.83x as on March 31, 2019.
Working capital intensive nature of operations
Rice milling is a working capital intensive business as the rice
millers have to stock rice by the end of each season till the next
season as the price and quality of paddy is better during the
harvesting season. Due to this, the inventory holding period of the
firm stood at 94 days in FY19. Since the firm is into agro based
business, and procuring paddy from the farmers generally
against cash payments or with minimum credit period of 7 days.
Selling is normally against cash payment. Due to high inventory
holding, the operating cycle of the firm stood at 84 days in FY19
as against 78 days in FY18. Further, the firm availed cash credit
facilities from the bank to the extent of INR 7.96 Crore and for
seasonal period, it avails adhoc facility to meet out its working
capital requirements. The utilization of working capital level
stood at 90% for the last 12 months ended October 2019.
Partnership nature of Constitution with inherent risk of withdrawal
of capital
SPMMRM's constitution as a partnership firm has the inherent risk
of possibility of withdrawal of the partner's capital at the time
of personal contingency and firm being dissolved upon the
death/retirement/insolvency of partner(s). Moreover, partnership
firms have restricted access to external borrowing as the credit
worthiness of partner(s) would be the key factors affecting credit
decision for the lenders.
Presence in highly fragmented, competitive, seasonal agro and
regulated nature of industry
SPMMRM operates in agro industry which is characterized by low
entry barriers, high fragmentation and the presence of a large
number of players in the organized and unorganized sector. This
puts pressure on the profitability of the players. Further, agro
based industries have seasonality associated with availability of
raw materials due to different harvesting periods. The supply of
key raw materials is also primarily dependent upon monsoon during a
particular year as well as overall climatic conditions.
Additionally, the raw material (paddy) prices are regulated by
government to safeguard the interest of farmers, which in turn
limits the bargaining power of the rice millers.
Key Rating strengths
Experienced partners and long track record of operations
Mr. A. Ponnambalam, Mrs. C Vennila and Mr. P Raja, are the partners
of the firm who belongs to same family. Mr. A Ponnambalam, aged 65,
is the managing partner of the firm having experience of more than
three decades in food processing industry. Followed by him Mrs. C
Vennila aged 52, wife of Mr. A. Ponnambalam, has experience since
the inception of the firm, and Mr. P. Raja, aged 35, Son of Mr. A.
Ponnambalam is taking care of day to day operations, has gained
experience in this business since its formation. The long track
record has aided the firm in having established relationship with
customers and suppliers.
Modest albeit year-on-year growth in total operating income (TOI)
The scale of operations of SPMMRM stood modest marked by its total
operating income (TOI) and low networth base at INR 39.01Crore and
INR 2.23 crore respectively in FY19. The small scale of operations
limits the firm's financial flexibility in times of stress and
deprives it from scale benefits. However TOI is improving
year-on-year. The total operating income (TOI) of the firm has
recorded year-on-year growth during review period with a CAGR of
7.95% from INR31.01crore in FY17 to INR39.01 crore in FY19 on
account of healthy order book position of the firm mostly from its
existing clientele. Furthermore, the firm has achieved
INR17.97crore in 7MFY20 (Prov.) and has orders in hands of around
INR 1.50 crore as on November 21, 2019.
Proximity to raw material and labor resources
SPMMRM is engaged in processing of paddy and milling of rice. The
firm's processing facility is situated at Trichy, Tamil Nadu which
is located near Tanjore district, one of the largest producers of
paddy in India. Its presence in the region gives additional
advantage over the competitors in terms of easy availability of the
raw material as well as favorable pricing terms.
SPMMRM owing to its location is also in a position to cut on the
freight component to certain extent of incoming raw materials.
Liquidity Analysis: Stretched Liquidity
Liquidity was stretched marked by low cash accruals, low cash
balance and high utilization of fund-based limits with moderate
cash flows. Cash accruals remained at INR0.54crore in FY19 against
debt repayment obligations of INR 0.16 for FY19. As on March 31,
2019, Cash & Bank balance also remained low at INR0.03crore as
compared to INR0.17crore as on March 31, 2018. Average utilization
of working capital limit remained high at 90% for the past 12
months ended October 31, 2019.
Sri Palani Murugan Modern Rice Mill was initially established as
proprietorship concern by Mr. A. Ponnambalam in the name of Sri
Palani Murugan Stores, which was later on reconstituted as a
partnership firm with Mr. A. Ponnambalam's family members in the
year 2009, with the name and style Sri Palani Murugan Modern Rice
Mill (SPMMRM). Mrs. C. Vennila and Mr. P. Raja are the partners of
the firm apart from Mr. A. Ponnambalam. The firm engaged in
purchasing and processing of paddy to produce rice types such as
Biriyani Rice, Ponni Rice, Red Rice and doubled boiled rice. SPMMRM
is operating from its sole processing unit located near
Tiruchirapalli having installed capacity of 70 tonnes per day as on
March 31, 2019. The firm selling the products in their own branch
names viz Sornam, rajarani, Sakthi gold ranging from 5kg to 50 kg.
Totally 20 employees are working for the firm.
SWIM CERAMIC: CARE Lowers Rating on INR5.14cr LT Loan to B+
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Swim
Ceramic (SC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 5.14 CARE B+; Stable Revised
Facilities From CARE BB-; Stable
On the basis on best
available information
Short Term Bank 1.00 CARE A4; Issuer not
Facilities cooperating; Based on
best available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from SC to monitor the ratings
vide e-mail communications/letters dated December 9, 2019, December
27, 2019, January 3, 2020, January 9, 2020 and various telephonic
interactions. However, despite our repeated requests, the firm has
not provided the requisite information for monitoring the ratings.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating. The ratings on SC's bank facilities will now be denoted as
CARE B+; Stable/ CARE A4; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while
using the above ratings.
The revision in the ratings assigned to the bank facilities of SC
take into account its modest scale of operations and profitability,
moderate capital structure and debt coverage indicators during FY18
(refers to the period April 1 to March 31).
The ratings, further, continue to remain constrained on account of
its partnership nature of constitution, susceptibility of profit
margins to volatility in raw material and fuel costs and foreign
exchange fluctuation risks as well as its presence in a highly
competitive ceramic industry with fortunes linked to demand from
cyclical real estate sector. The ratings, however,
continue to derive strength from experienced partners along with
location advantage.
Detailed description of the key rating drivers
At the time of last rating on January 17, 2019 the following were
the rating strengths and weaknesses
Detailed description of key rating drivers
Key Rating Weaknesses
Modest scale of operations and profitability
During FY18, SC's total operating income stood modest at INR15.38
crore as against INR12.00 crore during FY17 owing to increase in
the export sales. However, PBILDT of SC decreased; albeit continued
to remain modest at INR1.89 crore (12.29%) in FY18 as against
INR2.16 crore (17.96%) in FY17. PAT of SC remained thin at INR0.05
crore (0.31%) in FY18 as against INR0.03 crore (0.22%) in FY17.
Moderate capital structure and debt coverage indicators
SC's capital structure continued to remain moderate as marked by
overall gearing ratio of 1.90 times as on March 31, 2018 from 1.87
times as on March 31, 2017, owing to decrease in tangible net worth
led by net withdrawal of capital by the partners. The debt coverage
indicators of SC remained stable and continued to remain moderate
as marked by total debt to GCA of 6.86 years as on March 31, 2018
as against 6.54 years as on March 31, 2017. The interest coverage
ratio continued to remain moderate at 2.18 times during FY18 which
was in line with previous year.
Partnership nature of constitution
SC being a partnership firm is exposed to inherent risk of the
partners' capital being withdrawn at the time of contingency and
also limits the ability to raise the capital. The partners may
withdraw capital from the business as when it is required, which
may put pressure on the capital structure of the firm which may
restrict the financial flexibility to a certain extent.
Susceptibility of profit margins to volatility in raw material and
fuel costs as well as foreign exchange fluctuation risks Prices of
raw material i.e. clay, chemicals, corrugated boxes and fuel is
market driven and expected to put pressure on the margins of tile
manufacturers. Hence, SC's ability to control its cost structure
would be crucial going forward especially in light of competitive
environment. Furthermore, SC derives majority of its revenue from
exports, thereby exposing the firm to volatility in foreign
exchange rates. Therefore, any adverse movement in the prices of
foreign currency can negatively affect the profitability margins of
the firm.
Presence in a highly competitive ceramic industry with fortunes
linked to demand from cyclical real estate sector
SC operates in highly competitive segment of the ceramic industry
marked by low entry barriers, presence of large number of organized
and unorganized players as well as threats of new entrants.
Furthermore, majority of demand of tiles comes from the real estate
industry which in turn is also cyclical in nature.
Key rating strengths
Experienced partners
Overall operations of SC are handled by key partner, Mr.
Shailendrasinh Zala who has experience of around one decade in the
business of ceramic tiles industry. He is assisted by other
partners for conducting day to day operations.
Location Advantage
The manufacturing unit of SC is located at Morbi (Gujarat) which is
one of the largest ceramic clusters in India. Majority of total
ceramic tiles production in India comes from the Morbi cluster that
houses more than 600 units engaged in manufacturing of wall tiles,
vitrified tiles, floor tiles, sanitary wares, roofing tiles and
others such products. It provides easy access to raw material, fuel
and labour.
Liquidity Position: Stretched
Liquidity position of SC continued to remain stretched as marked by
current ratio of 1.02 times as on March 31, 2018 against 1.07 times
as on March 31, 2017. The operating cycle of the firm stood
moderate at 53 days during FY18 as against 67 days during FY17,
owing to decrease in average inventory holding period. The average
utilization of its working capital limit also
stood high at around 96% during past twelve months ended December
2018. The net cash flow from operations stood at INR2.40 crore
during FY18, while the cash and bank balance stood at INR1.05 crore
as on March 31, 2018.
Morbi-based (Gujarat) SC was formed in August 2013. SC is into the
business of manufacturing "Digital Wall Tiles" and it operates from
its manufacturing plant located at ceramic hub Morbi with an
installed capacity of 64,000 metric tons per annum (MTPA) as on
March 31, 2018. SC exports majority of its products to Middle East
countries like Kuwait.
UNIROYAL STHAPTYA: CARE Assigns B+ Rating to INR0.30cr LT Loan
--------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Uniroyal
Sthaptya (URS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 0.30 CARE B+; Stable Assigned
Facilities
Long-term/Short- 8.20 CARE B+; Stable/CARE A4
term Bank Assigned
Facilities
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of URS remained
constrained mainly on account of small scale of operations with low
profit margins, weak debt coverage indicators and stretched
liquidity during FY19 (FY; refers to the period April 1 to March
31). The ratings further remained constrained on account of its
partnership nature of constitution and presence in competitive
construction industry along with its tender driven nature of
business. However, the ratings derive strength from experienced
partners with established track record of operations and
comfortable capital structure and order book.
Rating Sensitivities
Positive Factors
* Increase in total operating income (TOI) to more than 5 times the
current level while reporting PBILDT margin of more than 4%
* Sustainability of below unity capital structure and improvement
in debt coverage indicators as marked by Total Debt to Gross Cash
Accruals (TDGCA) of lower than 7 years
Negative Factors
* Decline in GCA by around 50% or more
* Deterioration in capital structure with overall gearing of higher
than 3 times
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operations with low profit margins during FY19
The scale of operations of URS remained small as marked by TOI of
INR8.25 crore during FY19 as against INR22.37 crore during FY18,
owing to fewer numbers of orders bagged and executed during FY19.
Profitability as marked by PBILDT margin also remained low at 2.80%
in FY19 as against 2.05% during FY18. Resultantly, PAT margin also
remained low at 2.06% during FY19.
Weak debt coverage indicators
The debt coverage indicators remained weak marked by TDGCA of 14.65
times as on March 31, 2019 which deteriorated from 10.24 times as
on March 31, 2018, owing to a decrease in cash accruals during
FY19.The interest coverage ratio also remained moderate at 1.93
times during FY19 (2.55 times during FY18) led by reduction in
operating profits during FY19.
Partnership nature of constitution
URS being a partnership firm, the risks associated with withdrawal
of partners' capital exists. The firm is exposed to inherent risk
of the capital being withdrawn at a time of personal contingency
which may put pressure on financial flexibility of the firm. It
also has limited ability to raise capital and poor succession
planning may result in dissolution of the firm.
Presence in competitive construction industry and tender driven
nature of business
URS participates in the tender passed by the government for civil
construction of different state government authorities. Hence, the
entire business prospects are highly dependent on the government
tenders. Further, the construction industry is fragmented in nature
with a large number of medium scale players present at the regional
level coupled with the tender driven nature of the construction
contracts which poses huge competition and puts pressure on the
profitability margins of the players.
Key Rating Strengths
Experienced partners with established track record of operations
URS was formed in the year 1998 as a proprietorship firm, which was
later converted into partnership firm in year 2002 and is engaged
in civil construction works for various government authorities. URS
was formed by four partners led by Mr. Ramesh Hirani and Mr. Rajesh
Hirani having average experience of around two decades in the
construction industry. Both the partners collectively look after
the overall management of the firm. The firm has established track
record of operations of over two decades which helps the firm to
pocket the tenders.
Comfortable capital structure
As on March 31, 2019, the capital structure of URS remained
comfortable marked by overall gearing ratio which remained below
unity at 0.96 times (1.09 times as on March 31, 2018) on account of
an increase in the tangible net worth level coupled with a decrease
in total debt level as on March 31, 2019.
Comfortable order book
Order book of URS remained comfortable to INR85.62 crore as on
December 15, 2019 which is envisaged to be executed within tenure
of 10 – 30 months, translating into medium term revenue
visibility.
Liquidity: Stretched
The liquidity position of URS remained stretched with low cash
balance and low cash accruals, limiting the financial flexibility
of the firm.
Net cash flow from operations during FY19 remained negative at
INR0.21 crore during FY19, while the cash and bank balance remained
low at INR0.07 crore as on March 31, 2019.The operating cycle
remained negative at 24 days in FY19 as against negative 8 days in
FY18; however the same was due to increase in average creditors'
days. GCA was also low at INR0.22 crore during FY19, though there
are no expected principal term debt obligations for FY20. Average
utilization for past twelve months ended December, 2019 remained
low at ~40%.
URS was formed in the year 1998 as a proprietorship firm, which was
later converted into partnership firm in year 2002 and is engaged
into the business of civil construction work. URS was formed by
four partners led by Mr. Ramesh Hirani and Mr. Rajesh Hirani. The
firm undertakes civil construction work pertaining to construction
of class rooms and schools as well as engaged in designing,
constructing, testing and commissioning of water works for various
government authorities. URS is Class 'AA' registered contractor
with few state governments. The execution time line of its orders
on hand largely remains in the range of 10-30 months.
VIDEOCON INDUSTRIES: Insolvency Process Extended for 90 Days
------------------------------------------------------------
The Economic Times reports that Videocon Industries received a nod
from the National Company Law Tribunal (NCLT) to extend the
corporate insolvency resolution process for another 90 days. The
CIRP was to come to a halt on Feb. 4, 2020.
"This is for the extension of the CIRP process as it ends on 4th of
February. Public notices are being given for the submission of bids
on 31st of Jan and we see a lot of it coming in, so we request the
CIRP process be extended further," said the counsel representing
Videocon Industries, ET relays.
ET notes that Videocon Group had sought expression of interests
(EoIs) for its 13 group companies undergoing resolution in the
Indian bankruptcy court in October and it was to come to an end by
January 2020.
Section 12 of bankruptcy code states that the completion of a CIRP
process must be within 180 days, extensible to a maximum of 270
days from the date of commencement of insolvency. Thus, the new
extension will come to an end on 4th of May, 2020, the report
relays.
"There are many applications pending, like the application to merge
the overseas oil and gas assets with VIL assets. Oil and gas assets
are ostensibly held through a special purpose vehicle by Videocon"
ET quotes a lawyer representing VIL as saying.
There is a total claim of around INR57,000 crores pending from the
group and the merged 13 companies had just INR29,000 crores of
claims. It is better to bring the overseas assets too into the
process, he said, adding that the extended date will help in
figuring it.
Prior to the consolidation, claims of financial creditors of
Videocon Industries stood at INR59,451.87 crore, as on Nov. 12,
2018. State Bank of India's claims were at INR11,175 crores. Claims
of financial creditors of Videocon Telecommunication Ltd, another
group entity, was at INR26,673.81 crore.
NCLT in the month of August, 2019 passed a judgement to initiate
insolvency proceedings for consolidation of 13 Videocon group firms
into a single process, recalls ET.
And in the month of October the Group's consortium of lenders led
by SBI went ahead to sell the group's overseas oilfield assets,
Videocon Energy Brazil and Videocon Indonesia Nunukan, ET relates.
The VIL in the tribunal argued that it's better to include those
assets in the on-going CIRP.
In response, NCLT had passed an order barring SBI to sell the
overseas assets as "the Videocon group may suffer irreplaceable
loss if it was determined later that the assets belong to the
Venugopal Dhoot-led entities," the court, as cited by ET, said.
Other lenders to VIL include Allahabad Bank, IDBI Bank, Indian
Overseas Bank, Jammu & Kashmir Bank, Bank of Maharashtra, Bank of
Baroda, United Bank of India and Canara Bank.
About Videocon Industries
Videocon Industries sells consumer products like color televisions,
washing machines, air conditioners, refrigerators, microwave ovens
and many other home appliances in India.
On June 6, 2018, National Company Law Tribunal (NCLT), Mumbai
bench, admitted a petition for initiating insolvency resolution
process against the company under the Insolvency and Bankruptcy
Code, 2016.
According to Videocon's FY17 annual report, the company is liable
to repay the liability of other group companies to the extent of
INR5,082 crore as on March 31, 2017. The company's total debt stood
at INR19,506 crore as of March last year, Livemint.com discloses.
YASHICA ELECTRONICS: Insolvency Resolution Process Case Summary
---------------------------------------------------------------
Debtor: Yashica Electronics Private Limited
40-C Manimuthu Valagam Salai Road
Woraiyur Trichy, Tiruchirappalli
Tamil Nadu 620003
India
Insolvency Commencement Date: January 20, 2020
Court: National Company Law Tribunal, Division Bench-I, Chennai
Estimated date of closure of
insolvency resolution process: July 18, 2020
Insolvency professional: S. Kamaraj
Interim Resolution
Professional: S. Kamaraj
New No. 28, Old No. 22
Menod Street
Purasawalkam
Chennai 600007
Mobile: 9444758260
E-mail: rsadasivanandco@yahoo.com
Last date for
submission of claims: February 3, 2020
=================
S I N G A P O R E
=================
BM MOBILITY: Silk Routes Offers Restructuring Lifeline
------------------------------------------------------
The Straits Times reports that BM Mobility has received a proposal
and a memorandum of understanding (MOU) to explore a restructuring
or reorganisation of the group.
According to the report, Singapore-based investment and advisory
firm Silk Routes Financials is proposing to provide up to $1
million as rescue funding to fund the proposed restructuring or
reorganisation.
This could involve investing in the mainboard-listed company or the
acquisition or disposal of assets or undertakings.
The Straits Times relates that BM Mobility said the MOU is not
intended to be legally binding except for certain provisions, such
as confidentiality, exclusivity, costs and governing law, according
to a regulatory update.
BM Mobility and Silk Routes Financials have committed to exclusive
talks for three months from Jan. 29 to carve out a definitive
agreement, the report notes.
The Straits Times adds that BM Mobility said Silk Routes Financials
has separately proposed that the firm's board consider
court-ordered administration or judicial management to give the
company temporary respite from its creditors.
This would also give it more time to clarify its affairs and
consider options, including the proposed restructuring.
BM Mobility shares have been suspended since July last year, the
report notes.
Headquartered in Singapore, BM Mobility Ltd., an investment holding
company, builds and operates charging stations for electric
vehicles in China. It operates 22 charging stations in Beijing,
which are used by the public and electric-car rental companies. The
company also sells and rents electric scooters to commercial users.
In addition, it is involved in the research and development,
manufacture, and sale of SBR and other foamed materials; and
trading of foamed materials, textiles, sports and sports
accessories, garments, and footwear. The company was formerly
known as Ziwo Holdings Ltd. and changed its name to BM Mobility
Ltd. in January 2018.
CREATIVE TECHNOLOGY: Q2 Net Loss Narrows to US$2.8 Million
----------------------------------------------------------
The Business Times reports that Creative Technology on Jan. 29 said
its net loss narrowed from US$4.92 million a year ago to US$2.8
million for the three months ended Dec. 31, 2019.
Sales rose 6 per cent to US$17.2 million, while loss per share
worked out to four US cents, down from seven cents in the same
period in 2018, BT discloses.
For the six months ended Dec. 31, revenue was 6 per cent higher at
US$31.21 million, while net loss was trimmed to US$8.47 million,
from US$11.04 million a year earlier, according to BT.
BT relates that looking ahead, Creative warned: "Market conditions
for the group's products remain challenging, and the recent
outbreak of the novel coronavirus in China may negatively affect
market conditions, although the extent of its effect is presently
uncertain.
"For the next two quarters, revenue is expected to be lower
compared to the current level and the group expects to report an
operating loss."
No dividend has been recommended in the second quarter of FY20, as
was the case for the corresponding period a year ago, the report
notes.
Singapore-based Creative Technology Ltd. -- http://www.creative.com
-- designs, manufactures, and distributes digitized sound and
video boards, computers and related multimedia, and personal
digital entertainment products. The Company also sells, designs,
and manufactures electronic and electrical components, instruments,
and computer peripherals.
HYFLUX LTD: Bond Investors Lose Hope of Recovering Any Money
------------------------------------------------------------
Denise Wee and Ameya Karve at Bloomberg News report that some of
the mom and pop investors desperate to recover money from
Singapore's embattled water treatment firm Hyflux Ltd. are losing
confidence they'll get much of anything back as the wait drags on.
In the latest twist to the city-state's most high-profile debt
restructuring, Hyflux's legal adviser expressed its intent to
resign from the case due to "loss of confidence," while the company
said in turn that it has lost trust in its adviser and has since
appointed new ones. That adds to uncertainties facing the about
34,000 retail investors in the company who have been waiting for
resolution since it stumbled in 2018, Bloomberg relates.
"It has been a dramatic 18 months," Bloomberg quotes Violet Siew, a
home-maker in her 50s who invested in junior securities including
perpetual bonds and preference shares, as saying. "We have been hit
with bad news and bad decisions by Hyflux."
Bloomberg notes that Middle Eastern suitor Utico FZC reached a deal
with Hyflux in November, but that agreement still faces hurdles --
from investor approvals to how various lawyers and consultants will
divide around SGD40 million ($30 million) in fees. The entry of
mystery bidder Aqua Munda Pte, which has offered to buy up the
company's debt, has prompted further uncertainty. Hyflux's debt
moratorium was last week extended until Feb. 28, the report says.
A large pool of retail investors probably illustrates the
complications of this case and why it's taking so long for
resolution, Singapore high court judge Aedit Abdullah said at a
hearing last week, Bloomberg relays.
Bloomberg relates that Utico said the majority of investors in its
offer will get cash rather than equity, "which is better than
nothing." It added that perpetual and preference shareholders can
stay invested in the firm for dividends and a recovery, based on
how the market performs.
Some investors have hoped the government would step in to help,
despite it repeatedly rejecting calls to bail out Hyflux, saying
the restructuring is a "commercial matter," according to
Bloomberg.
All investments carry risks and "businesses can come under
financial stress and are not immune to defaults," the Monetary
Authority of Singapore and the Ministry of the Environment and
Water Resources said in a joint statement last year, recalls
Bloomberg.
The government can't use taxpayers' money to help investors recoup
their losses from the company, Singapore Minister for the
Environment and Water Resources Masagos Zulkifli said in parliament
in April.
"The long delay in the process probably reflects the bad situation
that Hyflux is now in and how many differing opinions there are
about the exit strategy of a rudderless ship," Bloomberg quotes
Weilong Sim, a 43, self-employed professional, who has invested
S$10,000 in Hyflux's perpetual notes, as saying.
For frustrated retail investors like Siew, Utico's offer, which
benefits smaller holders of bonds, isn't attractive. She said she
plans to vote against it as the recovery is low and there is "not
much difference from a complete write-off in the event of
liquidation," Bloomberg relays.
According to Bloomberg, Sim said he probably won't subscribe to the
offer, as he wants Hyflux "to go bust as a statement of protest."
Bloomberg says Hyflux's dragged-out restructuring is a reflection
of the challenges of working out debt in Singapore, where a
significant proportion of the local bonds have been bought by
individual investors. This has posed difficulties for investors to
organize as a group and to speak in a single voice, the report
states.
To be sure, restructuring bonds isn't easy anywhere. But in the
broader Asian credit markets, there have been a handful of cases
where investors have managed to get strong returns after companies
bounced back from defaults. Still, few investors in soured debt are
willing to wade into Singapore's local bonds, due to the lack of
liquidity and a fragmented investor base.
"Generally, the recoveries for Singapore dollar bonds have been
fairly poor," Bloomberg quotes Ezien Hoo, credit research analyst
at Oversea-Chinese Banking Corp, as saying. "We have seen some
companies coming out of restructuring and still operating but
bondholders haven't gotten very good returns."
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 engaged WongPartnership LLP as legal advisors and Ernst
& Young Solutions LLP as financial advisors in this process. On
Jan. 29, WongPartnership applied to discharge themselves due to
difficulties relating to "loss of confidence and good cause" in
working with the client.
In November 2019, Hyflux entered into a restructuring deal with
United Arab Emirates-based utility Utico FZC, according to Reuters.
*********
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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TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***