/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/200228.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 Friday, February 28, 2020, Vol. 23, No. 43 Headlines A U S T R A L I A AUSTRALIAN ABRASIVE: Second Creditors' Meeting Set for March 4 AUSTRALIAN INDUSTRIAL: Second Creditors' Meeting Set for March 4 CITY OF WOLLONGONG AERIAL: 2nd Creditors' Meeting Set for March 5 FIELDEN MANAGEMENT: Second Creditors' Meeting Set for March 6 HEATHMONT PRE SCHOOL: First Creditors' Meeting Set for March 5 LAING NEWS: First Creditors' Meeting Set for March 6 LATITUDE AUSTRALIA 2020-1: Moody's Rates AUD31.5MM Cl. E Notes Ba2 SAMSON OIL: Incurs $6.90 Million Net Loss in Second Quarter SK SKIN: Second Creditors' Meeting Set for March 9 WEST TANKERS: First Creditors' Meeting Set for March 10 C H I N A CAR INC: Moody's Affirms B1 CFR; Alters Outlook to Negative CHINA: May Cut Deposit Rates So Battered Banks Can Keep Lending GUANGZHOU R&F: Fitch Assigns BB- Rating to New USD Sr. Notes MODERN LAND: Fitch Assigns B Rating to Proposed USD Sr. Notes QINGHAI PROVINCIAL INVESTMENT: S&P Discontinues 'D' Long-Term ICR YIDA CHINA: S&P Lowers ICR to 'CC' on Distressed Exchange Offer H O N G K O N G [*] HONG KONG: Poised for Another Real Estate Crisis I N D I A AKSHAR GINNING: ICRA Moves B+ Rating to Not Cooperating AMERICAN SWAN: Insolvency Resolution Process Case Summary ANNAPOORANI YARNS: ICRA Maintains B+ Rating in Not Cooperating ANTIQUE COTTEX: ICRA Maintains B+ Rating in Not Cooperating ASIAN COLOUR: NCLAT Rejects IFCI Insolvency Bid Against Guarantor B D OVERSEAS: Insolvency Resolution Process Case Summary BHADRESHWAR VIDYUT: Insolvency Resolution Process Case Summary BHANDARI HOSIERY: Insolvency Resolution Process Case Summary BISMAN INDUSTRIES: ICRA Maintains 'D' Rating in Not Cooperating CHIRAG AGROFINS: ICRA Maintains D Rating in Not Cooperating D.B. MACHINE: ICRA Maintains 'B+' Rating in Not Cooperating GURUKRUPA CORP: ICRA Keeps B+/A4 Rating in Not Cooperating HAREKRUSHNA COTTEX: ICRA Keeps 'B+' Rating in Not Cooperating HPCL BIOFUELS: Insolvency Resolution Process Case Summary KBJ JEWEL: ICRA Maintains 'D' Rating in Not Cooperating KISHORI LAL: Insolvency Resolution Process Case Summary KRISHNA COTTEX: ICRA Maintains 'B' Rating in Not Cooperating KSHAMA BUILDERS: Insolvency Resolution Process Case Summary LEISURE WEAR: ICRA Maintains 'D' Rating in Not Cooperating LIMTEX AGRI: ICRA Maintains 'D' Rating in Not Cooperating MAGMA AUTOLINKS: ICRA Cuts Rating on INR5cr Loan to 'D' MOBISMART CARD: ICRA Assigns B+ Rating to INR19.50cr Term Loan NEW AGE: Insolvency Resolution Process Case Summary PIBCO ENTERPRISES: ICRA Cuts Rating on INR6cr Loan to B+ PMV MALTINGS: ICRA Maintains B+ Rating in Not Cooperating R J BUILDCON: ICRA Maintains 'D' Rating in Not Cooperating REGEN INFRASTRUCTURE: ICRA Keeps 'D' Rating in Not Cooperating S.B. SAHOO: ICRA Maintains 'B+' Rating in Not Cooperating SAI INTERNATIONAL: ICRA Keeps 'B+' Rating in Not Cooperating SHREE HANUMAN: ICRA Lowers Rating on INR59.50cr LT Loan to D SHRI RAM: ICRA Lowers Rating on INR48cr Loan to 'D' SIDDARTH ORGANISATION: Insolvency Resolution Process Case Summary SREE LAKSHMI: ICRA Withdraws D Rating on INR160cr Term Loan SRI LAKSHMI: ICRA Moves C+ Rating to Not Cooperating Category SRI TOORSA: ICRA Lowers Rating on INR7.12cr Term Loan to D STURDY INDUSTRIES: ICRA Assigns 'D' Rating to INR127.69cr Loan TBPR INFRA: ICRA Lowers Rating on INR17.50cr Loan to 'D' TERRENCE ALLOYS: Insolvency Resolution Process Case Summary VIRENDRA KUMAR: ICRA Keeps 'B+' Rating in Not Cooperating [*] INDIA: Deutsche Bank Boosts Lending to Cash-Strapped Tycoons P H I L I P P I N E S HONDA CARS: PH Unit to Stop Automobile Production in March S I N G A P O R E BREADTALK: No Notice to Repay SGD100MM Notes Received from Trustee - - - - - ================= A U S T R A L I A ================= AUSTRALIAN ABRASIVE: Second Creditors' Meeting Set for March 4 -------------------------------------------------------------- A second meeting of creditors in the proceedings of Australian Abrasive Minerals Pty Ltd has been set for March 4, 2020, at 3:00 p.m. at the offices of KordaMentha Sydney office, Level 5 Chifley Tower, at 2 Chifley Square, in Sydney, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by March 3, 2020, at 4:00 p.m. Rahul Goyal, John Bumbak and Richard Tucker of KordaMentha were appointed as administrators of Australian Abrasive on Oct. 24, 2019. AUSTRALIAN INDUSTRIAL: Second Creditors' Meeting Set for March 4 ---------------------------------------------------------------- A second meeting of creditors in the proceedings of Australian Industrial Minerals Limited has been set for March 4, 2020, at 1:00 p.m. at the offices of KordaMentha Sydney office, Level 5 Chifley Tower, at 2 Chifley Square, in Sydney, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by March 3, 2020, at 4:00 p.m. Rahul Goyal, John Bumbak and Richard Tucker of KordaMentha were appointed as administrators of Australian Industrial on Oct. 24, 2019. CITY OF WOLLONGONG AERIAL: 2nd Creditors' Meeting Set for March 5 ----------------------------------------------------------------- A second meeting of creditors in the proceedings of City of Wollongong Aerial Patrol Inc has been set for March 5, 2020, at 10:30 a.m. at the offices of Worrells Solvency & Forensic Accountants, Level 1, Suite 1, at 151 Tongarra Road, in Albion Park, NSW. The purpose of the meeting is (1) to receive the report by the Administrator about the business, property, affairs and financial circumstances of the Company; and (2) for the creditors of the Company to resolve whether the Company will execute a deed of company arrangement, the administration should end, or the Company be wound up. Creditors wishing to attend are advised proofs and proxies should be submitted to the Administrator by March 3, 2020, at 5:00 p.m. Stephen John Hundy and Daniel Ivan Cvitanovic of Worrells Solvency & Forensic Accountants were appointed as administrators of City of Wollongong Aerial on Feb. 5, 2020. FIELDEN MANAGEMENT: Second Creditors' Meeting Set for March 6 ------------------------------------------------------------- A second meeting of creditors in the proceedings of Fielden Management Services has been set for March 6, 2020, at 10:00 a.m. at the offices of Chartered Accountants Australia and New Zealand, Level 18, at 600 Bourke 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 March 5, 2020, at 5:00 p.m. Barry Wight and Sam Kaso of Cor Cordis were appointed as administrators of Fielden Management on Jan. 31, 2020. HEATHMONT PRE SCHOOL: First Creditors' Meeting Set for March 5 -------------------------------------------------------------- A first meeting of the creditors in the proceedings of Heathmont Pre School & Kindergarten Inc will be held on March 5, 2020, at 2:30 p.m. at the offices of Worrells Solvency & Forensic Accountants, Level 15, at 114 William Street, in Melbourne, Victoria. Con Kokkinos and Matthew Kucianski of Worrells Solvency & Forensic Accountants were appointed as administrators of Heathmont Pre School on Feb. 25, 2020. LAING NEWS: First Creditors' Meeting Set for March 6 ---------------------------------------------------- A first meeting of the creditors in the proceedings of Laing News Pty Ltd will be held on March 6, 2020, at 10:00 a.m. at 22nd Floor, Northbank Plaza, at 69 Ann Street, in Brisbane, Queensland. Trent McMillen of MaC Insolvency was appointed as administrator of Laing News on Feb. 26, 2020. LATITUDE AUSTRALIA 2020-1: Moody's Rates AUD31.5MM Cl. E Notes Ba2 ------------------------------------------------------------------ Moody's Investors Service assigned definitive ratings to notes issued by Perpetual Corporate Trust Limited, as trustee for Latitude Australia Personal Loans Series 2020-1 Trust. Issuer: Latitude Australia Personal Loans Series 2020-1 Trust AUD100.00 million Class A-S Notes, Assigned Aaa (sf) AUD245.50 million Class A-L Notes, Assigned Aaa (sf) AUD48.50 million Class B Notes, Assigned Aa2 (sf) AUD27.50 million Class C Notes, Assigned A2 (sf) AUD20.50 million Class D Notes, Assigned Baa2 (sf) AUD31.50 million Class E Notes, Assigned Ba2 (sf) The AUD26.50 million Seller Notes are not rated by Moody's. Latitude Australia Personal Loans Series 2020-1 Trust is an Australian asset-backed security (ABS) transaction. It is a cash securitization of personal loans extended to obligors located in Australia. It is a static structure. The receivables are typically unsecured, although a portion of it is partially secured. All receivables were originated by Latitude Personal Finance Pty Limited (Latitude). Latitude provides sales finance, credit cards, personal loans, Buy-Now-Pay-Later (BNPL) and consumer credit insurance in Australia and New Zealand. Latitude originates its lending through direct and third-party channels. Direct channels include online and call centre based applications with third-party distribution through partnership agreements and a network of brokers. The Latitude Australia Personal Loans Series 2020-1 Trust transaction represents Latitude's second term ABS transaction and its first term ABS for 2020. RATINGS RATIONALE The definitive ratings take into account, among other factors, the evaluation of the underlying receivables and their expected performance, the evaluation of the capital structure, the availability of excess spread over the life of the transaction, the liquidity facility in the amount of 1.50% of the note balance subject to a floor of AUD1,200,000, the interest rate swap provided by Commonwealth Bank of Australia (Aa3/P-1/Aa2(cr)/P-1(cr)), and the experience of Latitude as servicer and the backup servicing arrangement with AMAL Asset Management Limited. Initially, Class A Notes (which include Class A-S and Class A-L), Class B, Class C, Class D and Class E Notes benefit from 30.9%, 21.2%, 15.7%, 11.6% and 5.3% of note subordination, respectively. The notes will be repaid on a sequential basis until the credit enhancement of the Class A Notes is at least 55%, and as long as cumulative losses are less than 6.5%, where that payment date is on or before 12 months after the closing date, and 12% after 12 months. The notes will also be repaid on a sequential basis if the stated amount of the Class A-S Notes are not zero or there are any unreimbursed charge-offs on the notes or unreimbursed principal draws or if the first call option date has occurred. At all other times, the structure will follow a pro-rata repayment profile (assuming pro-rata conditions are satisfied). Moody's analysis also accounts for the risk of the transaction being over or under-hedged. This risk arises because the notional amount in the swap agreement is based on the repayment profile of the rated notes, assuming a prepayment rate of 24% on the underlying receivables. If prepayments deviate from this assumption, the transaction is exposed to the risk of being over or under-hedged. To account for this risk, Moody's ran a number of faster and slower prepayment scenarios in combination with associated upward and downward movements in bank bill swap rates. MAIN MODEL ASSUMPTIONS Moody's base case assumptions are a default rate of 10.4%, coefficient of variation (CoV) of 38.7%, and a recovery rate of 15.0%. Moody's assumed default rate, CoV and recovery rate are stressed compared to the historical levels of 9.8%, 16.8% and 25.5% respectively. The stress addresses lack of economic stress during the historical data period (2008-2019). Methodology Underlying the Rating Action The principal methodology used in these ratings was "Moody's Approach to Rating Consumer Loan-Backed ABS" published in March 2019. Factors That Would Lead to an Upgrade or Downgrade of the Ratings Factors that could lead to an upgrade of the notes include a rapid build-up of credit enhancement, due to sequential amortization or better-than-expected collateral performance. The Australian job market is a primary driver of performance. A factor that could lead to a downgrade of the notes is worse-than-expected collateral performance. Other reasons that could lead to a downgrade include poor servicing, error on the part of transaction parties, a deterioration in the credit quality of transaction counterparties or lack of transactional governance and fraud. SAMSON OIL: Incurs $6.90 Million Net Loss in Second Quarter ----------------------------------------------------------- Samson Oil & Gas Limited filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $6.90 million on $3.29 million of total oil and gas income for the three months ended Dec. 31, 2019, compared to a net loss of $2.55 million on $3.03 million of total oil and gas income for the three months ended Dec. 31, 2018. For the six months ended Dec. 31, 2019, the Company reported a net loss of $7.35 million on $7.14 million of total oil and gas income compared to a net loss of $1.35 million on $6.61 million of total oil and gas income for the same period a year ago. As of Dec. 31, 2019, the Company had $35.68 million in total assets, $52.90 million in total liabilities, and a total stockholders' deficit of $17.22 million. Samson Oil said, "We do not generate adequate revenue to satisfy our current operations, we have negative cash flows from operations, and we have incurred significant net operating losses during the six month period ended December 31, 2019, and for the fiscal year ended June 30, 2019, which raise substantial doubt about our ability to continue as a going concern. Nevertheless, of this our financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activities and the realization of assets and settlement of liabilities in the normal course of business. We are in breach of several of our covenants related to the Credit Agreement resulting in our borrowings payable of $33.5 million being classified in current liabilities. "Our ability to continue as a going concern is dependent on the re-negotiation of the Credit Agreement, the sale or refinancing of our oil and gas assets and/or raising further capital. These factors raise substantial doubt over our ability to continue as a going concern and therefore whether we will realize our assets and extinguish our liabilities in the normal course of business and at the amounts stated in the financial statements. "We are seeking a waiver of our breaches of the Credit Agreement from our Lender and thereafter plan to increase our cash flows from operations through the successful development of the Foreman Butte project and reducing our operating and general and administrative costs. In addition, we have been negotiating a potential transaction to divest substantially all of our oil and gas assets. If those negotiations are successful and the transaction effected, we believe it will result in proceeds not less than our obligations under the Credit Agreement and to our vendors. "However, there can be no assurances that we will successfully obtain a waiver, divest our oil and gas assets or increase our cash flows from operations. Given our current financial situation we may be forced to accept terms on some or all of these transactions that are less favorable than would be otherwise available." The Company used $35,278 of cash flow from its operations during the six month period ended Dec. 31, 2019, compared to approximately $36,712 of cash used in operations during the comparative period in the prior year. The Company's loss can be primarily attributed to higher LOE costs and higher interest expenses related to its Credit Agreement and a proposed settlement with the NDIC of $2.1 million in general and administrative expense, which, aggregated with LOE costs and interest expense, equaled $11.0 million compared to $5.6 million for the same period in the prior year. Cash flows used in investing activities during the six month period ended Dec. 31, 2019, was $20,271 compared to cash flow provided by investing activities of $0.4 million in the prior year. During the six month period ended Dec. 31, 2019, the Company was not engaged in any significant capital drilling projects. During the six month period ended Dec. 31, 2018, the Company recorded $1.0 million of other income related to the failed sale with Eagle Energy Partners I, LLC, where they forfeited a nonrefundable deposit of the same amount. In November 2019, the Company entered into an installment agreement for $160,713 related to royalties payable. The Company made the first principal payment in Dec. 31, 2019. There were no cash flows used in or provided by financing activities for the six month period ended Dec. 31, 2018. A full-text copy of the Form 10-Q is available for free at: https://is.gd/twIhiF About Samson Oil Headquartered in Perth, Western Australia, Samson Oil & Gas Limited -- http://www.samsonoilandgas.com-- is an independent energy company primarily engaged in the acquisition, exploration, exploitation and development of oil and natural gas properties, primarily with a focus in Montana and North Dakota. Samson Oil reported a net loss of $7.15 million for the fiscal year ended June 30, 2019, compared to a net loss of $6.04 million for the fiscal year ended June 30, 2018. As of Sept. 30, 2019, the Company had $38.19 million in total assets, $48.51 million in total liabilities, and a total stockholders' deficit of $10.32 million. Moss Adams LLP, in Denver, Colorado, the Company's auditor since 2017, issued a "going concern" qualification in its report dated Oct. 15, 2019, citing that the Company is in violation of its debt covenants, incurred a net loss from operations, has cash outflows from operations, and its current liabilities exceed its current assets as of and for the year ended June 30, 2019. These conditions raise substantial doubt about the Company's ability to continue as a going concern. SK SKIN: Second Creditors' Meeting Set for March 9 -------------------------------------------------- A second meeting of creditors in the proceedings of SK Skin Clinic and Day Spa Pty Ltd has been set for March 9, 2020, at 11:30 a.m. at the offices of SM Solvency Accountants, Level 10, at 144 Edward Street, in Brisbane, 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 March 6, 2020, at 4:30 p.m. Brendan Nixon of SM Solvency Accountants was appointed as administrator of SK Skin on Feb. 3, 2020. WEST TANKERS: First Creditors' Meeting Set for March 10 ------------------------------------------------------- A first meeting of the creditors in the proceedings of West Tankers Pty Ltd will be held on March 10, 2020, at 11:00 a.m. at the offices of PKF, 755 at Hunter Street, in Newcastle, West NSW. Simon Thorn of PKF was appointed as administrator of West Tankers on Feb. 27, 2020. ========= C H I N A ========= CAR INC: Moody's Affirms B1 CFR; Alters Outlook to Negative ----------------------------------------------------------- Moody's Investors Service affirmed CAR Inc.'s B1 corporate family rating and senior unsecured rating. At the same time, Moody's has changed the outlook on the ratings to negative from stable. RATINGS RATIONALE "The negative outlook reflects our concern over CAR's weakening revenue trend in 2020, which is below our earlier expectation," says Gerwin Ho, a Moody's Vice President and Senior Credit Officer. "The sluggish revenue trend will pressure the company's EBITDA generation and elevate its debt leverage." The sluggish revenue trend was highlighted in CAR's profit warning. The company announced on February 21 that it expects its net profit for 2019 to fall by more than 80%, compared to a net profit of RMB290 million in 2018. Nonetheless it expects EBITDA to grow by over 6% year-on-year to over RMB3.4 billion in 2019. CAR attributes the profit decline to a range of factors, including increased depreciation costs as the estimated residual value of used vehicles has declined, the additional consideration paid for the exchange offer for its USD bonds, share-based compensation expenses, lower than expected auto rental revenue due to decreased travel in certain tourist cities, and increased competition. More recently, the ongoing coronavirus outbreak in China has also reduced leisure and business travel, further pressuring CAR's revenue. Moody's expects the coronavirus outbreak to impact the company's revenue during 1H 2020, and in particular during 1Q 2020. Specifically, Moody's expects CAR's revenue to decline about 15% year-on-year in 2020, reflecting an approximate 14% year-on-year drop in auto rental revenue as a result of weakening demand. Revenue from used vehicle sales is also expected to decline about 16% year-on-year as the company reduces its fleet to boost utilization and improve liquidity. Consequently, Moody's expects CAR's debt leverage — as measured by adjusted debt/EBITDA — to rise to about 4.7x over the next 12 months from 3.8x in 2018, mainly reflecting lower EBITDA. The coronavirus outbreak's negative impact on the number of leisure and business travelers is nonetheless partially offset by demand from customers who rent vehicles to prevent travelling in public transit. CAR's liquidity is weak. Its restricted and unrestricted cash of RMB3.7 billion was insufficient to cover its short-term debt of RMB5.0 billion as of June 30, 2019, of which 43% consisted of bank loans. Nonetheless, the company has demonstrated a track record of access to diversified funding channels, including debt instruments such as corporate bonds, offshore renminbi bonds, US dollar bonds and unsecured bank borrowings. CAR exchanged USD172 million of its USD500 million bonds and issued USD200 million of USD bonds in May 2019. The company also repaid the remaining portion of its USD500 million bonds in February this year. In addition, CAR has financial flexibility in terms of its adjustable capacity business model and ability to reduce its fleet to generate liquidity. As of June 30, 2019, 92% of its rental vehicles in terms of net carrying amount were not pledged to interest-bearing loans. However, in the event that CAR is unable to refinance its short-term debt, this will pressure its rating. CAR's B1 CFR is supported by the company's leadership position in China's growing car rental market. The B1 rating also considers the company's business model, which exhibits a certain level of financial flexibility, as seen by the short lead time for its fleet acquisitions, its asset-light network, and the ease with which it can dispose of assets. At the same time, the rating is constrained by (1) direct competition from other car rental companies and indirect competition from non-car rental companies that provide transportation services; and (2) regulatory risks in terms of controls on vehicle ownership, the traffic points system, local regulation of the automotive rental industry, and regulations related to online chauffeured car services. CAR's rating also takes into account the following environmental, social and governance (ESG) considerations. While independent directors make up a minority of its board composition, the company is a listed and regulated entity. The company also has a diversified shareholder base that includes major shareholders such as Legend Holdings Corporation. CAR's senior unsecured rating is not affected by subordination to claims at the operating company level, because the latter is not seen as material, especially as Moody's expects the majority of claims will remain at the holding company. The ratings outlook could return to stable if CAR improves its liquidity over the next 12 months and if it improves its revenue and EBITDA trends over the next 12 months. Financial metrics that Moody's would consider for a change in outlook to stable include cash to short-term debt trending towards 1.0x over the next 12 months. Downward ratings pressure could emerge if: (1) the declining revenue trend continues; (2) liquidity continues to weaken; or (3) CAR's credit metrics weaken materially due to increased competition, shareholder distributions, or aggressive expansion and acquisitions. Credit metrics indicative of ratings downgrade pressure include debt/EBITDA failing to trend below 5.0x over the next 12 months. The principal methodology used in these ratings was Equipment and Transportation Rental Industry published in April 2017. = CHINA: May Cut Deposit Rates So Battered Banks Can Keep Lending --------------------------------------------------------------- Bloomberg News reports that China's battered banks are being asked to sacrifice profits to help millions of cash-squeezed companies struggling under the weight of the coronavirus outbreak. Now they may finally see some relief for themselves, the report says. Bloomberg relates that Liu Guoqiang, a deputy governor of the People's Bank of China, said over the weekend that policy makers are considering lowering their benchmark deposit rate for the first time in five years. A growing number of analysts are counting the days until such a reduction, with banks desperate for long-term incentives to keep doling out cheaper credit to support businesses as large parts of the economy remain idled. According to Bloomberg, the new benchmark for corporate loans has been cut three times in the past six months, but the PBOC has stopped short of the bolder move of cutting the deposit rate out of concern for the impact on savers. Lowering rates on CNY175 trillion ($25 trillion) of household and corporate savings would boost bank margins and free up capacity for lenders already buckling under a surge in bad debt. "If you keep 'fleecing the sheep' without giving them anything in return, some weaker Chinese banks may run into trouble themselves and that will end up destabilizing the financial system," Bloomberg quotes Wang Yifeng, a Beijing-based analyst at Everbright Securities Co, as saying. Almost two thirds of Chinese banks' CNY265 trillion in liabilities come from deposits. So a cut in the deposit rate will directly lower their funding costs and give them incentive to pass lower lending rates to borrowers, Wang said. Other easing measures, such as reserve ratio cuts, won't have the same impact, he said, Bloomberg relays. Bloomberg says the virus outbreak has added another shock to China's $41 trillion banking system. Lenders across China were already struggling to stay alive after two years of record debt defaults, triggered by an economic slowdown and a crackdown on debt. Authorities last year seized and bailed out a number of lenders, recalls Bloomberg. Even some of the relatively larger banks could require "sizable recapitalization," S&P Global warned last month. Bloomberg relates that the rating company also estimated that a prolonged public health emergency could cause the banking system's bad loan ratio to more than triple to about 6.3%, amounting to an increase of CNY5.6 trillion. Meanwhile, the industry's net interest margin, a measure of lending profitability, narrowed to 2.2% at the end of last year from 2.7% five years ago amid fierce competition for deposits, Bloomberg discloses. Government directives to lower borrowing rates for smaller companies is now exacerbating the squeeze. Bloomberg notes that as part of the latest relief measures to fight the virus, banks were required to provide some firms with loans at preferential interest rates of no higher than 3.15%, with some as low as 2.4%, according to the PBOC. They can borrow from the central bank at 2.75% and would be barely breaking even, once you include operating expenses and potential bad loan charges. "To ease the impacted corporates' financing difficulty and lower their interest burden, we believe government, financial institutions and depositors will all need to sacrifice," Citigroup Inc. analysts led by Judy Zhang wrote in a note this month, Bloomberg relays. A 5 basis points cut in the demand deposit benchmark rate and a 10 basis points reduction in the term-deposit rate would lift Chinese banks' margin and boost their profit by 2.1%, they wrote. Those higher margins could come in handy, with millions of firms such as car dealerships and karaoke bars desperate for credit as demand dries up, Bloomberg says. The economy will likely grow 4.3% in the first quarter, the slowest in 30 years, Bloomberg discloses citing a recent survey. Full-year growth is expected to be about 5.5%, down from estimates of 5.9% last month. "The chance of such a rate cut is getting significantly higher as the PBOC needs some actions to show that it's getting involved in the current campaign against the virus," Lu Ting, chief China economist at Nomura International HK Ltd., wrote in a note, Bloomberg relays. The demand deposit rate could be cut by 5 basis points while the one-year term-deposit could be lowered by 15 basis points, Lu said. Even so, Lu, as well as economists at BBVA SA and ANZ Banking Group Ltd., questioned the overall impact of such a move given that those rates are already low at 0.35% and 1.5%, respectively, Bloomberg states. Many lenders, however, are paying more than the benchmarks to retain savers. For Chinese banks, whose shares have underperformed the benchmark indexes in Hong Kong and on the mainland for most of the past five years and are trading near record low valuation, cheaper funding costs would come as a welcome relief, says Bloomberg. "The deposit rate should be cut sooner than later," Bloomberg quotes Liao Zhiming, an analyst at Tianfeng Securities, who expects a 25 basis point cut to 1.25% for one-year deposits, as saying. "A moderate cut will ease their pressure on margins." GUANGZHOU R&F: Fitch Assigns BB- Rating to New USD Sr. Notes ------------------------------------------------------------ Fitch Ratings assigned China-based Guangzhou R&F Properties Co. Ltd.'s (BB-/Stable) proposed US dollar senior notes a 'BB-' rating. The proposed notes will be issued by Guangzhou R&F's subsidiary, Easy Tactic Limited, and are rated at the same level as Guangzhou R&F's senior unsecured rating because the parent has granted a keepwell deed and a deed of equity interest purchase undertaking to ensure that the guarantor, R&F Properties (HK) Company Limited, also a wholly owned subsidiary of Guangzhou R&F, has sufficient assets and liquidity to meet its obligations. Guangzhou R&F intends to use the net proceeds from the proposed issuance for debt refinancing. Fitch expects Guangzhou R&F's leverage, measured by net debt/adjusted inventory, to fall below 55% as the company scales back its expansion. However, this is still high compared with similarly rated peers, which have average leverage of around 45%. Fitch believes Guangzhou R&F's stronger business profile mitigates the higher leverage, as it has a larger scale and better business diversification. Its moderately long land-bank life allows it to maintain a high development-property EBITDA margin of above 30%. KEY RATING DRIVERS Gradual Deleveraging: Fitch estimates that Guangzhou R&F's leverage fell to 56.5% in 2019 after it slowed land acquisitions in 2H19 to less than CNY10 billion, or below 15% of contracted sales (2018-1H19: 28%-29%). Management reduced its medium-term sales target in 2H19 and plans to keep land acquisition spending low in 2020. Controlled land purchases will help the company keep leverage in 2020-2022 below 55%, the threshold above which Fitch would consider negative rating action. Guangzhou R&F's leverage rose to 58.5% in 1H19 after weak cash collection. The company's approval from the China Securities Regulatory Commission in December 2019 to issue H-shares provides another option for deleveraging. Adequate Land Bank: Guangzhou R&F's moderately long land-bank life adds to flexibility for land acquisitions. Its attributable land bank of 61.0 million square metres (sq m) as of 1H19 was adequate for contracted sales to continue rising for 4.5 years. Moreover, management says that some of the company's sixty urban redevelopment projects are expected to be transferred to its land bank in phases and contribute to contracted sales in the coming year; the key projects are in Guangzhou and the Greater Bay Area. Guangzhou R&F is able to pick projects with high margins, as it is not in a rush to replenish its land bank. Higher Sales Scale: Fitch expects attributable contracted sales to increase moderately by 10% in 2020 to CNY154 billion (2019: 6% increase). The company's sales were higher than those of 'BB-' rated peer sales of CNY50 billion-80 billion. Guangzhou R&F's land bank covers more than 100 cities and is more geographically diversified than the 30-40 cities of 'BB-' peers. Its urban redevelopment projects will improve its land bank mix by adding sites in tier one and two cities. Currently, 37% of attributable land bank is in lower-tier Chinese cities, where home sales are volatile. Sustained High Margin: Guangzhou R&F's EBITDA margin, excluding capitalised interest from cost of sales, was about 34% in 2018, while its gross profit margin improved to 41% in 1H19, from 36% in 2018. The margin will be supported by the company's unrecognised property sales of CNY120 billion, which carried a gross profit margin of 35% on average. These sales will be recognised over the next year or two and support the company's EBITDA margin in 2020-2021. Its urban redevelopment projects to be launched over the next year carry a high margin of around 40%. Higher Non-Development EBITDA: The company's hotel and rental revenue surged by 145% to CNY8.1 billion in 2018 (2017: CNY3.3 billion), driven by contributions from its newly acquired Wanda hotels. Fitch estimates that Guangzhou R&F's non-development revenue from hotel and property rental reached CNY8.9 billion in 2019 and will continue to rise by around 5% in 2020. However, the company's non-development EBITDA/gross interest expense ratio will be around 0.30x (2018: 0.29x), weighed down by higher operating costs and pre-opening expenses for upcoming hotel and investment properties. DERIVATION SUMMARY Guangzhou R&F's geographical diversification is comparable with that of 'BB+' and 'BB' rated peers. It has a more geographically diversified operation spread across 100 Chinese cities than CIFI Holdings (Group) Co. Ltd.'s (BB/Stable) more than 50 cities. This should help both companies mitigate risk from local policy intervention and economies. Guangzhou R&F's homebuilding scale, measured by attributable contracted sales, is comparable with Seazen Group Limited's (BB/Stable) CNY143 billion in 2018. It is larger than that of some 'BB' rated peers, such as CIFI's CNY76 billion, and the CNY40 billion-80 billion of 'BB-' rated peers, such as China Aoyuan Group Limited's (BB-/Positive) CNY78 billion and Times China Holdings Limited's (BB-/Stable) CNY49 billion. Guangzhou R&F's ratings are constrained by its leverage of 58.5% in 1H19, which is comparable with the 50%-60% leverage of 'B+' rated peers, such as Yango Group Co., Ltd. (B+/Stable). Guangzhou R&F's high leverage is mitigated by stronger profitability, with its EBITDA margin, excluding capitalised interest from cost of sales, at 34%, which was higher than the 25%-30% of 'BB-' peers. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Attributable contracted sales of CNY140 billion-185 billion in 2019-2022- EBITDA margin, excluding capitalised interest from cost of sales, at 31%-34% in 2019-2022- 20%-40% of contracted sales proceeds to be spent on land acquisitions in 2019-2022 to maintain a land bank sufficient for about four years of development- Flat average selling price in 2020-2022 RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action: - Leverage, measured by net debt/adjusted inventory, at below 45% for a sustained period Developments that May, Individually or Collectively, Lead to Negative Rating Action: - Leverage, measured by net debt/adjusted inventory, at over 55% for a sustained period - Property development EBITDA margin, excluding capitalised interest from cost of sales, below 30% for a sustained period LIQUIDITY AND DEBT STRUCTURE Weak but Manageable Liquidity: Guangzhou R&F had a cash balance of CNY39 billion, including restricted cash of CNY16 billion, at end-1H19, which was insufficient to cover CNY58 billion of debt maturing in one year. Its cash/short-term debt ratio declined to 0.7x by end-1H19, from 1.1x at 2017. Guangzhou R&F has CNY128.6 billion in undrawn banking facilities that may be used to cover short-term debt and operating capex when in need. In terms of debt structure, only 11.3% out of Guangzhou R&F's CNY195.5 billion of debt is trust financing, which is not a big portion in its view. Debt outstanding in 2H19 has been refinanced. Fitch estimates that the cash/short-term debt ratio improved in 2019 after the company repaid part of the puttable bonds that were due in 2H19 and reduced land acquisitions to preserve cash. Guangzhou R&F's management has prepared cash adequate to cover debt due in three months. Of the CNY57.9 billion in short-term debt, 22.3% is puttable bonds, part of which may be rolled over for another year instead of being repaid in the coming 12 months. Fitch does not believe Guangzhou R&F will have major difficulty in refinancing its short-term debt. MODERN LAND: Fitch Assigns B Rating to Proposed USD Sr. Notes ------------------------------------------------------------- Fitch Ratings assigned a 'B' rating to China-based property developer Modern Land (China) Co., Limited's (B/Stable) proposed US dollar senior notes. The Recovery Rating is 'RR4.' The proposed notes are rated at the same level as Modern Land's senior unsecured rating, as they represent its direct, unconditional, unsecured and unsubordinated obligations. Modern Land's Issuer Default Rating reflects its weaker margin and higher leverage than peers, which are balanced against a stronger business profile. Its ratings are supported by improving land bank quality after the company repositioned its business towards tier one and two cities, which have higher land prices, to support contracted sales growth. KEY RATING DRIVERS High Leverage: Fitch expects the company to remain pressured to buy land in 2020 to sustain sales growth, which will keep leverage close to 45%. Modern Land's leverage was 46% at end-June 2019, lower than the 47% in 2018 but well above the 37% in 2016, due to aggressive land acquisition. Fitch assesses leverage on a proportionately consolidated basis, as the high share of contracted sales from joint ventures means that Modern Land's consolidated financial statements do not adequately reflect its financial profile. Land premium as a percentage of sales proceeds, on an attributable basis, remained stable at around 45% in 1H19, similar to 2018. In addition, an improvement in cash collection to 90% in 1H19, from 72% in 2018, contributed to the decrease in leverage. Sounder Margins Support Deleveraging: A higher 1H19 EBITDA margin of 16%, excluding capitalised interest, (2018: 13%) should help the company deleverage, although this was still lower than the 20%-25% of 'B' rated peers. Its gross profit margin improved to 27% in 1H19, from 20% in 2017, but remained below the 31% in 2015. The better margins followed lower land cost as a percentage of the average selling price of 39% in 2018, from 43% in 2017. Land Bank Pressure Remains: The company's land bank life improved to 3.3 years of sales in 2018, from 2.7 years in 2017, although Modern Land is likely to remain under pressure to add quality land to sustain growth in the next two years. This will increase its land acquisition cost. Modern Land replenished its land bank at lower cost due to acquisitions in tier-three cities, which saw its land cost fall to CNY2,226/square metre in 2018, from CNY3,270/square metre. Modern Land extended its coverage to more tier one and two cities in 2015-2018 and increased its land bank in tier three cities in 2017 and 2018 due to positive regional market sentiment. Fitch estimates that tier one cities, such as Beijing, and tier two cities, like Taiyuan, Hefei, Xiantao and Changsha, account for around 66% of Modern Land's saleable resources by value. Rising Scale: Fitch expects Modern Land's attributable contracted sales to be resilient in a market downturn as its land bank is concentrated in tier one and two cities. Modern Land's attributable contracted sales remained stable at CNY19 billion in 2019, after rising by 49% in 2018, while total contracted sales rose by 13% to CNY36 billion. DERIVATION SUMMARY Modern Land's attributable contracted sales of CNY20 billion in 2018 were close to that of other 'B' rated companies, such as Beijing Hongkun Weiye Real Estate Development Co., Ltd.'s (B/Negative) CNY13 billion and Redco Properties Group Ltd (B/Stable) CNY12 billion. Modern Land's leverage was slightly lower than Hongkun's 62% and higher than Redco's 28% in 2018, but its EBITDA margin was lower than Hongkun's 43% and similar to that of Redco. Modern Land's sales are lower than those of 'B+' rated companies, including Fantasia Holdings Group Co., Limited's (B+/Stable) CNY24 billion and Redsun Properties Group Limited's (B+/Stable) CNY24 billion. Leverage at the peer companies is similar to Modern Land's, but Modern Land has a lower margin. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Attributable contracted sales of CNY27 billion in 2020. - Gross profit margin from property development maintained at around 25% in 2019-2022 - Construction cash cost accounting for 30%-35% of attributable contracted sales in 2019-2022. - Land premium accounting for 45%-50% of annual sales receipts in 2019-2022 and average land acquisition cost to increase in 2019-2022. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that Modern Land would be liquidated in a bankruptcy because it is an asset-trading company. Fitch has assumed a 10% administrative claim. The liquidation estimate reflects Fitch's view of the value of balance-sheet assets that can be realised in sale or liquidation during a bankruptcy or insolvency proceeding and distributed to creditors. Cash balance is adjusted such that only cash in excess of the higher of accounts payables and three months of contracted sales is factored in. Advance rate of 60% applied to adjusted inventory, as Modern Land has an EBITDA of lower than 20%. Property, plant and equipment advance rate at 60%. 70% advance rate applied to accounts receivables. Advance rate of 100% applied to restricted cash, which mainly consists of guarantee for the company's bank borrowing and construction work. Based on its calculation of adjusted liquidation value after administrative claims, Fitch estimates the Recovery Rate of the offshore senior unsecured debt to be within the 'RR4" recovery range. RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action - Net debt/adjusted inventory (including joint venture proportionate consolidation) below 40% for a sustained period - Land bank maintained at above 2.5 years of sales Developments that May, Individually or Collectively, Lead to Negative Rating Action - Insufficient land bank for two years of sales. - Net debt/adjusted inventory (including joint venture proportionate consolidation) above 55% for a sustained period - EBITDA margin, excluding capitalised interest, below 18% for a sustained period LIQUIDITY AND DEBT STRUCTURE Sufficient Liquidity: Modern Land's liquidity remains healthy, with total cash of CN10.9 billion, including restricted cash of CNY3.0 billion, compared with short-term debt of CNY7.4 billion at end-1H19. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. QINGHAI PROVINCIAL INVESTMENT: S&P Discontinues 'D' Long-Term ICR ----------------------------------------------------------------- S&P Global Ratings discontinued its 'D' long-term issuer credit rating on Qinghai Provincial Investment Group Co. Ltd. (QPIG) and 'D' issue rating on the company's senior unsecured notes. On Jan. 14, 2020, S&P lowered the rating on QPIG to 'D' after the China-based aluminum producer defaulted on its offshore U.S.-dollar-denominated senior unsecured notes. YIDA CHINA: S&P Lowers ICR to 'CC' on Distressed Exchange Offer --------------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit rating on Yida China Holdings Ltd. to 'CC' from 'CCC-'. At the same time, S&P lowered its long-term issue rating on the China-based company's senior unsecured notes to 'C' from 'CC'. S&P said, "We lowered the rating on Yida because we view the proposed transaction as a distressed exchange rather than an opportunistic one. We believe the company is highly likely to default on its notes in the absence of a successful exchange offer. Yida has a low cash balance and few viable near-term refinancing options. "In our view, Yida has insufficient internal resources to repay the notes maturing in April 2020. We estimate the company has less than Chinese renminbi (RMB) 1 billion unrestricted cash as of Dec. 31, 2019, and limited operating cash inflow in January of this year." In addition, Yida has made no material breakthrough in other funding options it explored, nor has the potential sale of China Minsheng Investment Group Corp. Ltd. (CMIG)'s stake in Yida to third party been completed. Under the terms of the offer, Yida will issue new senior notes of up to US$276 million due 2022 to exchange for most of its outstanding 6.95% US$300 million senior notes due April 2020. The new notes will carry an interest rate of 10% per annum for the initial six months, rising to 14% per annum for the remaining 18 months. For each US$1,000 principal amount validly tendered, bondholders will receive a cash consideration of US$80 combined with US$920 in principal in new notes. Accrued interest will be paid in cash. Yida plans to pay the cash consideration and repay the remaining outstanding notes with internal funds. S&P said, "We will review Yida's credit profile after the exchange offer is completed. The exchange offer will likely settle in March 2020. We believe the completion of the transaction could temper the company's immediate nonpayment risk." However, Yida would continue to see exceptionally weak liquidity and face repayment risk, in particular for the RMB800 million domestic corporate bond due September 2020. The negative outlook reflects the likelihood that S&P will lower its issuer credit rating on Yida to 'SD' when the distressed exchange is completed. Following the conclusion of the exchange, S&P will reassess the company's financial and liquidity position, based on the amount of notes tendered. Yida is a business park developer in China. It also develops residential properties in integrated community projects. Yida listed on the Hong Kong stock exchange in 2014. CMIG became its controlling shareholder in late 2016. Yida holds a total land bank of 9.8 million square meters gross floor area as of end-June 2019, 70% of which is located in Dalian. Yida owns six business parks and manages 24 parks on behalf of other owners in China. ================= H O N G K O N G ================= [*] HONG KONG: Poised for Another Real Estate Crisis ---------------------------------------------------- South China Morning Post reports that Hong Kong's commercial banks are cutting their valuations of mortgaged homes as they bow to the double whammy impact of a viral epidemic with months of anti-government protests, in a move that could drive even more borrowers into negative equity and provoke panic selling. SCMP relates that the weekly Centa Valuation Index (CVI) compiled by one of the biggest real estate agencies in the city plummeted by 3.52 points to 12.5 last week, the lowest level since January 2019. The lower the reading, the more bearish banks become of prospects in the real estate industry, and the more likely banks they are to cut their valuations of mortgaged property, SCMP says. "The attitude of major banks towards home mortgages has cooled since the Lunar New Year in late January, as the coronavirus continued to spread," SCMP quotes Centaline Property's senior associate research director Wong Leung-sing as saying. The CVI "will continue to drop in the coming weeks, and may even dip below 10," he said. According to SCMP, the declining valuation could push borrowers further into negative equity, where the market value of a property is less than the outstanding amount of a mortgage secured on it. The potential indebtedness would drive mortgage borrowers into panic selling, creating a downward spiral that push prices lower. The price index for used homes in Hong Kong dipped 1.7 per cent to 378.5 in December, SCMP discloses citing the Rating and Valuation Department, the biggest monthly decline since last September's 1.8 per cent drop when sentiments in the city were hit by anti-government protests. As many as 128 mortgage loans valued at HK$764 million (US$98 million) were in negative equity as at the end of December, more than double the number of cases three months earlier, according to government data, SCMP relays. Signs were already evident in the fourth quarter of 2018, when the valuations of 262 homes were pushed below their mortgage values, a situation that only improved somewhat last year when prices reversed their declines, according to SCMP. As Hong Kong's economy finds itself in its first technical recession in a decade, the global coronavirus outbreak is keeping visitors away from the city and sapping the mood to consume. Property sales have stopped since mid January, as agents and potential buyers alike refrained from gathering in crowded places for fear of catching the virus, SCMP relates. SCMP adds that the last time Hong Kong faced a similar housing crisis was in 2003 during the global outbreak of the severe acute respiratory syndrome (Sars), when 105,000 households – 30 per cent of the city's total mortgages according to Fitch Ratings – were pushed into negative equity, a slump that took 14 years to recover from, requiring an almost sixfold jump in median home prices. For now, none of the major mortgage lenders in Hong Kong would divulge negative equity cases among their customers, the report states. ========= I N D I A ========= AKSHAR GINNING: ICRA Moves B+ Rating to Not Cooperating ------------------------------------------------------- ICRA has moved the rating for the INR8.00-crore bank facility of Akshar Ginning and Pressing Industries to 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA] B+ ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 8.00 [ICRA]B+(Stable) ISSUER NOT COOPERATING; Rating Moved to 'Issuer Not Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Established in 2006, Akshar Ginning & Pressing Industries (AGPI) is a partnership firm that gins and presses raw cotton to produce cotton bales and cottonseeds. The firm also crushes cottonseeds to produce cottonseed oil. The manufacturing facility, located at Una, Gujarat, is equipped with 24 ginning machines and a pressing machine, with a production capacity of 240 finished bales per day. The firm also has three expellers with a processing capacity of 15 tonnes of cottonseeds per day. AGPI is promoted by six partners, namely, Mr. Shambhu B. Zalavadiya, Mr. Himmat B. Zalavadiya, Mr. Chunilal B. Zalavadiya, Mr. Pareshkumar H. Zalavadiya, Mr. Jaydipkumar C. Zalavadiya and Mr. Ashvinkumar V. Barvaliya. All of them are family members, with an extensive experience in the cotton industry. AMERICAN SWAN: Insolvency Resolution Process Case Summary --------------------------------------------------------- Debtor: The American Swan Lifestyle Company Private Limited 1301 B, Naurang House 21 KG Marg Connaught Place, New Delhi 110001 Insolvency Commencement Date: February 13, 2020 Court: National Company Law Tribunal, New Delhi Bench II Estimated date of closure of insolvency resolution process: August 10, 2020 Insolvency professional: Bhim Sain Goyal Interim Resolution Professional: Bhim Sain Goyal 109-B, Pocket-F Mayur Vihar-II Delhi 110091 E-mail: bsgoyal1@gmail.com - and - M-215, Greater Kailash-II New Delhi, NCT of Delhi 110048 E-mail: cirptaslc@gmail.com Last date for submission of claims: February 27, 2020 ANNAPOORANI YARNS: ICRA Maintains B+ Rating in Not Cooperating -------------------------------------------------------------- ICRA said the ratings for the INR12.00-crore bank facilities of Annapoorani Yarns (AY) Continues to remain under 'Issuer Not Cooperating' category'. The Long term ratings and Short term ratings are denoted as "[ICRA]B+(Stable)/[ICRA]A4 ISSUER NOT COOPERATING." Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term- 7.90 [ICRA]B+(Stable); ISSUER NOT Cash Credit COOPERATING; Rating Continues to remain under 'Issuer Not Cooperating' category Long-term- 3.39 [ICRA]B+(Stable); ISSUER NOT Term Loan COOPERATING; Rating Continues to remain under 'Issuer Not Cooperating' category Long-term 0.71 [ICRA]B+(Stable)/[ICRA]A4; Unallocated ISSUER NOT COOPERATING; Rating Continues to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Annapoorani Yarns is primarily engaged in the trading of textile yarn and fabric, for garments. The operations of the firm are managed by Mr. R Jayachandran. The Entities product profile includes 100% Cotton, Polyester and Blended Yarns, Melange Yarns and Fabrics. ANTIQUE COTTEX: ICRA Maintains B+ Rating in Not Cooperating ----------------------------------------------------------- ICRA said the ratings for the INR8.18 crore bank facilities of Antique Cottex Private Limited (ACPL) continues to remain under the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable)/[ICRA]A4 ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based– 0.02 [ICRA]B+ (Stable) ISSUER NOT Term Loan COOPERATING; Rating continues to remain under the 'Issuer Not Cooperating' category Fund-based– 7.50 [ICRA]B+ (Stable) ISSUER NOT Cash Credit COOPERATING; Rating continues to remain under the 'Issuer Not Cooperating' category Unallocated 0.66 [ICRA]B+ (Stable)/[ICRA]A4 ISSUER NOT COOPERATING; Rating continues to remain under the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Incorporated in February 2011, ACPL is promoted by three directors - Mr. Vinod Ghatodiya, Mr. Vishal Ghatodiya and Mr. Arvind Ghatodiya. The company is engaged in cotton ginning and pressing to produce cotton bales. The company's manufacturing facility is equipped with 24 ginning machines with an intake capacity of 92 MTPD (considering 20 hours' operations per day), resulting in a manufacturing capacity of 200 cotton bales per day ever since the start of ACPL's commercial production in December 2011. ASIAN COLOUR: NCLAT Rejects IFCI Insolvency Bid Against Guarantor ----------------------------------------------------------------- Outlook reports that the National Company Law Appellate Tribunal (NCLAT) has dismissed the insolvency plea filed by IFCI against ACCIL Hospitality, a corporate guarantor of debt-ridden steel products maker Asian Colour Coated Ispat. According to Outlook, the tribunal observed that creditors of a debt-ridden company cannot file fresh insolvency plea against its corporate guarantor after collating the claims from principal borrowers as it would amount to "duplicity of claims being pressed". Outlook relates that public sector financial institution IFCI had filed petition to initiate insolvency proceedings against ACCIL Hospitality, which had extended a corporate guaranty for Asian Colour Coated Ispat Limited (ACCL) - a company currently under insolvency proceedings. A two-member bench headed by Chairperson Justice S J Mukhopadhaya also held that though the creditor may be faced with the prospect of taking a haircut, this could not be a ground to trigger a fresh resolution process against the Corporate Guarantor, the report says. "Once the Financial Creditor's claim has been collated and admitted by the IRP in its entirety, invoking of jurisdiction of the Adjudicating Authority at its instance for triggering a fresh Corporate Insolvency Resolution Process against the Corporate Guarantor would amount to duplicity of claims being pressed," said the NCLAT, Outlook relays. ACCL was the principal borrower, which had defaulted in clearing its outstanding liability of loan facility of INR150 crore extended to it by the financial creditor and is going through insolvency process, Outlook discloses. Outlook notes that the appellate tribunal upheld the orders of the New Delhi-based Principal Bench of the National Company Law Tribunal (NCLAT), which had on October 21, dismissed IFCI plea to initiate insolvency proceedings against ACCIL Hospitality. "This being a second application for same set of claim and arising out of the same default cannot be admitted against the 'Corporate Guarantor' while CIRP initiated against the 'Principal Borrower' is still subsisting," said NCLAT. According to NCLAT: "The fact that the Resolution Plan is yet to be approved by the NCLT and the Financial Creditor may be faced with the prospect of taking a haircut is no ground to trigger a fresh resolution process against the Corporate Guarantor," Outlook relays. Outlook adds that IFCI had contended that liability of ACCIL Hospitality was joint and coextensive with that of the Principal Borrower, ACCL and the mere filing of claim by the a financial creditor in the corporate insolvency resolution proceedings could not absolve the Corporate Guarantor of its contractual obligation of discharging the liability. Rejecting it NCLAT said: "There being no merit in the appeal same is dismissed." The lenders of ACCIL, a steel products manufacturing company, has approved INR1,500 crore bid by JSW Group, with 79.3 per cent of voting and approval from NCLT is pending, Outlook notes. B D OVERSEAS: Insolvency Resolution Process Case Summary -------------------------------------------------------- Debtor: B D Overseas and Fiscal Services Limited A/1113 Siddhi Vinayak Tower-A.B/H DCP Off S.G. Highway, Sur. No. 212/2 Near Katariya House Makarba, Ahmedabad GJ 380051 IN Insolvency Commencement Date: January 20, 2020 Court: National Company Law Tribunal, Ahmedabad Bench Estimated date of closure of insolvency resolution process: July 18, 2020 Insolvency professional: Navin Srichand Kanjwani Interim Resolution Professional: Navin Srichand Kanjwani 1, New Maharaja Park Maya Cinema Road Kubernagar, Ahmedabad Gujarat 382340 E-mail: navinskanjwani@yahoo.co.in - and - D/511, Kanakia Zillion Junction of L.B.S. Road & CST Road B.K.C. Annexe, Near Equinox Kurla (West), Mumbai 400070 E-mail cirp.bdofsl@gmail.com Last date for submission of claims: February 26, 2020 BHADRESHWAR VIDYUT: Insolvency Resolution Process Case Summary -------------------------------------------------------------- Debtor: M/s Bhadreshwar Vidyut Private Limited Terra 2 A, Flat No. 404 No. 2/5, Lavender Street Mugalivakkam Near Pon Vidyasharam School Porur Chennai 600125 Insolvency Commencement Date: January 27, 2020 Court: National Company Law Tribunal, Chennai Bench Estimated date of closure of insolvency resolution process: July 25, 2020 Insolvency professional: Ms. Jayashree S Iyer Interim Resolution Professional: Ms. Jayashree S Iyer C-15, Abhinav Kailash 19A Velachery Road Saidapet, Chennai 600015 Tamil Nadu E-mail: jayashree2505@gmail.com - and - New No. 10 Old No. 41 Kirupasankari Street West Mambalam Chennai 600033 E-mail: cirp.bhadreshwar@gmail.com Last date for submission of claims: February 10, 2020 BHANDARI HOSIERY: Insolvency Resolution Process Case Summary ------------------------------------------------------------ Debtor: Bhandari Hosiery Exports Limited Bhandari House Vill Meharban Rahon Road, Ludhiana Punjab Insolvency Commencement Date: February 10, 2020 Court: National Company Law Tribunal, Chandigarh Bench Estimated date of closure of insolvency resolution process: Augsut 8, 2020 (180 days from commencement) Insolvency professional: Davinder Singh Gandhi Interim Resolution Professional: Davinder Singh Gandhi 127, Panchsheel Vihar Barewal Chungi Road Ludhiana, Punjab 141012 E-mail: davindersinghgandhi@gmail.com cirpbhandari@gmail.com Last date for submission of claims: February 24, 2020 BISMAN INDUSTRIES: ICRA Maintains 'D' Rating in Not Cooperating --------------------------------------------------------------- ICRA said the ratings for the INR8.20 crore bank facilities of Bisman Industries Limited continues to remain under the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based- 8.00 [ICRA]D ISSUER NOT COOPERATING; Cash Credit Rating continues to remain under the 'Issuer Not Cooperating' category Non-Fund based 0.20 [ICRA]D ISSUER NOT COOPERATING; Letter of Credit Rating continues to remain under the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Bisman Industries Limited (BIL) was established in the year 1988 by Mr. Subhash Kumar Poddar in the name of Limtex Industries Ltd having its registered office at Kolkata. The company is engaged in manufacturing of biscuits and trading of tea in the domestic markets, primarily East India in Asansol, West Bengal. CHIRAG AGROFINS: ICRA Maintains D Rating in Not Cooperating ----------------------------------------------------------- ICRA said the ratings for the INR20.00 crore bank facilities of Chirag Agrofins Private Limited (CFPL) continues to remain under the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based- 20.00 [ICRA]D ISSUER NOT COOPERATING; Term Loan Rating continues to remain under the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Incorporated in 1991, Chirag Agrofins Private Limited (CAPL or the company) is involved in real estate development. Currently, the company is executing one project in Malad, Mumbai, where it is constructing a commercial-cumresidential complex. CAPL is a part of the Bhagat Group promoted by Mr. Suraj Prakash Bhagat and his family. Apart from real estate development, the Bhagat Group is also involved in brewing and distilleries. The group has executed twelve real estate projects in Mumbai. D.B. MACHINE: ICRA Maintains 'B+' Rating in Not Cooperating ----------------------------------------------------------- ICRA said the ratings for the INR8.00 crore bank facilities of D.B. Machine Tools Private Limited continues to remain under the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based 2.50 [ICRA]B+ (Stable) ISSUER NOT Limit packing COOPERATING; Rating continues Credit to remain under the 'Issuer Not Cooperating' category Fund-based- 5.50 [ICRA]B+ (Stable) ISSUER NOT Limit foreign COOPERATING; Rating continues Documentary to remain under the 'Issuer bill purchase Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. D.B. Machine Tools Private Limited was incorporated in 2006 and is a 100% export-oriented company based in Kolkata. The company exports almost all its products to Bangladesh. DBMTPL is a closely held company. The promoter has a business experience of around two decades in export trade. GURUKRUPA CORP: ICRA Keeps B+/A4 Rating in Not Cooperating ---------------------------------------------------------- ICRA said the ratings for the INR18.50 crore bank facilities of Gurukrupa Corporation continue to remain under 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable)/[ICRA]A4; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 18.50 [ICRA]B+ (Stable)/[ICRA]A4; ISSUER NOT COOPERATING; Rating continues to remain Under 'Issuer Not Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Established in April 2015, Gurukrupa Corporation (Gurukrupa or the firm) constructs residential projects. Gurukrupa is currently executing a residential project namely; Sanskruti Skydeck located in Surat. The firm is a group company of the Sanskruti Group and is promoted by Mr. Parimal Savalia and Mr. Rakesh Desai. The promoters of the group have been present in the construction business for over a decade. HAREKRUSHNA COTTEX: ICRA Keeps 'B+' Rating in Not Cooperating ------------------------------------------------------------- ICRA has continued the ratings for the INR5.92 crore bank facilities of Harekrushna Cottex. The rating is denoted as "[ICRA]B+(Stable) ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based 5.72 [ICRA]B+(Stable); ISSUER limits NOT COOPERATING; Rating Continues to remain under 'Issuer Not Cooperating' Category Unallocated 0.20 [ICRA]B+(Stable); ISSUER limits NOT COOPERATING; Rating Continues to remain under 'Issuer Not Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Established in April 2015 as a partnership firm, Harekrushna Cottex ('HC' or 'the firm') is in the business of ginning and pressing of raw cotton. HC's manufacturing facility is located at Rajkot (Gujarat), and is equipped with 24 ginning machines and one pressing machine with annual processing capacity of 12,442 metric tonnes (MT) of raw cotton. The operations commenced from February 2016. HPCL BIOFUELS: Insolvency Resolution Process Case Summary --------------------------------------------------------- Debtor: HPCL Biofuels Limited House no. 9, Shree Sadan 1st floor, Patliputra Colony Patna, Bihar 800013 IN Insolvency Commencement Date: February 12, 2020 Court: National Company Law Tribunal, Kolkata Bench Estimated date of closure of insolvency resolution process: August 9, 2020 Insolvency professional: CA Nitesh Kumar More Interim Resolution Professional: CA Nitesh Kumar More 18 Rabindra Sarani Gate No. 1, 7th Floor Room No. 701, Kolkata 700001 E-mail: nmore2091@gmail.com Last date for submission of claims: March 4, 2020 KBJ JEWEL: ICRA Maintains 'D' Rating in Not Cooperating ------------------------------------------------------- ICRA said the ratings for the INR110.00 crore bank facilities of KBJ Jewel Industry India Private Limited continues to remain under the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D/[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-Term- 110.00 [ICRA]D ISSUER NOT COOPERATING; Fund Based CC Rating continues to remain under the 'Issuer Not Cooperating' category Short Term– (20.00) [ICRA]D ISSUER NOT COOPERATING; Interchangeable Rating continues to remain under the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Incorporated in May 2006, KBJ Jewel Industry India Private Limited (KBJJPL) was promoted by Mr. Mohit D. Kamboj and his father Deepak K. Kamboj with the aim to manufacture and market gold jewellery. The Kamboj family has been in the jewellery business for more than five decades with Mr. Mohit Kamboj representing the third generation of the family in this business. The company's head office is located in Mumbai and it has a branch office in Varanasi, UP, where the family first commenced its jewellery business five decades ago. KISHORI LAL: Insolvency Resolution Process Case Summary ------------------------------------------------------- Debtor: M/s Kishori Lal Sudesh Kumar Metals Pvt. Ltd. Registered office: E-127, Industrial Area Bhiwadi Alwar, (Rajasthan) Insolvency Commencement Date: January 30, 2020 Court: National Company Law Tribunal, Jaipur Bench Estimated date of closure of insolvency resolution process: August 8, 2020 (180 days from commencement) Insolvency professional: Hansraj Mutreja Interim Resolution Professional: Hansraj Mutreja Mutreja & Associates 146/8, Premium Center Zone-I, M.P. Nagar Bhopal 462011 (M.P.) E-mail: mutreja@sancharnet.in kishorilal3hrminsolvency@ gmail.com Last date for submission of claims: February 24, 2020 KRISHNA COTTEX: ICRA Maintains 'B' Rating in Not Cooperating ------------------------------------------------------------ ICRA said the ratings for the INR6.05 crore bank facilities of Krishna Cottex Industries continue to remain under 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]B (Stable); ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term-Loan 0.87 [ICRA]B (Stable); ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Cash Credit 4.50 [ICRA]B (Stable); ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Unallocated Limits 0.68 [ICRA]B (Stable); ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Established in March 2014, Krishna Cottex Industries (KCI) has set up a cotton ginning and pressing facility at Rajkot in Gujarat. The plant is equipped with 24 ginning machines and 1 pressing machine with processing capacity of 8160 MT of raw cotton annually (considering 200 bales a day with 24 hours of operations with 240 working days in a year). KCI is a partnership firm with the promoters having an extensive experience in the cotton industry. The firm commenced commercial operations from October 2014. KSHAMA BUILDERS: Insolvency Resolution Process Case Summary ----------------------------------------------------------- Debtor: Kshama Builders and Developers Private Limited 20, Rajabahadur Mansion Ambalal Doshi Marg Fort, Mumbai MH 400023 IN Insolvency Commencement Date: February 15, 2020 Court: National Company Law Tribunal, Mumbai Bench Estimated date of closure of insolvency resolution process: August 13, 2020 (180 days from commencement) Insolvency professional: Miss Nayana Premji Savala Interim Resolution Professional: Miss Nayana Premji Savala 1/101-A, Vishal Susheel CHS Nariman Road, Vile Parle East Mumbai 400057 E-mail: nalinisavala@gmail.com Last date for submission of claims: March 4, 2020 LEISURE WEAR: ICRA Maintains 'D' Rating in Not Cooperating ---------------------------------------------------------- ICRA said the ratings for the INR6.00-crore bank facility of Leisure Wear Exports Ltd. continues to remain under 'Issuer Not Cooperating' category. The Long-term rating is denoted as "[ICRA] D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 6.00 [ICRA]D ISSUER NOT COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. LWEL is an integrated player in the garment manufacturing industry and has in house facilities for knitting, stitching, dyeing and embellishment work, having manufacturing facility located at Ludhiana. The product profile of the primarily includes collared and polo-neck T-shirts for export to the USA. The company has a unit manufacturing capacity of 8000 TShirts per day and same is utilized to the extent of 50%. The company buys yarn locally from mills and undertakes the knitting and dying process in house. The company is also engaged in the business of trading of fabrics. Both manufacturing and trading business have almost equal share in the total sales component. It also enjoys incentives from the government in the form of duty drawbacks on exports. LIMTEX AGRI: ICRA Maintains 'D' Rating in Not Cooperating --------------------------------------------------------- ICRA said the ratings for the INR33.50 crore bank facilities of Limtex Agri Udyog Limited (LAUL) continues to remain under the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D/[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based- 25.00 [ICRA]D ISSUER NOT COOPERATING; Cash Credit Rating continues to remain under the 'Issuer Not Cooperating' category Non-Fund based 0.50 [ICRA]D ISSUER NOT COOPERATING; Bank Guarantee Rating continues to remain under the 'Issuer Not Cooperating' category Non-Fund based 8.00 [ICRA]D ISSUER NOT COOPERATING; Letter of Credit Rating continues to remain under the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Analytical approach Limtex Agri Udyog Limited (LAUL) is a part of the Kolkata-based Limtex group, which has interests in tea, biscuits and information technology. LAUL concentrates on the production of CTC variety of tea as well as blending and trading of tea. Apart from production of CTC tea, the company also carries out purchasing of premium quality tea to blend with its lower grade of bought leaf production to enhance the quality of the blended tea. MAGMA AUTOLINKS: ICRA Cuts Rating on INR5cr Loan to 'D' ------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Magma Autolinks Private Limited (MAPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 1.00 [ICRA]D ISSUER NOT COOPERATING; Fund Based/CC Rating downgraded from [ICRA]B+(Stable) ISSUER NOT COOPERATING and continues to remain under 'Issuer Not Cooperating' category Long Term- 5.00 [ICRA]D ISSUER NOT COOPERATING; Fund Based TL Rating downgraded from [ICRA]B+(Stable) ISSUER NOT COOPERATING and continues to remain under 'Issuer Not Cooperating' category Rationale The rating downgrade reflects delays in Debt Servicing. The rating is based on limited information on the entity's performance since the time it was last rated in November 2018. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. As part of its process and in accordance with its rating agreement with Sri Rama Educational Trust, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. Key rating drivers and their description Credit challenges There have been delays in debt servicing as mentioned in publicly available sources. Liquidity position: Poor Magma Autolinks Private Limited profile is poor as reflected by irregularities in debt servicing by entity. Incorporated in November 2013, Magma Autolinks Private Limited (MAPL) is an authorised dealer for passenger vehicles of Honda Cars India Limited (HCIL). The company is promoted by the Sharma family, with Mr. Tushar Sharma and Ms.Shveta Sharma serving as the directors. MOBISMART CARD: ICRA Assigns B+ Rating to INR19.50cr Term Loan -------------------------------------------------------------- ICRA has assigned rating to the bank facilities of Mobismart Card Technology Private Limited (MCTPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 19.50 [ICRA]B+ (Stable); Assigned Cash Credit 3.70 [ICRA]B+ (Stable); Assigned Unallocated Limits 0.30 [ICRA]B+ (Stable)/A4; Assigned Rationale The assigned ratings remain constrained by MCTPL limited track record of operations and the risk associated with the plant's stabilisation as per the expected operating parameters. Furthermore, the ratings note the company's financial risk profile, which is expected to remain below average in the near term, given the predominantly debt-funded nature of the project and the impending debt repayments. The ratings are constrained by the intense competition and the vulnerability of its profitability to adverse movements in key raw material prices and foreign exchange rates owing to the dependence on import of raw materials. The assigned ratings, however, favorably factor in the company's professional and qualified management with diverse industry experience. The ratings positively consider the plant's certification by various authorities, driven by its well-equipped manufacturing facility. The Stable outlook on the [ICRA]B+ rating reflects ICRA's opinion that MCTPL will continue to benefit from the company's professional and qualified management. Key rating drivers and their description Credit strengths Professional management - The company's board comprises professional individuals with diverse experience in various industries. The key promoter, Mr. T. Chandramohan, has extensive experience of more than 35 years in various businesses. The CEO, Mr. K. Srinivasan, has extensive experience in the telecom industry catering to fulfilment of subscriber identification module (SIM) card kits. Certification by various authorities - The company's manufacturing facility in Chennai, Tamil Nadu, is well equipped to comply with the strict data security and internal controls requirement of the smart card industry (especially for the banking clients) Owing to this, it has received certifications from Visa and Master Card, Smart Card OS for Transport Application (SCOSTA) and the International Organisation for Standardisation (ISO), which will help in customer acquisition and scaling up its operations. Credit challenges Limited track record of operations - Being in the nascent stage (commercial operations commenced from January 2020), the company remains exposed to risks associated with stabilisation and successful scale up of operations as per the expected parameters. Below average financial risk profile - The total cost of the project is INR28.72 crore, which has been funded by promoters' share capital of INR8.09 crore, unsecured loans from promoters worth INR1.40 crore and bank term loans of INR19.23 crore (INR0.88 crore yet to be availed for machinery purchases). The company's financial risk profile is expected to remain below average in the near term because of the debt-funded project and the impending debt repayments, with an estimated gearing of 2.51 times and Total Debt/OPBDITA of 4.09 times in FY2021. Intense competition in industry - The company faces stiff competition from a large number of players due to the low capital-intensive nature of the industry. Profitability susceptible to volatility in raw material prices and foreign currency fluctuations - Raw material price is a major component that determines the cost competitiveness of the industry. The company has, however, little control over the prices of raw materials such as polyvinyl chloride (PVC) card body, silicon chips (~40-45% of the total cost), holographic foils, etc. Further, owing to the dependence on import of raw materials, its profitability will remain susceptible to adverse fluctuations in foreign currency fluctuations. Liquidity position: Stretched MCTPL's liquidity position is expected to remain stretched owing to the predominantly debt-funded project and suboptimal capacity utilisation in the initial stage of operations. It is expected to generate annual cash accruals of ~INR 2.63-4.77 crore over FY2021-FY2023 against debt repayments of ~INR2.39-2.58, which will keep its cash flow situation tight. The company has availed a working capital limit of INR3.70 crore, the utilisation of which commenced in January 2020. Rating sensitivities Positive Triggers * Significant scale up of operations while maintaining healthy profit margins * Strengthening of net-worth base; improvement in capital structure and coverage indicators * DSCR of 1.2 times or more on a sustained basis Negative Triggers * Lower than expected scale of operations resulting in low cash accruals * Stretch in working capital cycle adversely affecting liquidity * Any large debt funded capex that deteriorates the capital structure and coverage indicators Incorporated in 2016, MCTPL manufactures smart cards including magnetic striped and chip cards for various industries such as banking, telecom, retail, government entities, etc. The company has its manufacturing facility at Chennai, Tamil Nadu spanning across an area of 18,000 sq. feet, wherein it undertakes printing, lamination, chip implanting and personalisation for the manufacturing of cards. Its manufacturing facility is ISO and SCOSTA certified and is accredited by Visa and Master Card. NEW AGE: Insolvency Resolution Process Case Summary --------------------------------------------------- Debtor: New Age Satellite Services Private Limited 16 Netaji Subhas Road 4th Floor Kolkata WB 700001 IN Insolvency Commencement Date: February 14, 2020 Court: National Company Law Tribunal, Kolkata Bench Estimated date of closure of insolvency resolution process: August 12, 2020 (180 days from commencement) Insolvency professional: Mr. Manish Jain Interim Resolution Professional: Mr. Manish Jain Manish Mahavir & Co. 2B, Grant Lane Room No. 303, 3rd floor Bajarang Kunj Kolkata 700012 E-mail: manishmahavir@gmail.com cirp.newage@gmail.com Mobile: 9830248684 8582806221 Last date for submission of claims: March 2, 2020 PIBCO ENTERPRISES: ICRA Cuts Rating on INR6cr Loan to B+ -------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Pibco Enterprises Pvt. Ltd. (PEPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 6.00 [ICRA]B+ (Stable) ISSUER NOT COOPERATING; Rating downgraded from [ICRA]BB- (Stable) and Rating continues to remain under the 'Issuer Not Cooperating' category Rationale The rating downgrade is because of lack of adequate information regarding PEPL performance and hence the uncertainty around its credit risk. ICRA assesses whether the information available about the entity is commensurate with its rating and reviews the same as per its "Policy in respect of non-cooperation by the rated entity". The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. As part of its process and in accordance with its rating agreement with Pibco Enterprises Pvt. Ltd., ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information Incorporated in 2003, PEPL is engaged in the business of automobile dealership for two wheelers of Hero MotoCorp Limited (HML) and commercial vehicles as well as passenger vehicles of Force Motors Limited (FML). PEPL operates through one showroom of HML and two showrooms of FML, and two workshops of HML and FML each in the state of Assam. PEPL also operates through a network of eight sub-dealers for two wheelers, spread over the surrounding areas of Guwahati. Apart from the sale of new vehicles, the company is also engaged in the sale of spare parts, accessories and servicing of vehicles. PMV MALTINGS: ICRA Maintains B+ Rating in Not Cooperating --------------------------------------------------------- ICRA said the ratings for the INR100.00 crore bank facilities of PMV Maltings Private Limited continue to remain under Issuer Not Cooperating category. The long-term rating is denoted as [ICRA]B+ (Stable) ISSUER NOT COOPERATING with a Stable outlook. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based 35.00 [ICRA]B+ (Stable); ISSUER NOT Working Capital COOPERATING; Continues to Facilities remain under the 'Issuer Not Cooperating' category Term loans 51.00 [ICRA]B+ (Stable); ISSUER NOT COOPERATING; Continues to remain under the 'Issuer Not Cooperating' category Unallocated 14.00 [ICRA]B+ (Stable); ISSUER NOT Limits COOPERATING; Continues to remain under the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis dated information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Incorporated in 2008, PMV was a dormant company till the demerger of The Malt Company India Private Limited (MCIPL) with effect from April 2013. Under the demerger scheme, MCIPL handed over two of its units – Pataudi (Haryana) and Kashipur (Uttarakhand) – to PMV, while retaining the Khandsa (Haryana)-based unit. PMV manufactures barley malt with an installed capacity of 30,000 MTPA and 150,000 MTPA at its Pataudi and Kashipur units, respectively. In FY2017, the company reported a profit after tax (PAT) of INR0.59 crore on operating income (OI) of INR139.64 crore compared to a PAT of INR0.41 crore on an OI of INR126.52 crore in the previous year. R J BUILDCON: ICRA Maintains 'D' Rating in Not Cooperating ---------------------------------------------------------- ICRA has continued the long-term/Short Term ratings for the bank facilities of R J Buildcon Private Limited to the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]D/[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 4.00 [ICRA]D ISSUER NOT COOPERATING; Fund Based/ Rating continues to remain Cash Credit under the 'Issuer Not Cooperating' category Long Term- 4.00 [ICRA]D ISSUER NOT COOPERATING; Fund Based Rating continues to remain Term Loan under the 'Issuer Not Cooperating' category Short Term- 6.00 [ICRA]D ISSUER NOT COOPERATING; Non Fund Based Rating continues to remain under the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Incorporated in 2008, R J Buildcon Private Limited (RJBPL) is involved in executing contracts for roads, irrigation systems and buildings for state government and civil bodies. The company is a class I(A) contractor with Public Works Department (PWD) of Government of Maharashtra and an approved contractor for various government and civil bodies. REGEN INFRASTRUCTURE: ICRA Keeps 'D' Rating in Not Cooperating -------------------------------------------------------------- ICRA said the ratings for the INR40-crore bank loan facilities of Regen Infrastructure and Services Private Limited (RISPL) continue to remain under 'Issuer Not Cooperating' category'. The ratings are denoted as "[ICRA]D/[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based– 20.00 [ICRA]D; ISSUER NOT COOPERATING; Cash credit Rating continues to remain in (Long-term) the 'Issuer Not Cooperating' category Non-funded 20.00 [ICRA]D/[ICRA]D; ISSUER NOT Based (Long- COOPERATING; rating continues term/Short to remain in the 'Issuer Not term) Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. RISPL, incorporated in January 2008, is a wholly owned subsidiary of Regen Powertech Private Limited (RPPL). This company primarily handles the infrastructure requirements in commissioning a wind turbine generator (WTG), including facilitation of land acquisition, and the civil works w.r.t. erection and commissioning of WTGs supplied by RPPL. The company also provides O&M services to WTGs installed by RPPL. S.B. SAHOO: ICRA Maintains 'B+' Rating in Not Cooperating --------------------------------------------------------- ICRA said the ratings for the INR7.00 crore bank facilities of S.B. Sahoo & Co. Pvt. Ltd. (SBSCPL) continues to remain under the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based– 7.00 [ICRA]B+ (Stable) ISSUER NOT Cash Credit COOPERATING; Rating continues to remain under the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Established in 1972 as a proprietorship firm, VKS is primarily engaged in the civil construction business. VKS's core area of operation includes construction of roads, dams and canals. The firm's operations are limited to the state of Chhattisgarh, with the firm executing contracts for various Government and Semi- Government agencies. SAI INTERNATIONAL: ICRA Keeps 'B+' Rating in Not Cooperating ------------------------------------------------------------ ICRA said the rating for the INR13.00 crore bank facilities of Sai International continue to remain under 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable); ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based 13.00 [ICRA]B+ (Stable) ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Sai International is a partnership firm and was incorporated in 2005 by two brothers Mr Nishant Jaggaand Mr. Vishal Jagga. The firm manufactures footwear at its plant at Bahadurgarh in Haryana. The product profile of the firm includes sports shoes, sandals and slippers. The sports shoes of the firm are sold under the brand name 'Tavera' whereas the sandals and slippers are sold under the brand name 'PU-Lite'. The firm's major raw material is Polyurethane, which is mostly imported and Rexine which is procured from suppliers in Haryana, Delhi and Uttar Pradesh. SHREE HANUMAN: ICRA Lowers Rating on INR59.50cr LT Loan to D ------------------------------------------------------------ ICRA has revised the ratings on certain bank facilities of Shree Hanuman Trust (SHT), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 59.50 [ICRA]D ISSUER NOT COOPERATING; Fund Based Rating downgraded from [ICRA]B+ Term Loan (Stable) and continues to remain under 'Issuer Not Cooperating' category Rationale The rating downgrade reflects Delayed in Debt Servicing. The rating is based on limited information on the entity's performance since the time it was last rated in August 27, 2018. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. As part of its process and in accordance with its rating agreement with Shree Hanuman Trust, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. Key rating drivers and their description: Credit challenges: There has been delays in debt as mentioned in publicly available sources. Liquidity position: Weak Shree Hanuman Trust liquidity profile is weak as reflected by irregularities in debt servicing by entity. Incorporated in 1982, Shree Hanuman Trust (SHT) is engaged in leasing of the 3rd floor of Mittal Court developed by the Mittal Group with an area of 22,111 sq. ft. at 244, Nariman Point, Mumbai to The Income Tax Department, Government of India. The trust is a part of the Mittal Group, which is engaged in real estate development since 1952. SHRI RAM: ICRA Lowers Rating on INR48cr Loan to 'D' --------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Shri Ram Switchgears Limited (SRSL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based– 17.00 [ICRA]D; Downgraded from Cash credit [ICRA]C+ Fund-based– 2.70 [ICRA]D; Downgraded from Term Loan [ICRA]C+ Non-Fund based 48.00 [ICRA]D; Downgraded from limits-Bank [ICRA]C+ Guarantee Non-Fund based 5.00 [ICRA]D; Downgraded from limits-Letter [ICRA]C+ of Credit Rationale The downgrade in the ratings reflects irregularities in debt servicing by the company as confirmed by its lender owing to its stretched liquidity. Outlook: Not Applicable Key rating drivers and their description Credit strengths Long standing experience of promoters- The promoters of the company have been involved in the transformer manufacturing business over the past three decades. Credit challenges Irregularities in debt-servicing - There has been irregularities in servicing of non-fund based facilities. Liquidity position: Poor Shri Ram Switchgears Limited's (SRSL) liquidity is poor as reflected in irregularities in its debt servicing. Rating sensitivities Positive triggers: ICRA could upgrade SRSL's rating if the company demonstrates a track record of timely debt-servicing. Shri Ram Switchgears Limited (SRSL), promoted by the Jhalani family of Ratlam (Madhya Pradesh) since 1985, manufactures electrical items such as distribution transformers, switchgear, meter boxes, feeder pillars, distribution boxes, and junction boxes used in the distribution of power and also undertake erection, installation, and operation and maintenance of these items for its customers. Its manufacturing units are located in Ratlam. Customer profile mainly consists of power discoms in Madhya Pradesh and Mumbai. The contracts are primarily secured through biding for tenders floated by the discoms. SIDDARTH ORGANISATION: Insolvency Resolution Process Case Summary ----------------------------------------------------------------- Debtor: Siddarth Organisation Limited Registered office address: F-21, Malviya Industrial Area Malviya Nagar, Jaipur RJ 302017 IN Insolvency Commencement Date: February 14, 2020 Court: National Company Law Tribunal, Jaipur Bench Estimated date of closure of insolvency resolution process: August 11, 2020 (180 days from commencement) Insolvency professional: Mrs. Anuradha Gupta Interim Resolution Professional: Mrs. Anuradha Gupta AVM Resolution Professionals LLP E-194, Amba Bari Jaipur 302039 Rajasthan E-mail: anuradhagupta70@gmail.com cirp.sol@avmresolution.com Last date for submission of claims: February 27, 2020 SREE LAKSHMI: ICRA Withdraws D Rating on INR160cr Term Loan ----------------------------------------------------------- ICRA has withdrawn the ratings on certain bank facilities of Sree Lakshmi Gayatri Hospitals Private Limited (SLGHPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based 160.00 [ICRA]D ISSUER NOT COOPERATING; Term Loan Withdrawn Limits Rationale The rating is withdrawn in accordance with ICRA's policy on withdrawal and suspension at the request of the company, based on no-objection certificate provided by its bankers. Incorporated in 2011, Sree Lakshmi Gayatri Hospitals Private Limited (SLGHPL) is setting up a 775-bed multi-specialty namely "SLG Hospital" in Bachupally, Hyderabad. In the same premises, the company is also setting up a 120-room hotel to facilitate the longer stay requirements at the hospital and promote medical tourism. The total estimated cost of the project is INR235.00 crore which is to be funded by debt of INR160.00 crore, promoters' equity of INR67.00 crore and unsecured loans of INR8.00 crore. Mr. Dandu Sivarama Raju and family are the main promoters of the hospital and they currently operate a hotel named "Katriya hotels & towers(KHT)" in Somajiguda, Hyderabad through group company Sri Lakshmi Gayatri Hotels Pvt. Ltd. SRI LAKSHMI: ICRA Moves C+ Rating to Not Cooperating Category ------------------------------------------------------------- ICRA has moved the ratings for the INR8.37-crore bank facilities of Sri Lakshmi Poultry Farm (SLPF) to 'Issuer Not Cooperating' category'. The ratings are denoted as "[ICRA]C+ ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term- 6.50 [ICRA]C+; ISSUER NOT COOPERATING; Fund Based– Rating Moved to 'Issuer Not Cash Credit Cooperating' Category Long Term- 1.87 [ICRA]C+; ISSUER NOT COOPERATING; Fund Based– Rating Moved to 'Issuer Not Term Loan Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Sri Lakshmi Poultry Farm (SLPF) was incorporated as a partnership firm in 2007 and is engaged in the business of commercial layer poultry farming and trading of maize. The firm operates through its facilities located in Brahmanagudem and Chikkala villages with a total capacity of 2,80,000 commercial layers. SRI TOORSA: ICRA Lowers Rating on INR7.12cr Term Loan to D ---------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Sri Toorsa Plantations Private Limited (STPPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based- 1.50 [ICRA]D; Downgraded from Cash Credit [ICRA]B- (Stable) Fund-based- 7.12 [ICRA]D; Downgraded from Term Loan [ICRA]B- (Stable) Non-fund (0.15) [ICRA]D; Downgraded from Based limit [ICRA]A4 Rationale The downgrade of STPPL ratings primarily considers the delay in debt servicing by the company in the recent months due to its poor liquidity position. The company's liquidity position was adversely impacted owing to inadequate increase in the company's tea realisation vis-a-vis its increased input costs arising from hike in wage rate of employees, which adversely impacted the cost structure. The ratings continue to consider STPPL's low productivity of the tea gardens, which coupled with the fixed cost intensive nature of the company's operation, is likely to keep the operating profits under check. ICRA notes the stretched financial profile of STPPL, as reflected by depressed debt coverage metrics and negative tangible net worth as on March 31, 2019. The ratings also consider the risks associated with tea for being an agricultural commodity, which depends on favourable agro-climatic conditions. Such risks are aggravated by the geographical concentration of the company's operations, as both the gardens are in Dooars region. Moreover, the domestic tea prices are impacted, to some extent, by international prices and hence the demand-supply situation in the global tea market, in ICRA's opinion, would continue to have a bearing on the profitability of Indian players, including STPPL. However, ICRA notes the long experience of STPPL's management in the tea industry and the premium fetched by the company's produce in the domestic market compared to North Indian auction prices because of good quality of tea produced by STPPL. Key rating drivers and their description Credit strengths Long experience of the management in the tea industry – The promoters have significant experience in the tea industry. The Group's foray into the tea industry began with the takeover of Malnady Tea Estate Pvt. Ltd. in 2002. Subsequently, the Group had also acquired two other tea estates in 2007. While Malnady Tea Estate Pvt. Ltd. produces green tea, the other two companies are involved in the production of crush tear curl (CTC) variety of tea. Thus, the management has experience in processing both the variants of tea. Good quality of tea as evident from significant premium commanded by its produce – The average realisation of STPPL's tea increased to INR176.14 per kg in 10M FY2020 compared to INR164.43 per kg in 10M FY2019. The company's average tea realisation in 10M FY2020 stood at a premium of around 9% compared to the North Indian auction averages, indicating good quality of tea produced by the company. Credit challenges Irregularity in debt servicing in recent months – The company's poor liquidity position led to irregularity in debt servicing in the recent months. A significant hike in wage rate of tea estate workers in FY2019 led to an increased input cost. Though the average realisations increased considerably in H1 FY2020, the same moderated in the recent months. Inadequate increase in realisation vis-a-vis increased input cost adversely impacted STPPL's cash flow position, leading to a delay in debt servicing of the term loan facility. Low productivity of the estates coupled with fixed-cost intensive nature of operations – STPPL's garden costs, as inherent in the industry, are almost fixed, with labour costs accounting for around 59% of the total production cost in FY2019. Risks associated with high fixed-cost nature of the industry are further aggravated by the low productivity of the company's tea estate, as reflected by the yield of 1416 kg per hectare in FY2019. ICRA notes that any further rise in wage rates would adversely impact the operating margins unless there is a commensurate increase in tea prices. Stretched financial profile, reflected by depressed debt coverage metrics and negative tangible net worth – STPPL's financial profile remained weak, as reflected by depressed debt coverage metrics and negative tangible net worth as on March 31, 2019 mainly due to losses incurred in the previous years (FY2015 to FY2017). Risks associated with tea for being a cyclical agricultural commodity – Tea production is primarily dependent on agro-climatic conditions and is subject to various agro-climatic risks. STPPL has two tea gardens – Mohua Tea Estate and Hilla Tea Estate – which are located at a distance of 60 km from one another. The presence of both the gardens in the Dooars region increases the company's geographical concentration risks and vulnerability to agroclimatic conditions. Prices of Indian tea, in spite of better quality, remain vulnerable to price fluctuation in the international market – Prices of domestic tea, despite better quality, are impacted by international prices to some extent. Hence, the demand-supply situation in the global tea market, in ICRA's opinion, would continue to have a bearing on the profitability of Indian players, including STPPL. Liquidity position: Poor STPPL's liquidity position is poor. The company's significant debt servicing obligation vis-a-vis low fund flow from operation led to cash flow mismatches, as reflected by irregularity in debt servicing in the recent months. Rating sensitivities Positive triggers – Regularisation of debt servicing for a continuous period of three months may lead to an upgrade of the ratings. Sri Toorsa Plantations Private Limited (STPPL) is a special purpose vehicle, incorporated in February 2015, by Malnady Tea Estate Private Limited (owning ~51% of the shares) and Tirupati Assets Private Limited (owning ~49% of the shares) for procuring two of the tea estates auctioned by the West Bengal Tea Development Corporation Limited under the policy to rejuvenate the tea gardens and protect the interest of tea workers. The company has two tea estates – Mohua Tea Estate and Hilla Tea Estate – located in Dooars region of West Bengal, with a total cultivable area of 413 hectares. STURDY INDUSTRIES: ICRA Assigns 'D' Rating to INR127.69cr Loan -------------------------------------------------------------- ICRA has assigned rating to the bank facilities of Sturdy Industries Limited (SIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based- CC limits 41.79 [ICRA]D; assigned Term loans 127.69 [ICRA]D; assigned Non-fund based Facilities 74.18 [ICRA]D; assigned Unallocated facilities 1.34 [ICRA]D; assigned Rationale The rating factors in the classification of SIL account as a non-performing asset (NPA) by its lenders, pending the fulfilment of the terms and conditions of its debt resolution plan. Further, the rating takes into consideration SIL's weak financial profile, characterised by continued decline in revenues, operating losses, and poor liquidity position. SIL has reported continuous decline in revenues over the last five years on account of weak order inflows from its major clients. Decrease in scale of operations along with intense competition and low value-additive operations have resulted in operating losses over the last two years. Further, decline in revenues and profitability, coupled with a stretched receivables cycle, has led to a poor liquidity position for SIL. The company had not been able to generate sufficient cash flows for fulfilling its debt servicing obligations, which led to defaults on term loan repayments and interest payments, overdrawals of fund-based limits as well as devolvement of LC limits in the past. SIL's debt resolution plan was approved by its lenders on June 25, 2019, wherein out of its total outstanding debt of around INR284 crore, around INR170 crore was retained as sustainable debt (including INR128-crore term debt and INR42-crore working capital limits). The sustainable term debt is repayable in structured quarterly instalments starting from June 2020 and ending in March 2029. While SIL has been able to service its debt obligations post restructuring (starting from July 2019), the same has been supported by fund infusion from promoters, as the company has continued to generate OPBDITA losses. Going forward as well, additional promoter support requirement is envisaged for meeting debt obligations, as SIL's cash flow generation is expected to remain insufficient for meeting its debt obligations. However, ICRA takes note of the two-decade-long experience of SIL's promoters and the company's established operational track record in the aluminium cables and conductors industry. Key rating drivers Credit strength Experienced promoters with long track record in aluminium cables and conductors industry – SIL's promoters Mr. Mohan Lal Gupta and Mr. Ramesh Gupta have over three decades of experience in the aluminium cables and conductors industry. Moreover, the company has a long track record of operations, having commenced operations in July 1989. Credit challenges Weak financial profile characterised by continued decline in scale of operations and operating losses – SIL's operating income (OI) declined substantially to INR195 crore in FY2019 from INR842 crore in FY2014. This was on account of weak order inflows from its clients as well as working capital funding constraints that have limited the scale of operations. In the current fiscal as well, the company's revenues have remained low on account of weak demand from clients, with OI of INR68 crore in H1 FY2020. Further, SIL reported OPBDITA losses in the last two years on account of a decline in scale of operations along with intense competition and low value-additive operations. Delays in debt servicing in the past due to poor liquidity position; debt servicing in current fiscal supported by fund infusion from promoters – Consistent decline in revenues and profitability along with stretched receivables cycle resulted in SIL's poor liquidity position. The company was not able to generate sufficient cash flows to fulfill its debt servicing obligations, which led to defaults on term loan repayments and interest payments, overdrawals of fund-based limits as well as devolvement of letter of credit (LC) limits in the past. In the current fiscal as well, the company's liquidity position has remained weak with losses at the OPBDITA level and the debt servicing has been supported by fund infusion from promoters. Going forward as well, additional promoter support requirement is envisaged for meeting debt obligations. Highly leveraged capital structure and weak debt coverage indicators – SIL's net worth position has continued to erode over the years on account of continued losses at the net level, leading to negative net worth of INR13.4 crore as on March 31, 2019. This coupled with high debt levels has resulted in highly leveraged capital structure. Further, weak profitability has resulted in poor debt coverage metrics with OPBDITA/interest of 0.87 times and NCA/total debt of -6.0% as on March 31, 2019. Liquidity position SIL's liquidity profile remains poor on account of the continued decline in scale of operations, operating losses and stretched working capital cycle. The company's cash flow generation remains weak in the current fiscal and interest servicing has been primarily funded by additional unsecured loan infusion by promoters. Going forward as well, additional promoter support requirement is envisaged for meeting debt repayment obligations. Rating sensitivities Positive triggers: Fulfilment of the terms of the restructuring plan along with timely servicing of debt obligations. Incorporated in July 1989, SIL manufactures aluminium cables and conductors along with plastic pipes and drip irrigation systems. The company has three manufacturing facilities at Baddi (Himachal Pradesh), Kamrup (Assam) and Parwanoo (Himachal Pradesh). The company is managed by the Gupta family, namely Mr. Mohan Lal Gupta, Mr. Ramesh Gupta and Mr. Amit Gupta. SIL's equity shares are listed on the Bombay Stock Exchange. In FY2019, the company reported a net loss of INR18.3 crore on an OI of INR195.5 crore compared with a net loss of INR21.5 crore on an OI of INR218.9 crore in the previous year. TBPR INFRA: ICRA Lowers Rating on INR17.50cr Loan to 'D' -------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of TBPR Infra Projects Private Limited (TBPR), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based 7.00 [ICRA]D ISSUER NOT COOPERATING; limits Rating downgraded from [ICRA]B- (Stable) and continues to remain under 'Issuer Not Cooperating' category Non-fund 9.50 [ICRA]D ISSUER NOT COOPERATING; Based limits Rating downgraded from [ICRA]B- (Stable) and continues to remain under 'Issuer Not Cooperating' category Unallocated 17.50 [ICRA]D ISSUER NOT COOPERATING; Limits Rating downgraded from [ICRA]B- (Stable) and continues to remain under 'Issuer Not Cooperating' category Rationale The rating downgrade reflects delays in Debt Servicing. The rating is based on limited information on the entity's performance since the time it was last rated in January 2019. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. As part of its process and in accordance with its rating agreement with Sri Rama Educational Trust, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. Key rating drivers and their description Credit challenges There have been delays in debt servicing as mentioned in publicly available sources. Liquidity position: Poor TBPR Infra Projects Private Limited liquidity profile is poor as reflected by irregularities in debt servicing by entity. Incorporated in 2007 by Mr. Bhanu Prakash Reddy, TBPR Infra Projects Private Limited (TBPR) is primarily involved in execution of irrigation projects like canals, tanks, dams and barrages etc. The company is also involved in execution of road projects. TBPR is registered with various government authorities as a contractor. The company has executed government contracts directly for projects in Adilabad, Hyderabad, Nalgonda, Nizamabad and Warangal districts of Telangana. TERRENCE ALLOYS: Insolvency Resolution Process Case Summary ----------------------------------------------------------- Debtor: Terrence Alloys Private Limited Office No. 206, 2nd Floor Royal Palace G-55 Laxmi Nagar, Vikas Marg Delhi 110092 Insolvency Commencement Date: February 3, 2020 Court: National Company Law Tribunal, New Delhi Bench Estimated date of closure of insolvency resolution process: August 1, 2020 Insolvency professional: Nitesh Kumar Sinha Interim Resolution Professional: Nitesh Kumar Sinha 8A UG CS, Ansal Corporate Suites Ansal Plaza, Sector-1 Vaishali Ghaziabad, UP 201010 E-mail: info@csnitesh.com cirp.terrence@gmail.com Last date for submission of claims: February 24, 2020 VIRENDRA KUMAR: ICRA Keeps 'B+' Rating in Not Cooperating --------------------------------------------------------- ICRA said the ratings for the INR6.50 crore bank facilities of Virendra Kumar Singh (VKS) continues to remain under the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based– 4.00 [ICRA]B+ (Stable) ISSUER NOT Cash Credit COOPERATING; Rating continues to remain under the 'Issuer Not Cooperating' category Non Fund Based– 2.00 [ICRA]B+ (Stable) ISSUER NOT Bank Guarantee COOPERATING; Rating continues to remain under the 'Issuer Not Cooperating' category Untied Limits 0.50 [ICRA]B+ (Stable) ISSUER NOT COOPERATING; Rating continues to remain under the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Established in 1972 as a proprietorship firm, VKS is primarily engaged in the civil construction business. VKS's core area of operation includes construction of roads, dams and canals. The firm's operations are limited to the state of Chhattisgarh, with the firm executing contracts for various Government and Semi- Government agencies. [*] INDIA: Deutsche Bank Boosts Lending to Cash-Strapped Tycoons ---------------------------------------------------------------- Bloomberg News reports that India's shadow banking crisis and revitalized bankruptcy process are creating new opportunities for Deutsche Bank AG as it steps up lending to cash-strapped tycoons and for purchases of distressed assets. Bloomberg relates that the German lender is seeing three times the volume of financing deals compared with 2018, when the shadow banking problems erupted, according to Rahul Chawla, the head of global credit trading at Deutsche Bank's India unit. He declined to provide specific numbers, but said the bank has helped deploy "a couple of billion" euros to Indian structured finance deals. For Deutsche Bank, "this is a very, very high level of commitment," Mr. Chawla said in an interview, Bloomberg relays. He expects to grow the size of his book by another 30% in the next two years. According to Bloomberg, Goldman Sachs Group Inc. and Apollo Global Management Inc. are among the other global firms to have spotted similar opportunities in India's bad-debt woes, which have been magnified by the shadow banking crisis that erupted in 2018 with the default of a major infrastructure lender. As the non-bank finance firms have retreated, Indian companies have been struggling to obtain credit, curbing wider economic growth. Asian distressed debt is one of the few growth areas at Deutsche Bank as Chief Executive Officer Christian Sewing pursues a deep restructuring that involves the loss of 18,000 jobs worldwide, or roughly a fifth of total headcount, Bloomberg says. Bloomberg relates that Mr. Chawla said one element of Deutsche Bank's push in India is lending to business tycoons against their equity holdings. Before 2018, that business was dominated by short-term funding from shadow banks and mutual funds, which have since retreated. "Earlier, borrowers in India were demanding their terms on everything from the size of the loan to pricing, and we were just one in the beauty parade," Bloomberg quotes Mr. Chawla as saying. "The balance then tilted, with borrowers seeking loans at prices which reward the risks lenders are taking," he added, noting that business owners are seeking more longer-term funding since the crisis. Mr. Chawla declined to mention specific transactions, Bloomberg notes. However, the Economic Times newspaper reported last month that Deutsche Bank loaned $200 million to the Mistry family against their stakes in Tata Sons, to ease the tight liquidity conditions at Cyrus Mistry's Shapoorji Pallonji Group. As well as loans to company founders, Deutsche Bank India offers credit to commercial real estate, private equity firms and for one-time debt settlements by delinquent companies. The lender is also active in trading and providing funds for distressed debt purchases, Bloomberg adds. ===================== P H I L I P P I N E S ===================== HONDA CARS: PH Unit to Stop Automobile Production in March ---------------------------------------------------------- CNN Philippines reports that Honda Cars Philippines, Inc. announced on Feb. 22 that it will stop production operations in the country by next month. Honda Cars Philippines said the company will close its production plant in Sta. Rosa, Laguna in March, CNN Philippines relates. The company is known to produce passenger cars and models such as the BR-V and City. According to CNN Philippines, HCPI said closing the plant was necessary to meet customer's needs through "efficient allocation and distribution of resources." "As such, after consideration of optimization efforts in the production operations in Asia and Oceania region, Honda decided to close the manufacturing operations of HCPI," said HCPI in a statement. CNN Philippines relates that the company said it has around 650 employed associates in the country but it did not detail how many may be affected by the closure. However, it clarified that automobile sales and after-sales services will still continue. According to the report, labor group Defend Jobs Philippines claimed that there are 387 people who will lose their jobs over the closure of the plant. The group said workers from 60 other companies who supply parts to HCPI will also be affected. CNN Philippines adds that Defend Jobs Philippines said it has urged the Labor Secretary Silvestre Bello III to "directly intervene, conduct impartial investigation and thoroughly look into" the reported closure. "Our government must not just allow the announced closure of HCPI without undergoing proper evaluation and assessment but rather consider the holistic benefits of Filipino workers," the report quotes Thadeus Ifurung, Defend Jobs Philippines spokesperson, as saying. Last month, Honda, along with fellow automaker Toyota, recalled millions of vehicles due to safety issues. Honda recalled 2.7 million cars -- of which 2.4 million are in the United States, CNN Philippines recalls. On the other hand, Toyota called back 3.4 million cars, 2.9 million of which are in the United States. In February 2019, Honda also announced that it will shut down its only British factory on 2021, which employs 3,500 people, the report notes. Honda said production would shift to Japan, North America and China. Christian Stadler, an auto expert and professor of strategic management at Warwick Business School, said Brexit or the United Kingdom's departure from the European Union may have been a factor in the automaker's decision, CNN reported. Honda Cars Philippines, Inc. has a capital investment of PHP1.9 billion. It was first established in 1990 and it started production in 1992. ================= S I N G A P O R E ================= BREADTALK: No Notice to Repay SGD100MM Notes Received from Trustee ------------------------------------------------------------------ The Business Times reports that Breadtalk Group has not received notice from its trustee to immediately repay its SGD100 million notes due in 2023, following its technical breach of the relevant financial covenants, the food and beverage player said on Feb. 26 in response to queries from the Singapore Exchange Securities Trading (SGX-ST). According to BT, the SGX-ST queried whether noteholders or the trustee are required to take any action to call for an event of default given the breach, whether the breach is capable of remedy and whether there is any remedy or grace period before an event of default is called. BT relates that BreadTalk said that the breaches are not capable of remedy since they are a result of the company's FY2019 performance, and prospective changes to the performance will not remedy the breaches. As a result, an event of default has already occurred. Given that an event of default has occurred, the trustee may give notice in writing to the company that the notes are immediately repayable with accrued interest, referred to as an acceleration, BT relates. However, it is not bound to do so unless it is requested to do so in writing by the holders of at least 25 per cent of the principal amount of the notes or directed to do so by an extraordinary resolution, and the trustee should also be indemnified and/or secured and/or prefunded to its satisfaction by the noteholders against all actions, proceedings, claims and demands. "As mentioned in the breach announcement, the company is currently evaluating all viable and available options in respect of the aforesaid breaches (including waivers and amendments to the relevant financial covenants)," BreadTalk said. BT says SGX-ST also asked BreadTalk to advise on the implications of its breaches of certain bilateral bank loans, mentioned in its financial results announcement on Feb. 24. BT adds that the company said it has reclassified the affected loans from non-current liabilities to current liabilities and is making efforts to engage its principal bankers and seek their support. So far, none of the banks have stated an intention to withdraw or terminate any of their financing lines extended and/or currently outstanding with BreadTalk, the report notes. BreadTalk's board is of the opinion that the group can operate as a going concern for a reasonable period of time, it said in response to an SGX-ST query on that issue, BT relays. However, it added that there is no certainty that its management's recovery plans to mitigate the effect of the breaches and/or actions to address the breaches will be successful. It will suspend trading in its shares should the company and group no longer operate as a going concern, BT relays. Headquartered in Singapore, BreadTalk Group Limited, an investment holding company, engages in bakery, food court, restaurant, and food and beverage businesses in Singapore, Mainland China, Hong Kong, Taiwan, Southeast Asia, and internationally. The company manufactures and retails various food, bakery, and confectionary products, as well as engages in franchising activities. It also manages and operates food courts, food and drinks outlets, eating houses, and restaurants. In addition, the company bakes, manufactures, and deals in bread, flour, and biscuits; acquires and holds intellectual property rights; processes, distributes, and sells premium coffee beans and tea dust; and distributes related processing equipment. Further, it is involved in the wholesale of confectionery and bakery products; and food and beverage management activities. The company operates approximately 1,000 outlets in 16 countries under the BreadTalk, Toast Box, Bread Society, Food Republic, Thye Moh Chan, The Icing Room, So Ramen, Song Fa Bak Kut The, Din Tai Fung, Wu Pao Chun Bakery, Nayuki, and TaiGai brands. ********* 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. 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