/raid1/www/Hosts/bankrupt/TCRAP_Public/200319.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
Thursday, March 19, 2020, Vol. 23, No. 57
Headlines
A U S T R A L I A
ARMNET LIMITED: First Creditors' Meeting Set for March 26
BARDOT PTY: Second Creditors' Meeting Set for March 25
FABRICATED GLAZING: First Creditors' Meeting Set for March 26
FIBARO AUSTRALIA: Second Creditors' Meeting Set for March 27
J.A TIGHE: Second Creditors' Meeting Set for March 24
MEDLYN COURIERS: First Creditors' Meeting Set for March 27
MOUNT ELIZA HOMES: First Creditors' Meeting Set for March 26
OZTOPIA HOLDINGS: First Creditors' Meeting Set for March 25
PROGRESSIVE GLAZING: First Creditors' Meeting Set for March 26
TICKETEK: S&P Alters Outlook to Negative & Affirms 'B' ICR
C H I N A
21VIANET GROUP: S&P Alters Outlook to Negative & Affirms 'B+' ICR
WANDA GROUP: Moody's Withdraws B3 CFR for Business Reasons
[*] Bad Loans Rise for China Banks as Virus Hits Businesses
I N D I A
ABSOLUTE PROJECTS: CRISIL Lowers Rating on INR8cr Loan to B+
ATC BEVERAGES: CRISIL Maintains 'B-' Rating in Not Cooperating
B.R. ELASTICS: CRISIL Keeps INR14.9cr Loans in Not Cooperating
BVSR KP ROAD: CRISIL Lowers Ratings on INR75cr Loans to B+
CAPTAIN TRACTORS: CRISIL Cuts Rating on INR20cr Cash Loan to B+
CAREER COACHING: CRISIL Keeps D on INR10cr Loan in Not Cooperating
CHANDRMAULI MOTORS: CRISIL Keeps B Debt Ratings in NonCooperating
CHAWRA TRADING: CRISIL Lowers Rating on INR8cr Cash Loan to B+
CORE PLASTO: CRISIL Keeps D on INR16cr Loans in Not Cooperating
COSMOS MERCANTILE: CRISIL Keeps B on INR5cr Loan in Not Cooperating
CREATIVE CORRUPACK: CRISIL Cuts Rating on INR7.5cr Loan to B+
DEEPAK COTTON: CRISIL Keeps B+ on INR14cr Loan in Not Cooperating
DHAN LAXMI: CRISIL Keeps D on INR10cr Loans in Not Cooperating
ML KANHAIYALAL: CRISIL Lowers Rating on INR10cr Loan to B+
SPECTRA MOTORS: CRISIL Keeps D Debt Ratings in Not Cooperating
WARYAM STEEL: CRISIL Cuts Rating on INR9.9cr Cash Loan to B+
J A P A N
SOFTBANK GROUP: S&P Alters Outlook to Negative & Affirms 'BB+' ICR
M A L A Y S I A
MALAYSIA AIRLINES: At Risk of Bankruptcy Amid Covid-19 Outbreak
S I N G A P O R E
HYFLUX LTD: Scheme Meetings to Take Place on April 22 and 23
MAGNUS ENERGY: Net Loss Narrows to SGD1.9MM in Q2 Ended Dec. 31
S O U T H K O R E A
[*] Korean Exotic Notes to Face Losses as Europe Banks Plunge
- - - - -
=================
A U S T R A L I A
=================
ARMNET LIMITED: First Creditors' Meeting Set for March 26
---------------------------------------------------------
A first meeting of the creditors in the proceedings of ARMnet
Limited will be held on March 26, 2020, at 11:30 a.m. at the
offices of PKF, Level 8, at 1 O'Connell Street, in Sydney, NSW.
Geoffrey Trent Hancock of PKF was appointed as administrator of
ARMnet Limited on March 16, 2020.
BARDOT PTY: Second Creditors' Meeting Set for March 25
------------------------------------------------------
A second meeting of creditors in the proceedings of Bardot Pty Ltd,
trading as Bardot and Bardot Junior, has been set for March 25,
2020, at 11:00 a.m. at the offices of Level 36, Tower Two, Collins
Square, at 727 Collins Square, 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 24, 2020, at 4:00 p.m.
Brendan Richards and Ryan Eagle of KPMG were appointed as
administrators of Bardot Pty on Feb. 14, 2020.
FABRICATED GLAZING: First Creditors' Meeting Set for March 26
-------------------------------------------------------------
A first meeting of the creditors in the proceedings of Fabricated
Glazing Pty Ltd will be held on March 26, 2020, at 11:00 a.m. at
the offices of Mackay Goodwin, Level 2, at 10 Bridge Street, in
Sydney, NSW.
Grahame Ward and Domenic Calabretta of Mackay Goodwin were
appointed as administrators of Fabricated Glazing on March 16,
2020.
FIBARO AUSTRALIA: Second Creditors' Meeting Set for March 27
------------------------------------------------------------
A second meeting of creditors in the proceedings of Fibaro
Australia Pty Ltd has been set for March 27, 2020, at 11:30 p.m. at
the offices of SM Solvency Accountants, at 10/144 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 26, 2020, at 4:30 p.m.
Brendan Nixon of SM Solvency Accountants was appointed as
administrator of Fibaro Australia on
Feb. 21, 2020.
J.A TIGHE: Second Creditors' Meeting Set for March 24
-----------------------------------------------------
A second meeting of creditors in the proceedings of J.A Tighe Pty
Ltd has been set for March 24, 2020, at 3:00 p.m. at 110 Harris
Street, in Harris 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 18, 2020, at 4:00 p.m.
Riad Tayeh and Suelen McCallum of de Vries Tayeh were appointed as
administrators of J.A Tighe on Feb. 18, 2020.
MEDLYN COURIERS: First Creditors' Meeting Set for March 27
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Medlyn
Couriers Pty Ltd will be held on March 27, 2020, at 11:00 a.m. at
the offices of Hamilton Murphy Advisory Pty Ltd, Level 1, at 255
Mary Street, in Richmond, Victoria.
Stephen Robert Dixon of Hamilton Murphy Advisory was appointed as
administrator of Medlyn Couriers on March 17, 2020.
MOUNT ELIZA HOMES: First Creditors' Meeting Set for March 26
------------------------------------------------------------
A first meeting of the creditors in the proceedings of Mount Eliza
Home Services Pty Ltd will be held on March 26, 2020, at 11:00 a.m.
at the offices of Rodgers Reidy, Level 3, at 326 William Street, in
Melbourne, Victoria.
Brent Leigh Morgan of Rodgers Reidy was appointed as administrator
of Mount Eliza on March 16, 2020.
OZTOPIA HOLDINGS: First Creditors' Meeting Set for March 25
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of Oztopia
Holdings Pty Ltd, trading as Oztopia Electrical And Oztopia, will
be held on March 25, 2020, at 12:30 p.m. at QV1 Conference Centre,
Level 2, Theatrette, at 250 St Georges Terrace, in Perth, WA.
Jimmy Trpcevski and David Ashley Norman Hurt of WA Insolvency
Solutions were appointed as administrators of Oztopia Holdings on
March 16, 2020.
PROGRESSIVE GLAZING: First Creditors' Meeting Set for March 26
--------------------------------------------------------------
A first meeting of the creditors in the proceedings of Progressive
Glazing Services Pty Ltd will be held on March 26, 2020, at 11:30
a.m. at the offices of
Grahame Ward and Domenic Calabretta of Mackay Goodwin were
appointed as administrators of Progressive Glazing on March 16,
2020.
TICKETEK: S&P Alters Outlook to Negative & Affirms 'B' ICR
----------------------------------------------------------
S&P Global Ratings, on March 18, 2020, revised its outlook on
Ticketek (rated entity TEG Pty Ltd.) to negative from stable. S&P
also affirmed its 'B' issuer credit rating on TEG and 'B' issue
rating on the company's US$285 million first-lien term loan B
(consisting of a US$205 million tranche and A$118.2 million
tranche) with a recovery rating of '3'. At the same time, S&P
affirmed its 'CCC+' issue rating on TEG's US$100 million
second-lien term loan B with a recovery rating of '6'.
S&P revised the outlook to negative based on its expectation that
plans to impose restrictions on non-essential indoor crowd
attendances and postponements of major sporting and artist events
in Australia and New Zealand will significantly reduce TEG's
earnings in fiscal 2020. Ticketing accounts for approximately 63%
of group revenue. The very high uncertainty surrounding the
duration and severity of the COVID-19 outbreak and the fallout on
events held at Australia's and New Zealand's major venues means TEG
is unlikely to remain within our credit metric expectations for
TEG's leverage and free operating cash flow in fiscal 2020. There
is also the risk that the company's operating performance will be
affected in fiscal 2021 if the mass-gathering restrictions remain
in force. Further, it is unclear how consumers will respond once
these restrictions are lifted.
In S&P's view, TEG also remains significantly exposed to a downturn
in consumer discretionary spending. The live entertainment industry
has high sensitivity to shifting public tastes and global tour
schedules, which make the company more susceptible to a downturn if
consumer discretionary spending decreases. Further, given live
music tours are typically booked several months in advance with a
pre-fixed guaranteed amount paid to artists, tour rescheduling or
artist cancellations can threaten TEG's financial performance. The
ticketing segment has traditionally provided more stability and
predictability thanks to the company's multiyear contracts with
major event venues and extensive relationship network with artists.
However, recent social isolation measures and significant
restrictions imposed on attendance to live events will disrupt this
source of earnings.
TEG's highly leveraged capital structure limits its ability to
restore credit measures in the face of a sudden shock to earnings.
In S&P's view, adjusted debt to EBITDA is at an elevated risk of
exceeding its 5.5x threshold in fiscal 2020. If the mass-gathering
restrictions remain in force for a prolonged period, the likelihood
of an improvement in leverage metrics beyond fiscal 2020 looks less
certain.
Despite the risk of further revenue declines, TEG has a meaningful
cash balance and a capital-light operating model. S&P said, "We
expect the group's cost base to be largely variable. As revenue
declines, we anticipate there to be a partial commensurate
reduction in total costs, tempering any cash outflows. We also
believe TEG's capital expenditure requirement of around A$10
million-A$15 million, which is largely for maintenance and
exclusive of ticketing contract advances, will not meaningfully
undermine the cash outflow." The sizable cash balance (about A$200
million of unrestricted cash) and undrawn A$74 million (US$50
million) revolving credit facility bolster the company's liquidity
position and ability to weather the challenging operating
environment.
The duration of restrictions on non-essential indoor gatherings
depends on when COVID-19 infections peak and public attendance is
reintroduced for major sporting and other entertainment events.
These include the Australian Football League and National Rugby
League, as well as major artist tours. The rate of spread and
timing of the peak of the COVID-19 disease outbreak are still
highly uncertain. As the situation evolves, S&P will update its
assumptions and estimates accordingly.
The negative outlook reflects the increased uncertainty around the
impact of COVID-19 on the global economy and specifically how it
could affect TEG's ability to maintain its S&P Global
Ratings-adjusted leverage below 5.5x or free operating cash flow to
debt above 4% over the next one to two years.
S&P could lower the rating if industry conditions further
deteriorate, such that it expects the group's adjusted
debt-to-EBITDA ratio to remain elevated at above 5.5x in fiscals
2020 and 2021, free operating cash flow to fall below 4%, or if
cash outflows pressure our assessment of the company's liquidity
position.
More immediate downward rating pressure could occur if dividends
are returned to the financial sponsor equity owners that reduce
accessible cash balance and weaken our liquidity assessment.
S&P could revise the outlook to stable if the COVID-19 crisis
passes with limited longer-term impact on TEG's credit metrics. An
adjusted debt-to-EBITDA ratio remaining below 5.5x or free
operating cash flow to debt above 4% would likely support a stable
outlook. Return to rating stability would likely be based on the
expectation that restrictions to ticketed events and tour
cancellations would be lifted and the company is able to return to
sustained profitability.
=========
C H I N A
=========
21VIANET GROUP: S&P Alters Outlook to Negative & Affirms 'B+' ICR
-----------------------------------------------------------------
S&P Global Ratings, on March 17, 2020, revised its outlook on
21Vianet Group Inc. to negative from stable. S&P also affirmed its
long-term issuer credit rating on the company and the issue rating
on its US$300 million senior unsecured notes maturing in October
2021 at 'B+'.
S&P revised the outlook to negative because it expects 21Vianet's
leverage will stay high and the company will need substantial
refinancing over the next six to nine months. This is because
21Vianet is investing aggressively in new capacity, and is
dependent on an increasingly uncertain capital market for funding
its capital expenditure and refinancing its US$300 million notes
due October 2021.
21Vianet's debt leverage will increase. S&P said, "We revised our
debt-to-EBITDA forecast for the company to 4.9x-5.3x for 2020, from
4.4x-4.7x, and to 5.4x-5.6x for 2021, from 4.6x-4.9x. The revision
reflects higher-than-expected capital lease liabilities attributed
to 21Vianet's internet data center (IDC) expansion plans and
additional operating lease liabilities associated with a lease
arrangement with a large foreign cloud service provider. We believe
the company's target of adding 15,000 cabinets in 2020 will extend
to the subsequent years. Leverage could be lower than our forecast
if 21Vianet's recently issued US$200 million of convertible notes
are converted (the notes are currently in-the-money with a strike
price of US$12/share). However, given the uncertainty of the
conversion, we do not include such a scenario in our base case."
The company's debt leverage is already starting from a high base of
5.1x in 2019, above our previous forecast of 4.7x-5.0x. However,
this increase is primarily attributed to operating lease
liabilities associated with the lease arrangement for the cloud
business. In the last quarter of 2019, 21Vianet took on the lease
obligations of IDCs supporting cloud services provided by a large
foreign company in China. S&P believes the move will likely
strengthen the relationship between the two companies. Such an
arrangement could help the cloud service provider mitigate
potential regulatory risks should China place further restrictions
on foreign cloud service providers.
S&P assesses the lease arrangement as representing a lower risk
relative to 21Vianet's other financial obligations, as the foreign
cloud service provider remains a de facto lessee and ultimately
responsible for the lease payments. Any missed payments or
termination of the agreement by the foreign company could result in
significant disruption to its cloud services in China.
Liquidity is another risk for 21Vianet as debt maturities approach
and the funding environment becomes increasingly uncertain given
the coronavirus pandemic and a slowdown in the global economy. The
company has annual capital expenditure of Chinese renminbi (RMB)
2.4 billion-RMB2.8 billion over the next two years and senior note
maturities of US$150 million (RMB1.0 billion) in August 2020 and
US$300 million (RMB2.1 billion) in October 2021. Therefore, S&P
anticipates the company will require RMB3.5 billion-RMB5.0 billion
of funding in each of 2020 and 2021 to meet these obligations.
For now 21Vianet has some sources of liquidity, including the
recently announced private placement of convertible bonds of US$200
million (RMB1.4 billion) and an unrestricted cash balance of RMB2.2
billion as of Dec. 31, 2019. S&P said, "In addition, we expect
roughly RMB1 billion of the company's capital expenditure could be
funded through project financing, particularly that associated with
its wholesale businesses or IDCs with favorable locations. However,
we could consider further negative rating actions if a credible
refinancing plan does not materialize within the next six to nine
months."
21Vianet's ability to increase utilization for its newly added
cabinets will be a key factor in supporting its liquidity and
meeting our leverage forecast. To that end, around 30% of new
capacity will correspond to the company's wholesale IDC business,
providing some support to overall utilization and stability of cash
flow. S&P anticipates the wholesale business will represent 5%-7%
of total sales in 2020 and 10%-14% in 2021, from no contribution in
2019.
Rising execution risks associated with unprecedented scale of
expansion could limit 21Vianet's ability to further improve its
EBITDA margin from 32.8% in 2019. S&P said, "We also see lower
growth potential for the company's monthly recurring revenue given
intense market competition and increasing revenue contribution from
large customers with stronger bargaining power. As a result, we
expect EBITDA margins to remain 31%-34% over the next two to three
years. Over the longer term, profitability could improve once
growth normalizes and utilization increases."
In S&P's view, the COVID-19 outbreak could increase demand for
internet-based applications in the longer term. However, in the
near term, the company could face challenges in its IDC expansion.
That's due to labor restrictions and logistics, and a longer cash
conversion cycle as some customers may delay payments because of
the outbreak.
The negative outlook reflects 21Vianet's increasing debt leverage
and the need for refinancing over the next six to nine months. The
company is investing aggressively in new capacity and is dependent
on capital markets for funding.
S&P said, "We could lower the rating if 21Vianet's leverage exceeds
5.5x. This could happen if the company undertakes more debt-funded
expansion than our base case, or it poorly executes its expansion
plan resulting in low utilization and weak profitability.
"We could also downgrade 21Vianet if it does not have a credible
refinancing plan in place within the next six to nine months for
the US$300 million senior notes maturing in October 2021 and its
other funding needs.
"We may also lower the rating if we believe ongoing parental
support from TUS–Holdings Co. Ltd. diminishes. This could be
indicated by: (1) a meaningful decrease in TUS Holdings'
shareholding in 21Vianet; or (2) a change in the parent's
investment strategy for 21Vianet, possibly signaled by a
reclassification of the investment in 21Vianet to short-term from
long-term. The potential conversion of the convertible notes may
warrant a review of parental support.
"We could revise the outlook back to stable if 21Vianet is able to
maintain adequate liquidity. This could be indicated by the company
securing substantial long-term financing or having a credible and
executable refinancing plan that will satisfy its liquidity needs
for maturing debts and capacity expansion for 2021. The revision
assumes the company can contain its leverage at well below 5.5x."
WANDA GROUP: Moody's Withdraws B3 CFR for Business Reasons
----------------------------------------------------------
Moody's Investors Service has withdrawn the B3 corporate family
rating of Wanda Group Co., Ltd. (previously referred to as China
Wanda Group Co., Ltd).
The outlook at the time of the withdrawal was negative.
RATINGS RATIONALE
Moody's has decided to withdraw the rating for its own business
reasons.
Founded in 1988 and headquartered in Dongying, Shandong, Wanda
Group Co., Ltd. is a privately-owned company operating multiple
business segments including (1) refining (mainly refineries of
diesel and gasoline); (2) tire production; (3) the manufacture of
electric cables; (4) the manufacture of chemical products,
including methacrylate butadiene styrene and polyacrylamide; and
(5) electronics, including the production of polyimide film.
[*] Bad Loans Rise for China Banks as Virus Hits Businesses
-----------------------------------------------------------
Caixin Global reports that China's banking sector is seeing a rise
in non-performing loans as the Covid-19 pandemic hurts businesses
and public consumption. But the top industry regulator said risks
are under control.
According to Caixin, banking institutions sat on CNY3.3 trillion
(US$471 billion) of non-performing loans as of the end of February,
or 2.08% of total loans outstanding. The bad loan ratio was 0.05 of
a percentage point higher than in the previous month.
In addition, specially mentioned loans - those potentially at risk
of not performing - totaled CNY5.8 trillion by the end of the
month. That category's ratio to total loans rose 0.17 of a
percentage point from the previous month, according to the China
Banking and Insurance Regulatory Commission (CBIRC) on March 17.
=========
I N D I A
=========
ABSOLUTE PROJECTS: CRISIL Lowers Rating on INR8cr Loan to B+
------------------------------------------------------------
CRISIL has revised the ratings on certain bank facilities of
Absolute Projects India Limited (APIL), as:
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB+/Stable ISSUER NOT
COOPERATING')
Letter of credit 30 CRISIL A4 (ISSUER NOT
& Bank Guarantee COOPERATING; Revised from
'CRISIL A4+ ISSUER NOT
COOPERATING')
Detailed Rationale
CRISIL has been consistently following up with APIL for obtaining
information through letters and emails dated November 30, 2019 and
February 6, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
APIL is a public limited company promoted by Mr DV Parmar and Mr Rs
Ola in 1995 to provide turnkey solutions in installation of power
transmission towers, substations and power distribution system. The
firm also undertakes sale of transmission towers to other players.
It was earlier incorporated as a private limited company but during
2005, the company was transformed into a limited company by
including some more shareholders from Parmar and Ola family.
Subsequently in 2010-11, there has been a further change in
management and the entire stake of Mr Parmar has been bought by Mr
RsOla.
ATC BEVERAGES: CRISIL Maintains 'B-' Rating in Not Cooperating
--------------------------------------------------------------
CRISIL said the ratings on bank facilities of ATC Beverages Private
Limited (ATC) continues to be 'CRISIL B-/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
Long Term Loan 15.8 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with ATC for obtaining
information through letters and emails dated August 31, 2019 and
February 6, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of ATC, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on ATC is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' category or lower'.
Based on the last available information, the ratings on bank
facilities of ATC continues to be 'CRISIL B-/Stable Issuer not
cooperating'.
ATC, based in Bengaluru, was established in 2004 by Mr. Prem Goyal
and his son Mr. Amitabh Goyal. The company undertakes contract
manufacturing of sweetened and non-sweetened aerated drinks. It has
a manufacturing facility at Nanjangard near Mysore (Karnataka).
B.R. ELASTICS: CRISIL Keeps INR14.9cr Loans in Not Cooperating
--------------------------------------------------------------
CRISIL said the ratings on bank facilities of B. R. Elastics India
Private Limited (BREPL) continues to be 'CRISIL B/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 13.75 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Term Loan 1.20 CRISIL B/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with BREPL for obtaining
information through letters and emails dated November 30, 2019 and
February 06, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of BREPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on BREPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower'.
Based on the last available information, the ratings on bank
facilities of BREPL continues to be 'CRISIL B/Stable Issuer not
cooperating'.
BREPL was set up as a proprietorship firm in 2000 and reconstituted
as a private limited company in 2008. The company, based in
Tirupur, manufactures varied types of elastic, including woven
elastic, woven jacquard elastic, plain knitted elastic, fancy frill
elastic, and lycra elastic.
BVSR KP ROAD: CRISIL Lowers Ratings on INR75cr Loans to B+
----------------------------------------------------------
CRISIL has revised the ratings on bank facilities of BVSR KP Road
Projects Private Limited (BVSR KP) to 'CRISIL B+/Stable Issuer not
cooperating' from 'CRISIL BB+/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Long Term 33.3 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Revised from
'CRISIL BB+/Stable ISSUER
NOT COOPERATING')
Term Loan 41.7 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB+/Stable ISSUER
NOT COOPERATING')
CRISIL has been consistently following up with BVSR KP for
obtaining information through letters and emails dated August 31,
2019 and February 06, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of BVSR KP, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on BVSR KP is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower'.
Based on the last available information, the ratings on bank
facilities of BVSR KP revised to 'CRISIL B+/Stable Issuer not
cooperating' from 'CRISIL BB+/Stable Issuer not cooperating'.
BVSR KP is a special purpose vehicle promoted by BVSR Constructions
and Mr. B Srinivasul Reddy. BVSR KP has designed and rehabilitated
the Kadapa-Pulivendula Road (18.2 km) in Kadapa district (Andhra
Pradesh) by upgrading the road to a two-lane carriageway.
CAPTAIN TRACTORS: CRISIL Cuts Rating on INR20cr Cash Loan to B+
---------------------------------------------------------------
CRISIL has revised the ratings on bank facilities of Captain
Tractors Private Limited (CTPL) to 'CRISIL B+/Stable Issuer not
cooperating' from 'CRISIL BB-/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 20 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
Long Term Loan 1.69 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
CRISIL has been consistently following up with CTPL for obtaining
information through letters and emails dated August 31, 2019 and
February 6, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of CTPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CTPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower'.
Based on the last available information, the ratings on bank
facilities of CTPL revised to 'CRISIL B+/Stable Issuer not
cooperating' from 'CRISIL BB-/Stable Issuer not cooperating'.
CTPL, incorporated in 2006, is engaged in business of assembling of
tractors and manufacturing of farm equipment. The company markets
its tractor under its own brand 'Captain'. The company has its
manufacturing unit located at Veraval Shapar, Dist. Rajkot
(Gujarat). The day-to-day operations of the company are managed by
Mr. Kailesh Movaliya along with his family members.
CAREER COACHING: CRISIL Keeps D on INR10cr Loan in Not Cooperating
------------------------------------------------------------------
CRISIL said the ratings on bank facilities of Career Coaching
(Alld) Private Limited (CCPL) continues to be 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 10 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with CCPL for obtaining
information through letters and emails dated August 31, 2019 and
February 6, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of CCPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CCPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower'.
Based on the last available information, the ratings on bank
facilities of CCPL continues to be 'CRISIL D Issuer not
cooperating'.
CCPL, established in 2004 by Mr. Zafar Bakht and Mr. Saeed Fatima,
provides coaching services for various entrance examinations at its
coaching institutes located in Allahabad (Uttar Pradesh).
CHANDRMAULI MOTORS: CRISIL Keeps B Debt Ratings in NonCooperating
-----------------------------------------------------------------
CRISIL said the ratings on bank facilities of Chandrmauli Motors
Private Limited (CMPL) continues to be 'CRISIL B/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5.5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Inventory Funding 15.0 CRISIL B/Stable (ISSUER NOT
Facility COOPERATING)
Term Loan 1.5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with CMPL for obtaining
information through letters and emails dated August 31, 2019 and
February 6, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of CMPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CMPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower'.
Based on the last available information, the ratings on bank
facilities of CMPL continues to be 'CRISIL B/Stable Issuer not
cooperating'.
CMPL, established by Mr. Pramod Gupta in 2008, is an authorised
dealer of TML's SCVs and ICVs. CMPL operates six showrooms in Alwar
and Bharatpur, both in Rajasthan.
CHAWRA TRADING: CRISIL Lowers Rating on INR8cr Cash Loan to B+
--------------------------------------------------------------
CRISIL has revised the ratings on bank facilities of Chawra Trading
(CT) to 'CRISIL B+/Stable Issuer not cooperating' from 'CRISIL
BB-/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
Electronic Dealer 2.95 CRISIL B+/Stable (ISSUER NOT
Financing Scheme COOPERATING; Revised from
(e-DFS) 'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
Proposed Long Term .05 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
CRISIL has been consistently following up with CT for obtaining
information through letters and emails dated August 31, 2019 and
February 6, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of CT, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CT is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' category or lower'.
Based on the last available information, the ratings on bank
facilities of CT revised to 'CRISIL B+/Stable Issuer not
cooperating' from 'CRISIL BB-/Stable Issuer not cooperating'.
CT was established in 1996 as a partnership firm by Mr. Dinesh
Chawra, his wife, Mrs. Dipti Chawra, and his son, Mr. Aditya
Chawra. It is one of the three primary distributors of HUL for its
FMCG products in Pune district (Maharashtra) with each distributor
having its own exclusive area for distribution. It caters to more
than 2500 outlets and also distributes HUL's water purification
systems since 2013.
CORE PLASTO: CRISIL Keeps D on INR16cr Loans in Not Cooperating
---------------------------------------------------------------
CRISIL said the ratings on bank facilities of Core Plasto
Enterprises (CPE) continues to be 'CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 14 CRISIL D (ISSUER NOT
COOPERATING)
Term Loan 2 CRISIL D (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with CPE for obtaining
information through letters and emails dated August 31, 2019 and
February 6, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of CPE, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CPE is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' category or lower'.
Based on the last available information, the ratings on bank
facilities of CPE continues to be 'CRISIL D Issuer not
cooperating'.
Set up as a partnership firm in 2007 in Chennai, CPE manufactures
plastic injection moulds primarily for use in home appliances. The
company's products include table top wet grinders, mixer grinders
and plastic dash board components for 4-wheelers. Mr. Renny Jose
and his brother Mr. Reji Jose manage the operations.
COSMOS MERCANTILE: CRISIL Keeps B on INR5cr Loan in Not Cooperating
-------------------------------------------------------------------
CRISIL said the ratings on bank facilities of Cosmos Mercantile
Private Limited (CMPL) continues to be 'CRISIL B/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with CMPL for obtaining
information through letters and emails dated August 31, 2019 and
February 6, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of CMPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CMPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower'.
Based on the last available information, the ratings on bank
facilities of CMPL continues to be 'CRISIL B/Stable Issuer not
cooperating'.
CMPL, incorporated in 1995, is engaged in trading of metals and
plastic products. CMPL is also engaged in crushing of stone into
stone chips. The company is promoted by Jamshedpur based Kejriwal
family. Mr. Ravi Kumar Kejriwal and Mrs. Mamta Kejriwal are the
directors of the company. The operations are however primarily
managed by Mr. Kejriwal.
CREATIVE CORRUPACK: CRISIL Cuts Rating on INR7.5cr Loan to B+
-------------------------------------------------------------
CRISIL has revised the ratings on bank facilities of Creative
Corrupack Private Limited (CCPL) to 'CRISIL B+/Stable Issuer not
cooperating' from 'CRISIL BB-/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7.5 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
Proposed Long Term 3.55 CRISIL B+/Stable (ISSUER NOT
Bank Loan Facility COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
Term Loan 1.00 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
CRISIL has been consistently following up with CCPL for obtaining
information through letters and emails dated August 31, 2019 and
February 6, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of CCPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CCPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower'.
Based on the last available information, the ratings on bank
facilities of CCPL revised to 'CRISIL B+/Stable Issuer not
cooperating' from 'CRISIL BB-/Stable Issuer not cooperating'.
CCPL was incorporated in 2005 in Dhule by Mr Ramesh Khetan, and his
son Mr. Nikhil Khetan. The company is engaged in manufacturing of
corrugated boxes mainly for FMCG players.
DEEPAK COTTON: CRISIL Keeps B+ on INR14cr Loan in Not Cooperating
-----------------------------------------------------------------
CRISIL said the ratings on bank facilities of Deepak Cotton Factory
(DCF) continues to be 'CRISIL B+/Stable Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 14 CRISIL B+/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with DCF for obtaining
information through letters and emails dated August 31, 2019 and
February 06, 2020 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of DCF, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on DCF is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' category or lower'.
Based on the last available information, the ratings on bank
facilities of DCF continues to be 'CRISIL B+/Stable Issuer not
cooperating'.
DCF was set up in 2006, promoted by Mr. Tarsem Chand Bansal as a
proprietorship firm. The firm operates a ginning unit for
manufacturing cotton bales, and trades in cotton seeds. It also has
an oil crushing unit. The manufacturing units are based in Mansa,
Punjab, with an installed capacity of 250 bales per day, which is
almost fully utilised.
DHAN LAXMI: CRISIL Keeps D on INR10cr Loans in Not Cooperating
--------------------------------------------------------------
CRISIL said the ratings on bank facilities of Dhan Laxmi Agromills
India Limited (DAIL) continues to be 'CRISIL B+/Stable Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B+/Stable (ISSUER NOT
COOPERATING)
Term Loan 5 CRISIL B+/Stable (ISSUER NOT
COOPERATING)
CRISIL has been consistently following up with DAIL for obtaining
information through letters and emails dated August 31, 2019 and
February 6, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of DAIL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on DAIL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower'.
Based on the last available information, the ratings on bank
facilities of DAIL continues to be 'CRISIL B+/Stable Issuer not
cooperating'.
DAIL is an Uttarakhand-based company established and promoted in
2013 by Mr. Meghraj Garg, Mr. Naveen Kumar Singhal, Mr. Rajendra
Kumar Aggarwal, and Mr. Anshul Garg. It extracts rice bran oil and
manufactures de-oiled rice bran.
ML KANHAIYALAL: CRISIL Lowers Rating on INR10cr Loan to B+
----------------------------------------------------------
CRISIL has downgraded its rating on the long-term bank facility of
ML Kanhaiyalal Jewellers (MLKJ) to 'CRISIL B+/Stable' from 'CRISIL
BB-/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL B+/Stable (Downgraded
from 'CRISIL BB-/Stable')
The downgrade reflects weakening of the firm's financial risk
profile and liquidity on account of stretch in working capital
cycle and large capital withdrawal by the partners in fiscal 2019.
Working capital cycle increased with gross current assets of 140
days as on March 31, 2019, compared to 67 days a year ago. This led
to increase in debt levels and deterioration in capital structure.
Liquidity is stretched with fully utilised bank lines.
The rating reflects the firm's modest scale of operations, weak
financial profile, and susceptibility to changes in government
regulations and volatility in gold prices. These weaknesses are
partially offset by the extensive experience of the partners in the
gold jewellery industry.
Analytical Approach
Unsecured loans have been treated as debt.
Key Rating Drivers & Detailed Description
Weakness:
* Modest scale of operations amid intense competition:
In spite of more than 3 decades of presence in the gold jewellery
wholesale business, the firm's scale remains modest as reflected in
revenue of INR77.86 crore in fiscal 2019, estimated to around INR75
Crore in fiscal 2020. The jewellery industry in India is highly
fragmented with a large number of jewellers having regional
presence which restricts scalability of operations and bargaining
power against suppliers or customers.
* Weak financial risk profile:
Gearing and Total outside liabilities to adjusted networth (TOLANW)
ratio were negative due to negative networth as on March 31, 2019.
Debt protection metrics were also weak, reflected in interest
coverage and net cash accrual to total debt ratio of 0.5 time and
-0.22 time in fiscal 2019 which is expected to improve over the
medium term with infusion of capital in the business.
* Susceptibility to changes in government regulations and
volatility in gold prices:
MLKJ remains exposed to regulatory risks in the jewellery sector,
which has seen heightened regulatory action over the past four
years. These regulatory changes may impact the performance of
jewellers. Besides, gold prices are highly volatile and constrain
profitability.
Strength:
* Extensive industry experience of the partners:
The partners' experience of more than 3 decades in the jewellery
industry has given them an understanding of the dynamics of the
market, and helped establish relationships with suppliers and
customers. This helped the firm increase revenue from INR25.84
crore in fiscal 2016 to INR78.25 crore in fiscal 2019.
Liquidity Poor
Cash accrual, expected at INR0.15-0.18 crore each in fiscals 2020
and 2021, will be inadequate to meet yearly debt obligation of
INR0.32 crore, and the shortfall is expected to be met through
unsecured loans. Bank limit of INR10 was fully utilised, and will
remain high because of large working capital requirement. Cash and
cash equivalent were low at INR0.15 crore as on March 31, 2019.
Liquidity is partly supported by unsecured by unsecured loans by
partners.
Outlook: Stable
CRISIL believes MLKJ will continue to benefit from its partners'
extensive industry experience.
Rating Sensitivity factors
Upward factors
* Increase in revenue or profit margin, leading to net cash accrual
above INR1.5 crore on sustained basis.
* Improvement in working capital management, resulting in lower
bank limit utilization.
Downward factors
* Absence of unsecured loan support from the partners.
* Deterioration in the financial risk profile because of
debt-funded capital expenditure.
MLKJ, set up in 1992 by Mr Ramsjeevanlal Soni and his sons Mr Ravi
Soni and Mr Rupesh Soni, is in the wholesale gold jewellery
business and is based in Mumbai.
SPECTRA MOTORS: CRISIL Keeps D Debt Ratings in Not Cooperating
--------------------------------------------------------------
CRISIL said the ratings on bank facilities of Spectra Motors
Limited (SML) continues to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee .5 CRISIL D (ISSUER NOT
COOPERATING)
Cash Credit 54.75 CRISIL D (ISSUER NOT
COOPERATING)
Letter of Credit 6.00 CRISIL D (ISSUER NOT
COOPERATING)
Term Loan 33.75 CRISIL D (ISSUER NOT
COOPERATING)
Working Capital 5.00 CRISIL D (ISSUER NOT
Term Loan COOPERATING)
CRISIL has been consistently following up with SML for obtaining
information through letters and emails dated August 31, 2019 and
February 6, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SML, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on SML is consistent
with 'Scenario 1' outlined in the 'Framework for Assessing
Consistency of Information with CRISIL BB' category or lower'.
Based on the last available information, the ratings on bank
facilities of SML continues to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
Incorporated in 1993 and promoted by Mr Bharat Bhushan Gupta and
family, SML was initially a dealer of Fiat vehicles; however in
1998 it obtained the dealership of Maruti. Currently, the company
has six showrooms and eight workshops in Mumbai apart from a
showroom and workshop in Surat (Gujarat). It sells 1000-1100
vehicles a month.
WARYAM STEEL: CRISIL Cuts Rating on INR9.9cr Cash Loan to B+
------------------------------------------------------------
CRISIL has revised the ratings on bank facilities of Waryam Steel
Castings Private Limited (WSCL; part of the Waryam group) to
'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating' from 'CRISIL
BB/Negative/CRISIL A4+ Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 9.9 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB/Negative ISSUER
NOT COOPERATING')
Letter of Credit 5.0 CRISIL A4 (ISSUER NOT
COOPERATING; Revised from
'CRISIL A4+ ISSUER NOT
COOPERATING')
Letter of Credit 8.1 CRISIL B+/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB/Negative ISSUER
NOT COOPERATING')
CRISIL has been consistently following up with WSCL for obtaining
information through letters and emails dated August 31, 2019 and
February 6, 2020 among others, apart from telephonic communication.
However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as it is arrived at without any management
interaction and is based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of WSCL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on WSCL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' category or
lower'.
Based on the last available information, the ratings on bank
facilities of WSCL revised to 'CRISIL B+/Stable/CRISIL A4 Issuer
not cooperating' from 'CRISIL BB/Negative/CRISIL A4+ Issuer not
cooperating'.
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of WSCL and Veekay Concast Pvt Ltd (VCPL).
This is because the two companies, together referred to as the
Waryam group, are in the same line of business and derive
considerable operational, financial, and business synergies from
each other.
Incorporated in 1991, WSCL was acquired by Mr. Vipan Gupta in
January 2002. It manufactures alloyed and nonalloyed steel ingots,
and trades in commodities such as scrap, ingots, iron, and steel.
The company has the capacity to produce around 3000 tonnes of
ingots per month at its facilities in Ludhiana.
=========
J A P A N
=========
SOFTBANK GROUP: S&P Alters Outlook to Negative & Affirms 'BB+' ICR
------------------------------------------------------------------
S&P Global Ratings revised to negative from stable the outlook on
its long-term issuer credit rating on Japan-based investment
holding company SoftBank Group Corp. S&P affirmed the 'BB+'
long-term issuer credit rating. S&P also affirmed long-term senior
unsecured ratings at 'BB+' and subordinated debt at 'B+'.
S&P said, "We revised the outlook for two reasons. First, on March
13, 2020, the company announced plans to buy back up to JPY500
billion of shares in the midst of a plunge in stock markets, which
raises questions over its commitment to financial management that
prioritizes its financial soundness and the credit ratings on the
company. Second, the company may struggle to maintain a level of
financial soundness that is commensurate with the long-term credit
rating if continued volatility in stock prices causes its
investment assets to lose substantial value.
"We affirmed the rating because the company maintains sufficient
cash and deposits to cover bond redemptions in the coming two
years. In addition, we think it might be able to absorb the
negative impact the share buyback will have on its finances by
curbing fresh investments and selling assets."
The buyback plan is likely to weigh on SoftBank Group's credit
quality because it strongly underscores its aggressive financial
management. Under normal circumstances, the current rating would
likely tolerate the impact of a share buyback of this scale. But
the buyback follows a plan announced in October 2019 to provide
extensive financial support to U.S.-based investee WeWork Companies
LLC. It also comes amid large falls in stock prices. Therefore, the
damage to its credit quality is unlikely to be limited to the
loan-to-value (LTV) ratio, a key financial measure in S&P's credit
analysis.
In the coming year or so, the LTV ratio is likely to be about
30%-35%, leaving little headroom under the 40% threshold that would
cause us to consider a downgrade. In S&P's base case, it assumes
that the value of the company's portfolio will fall slightly from
current levels to about JPY24 trillion-JPY25 trillion. S&P also
takes into account the JPY500 billion share buyback and net
investments (fresh investments minus asset sales) of JPY250
billion. It also assumes that listed stocks will account for over
70% of its investment portfolio and the portfolio will have a
weighted average creditworthiness at about the 'BBB' category.
S&P estimates that the LTV ratio will deteriorate slightly from the
28%-29% range (as of March 13), which is weaker than the
approximately 26% recorded at the end of December 2019. This is as
a result of a fall in the value of its investment portfolio to
about JPY26 trillion as of March 13, after it had risen to about
JPY30 trillion on Feb. 11 from about JPY28 trillion at the end of
December 2019.
The value of SoftBank's investment portfolio and its financial
soundness are susceptible to swings in the stock market. The
portfolio is strong in terms of the size of its assets, its
liquidity (listed assets account for more than 70%), and the
average credit quality across the portfolio. However, it is highly
concentrated, which we view as its most significant risk. Its
shareholdings in China-based e-commerce company Alibaba Group
Holding Ltd. (A+/Stable/--) account for about half of its
investment assets, and the three largest assets account for over
80% of the portfolio. Share prices and fair values of such
concentrated assets can produce considerable swings in portfolio
value. The portfolio also includes many recently listed and
unlisted technology companies, whose values fluctuate
considerably.
S&P said, "We believe SoftBank's aggressiveness in pursuing growth
and managing its finances makes its financial standing weak. While
it has a policy of maintaining sufficient cash and deposits to
cover bond redemptions for the coming two years, it needs to
constantly procure funds because it has approximately JPY8 trillion
of debt at the holding company level. It might be able to sell
assets or curb fresh investments to absorb the impact of the share
buyback. However, uncertainties remain over whether the company
would be able to take these measures and maintain financial
soundness if stock markets fall even further.
"The negative rating outlook reflects our view that SoftBank might
not be able to maintain a level of financial soundness that is
commensurate with the current rating if continued stock market
volatility causes the value of its investment assets to plunge.
"We might consider downgrading SoftBank in the next six to 12
months if we determine it has adopted a more aggressive financial
management policy that the rating could not tolerate. This could
occur if it makes an additional large share buyback, fails to react
sufficiently to any dramatic fall in portfolio value, or repeatedly
extends considerable financial support to investees whose finances
have suffered. We would also consider a downgrade if we expect the
LTV ratio to near 40% for the same reasons. Another downgrade
scenario entails a substantial decline in the liquidity or
creditworthiness of its investment assets as a result of selling
its holdings of listed stocks while increasing investments in its
fund business, which focuses on unlisted stocks. We would consider
a downgrade also if a large investee's creditworthiness worsens
substantially, rapidly dragging down the creditworthiness of
SoftBank's investment portfolio.
"We would consider revising the outlook up to stable if SoftBank
acts to maintain its financial soundness, such as by curbing new
investments and selling assets to absorb the impact of the share
buyback on its finances, and it becomes more likely that the LTV
ratio will hover below 40% even when taking into account a notable
drop in share prices."
===============
M A L A Y S I A
===============
MALAYSIA AIRLINES: At Risk of Bankruptcy Amid Covid-19 Outbreak
---------------------------------------------------------------
The Malaysian Reserve reports that Malaysia Airlines Bhd (MAB) is
at risk of bankruptcy and staff are encouraged to take the
voluntary unpaid leave programme, said the group CFO Boo Hui Yee in
an internal memo addressed to the airline's 13,000 staff.
Boo, in the memo seen by The Malaysian Reserve (TMR), cited that
the widespread Covid-19 outbreak disrupted travel sentiments that
resulted in passengers calling the carriers' global contact centre
and social media accounts to cancel bookings.
"Many airlines are now at the risk of going bankrupt and Malaysia
Airlines is no different. To ensure the company could sustain
itself through this critical time, more hard decisions will have to
be taken soon," the report quotes Boo as saying.
She said the recent political shakeup in the country also
compounded the sharp decline on travel demand.
The Malaysian Reserve relates that the national airline also faced
a double whammy with weakening ringgit and collapse in oil price
that further drives up its operational cost.
MAB reported a net loss in the financial year ended Dec. 31, 2018
(FY18), of MYR792 million.
The report says the airline previously confirmed with TMR that its
parent company Malaysia Aviation Group Bhd (MAG) has offered staff
two voluntary options, either five days of unpaid leave per month
for at least three months or unpaid leave between one and three
months beginning April following capacity cuts.
The national flag carrier previously said more than 2,000 flights
have been cancelled up to April due to travel restrictions imposed
by countries within the company's network, the report relates.
Earlier, the company had slashed the salary of the senior
management staff by 10% and removed all allowances effective this
month as it battles the financial fallout from the virus outbreak,
the report notes.
According to The Malaysian Reserve, MR reported that MAB would need
more capital injection from Khazanah Nasional Bhd to keep the
company afloat amid the Covid19 pandemic.
Last October, Khazanah MD Datuk Shahril Ridza Ridzuan said in a
report to the Public Accounts Committee that the government needs
to pump about MYR1 billion per year to MAB to sustain the entity
amid overcrowded market - but that was before the Covid-19
appeared.
The Malaysian Reserve adds that one analyst who declined to be
named said drastic measures are needed for MAB, which may include
the consideration of more pay cuts for the top management.
"Let's tighten our belts, focus on driving costs down and reduce
wastage to conserve cash," the report quotes Boo as saying at
another line in the message.
About Malaysia Airlines
Headquartered in Selangor, Malaysia, state-owned Malaysia Airlines
-- http://www.malaysiaairlines.com/-- engages in the business of
air transportation and the provision of related services.
As reported in the Troubled Company Reporter-Asia Pacific on March
8, 2019, New Straits Times said Malaysia Airlines' days as a
national carrier may be numbered as it has failed to meet its
three-year target to be profitable, but is instead bleeding since
it was taken private in 2014, aviation analysts said. The analysts
said the best deal for the airline is to completely shut down its
operations or sell it to interested parties or spin off its
business divisions, NST related.
Khazanah is the sole shareholder of MAS after taking the airline
private in 2014. The sovereign wealth fund injected MYR6 billion
into the airline to keep it afloat, NST noted.
From its delisting from Bursa Malaysia from 2015 to 2017, MAS had
registered a loss of MYR2.3 billion due to the ringgit's weakness
and higher jet fuel costs, NST disclosed.
According to Reuters, the Malaysian government has been seeking a
strategic partner for its national airline, which has struggled to
recover from two tragedies - the mysterious disappearance of flight
MH370 and the shooting down of flight MH17 over eastern Ukraine.
=================
S I N G A P O R E
=================
HYFLUX LTD: Scheme Meetings to Take Place on April 22 and 23
------------------------------------------------------------
Fiona Lam at The Business Times reports that next month, creditors
will vote on the proposed schemes of arrangement based on Utico's
rescue package for troubled water treatment firm Hyflux Ltd and
three of its subsidiaries.
All the meetings will take place at the Hyflux Innovation Centre on
80 Bendemeer Road, BT discloses.
For Hyflux, there will be two meetings on April 22. The first will
start at 12:00 p.m. for the unsecured creditors – including
banks, noteholders, trade creditors and contingent creditors –
and the subordinated scheme parties. The second meeting will be
held at 7:00 p.m. for holders of the perpetual securities and
preference shares (PnP).
Hyflux Membrane Manufacturing (S) and Hydrochem (S) will convene
their meeting at 10:00 a.m. on April 23. This will be for the two
companies' trade creditors and inter-company creditors, the report
discloses.
The final meeting is for Hyflux Engineering, to start at 2pm on
April 23, likewise for its trade creditors and inter-company
creditors.
If the schemes go through, the High Court of Singapore will
sanction them on April 30.
In view of the evolving novel coronavirus situation and the
Singapore government's restrictions on large organised events,
Hyflux is "still considering the best approach to holding the
scheme meetings", it said in a bourse filing on Wednesday.
In the event of any further developments, Hyflux will update
creditors as soon as practicable.
At a March 10 hearing in the High Court, the judge attempted to get
creditors to chip in towards an escrow account to help pay fees for
advisers of the PnP holders and noteholders in the event of a
liquidation.
Separately, the Securities Investors Association (Singapore) or
Sias will conduct its own independent town hall sessions on March
23 for the retail PnP investors. Details will be announced shortly,
the report notes.
About Hyflux
Singapore-based Hyflux Ltd -- https://www.hyflux.com/ -- provides
various solutions in water and energy areas worldwide. The company
operates through two segments, Municipal and Industrial. The
Municipal segment supplies a range of infrastructure solutions,
including water, power, and waste-to-energy to municipalities and
governments. The Industrial segment supplies infrastructure
solutions for water to industrial customers. It has business
operations across Asia, Middle East and Africa.
As reported in the Troubled Company Reporter-Asia Pacific on May
24, 2018, Hyflux Ltd. said that the Company and five of its
subsidiaries, namely Hydrochem (S) Pte Ltd, Hyflux Engineering Pte
Ltd, Hyflux Membrane Manufacturing (S) Pte. Ltd., Hyflux Innovation
Centre Pte. Ltd. and Tuaspring Pte. Ltd. have applied to the High
Court of the Republic of Singapore pursuant to Section 211B(1) of
the Singapore Companies Act to commence a court supervised process
to reorganize their liabilities and businesses. The Company said
it is taking this step in order to protect the value of its
businesses while it reorganises its liabilities.
The Company engaged WongPartnership LLP as legal advisors and Ernst
& Young Solutions LLP as financial advisors in this process. On
Jan. 29, WongPartnership applied to discharge themselves due to
difficulties relating to "loss of confidence and good cause" in
working with the client. The Company subsequently appointed
Clifford Chance and Cavenagh Law as its legal advisers in WongP's
place.
In November 2019, Hyflux entered into a restructuring deal with
United Arab Emirates-based utility Utico FZC, according to
Reuters.
MAGNUS ENERGY: Net Loss Narrows to SGD1.9MM in Q2 Ended Dec. 31
---------------------------------------------------------------
The Business Times reports that Magnus Energy Group saw its net
loss narrow to S$1.2 million for its second quarter ended Dec 31,
2019, from S$1.9 million a year ago.
This came as the oil and gas firm saw a drop in its cost of sales
and a rise in other operating income for the quarter, according to
its financial results released on March 17, BT relates.
Loss per share stood at 0.008 Singapore cent for the quarter, from
0.006 cent a year ago.
Revenue for Q2 fell 34.3 per cent to S$2.9 million, from S$4.5
million a year ago due to the group's winding down of its oil and
gas segment in South-east Asia since end-2017, BT discloses.
No dividend was declared for the quarter, unchanged from a year
ago, the report notes.
For the half-year ended Dec 31, 2019, net loss widened to S$1.8
million, while revenue was down 27.2 per cent to S$6.9 million, BT
discloses.
For the next 12 months, the group intends to dispose of redundant
and unproductive assets in an orderly manner. This includes its
land in Australia and Singapore to provide cash for operating
purposes and to reinvest into new businesses to be identified, the
report relays.
Magnus Energy Group Limited -- https://www.magnusenergy.com.sg/
--is an upstream oil and gas company. The Company's businesses
involves oil and gas equipment distribution in Asia Pacific, gas
exploration in Australia, crude oil production in China and coal
mining activities in Indonesia.
=====================
S O U T H K O R E A
=====================
[*] Korean Exotic Notes to Face Losses as Europe Banks Plunge
-------------------------------------------------------------
Heejin Kim at Bloomberg News reports that South Korean structured
notes, favored by local retail investors, could face massive losses
after European banking shares plunged more than 40% in the past
month.
At least four Korean products linked to the Euro Stoxx Banks Index
are likely to record losses of more than 50% if the underlying
gauge stays at around the current level until their maturity,
according to terms compiled by Bloomberg. The gauge has fallen 45%
since a mid-February high on disappointment over European Central
Bank stimulus measures.
According to Bloomberg, Korea Investment & Securities Co. is one of
the nation's top 10 issuers of structured notes, and one of the
products it offers is among those that could yield losses: a
three-year note that guarantees a 7.8% annual return if none of
three underlying indexes -- the Hang Seng Index, Euro Stoxx Banks
Index, and Kosdaq 150 Index -- falls more than 50% from their
closing levels on Sept. 28, 2017 and fails to recover. The Euro
Stoxx Banks Index has dropped 58% since then, so the product will
incur a loss unless the gauge bounces above the buying price by its
maturity in September. The maximum loss can be 100%, according to
the terms of the notes.
Bloomberg says South Korean investors are known for their appetite
for esoteric financial products fueled by a hunt for yield amid
record-low domestic interest rates. The nation's regulators have
stepped up scrutiny over the improper sale of derivative products
at local brokerages to retail investors, many of whom are elderly
people seeking a stable yield for retirement.
In January and February, before the coronavirus hit global shares,
Korean brokerages sold equity-linked notes with riskier conditions
such as loss-making barriers of 35% or 40% rather than 50% or 55%
previously, Bloomberg discloses citing a report from DB Financial
Investment. Among equity gauges, the Euro Stoxx 50 Index, the
favored one for Korean notes, is also the most dangerous one, given
that it's already tumbled 33% from a high, DB said.
"The real risk for institutional investors like us is how those
kinds of products could spark an unexpected crisis in financial
markets," Bloomberg quotes Jeon Kyung-dae, chief investment officer
for equities at Macquarie Investment Management Korea, as saying.
"No one had expected the so-called 'KIKO crisis' in 2008 -- when
currency-linked derivatives sparked defaults at Korean small- and
medium-sized companies. No one knows whether such derivatives can
trigger a crisis this time, too."
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
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thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
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