/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/200415.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Wednesday, April 15, 2020, Vol. 23, No. 76 Headlines A U S T R A L I A AUSSIE DISPOSALS: Magnetic Insolvency Appointed as Administrator BURGLED PTY: First Creditors' Meeting Set for April 23 CLARIDGE COLLISION: Worrells Solvency Appointed as Administrators CRINITI GROUP: Saved From Collapse After Brunelli Group Steps In INDOOR CLIMATE: Second Creditors' Meeting Set for April 22 PEPPER I-PRIME 2019-1: S&P Affirms B Rating on Class F Notes VIRGIN AUSTRALIA: Weighs Financial Options Amid Coronavirus Crisis B A N G L A D E S H DUTCH-BANGLA BANK: Moody's Affirms 'B1' LongTerm Issuer Ratings C H I N A EHI CAR: Fitch Alters Outlook on 'B' LT IDR to Negative MGM CHINA: Moody's Confirms 'Ba3' Corp. Family Rating, Outlook Neg. H O N G K O N G [*] HONG KONG: Brokers Shut at Record Pace on Falling Commissions I N D I A ALTECH INFRASTRUCTURE: CRISIL Moves B+ Ratings to Not Cooperating ARVEE LABORATORIES: CRISIL Keeps B- Rating in Not Cooperating ASSOCIATED CERAMICS: CRISIL Cuts Rating on INR3cr Loan to B+ BIRESHWAR COLD: CRISIL Reaffirms B+ Rating on INR5.5cr Loan CHIRAG GOEL: CRISIL Withdraws 'B' Rating on INR5cr Cash Loan GAMA INFRAPROP: CRISIL Withdraws D Rating on INR564.90cr Loan GAURAV LAND: CRISIL Withdraws 'B' Rating on INR18.5cr Term Loan GAURAVH WINES: CRISIL Withdraws 'B' Rating on INR8cr Cash Loan H M STEELS: CRISIL Withdraws 'D' Rating on INR26cr Cash Loan IKF TECHNOLOGIES: CRISIL Keeps B- on INR7cr Debt in Not Cooperating INTERNATIONAL TRADING: CRISIL Withdraws D Ratings on INR15.7 Loans LODHI RAJPOOT: CRISIL Assigns B+ Rating to INR4.40cr Cash Loan MUTHOOT FINANCE: Moody's Affirms Ba2 CFR & Alters Outlook to Neg. OSM PROJECTS: CRISIL Withdraws B+ Rating on INR9.9cr Cash Loan P KRISHNA PILLAI: CRISIL Withdraws B+ Rating on INR8cr LT Loan PACIFIC CYBER: CRISIL Lowers Rating on INR1cr Loan to B+ SARAVANA HI-TECH: CRISIL Reaffirms B+ Rating on INR6cr Loan SARAVANA HOSPITAL: CRISIL Hikes Rating on INR5.08cr Loan to B- SARVODAYA MARKETING: CRISIL Migrates B+ Rating to Not Cooperating SREEMA MAHILA: CRISIL Keeps B+ on INR6cr Debt in Not Cooperating SWAPNIL AGRO: CRISIL Withdraws 'B' Rating on INR15cr Cash Loan TOMCO ENGINEERING: CRISIL Withdraws B+ Rating on INR12cr Loan TULSI DAL MILL: CRISIL Withdraws 'B' Rating on INR9.9cr Cash Loan UNITON ENTERPRISE: CRISIL Withdraws B+ Ratings on INR10cr Loans VINAYAK AGRO: CRISIL Withdraws B+ Rating on INR10cr Receipts VISHAL CONSTRUCTION: CRISIL Reaffirms 'B' Rating on INR3cr Loan VISHNU SALES: CRISIL Assigns 'B' Ratings to INR10cr Loans YADAV TRACTOR: CRISIL Withdraws B+ Rating on INR3.5cr Cash Loan YARLAGADDA EXPORTS: CRISIL Withdraws B+ Rating on INR17cr Credit I N D O N E S I A BANK BRISYARIAH: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable J A P A N SOFTBANK GROUP: Sees US$12.5BB Losses as Startup Bets Backfire N E W Z E A L A N D TANGO FINANCE: Burger King NZ Placed in Receivership V I E T N A M VIETNAM ELECTRICITY: Fitch Alters Outlook on 'BB' LT IDR to Stable - - - - - ================= A U S T R A L I A ================= AUSSIE DISPOSALS: Magnetic Insolvency Appointed as Administrator ---------------------------------------------------------------- Peter Goodin -- dmgpag@gmail.com -- of Magnetic Insolvency was appointed as administrators of Aussie Disposals Pty Ltd on April 14, 2020. BURGLED PTY: First Creditors' Meeting Set for April 23 ------------------------------------------------------ A first meeting of the creditors in the proceedings of Burgled Pty Ltd will be held on April 23, 2020, at 11:00 a.m. at the offices of Romanis Cant, 2nd Floor, at 106 Hardware Street, in Melbourne, Victoria. Anthony Robert Cant and Renee Di Carlo of Romanis Cant were appointed as administrators of Burgled Pty on April 9, 2020. CLARIDGE COLLISION: Worrells Solvency Appointed as Administrators ----------------------------------------------------------------- Nicholas David Cooper and Dominic Charles Cantone of Worrells Solvency & Forensic Accountants were appointed as administrators of Claridge Collision Repairs Pty Ltd, trading as Claridge Crash, on April 9, 2020. CRINITI GROUP: Saved From Collapse After Brunelli Group Steps In ---------------------------------------------------------------- Matthew Elmas at SmartCompany reports that Criniti's restaurants have been saved from ruin in an 11th hour deal that will see South-Australia based Brunelli Group take ownership of slimmed down version of the business. Just days after reports emerged that Criniti's six remaining restaurants were headed for permanent closure with the COVID-19 pandemic scuppering hopes the collapsed business could be sold, Worrels insolvency announced the last-minute buyer had emerged on April 12, SmartCompany relates. Criniti's collapsed into voluntary administration last November, owing millions to creditors like the Australian Taxation Office (ATO), and has been looking for a saviour ever since, the report notes. In a statement posted to the company's Instagram on April 13, Criniti's said its stores will remain closed for the time being amid coronavirus trading restrictions, but would re-open eventually, SmartCompany relays. "It has been a difficult period for Criniti's, but we are so pleased to announce that we are looking positively into the future to rebuild your favorite Italian, focusing on a more fine-dining experience," the company, as cited by SmartCompany, said. "We are confident that the Criniti's brand will reach new heights under this new management and are excited to be back with a bang, as soon as it is safe to do so." According to SmartCompany, the sale came as a surprise after news.com.au on April 11 reported a last ditch attempt to sell the business had fallen through due to the coronavirus crisis, which has reportedly cost the company $6.1 million. But Worrel's Graeme Beattie managed to find another suitor at the last minute, saying faith in the company had been rewarded. "Our faith has been rewarded. This is a remarkable tale of retail survival and a testament to the strength of the Criniti's brand name," SmartCompany quotes Mr. Beattie as saying in a statement on April 13. "The leaner operation traded well through the Christmas and holiday period and put up a good fight after the March ban on in-house dining, only to succumb to Corona-economics in early April." SmartCompany relates that Mr. Beattie confirmed all memorabilia, trademarks, recipes and menus are included in the sale, bolstering confidence the re-opened venues will "faithfully reproduce" the original experience. Criniti's will now fall under the ownership of RP Capital, the private firm behind Brunelli Group, the report adds. Aaron Kevin Lucan, Graeme Beattie & Christopher Darin of Worrells Solvency & Forensic Accountants were appointed as administrators of Criniti Group, and related companies on Nov. 18, 2019. Criniti Group operates Italian restaurant chain in Australia. INDOOR CLIMATE: Second Creditors' Meeting Set for April 22 ---------------------------------------------------------- A second meeting of creditors in the proceedings of Indoor Climate Technologies Pty Ltd has been set for April 22, 2020, at 11:00 a.m. at the offices of SM Solvency Accountants, at Level 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 April 21, 2020, at 5:00 p.m. Brendan Nixon of SM Solvency Accountants was appointed as administrator of Indoor Climate on March 11, 2020. PEPPER I-PRIME 2019-1: S&P Affirms B Rating on Class F Notes ------------------------------------------------------------ S&P Global Ratings assigned its rating to the class A1-p2 prime residential mortgage-backed securities (RMBS) issued by Permanent Custodians Ltd. as trustee of Pepper I-Prime 2019-1 Trust. At the same time, S&P affirmed its ratings on seven classes of notes and withdrew our rating on the A1-u1 notes. Pepper I-Prime 2019-1 Trust is a securitization of prime residential mortgages originated by Pepper Homeloans Pty Ltd. (Pepper). The class A1-p2 notes proceeds, together with the balance of the redemption fund, will be applied to redeem the class A1-u1 notes on their legal final maturity date of April 14, 2020. The class A1-p2 notes are floating-rate pass-through notes with a legal final maturity of one year from the class A1-p2 notes issue date. The ratings reflect: -- S&P's view of the credit risk of the underlying collateral portfolio, including the fact that this is a closed portfolio, which means no further loans have been assigned to the trust after the closing date. As of March 31, 2020, the weighted-average loan-to-value ratio of the portfolio was about 72.9% and weighted average seasoning was 18 months. -- That loss of income for borrowers in the coming months due to the effects of COVID-19 will likely put liquidity strain on the transaction and upward pressure on mortgage arrears over the longer term. S&P has therefore applied a range of additional stresses in our analysis to assess each class of notes' sensitivity to liquidity stress, and the possibility of higher arrears. Loans more than 30 days in arrears make up 1.8% of the current balance, of which 0.7% are more than 90 days in arrears. Borrowers with COVID-19-related hardship applications comprise 1.7% of the current balance, with none of these loans currently more than 30 days in arrears. -- S&P's view that the credit support is sufficient to withstand the stresses we apply. This credit support comprises note subordination for each class of rated note and excess spread to the extent available. Subordination to the class A1-p2 and class A1-a notes was 25.66% as of the note payment date in April 2020. -- The availability of a yield-enhancement reserve, amortization reserve, and overcollateralization amount, which are all funded by excess spread to cover potential yield shortfalls and loss reimbursements and to repay principal on the notes at various stages of the transaction's term. -- The extraordinary expense reserve of A$250,000, which was funded by Pepper at closing, is available to meet extraordinary expenses. The reserve will be topped up via excess spread if drawn. -- S&P's expectation that the various mechanisms to support liquidity within the transaction, including a liquidity facility equal to 2.2% of the outstanding balance of the notes, and principal draws, are sufficient under our stress assumptions to ensure timely payment of interest. -- National Australia Bank Ltd. (NAB) as redemption facility provider. To the extent the class A1-p2 notes are not repaid on the legal final maturity date, the class AR-U notes will be issued to refinance the class A1-p2 notes. As redemption facility provider, NAB will subscribe to the class AR-U notes to the extent they are not subscribed for by other parties. S&P's rating on the class A1-p2 notes therefore is weak linked to that on the redemption facility provider. -- The counterparty exposure to Commonwealth Bank of Australia as bank account provider and NAB as liquidity facility provider. S&P Global Ratings acknowledges a high degree of uncertainty about the rate of spread and peak of the coronavirus outbreak. Some government authorities estimate the pandemic will peak about midyear, and we are using this assumption in assessing the economic and credit implications. S&P believes the measures adopted to contain COVID-19 have pushed the global economy into recession. As the situation evolves, S&P will update its assumptions and estimates accordingly. RATING ASSIGNED Pepper I-Prime 2019-1 Trust Class Rating A1-p2 A-1+ (sf) RATINGS AFFIRMED Pepper I-Prime 2019-1 Trust Class Rating A1-a AAA (sf) A2 AAA (sf) B AA (sf) C A (sf) D BBB (sf) E BB (sf) F B (sf) RATING WITHDRAWN Pepper I-Prime 2019-1 Trust Class Rating To Rating From A1-u1 NR A-1+ (sf) NR--Not rated. VIRGIN AUSTRALIA: Weighs Financial Options Amid Coronavirus Crisis ------------------------------------------------------------------ The Sydney Morning Herald reports that Virgin Australia has gone into a trading halt as its tries to restructure its crushing $5 billion debt and waits on the government to decide whether to bail the airline out. According to SMH, Australia's number two carrier has asked the federal government for a AUD1.4 billion loan to ensure it survives the coronavirus crisis, which has prompted it to ground almost its entire fleet. "Virgin Australia has requested a trading halt as it continues to consider ongoing issues with respect to financial assistance and restructuring alternatives," the company said in a statement on April 14, SMH relays. "This has arisen due to the unprecedented COVID-19 crisis which has particularly impacted the aviation sector." As well as holding out for government help, sources confirmed Virgin has appointed American investment bank Houlihan Lokey to try and restructure its debt load, SMH says. With almost no revenue coming in, Virgin's interest payments are a major drain on its remaining AUD900 million cash balance, which analysts estimate could last the company three to six months, according to SMH. SMH relates that options being considered include creditors swapping their debt for equity in the company which, with its market value at just AUD726 million, would wipe out Virgin's existing major shareholders. Virgin is 90 per cent owned by Singapore Airlines, Etihad Airways, the Chinese conglomerates HNA and Nanshan, and Richard Branson's Virgin Group, SMH discloses. According to the report, analysts said these investors are unlikely to come to Virgin's aid given their own financial woes caused by the pandemic. Virgin last week grounded all domestic flights until June 15, except a single Sydney-Melbourne return service running six days a week, the report discloses. The airline resumed some government-subsidised international flying last week. Around 8,000 of Virgin's 10,000 employees are stood down, while all pilots at its low-cost arm Tigerair and crew based in New Zealand will be made redundant, SMH notes. About Virgin Australia Brisbane, Queensland-based Virgin Australia is Australia's second-largest airline. It commenced services in 2000 as Virgin Blue, wholly owned by the Virgin Group. As reported in the Troubled Company Reporter-Asia Pacific, S&P Global Ratings, on March 26, 2020, lowered its issuer credit rating on Virgin Australia to 'CCC' from 'B-', and lowered its related issue ratings on the airline's debt to 'CCC-' from 'CCC+'. At the same time, S&P placed all ratings on CreditWatch with developing implications. Recovery ratings on the debt remain unchanged at '5'. S&P lowered its ratings on Virgin Australia to reflect its view that the company's cash outflow and liquidity pressures have intensified. This follows Virgin Australia's decision to temporarily ground 125 aircraft, reduce domestic capacity by 90%, as well as suspend international flights and Tigerair Australia in response to heightened government-led COVID-19-related restrictions. The airline will also defer certain supplier payments. =================== B A N G L A D E S H =================== DUTCH-BANGLA BANK: Moody's Affirms 'B1' LongTerm Issuer Ratings --------------------------------------------------------------- Moody's Investors Service has affirmed the long-term local and foreign currency deposit ratings of Dutch-Bangla Bank Limited and Eastern Bank Limited at B1. Moody's has also affirmed the Baseline Credit Assessments and adjusted BCAs of DBBL and EBL at b2. At the same time, Moody's has changed the outlooks for DBBL and EBL to negative from stable. RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The Bangladeshi banking system has been one of the sectors affected by the shock, especially given the persistent weaknesses in underwriting standards and high credit concentrations in large domestic corporates. Moody's regards the coronavirus outbreak as a social risk under its environmental, social and governance framework, given the substantial implications for public health and safety. Its action reflects the negative impact on DBBL and EBL of the breadth and severity of the shock, and the likely deterioration in these banks' asset quality and profitability. Following its action, all Moody's-rated banks in Bangladesh have negative outlooks. NEGATIVE OUTLOOK The negative outlooks on DBBL and EBL's ratings reflect Moody's expectation that the coronavirus outbreak could lead to higher problem loans. Profitability will also decrease due to higher credit provisions. The two banks have sizable exposures to the export-oriented ready-made garment and textile sectors, which have been disrupted by the coronavirus outbreak. The banks' exposures to other sectors such as retail, manufacturing and trade are also affected by the forced closure of businesses and domestic restrictions on people movement. The degree of negative impact will depend on the length of the disruption, which is uncertain at this point. AFFIRMATION OF BCAs The affirmation of DBBL's b2 BCA reflects the bank's strong funding and liquidity. DBBL is the market leader in transaction banking, supported by automated teller machine and agent banking networks that are the largest in the country. As a result, the bank enjoys strong access to sticky, low-cost current and savings accounts, which constituted more than 70% of customer deposits at September 30, 2019. The affirmation of EBL's b2 BCA reflects the bank's track record of good asset quality, as observed in its stable problem loan ratio for the past five years. The bank has also maintained prudent underwriting standards, with a focus on high quality corporates. MODERATE LEVEL OF GOVERNMENT SUPPORT Moody's continues to maintain a "Moderate" level of government support for DBBL and EBL, taking into consideration each bank's small market share, as well as the government's modest ability to support the banking system. This results in the incorporation of one-notch uplifts into the long-term deposit ratings of DBBL and EBL. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative outlooks, the BCAs and long-term ratings of DBBL and EBL are unlikely to be upgraded over the next 12-18 months. However, the outlooks could return to stable if the coronavirus situation stabilizes in Bangladesh and its major trading partners, or if the impact from the outbreak on asset quality is not as severe as Moody's currently anticipates. However, Moody's could downgrade the banks' BCA and long-term ratings if their asset quality deteriorates significantly. Weaker capitalization, declining profitability, or a further tightening of liquidity conditions would also pressure the BCAs and ratings. The principal methodology used in these ratings was Banks Methodology published in November 2019. Dutch-Bangla Bank Limited is headquartered in Dhaka, and reported total assets of BDT380.2 billion ($4.5 billion) at September 30, 2019. Eastern Bank Limited is headquartered in Dhaka, and reported total assets of BDT322.4 billion ($3.8 billion) at September 30, 2019. LIST OF AFFECTED RATINGS Issuer: Dutch-Bangla Bank Limited Adjusted Baseline Credit Assessment, Affirmed at b2 Baseline Credit Assessment, Affirmed at b2 Long-term Counterparty Risk Assessment, Affirmed at B1(cr) Short-term Counterparty Risk Assessment, Affirmed at NP(cr) Long-term Counterparty Risk Ratings (Foreign and Local Currency), Affirmed at B1 Short-term Counterparty Risk Ratings (Foreign and Local Currency), Affirmed at NP Long-term Issuer Ratings (Foreign and Local Currency), Affirmed at B1, outlook changed to Negative from Stable Short-term Issuer Ratings (Foreign and Local Currency), Affirmed at NP Long-term Deposit Ratings (Foreign and Local Currency), Affirmed at B1, outlook changed to Negative from Stable Short-term Deposit Ratings (Foreign and Local Currency), Affirmed at NP Outlook, Changed to Negative from Stable Issuer: Eastern Bank Limited Adjusted Baseline Credit Assessment, Affirmed at b2 Baseline Credit Assessment, Affirmed at b2 Long-term Counterparty Risk Assessment, Affirmed at B1(cr) Short-term Counterparty Risk Assessment, Affirmed at NP(cr) Long-term Counterparty Risk Ratings (Foreign and Local Currency), Affirmed at B1 Short-term Counterparty Risk Ratings (Foreign and Local Currency), Affirmed at NP Long-term Issuer Ratings (Foreign and Local Currency), Affirmed at B1, outlook changed to Negative from Stable Short-term Issuer Ratings (Foreign and Local Currency), Affirmed at NP Long-term Deposit Ratings (Foreign and Local Currency), Affirmed at B1, outlook changed to Negative from Stable Short-term Deposit Ratings (Foreign and Local Currency), Affirmed at NP Outlook, Changed to Negative from Stable ========= C H I N A ========= EHI CAR: Fitch Alters Outlook on 'B' LT IDR to Negative ------------------------------------------------------- Fitch Ratings has revised the Outlook on eHi Car Services Limited's Long-Term Issuer Default Rating to Negative, from Stable, and has affirmed the Long-Term IDR at 'B". The senior unsecured rating is also affirmed at 'B' with a Recovery Rating of 'RR4'. The Outlook revision reflects Fitch's expectation that eHi's coverage, leverage metrics and financial flexibility might deteriorate as a result of the disruption caused by the coronavirus pandemic. KEY RATING DRIVERS Upcoming Repayment Could Affect Liquidity: eHi has manageable near-term debt maturities and no immediate liquidity risk. However, 30% of its USD195 million syndicated loan facility, originally entered in 2018, will become due in 4Q20 as part of a scheduled instalment repayment. Fitch believes eHi will have sufficient liquidity to repay the instalment, but any repayment, without replacement with other long-term borrowings, could significantly affect eHi's liquidity position. Pandemic Adds to Covenant Uncertainty: The abrupt disruption caused by the coronavirus pandemic, which has led to a sharp drop in domestic business and tourism travel, has pressured eHi's business. eHi says the disruption is manageable; the company forecasts a 10%-15% fall in 1Q20 revenue, with business activity normalizing from 2Q20. However, Fitch believes the company may find it difficult to stay within some of its syndicated loan covenants if the recovery in demand is weaker than the company's expectation. Balancing Growth and Leverage: Fitch believes the company will carefully manage its fleet size in 2020 as it responds to demand disruption and manages its covenants requirements. However, eHi is likely continue to expand its fleet in the medium term, as it aims to enhance its market position in an expanding market. Fitch understands that eHi is considering alternative financing strategies, including onshore bond issuance and equity financing to help it juggle between bullet-debt refinancing, restrictive covenants and its growth ambition. DERIVATION SUMMARY eHi's ratings are supported by its leading market position as China's second-largest car rental company. However, it has a smaller operating scale and weaker financial profile than other Fitch-rated car rental operators, such as Localiza Rent a Car S.A. (BB/Stable), the leading rental car operator in Brazil. eHi also has smaller operating scale and higher capex requirement than China Grand Automotive Services Group Co., Ltd. (B+/Negative), the largest auto dealer in China. KEY ASSUMPTIONS Fitch's Key Assumptions Within its Rating Case for the Issuer: - 6% revenue CAGR in 2019-2022 (2019 estimate: 18%) - Average EBITDA margin of 43% in 2019-2022 (2019 estimate: 45%) - Capex declining to CNY0.9 billion in 2020 (2019 estimates: CNY1.9 billion) Recovery Rating Assumptions: Its recovery analysis is based on liquidation value, as it is higher than going-concern value. The liquidation value is derived from the value of eHi's vehicle fleet. eHi has a solid record in disposing of its used cars with minimal gain/loss from disposal, and there is a large and liquid market for used cars in China. Hence, Fitch believes the 70% advance rate is achievable and a fair assumption. The Recovery Rating assigned to eHi's senior unsecured debt is 'RR4' because, under Fitch's Country-Specific Treatment of Recovery Ratings criteria, China falls into the Group D of countries in terms of creditor friendliness. Recovery Ratings of issuers with assets in this group are capped at 'RR4'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: The Outlook on eHi's rating could be revised to Stable if the company is able to access the capital market to extend its debt maturity and stay within negative leverage and coverage guidelines over the next 12 months. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: eHi's rating could be downgraded should business recovery be slower than its expectations, which would lead to prolonged deterioration in revenue, margins and cash flow generation, such that leverage and coverage are higher than the negative guidelines for a sustained period. The negative guidelines include: - FFO net leverage, including accounts payable for vehicle purchases, sustained above 6.0x - Operating EBITDA/interest paid below 3x for a sustained period - Failure to improve its debt maturity profile within the next 12 months BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Refinancing Needs: eHi had readily available cash and cash equivalents of CNY0.4 billion (reported CNY1.6 billion) at end-2019, against short-term debt obligations of CNY1.3 billion (or CNY3.9 billion if payables for vehicles purchased are included). Fitch believes eHi has no immediate liquidity issues, but refinancing needs could become more pressing over the next 12 months. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). MGM CHINA: Moody's Confirms 'Ba3' Corp. Family Rating, Outlook Neg. ------------------------------------------------------------------- Moody's Investors Service confirmed the ratings of MGM Resorts International, including its Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating, and Ba3 rated senior unsecured notes. At the same time, Moody's confirmed the Ba3 rating on the senior unsecured notes of MGM China Holdings Limited. MGM's speculative-grade liquidity rating was downgraded to SGL-2 from SGL-1. The outlook is negative. The actions conclude the review for downgrade initiated on March 16, 2020. The confirmation of the company's Ba3 CFR reflects MGM's good liquidity, including sizeable cash balances, aided by revolver drawdowns, and the ability to withstand a meaningful but temporary cash burn from weakened operating performance and facility closures related to the coronavirus. Moody's expects earnings and credit metrics will weaken while operations in the U.S. and Macau are negatively affected by facility closures and reduced travel and leisure spending, but that earnings and credit metrics will improve when economic conditions recover. The negative outlook reflects the uncertain duration and recovery from the coronavirus-related earnings and cash flow pressure, which will lead to higher debt (from the revolver draw or other debt offerings) and leverage even when property earnings recover. Earnings will decline due to the disruption in casino visitation resulting from efforts to contain the spread of the coronavirus including recommendations from federal, state and local governments to avoid gatherings and avoid non-essential travel. These efforts include mandates to close casinos on a temporary basis. The negative outlook also reflects the negative effect on consumer income and wealth stemming from job losses and asset price declines, which will diminish discretionary resources to spend at casinos once this crisis subsides. MGM remains vulnerable to travel disruptions and unfavorable sudden shifts in discretionary consumer spending and the uncertainty regarding the timing of facility re-openings and the pace at which consumer spending at the company's properties will recover. Downgrades: Issuer: MGM Resorts International Speculative Grade Liquidity Rating, Downgraded to SGL-2 from SGL-1 Confirmations: Issuer: MGM China Holdings Limited Senior Unsecured Regular Bond/Debenture, Confirmed at Ba3 (LGD4) Issuer: MGM Resorts International Probability of Default Rating, Confirmed at Ba3-PD Corporate Family Rating, Confirmed at Ba3 Senior Unsecured Shelf, Confirmed at (P)Ba3 Senior Unsecured Regular Bond/Debenture, Confirmed at Ba3 (LGD4) Outlook Actions: Issuer: MGM China Holdings Limited Outlook, Changed to Negative from Rating Under Review Issuer: MGM Resorts International Outlook, Changed to Negative from Rating Under Review RATINGS RATIONALE MGM's Ba3 Corporate Family Rating reflects the meaningful earnings decline over the next few months expected from efforts to contain the coronavirus and the potential for a slow recovery once properties reopen. The rating is supported by MGM's large scale, a diversified presence on the Las Vegas Strip across multiple customer segments, a solid position within several regional markets, and its presence in the large Macau market with favorable long-term prospects. MGM is constrained by its concentration in Las Vegas, and exposure to the Macau gaming market that is experiencing volatility. MGM also faces ramp-up risk associated with recent resort developments - MGM Cotai (opened in Q1 2018) and MGM Springfield (opened in August 2018) and the redeveloped Park MGM (completed in December 2018) and the integration of the recent Empire City and MGM Northfield Park acquisitions. Moody's downgraded MGM's speculative-grade liquidity rating to SGL-2 from SGL-1 because of the expected decline in earnings and cash flow and increased risk of a covenant violation. As of the year ended December 31, 2019, MGM had cash of $2.3 billion on a consolidated basis. As of March 26, 2020, the company, excluding MGM China and MGM Growth Properties LLC, has $3.9 billion of cash and cash investment balances, including approximately $1.5 billion drawn under its revolving credit facility. Moody's estimates the company could maintain sufficient internal cash sources after maintenance capital expenditures to meet required annual amortization and interest requirements assuming a sizeable decline in annual EBITDA. The expected EBITDA decline will not be ratable over the next year and because EBITDA and free cash flow will be negative for an uncertain time period, liquidity and leverage could deteriorate quickly over the next few months. The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The gaming sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, the weaknesses in MGM's credit profile, including its exposure to travel disruptions and discretionary consumer spending have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions and MGM remains vulnerable to the outbreak continuing to spread. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on MGM of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS While not anticipated in the near term due to the current weak operating environment, ratings could be upgraded if: Consolidated debt/EBITDA is sustained below 5.0x, EBITDA/fixed charges (including interest, rent expense, etc.) remains above 2.0x; the company maintains sufficient liquidity to support both recourse and non-recourse subsidiaries; operating results of MGM China operations, including MGM Cotai, track to estimated levels and share repurchases are funded with asset sale proceeds or cash on hand rather than debt. The credit ratios required for an upgrade also takes into account that reported credit metrics may experience some variability due to the timing of new resort openings and the closing of the announced and potential acquisitions. Ratings could be downgraded if liquidity deteriorates or if Moody's anticipates MGM's earnings declines to be deeper or more prolonged because of actions to contain the spread of the coronavirus or reductions in discretionary consumer spending. If consolidated gross debt/ EBITDA is sustained above 6.0x, EBITDA/fixed charges declines below 1.75x or the company deviates materially from its financial policy goals, the ratings could be downgraded. MGM owns and operates casino resorts in Las Vegas, Nevada; Springfield, Massachusetts; and, through its majority ownership stake of MGM China Holdings Limited, the MGM Macau resort and casino and MGM Cotai, which opened in February 2018. MGM also owns 50% of CityCenter in Las Vegas and a majority stake in MGM Growth Properties LLC (MGP), a real estate investment trust formed in April 2016. MGM has entered into a long-term triple net master lease with MGP pursuant to which the company leases and operates 14 properties for MGP. Consolidated net revenue for the year ended December 31, 2019 was approximately $12.9 billion. The principal methodology used in these ratings was Gaming Industry published in December 2017. ================= H O N G K O N G ================= [*] HONG KONG: Brokers Shut at Record Pace on Falling Commissions ----------------------------------------------------------------- South China Morning Post reports that Hong Kong's small brokerages are closing at a record pace as falling commissions and higher technology and compliance costs drive them out of business, according to industry watchers. A total of 35 small brokers closed over the 12 months before the end of March, the fastest clip since records began in 2003, SCMP discloses citing data from Hong Kong's stock exchange. SCMP relates that the exodus has only accelerated in recent months. Fifteen brokers handed back their trading rights to the stock exchange in the first quarter, versus two in the same period last year. In all of 2019, 22 brokers shut down. Lower commission income, higher technology and compliance costs, stricter margin-financing rules as well as a drop in takeover interest from mainland buyers all contributed to the winnowing out of the world's most crowded brokerage market, according to SCMP. SCMP says many retail investors avoided investing in the market late last year amid anti-government protests. Heightened volatility and the coronavirus pandemic scared more away this year, said some small brokerage firms. "Many small brokers found their commissions were crushed and they could not make ends meet," SCMP quotes Gordon Tsui, chairman of the Hong Kong Securities Association, as saying. Compounding their pain, the Securities and Futures Commission has asked brokers to hire more compliance staff in recent years, bumping up operating costs, the report relays. The watchdog's clampdown on the relatively lucrative margin lending business from October has also pushed many brokers over the edge. "Many small brokers cannot earn enough from brokerage commissions, so they relied on interest income from lending to customers to trade stocks. The ruling slashed their last major source of income," Mr. Tsui, as cited by SCMP, said. SCMP says the inexorable rise of electronic trading has crushed brokerage commissions globally over the past decade. Portfolio managers down to retail investors can now buy and sell stocks digitally and expect to pay a fraction of what it would cost to ring a broker to place an order. Technology costs have also spiralled to the point that only the largest brokers can afford to build the platforms able to handle electronic trading, the report adds. ========= I N D I A ========= ALTECH INFRASTRUCTURE: CRISIL Moves B+ Ratings to Not Cooperating ----------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Altech Infrastructure Private Limited (AIPL) to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 8.4 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) Cash Credit 8.5 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) Letter of Credit 1.5 CRISIL A4 (ISSUER NOT COOPERATING; Rating Migrated) Proposed Cash 1 CRISIL B+/Stable (ISSUER NOT Credit Limit COOPERATING; Rating Migrated) Proposed Long Term .41 CRISIL B+/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Rating Migrated) Term Loan .19 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with AIPL for obtaining information through letters and emails dated March 2, 2020 and March 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 AIPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on AIPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of AIPL to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Incorporated in 2006 and promoted by Mr Anil Kumra and his sons, Mr Rohit Kumra and Mr Amit Kumra; AIPL is engaged in the fabrication business. Unit in Bhiwadi, Rajasthan, has capacity of 2,600 tonne per month. ARVEE LABORATORIES: CRISIL Keeps B- Rating in Not Cooperating ------------------------------------------------------------- CRISIL said the ratings on bank facilities of Arvee Laboratories (India) Limited (ALPL) continues to be 'CRISIL B-/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 5.50 CRISIL B-/Stable (ISSUER NOT COOPERATING) Proposed Long Term 4.44 CRISIL B-/Stable (ISSUER NOT Bank Loan Facility COOPERATING) Term Loan 4.06 CRISIL B-/Stable (ISSUER NOT COOPERATING) CRISIL has been consistently following up with ALPL for obtaining information through letters and emails dated March 13, 2020 and March 18, 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 ALPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on ALPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of ALPL continues to be 'CRISIL B-/Stable Issuer not cooperating'. ALPL, incorporated in 2012, is promoted by Mr. Shalin Bharat Chokshi and Mr. Sudhakarbhai Chhotabhai Patel. The company manufactures polymer modifiers, drug intermediaries, and contrast media intermediaries used in the textile, pharmaceutical, fertiliser, and other industries. Its facility is in Ahmedabad, Gujarat. ASSOCIATED CERAMICS: CRISIL Cuts Rating on INR3cr Loan to B+ ------------------------------------------------------------ CRISIL has revised the ratings on bank facilities of Associated Ceramics Limited (ACL) to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 6 CRISIL A4 (ISSUER NOT COOPERATING; Revised from 'CRISIL A4+ ISSUER NOT COOPERATING') Cash Credit 3 CRISIL B+/Stable (ISSUER NOT COOPERATING; Revised from 'CRISIL BB-/Stable ISSUER NOT COOPERATING') CRISIL has been consistently following up with ACL for obtaining information through letters and emails dated March 13, 2020 and March 18, 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 ACL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on ACL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of ACL revised to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. Incorporated in 1970, ACL manufactures refractory materials that are used in lining furnaces, kilns, fireboxes, and fireplaces. BIRESHWAR COLD: CRISIL Reaffirms B+ Rating on INR5.5cr Loan ----------------------------------------------------------- CRISIL has reaffirmed its rating on the long-term bank facilities of Bireshwar Cold Storage Private Limited (BCSPL) at 'CRISIL B+/Stable'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 5.5 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 2.55 CRISIL B+/Stable (Reaffirmed) Working Capital Facility .8 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect the company's exposure to intense competition and stringent regulations, and weak financial risk profile. These weaknesses are partially offset by the extensive experience of BCSPL's promoters in the cold storage business in West Bengal (WB). Key Rating Drivers & Detailed Description Weaknesses: * Exposure to risks arising from intense competition and stringent regulations: The potato cold storage industry in West Bengal is regulated by the West Bengal Cold Storage Association, and rental rates are fixed by the state Department of Agricultural Marketing. Fixed rentals will continue to limit players' ability to earn profit, based on their respective strengths and geographical advantages. The intense competition from other cold storage units in the vicinity forces them to offer discounts to ensure healthy utilisation of storage capacity. * Weak financial risk profile: Networth is average and gearing moderate at INR2.38 crore and 1.9 times, respectively, as on March 31, 2019. Networth has improved marginally, aided by better accretion to reserve. Loans extended to farmers, especially towards the fiscal-end, kept gearing high. Debt protection metrics are likely to remain weak: interest coverage and net cash accrual to total debt ratios were 1.46 times and 0.07 time, respectively, in fiscal 2019. * Vulnerability to delay in payments by farmers because of adverse market conditions: Cold storages contract debt from banks, backed by the West Bengal government's initiative to support agriculture, and extend it to the farmers as financial assistance. Repayment of loans depend on timely realisation of payments by the farmers, but the primary responsibility to service loans lies with cold storages. However, payments are often stretched. In case of adverse market conditions, when agricultural commodity prices fall significantly, the farmers do not lift their stock to save on rental charges, and tend to default on loans, which puts pressure on the profitability of cold storages. Consequently, cold storages have cash flow mismatches and bank liabilities. Though BCSPL has not faced any such issue in the recent past, the company is vulnerable to downturns, given its presence in the agricultural industry. Strength: * Extensive experience of the promoters: The three-decade-long experience of the promoters in the cold storage industry and their longstanding association with farmers and traders have helped the company to ensure healthy utilisation of storage capacity. Liquidity Stretched Cash accrual was adequate to cover incremental working capital requirement as term debt was fully repaid in fiscal 2019. However, bank limit utilisation remains high during the peak season (March-April). Current ratio remained moderate at around 1 time as on March 31, 2019. Outlook: Stable CRISIL believes BCSPL will continue to benefit from the extensive experience of its promoters in the cold storage business. Rating Sensitivity factors Upward factors * Increase in rental rates and optimum capacity utilisation resulting in ramp-up in revenue, while operating margin exceeds 30% * Improvement in financial risk profile, especially liquidity Downward factors * Decline in rental rates and dip in capacity utilisation weakening business risk profile * Deterioration in interest coverage ratio to less than 1 time * Delay in payments by farmers BCSPL was set up in 1978 in Bankura, West Bengal by Kolkata-based Pal family. The company provides cold storage facilities to potato farmers and traders and also trades in potatoes. CHIRAG GOEL: CRISIL Withdraws 'B' Rating on INR5cr Cash Loan ------------------------------------------------------------ CRISIL has withdrawn its rating on the bank facilities of Chirag Goel Enterprises Private Limited (CGEPL) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 5 CRISIL B/Stable (ISSUER NOT COOPERATING; Migrated from 'CRISIL B/Stable'; Rating Withdrawn) Inland/Import 5 CRISIL A4 (ISSUER NOT Letter of Credit COOPERATING; Migrated from 'CRISIL A4'; Rating Withdrawn) CRISIL has been consistently following up with CGEPL for obtaining information through letters and emails dated March 23, 2020 and March 27, 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 CGEPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for CGEPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of CGEPL to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of CGEPL on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. CGEPL, incorporated in 2006 and based in Mumbai, is promoted by Mr Dayakishan Goel. It trades in non-ferrous metals and copper pancake coils and pipes. It has a warehouse at Bhiwandi in Thane. GAMA INFRAPROP: CRISIL Withdraws D Rating on INR564.90cr Loan ------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Gama Infraprop Private Limited (GIPL) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 18 CRISIL D (ISSUER NOT COOPERATING; Rating Withdrawn) Funded Interest Term Loan 19.35 CRISIL D (ISSUER NOT COOPERATING; Rating Withdrawn) Term Loan 564.90 CRISIL D (ISSUER NOT COOPERATING; Rating Withdrawn) CRISIL has been consistently following up with GIPL for obtaining information through letters and emails dated February 26, 2019, May 28, 2019 and February 12, 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 GIPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for GIPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has Continues the ratings on the bank facilities of GIPL to 'CRISIL D/CRISIL D Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of GIPL on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. GIPL is a special purpose vehicle floated by the RL Goyal group (RLG group) to develop a 225-megawatt power plant, using the combine cycle gas technology, near Kashipur, Uttarakhand. The company was incorporated in May 2010 with the purpose of developing and running the proposed power plant. Over the years, the RLG group has established itself in the chemicals industry by setting up a number of manufacturing units for producing chemicals, such as acetic anhydride, mono-chloroacetic acid, acetanilide, power alcohol, aniline oil, and nitro benzene. Luna Chemical Industries Pvt Ltd (rated 'CRISIL BB/Stable/CRISIL A4+'), GD Dyestuff Industries Ltd ('CRISIL BB/Stable/CRISIL A4+'), and Jay Jee Enterprises ('CRISIL BB/Stable/CRISIL A4+') are also part of the RLG group. The group's operations are managed by Mr R L Goyal and his sons, Mr Rahul Goyal and Mr Raman Goyal. GAURAV LAND: CRISIL Withdraws 'B' Rating on INR18.5cr Term Loan --------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Gaurav Land Developers and Colonizers Private Limited (GLDCPL) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 6.5 CRISIL A4 (ISSUER NOT COOPERATING; Migrated from 'CRISIL A4'; Rating Withdrawn) Term Loan 18.5 CRISIL B/Stable (ISSUER NOT COOPERATING; Migrated from 'CRISIL B/Stable'; Rating Withdrawn) CRISIL has been consistently following up with GLDCPL for obtaining information through letters and emails dated March 23, 2020 and March 27, 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 GLDCPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for GLDCPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of GLDCPL to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of GLDCPL on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Incorporated in 2015, Ludhiana-based GLDCPL is currently setting up a residential-cum-shopping complex on the Chandigarh-Ludhiana highway. The residential project is under the name of Garav Basera under Pradhan Mantri Awas Yojna. Fiscal 2020 will be the company's first year of operations. Mr Balraj Garg, Mr Vidhu Mangal, and Mr Gaurav Gupta are the promoters. GAURAVH WINES: CRISIL Withdraws 'B' Rating on INR8cr Cash Loan -------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Gauravh Wines Private Limited (GWPL) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 8 CRISIL B/Stable (ISSUER NOT COOPERATING; Migrated from 'CRISIL B/Stable'; Rating Withdrawn) Proposed Long Term 2 CRISIL B/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Migrated from 'CRISIL B/Stable'; Rating Withdrawn) CRISIL has been consistently following up with GWPL for obtaining information through letters and emails dated March 23, 2020 and March 27, 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 GWPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for GWPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of GWPL to 'CRISIL B/Stable Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of GWPL on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. GWPL was set up as a partnership firm in 2007 and reconstituted as a private-limited company in 2008; it was taken over by Malhotra and family in 2009. The Ludhiana (Punjab)-based company trades in Indian-made foreign liquor through wholesale distribution. GWPL is owned by Mr Deep Malhotra, Mr Gaurav Malhotra, and Mr Gautam Malhotra. H M STEELS: CRISIL Withdraws 'D' Rating on INR26cr Cash Loan ------------------------------------------------------------ CRISIL has withdrawn its rating on the bank facilities of H M Steels Limited (HMSL) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 26 CRISIL D (ISSUER NOT COOPERATING; Rating Withdrawn) Funded Interest 5.51 CRISIL D (ISSUER NOT Term Loan COOPERATING; Rating Withdrawn) Letter Of Guarantee 2 CRISIL D (ISSUER NOT COOPERATING; Rating Withdrawn) Working Capital 40 CRISIL D (ISSUER NOT Term Loan COOPERATING; Rating Withdrawn) CRISIL has been consistently following up with HMSL for obtaining information through letters and emails dated December 31, 2017 and May 31, 2018, February 26, 2019 and August 16, 2019 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 HMSL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for HMSL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has Continues the ratings on the bank facilities of HMSL to 'CRISIL D/CRISIL D Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of HMSL on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. HMSL, incorporated in 1999, manufactures ingots, ERW pipes, MS bars, and galvanised iron pipes at its plant in Sirmour (Himachal Pradesh); it sells in the domestic market. It is managed by Mr. Megh Raj Garg, Mr. Rajnish Bansal, Mr. Pankaj Bansal, and Mr. Ashok Kumar Singla. IKF TECHNOLOGIES: CRISIL Keeps B- on INR7cr Debt in Not Cooperating ------------------------------------------------------------------- CRISIL said the ratings on bank facilities of IKF Technologies Limited (IKF) continues to be 'CRISIL B-/Stable/CRISIL A4 Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 2 CRISIL A4 (ISSUER NOT COOPERATING) Cash Credit 7 CRISIL B-/Stable (ISSUER NOT COOPERATING) Term Loan 2 CRISIL B-/Stable (ISSUER NOT COOPERATING) CRISIL has been consistently following up with IKF for obtaining information through letters and emails dated March 13, 2020 and March 18, 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 IKF, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on IKF is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of IKF continues to be 'CRISIL B-/Stable/CRISIL A4 Issuer not cooperating'. IKF based in Kolkata (West Bengal) was incorporated in 2000 as IKF Software.com Ltd to carry on the software development business and provide IT-enabled services. The company got its present name in 2001 following the initial public offering in 2001. In 2008, it got Internet Service Provider Category 'A' license from the Department of Telecom, Government of India to provide internet services across India. INTERNATIONAL TRADING: CRISIL Withdraws D Ratings on INR15.7 Loans ------------------------------------------------------------------ CRISIL has withdrawn its rating on the bank facilities of International Trading Company (ITC) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 12.7 CRISIL D (ISSUER NOT COOPERATING; Migrated from 'CRISIL D'; Rating Withdrawn) Term Loan 3.0 CRISIL D (ISSUER NOT COOPERATING; Migrated from 'CRISIL D'; Rating Withdrawn) CRISIL has been consistently following up with ITC for obtaining information through letters and emails dated March 18, 2020 and March 24, 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 ITC. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for ITC is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of ITC to 'CRISIL D Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of ITC on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Set up in 2004, ITC, a partnership firm, manufactures knitted garments for both the domestic and international markets at its facility in Salem, Tamil Nadu. LODHI RAJPOOT: CRISIL Assigns B+ Rating to INR4.40cr Cash Loan -------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-term bank facilities of Lodhi Rajpoot Ice And Cold Storage Private Limited (LRICS). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 4.40 CRISIL B+/Stable (Assigned) Term Loan 1.65 CRISIL B+/Stable (Assigned) The rating reflects LRICS's modest scale of operations, and exposure to risks from dependence on weather conditions, seasonal nature of business and investments in group companies. These weaknesses are partially offset by the extensive experience of promoters in the agro-commodity business and the favourable location of the cold storage unit. Key Rating Drivers & Detailed Description Weaknesses: * Modest scale of operation: Intense competition in the diversified support services industry will continue to restrict LRICS's scalability and operating flexibility. * Exposure to risks related to dependence on weather conditions and seasonal nature of business: The agro-commodity industry is seasonal in nature, as players are dependent on availability of raw materials, which also varies with different harvesting periods. Potato is mainly a winter crop, and the production highly depends on vagaries of nature. Lower output of potato can adversely impact rental collections, as the cold storage units collects rent based on the quantity of produce stored. * Exposure to group companies: Investment of INR1 crore in group companies, as on March 31, 2019, formed 25% of LRICS' networth. CRISIL believes any further exposure to group companies, impinging the company's own cash accrual, cann weaken liquidity, and hence, will remain a rating sensitivity factor. Strengths: * Extensive experience of the promoters: The two-decade-long experience of the promoters in the diversified support services industry, their strong understanding of local market dynamics, and established relationships with suppliers and customers, will continue to support the business risk profile. * Favourable location of cold storage unit: Proximity of cold storage to the potato producing belt of Shikohabad (Uttar Pradesh), along with the diverse range of products stored, should help LRICS achieve optimum capacity utilisation over the medium term. Liquidity Stretched Liquidity remains stretched, marked by full bank limit utilisation. However, net cash accrual is likely to be around INR50 lakh, against the maturing debt of INR25 lakh in fiscals 2020 and 2021. Unsecured loans from promoters (around INR13 lakh as on March 31, 2019) also aid liquidity. Outlook: Stable CRISIL believes LRICS will continue to benefit from extensive experience of its promoter in the agro products business, and established relationships with clients. Rating Sensitivity factors Upward Factors * Growth in revenue by over 20% * Better working capital management, aiding liquidity Downward Factors * Drop in revenue by over 10%, leading to tightly matched cash accrual against the maturing debt * Any unanticipated, debt-funded capital expenditure, exerting pressure on liquidity LRICS, which was set up in 1996, operates a cold storage facility for potatoes, for local farmers in Shikohabad (Uttar Pradesh), with capacity of 2 lakh tonnes. Daily operations are managed by promoters, Mr Mohan Datt and Mr Ram Gopal. MUTHOOT FINANCE: Moody's Affirms Ba2 CFR & Alters Outlook to Neg. ----------------------------------------------------------------- Moody's Investors Service has taken rating actions on three Indian non-banking financial companies: - Hero FinCorp Limited's local and foreign currency Baa3 issuer rating is placed under review for downgrade - India Infoline Finance Limited's Ba3 Corporate Family Rating (CFR), (P)Ba3 foreign and local currency senior secured MTN program ratings, and Ba3 senior unsecured debt rating are placed under review for downgrade - Muthoot Finance Limited's Ba2 CFR is affirmed and its outlook changed to negative from stable RATINGS RATIONALE The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, volatile oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The Indian NBFC industry has been affected given disruptions to India's economic activity from the coronavirus outbreak, which will weaken these companies' credit profiles. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Its action reflects the impact on Hero FinCorp, India Infoline Finance and Muthoot of the breadth and severity of the shock, and the deterioration in credit quality it has triggered. "We expect the asset quality of these three companies to deteriorate on the back of rising loan delinquencies and defaults, as some customers and businesses will struggle with payments given declining earnings due to the 21-day nationwide lockdown across India," says Alka Anbarasu, a Moody's Vice President and Senior Credit Officer. Although Reserve Bank of India's 3-month loan repayment moratorium will help borrowers without affecting NBFCs' asset quality classifications, it will also slow the pace at which loan balances are reduced, or even foreclosed on, which in turn will result in some loans performing more poorly than they otherwise would have. However, the negative effects of the RBI's measures are likely to be significantly offset by the positive macroeconomic effects resulting from the stimulus due to the loan repayment moratorium, which is designed to boost consumer confidence and spending. The loan repayment moratorium may also support the value of the underlying loans, which would otherwise fall if all banks and NBFCs pursue strict repayment terms during times of economic stress, such as now. That said, the deeper and broader the economic slowdown in India's growth, the more these companies will face asset quality issues. "Despite these risks, we expect Muthoot's asset quality to perform better than the other two companies given its focus on lending against gold jewelry, which is supported by highly liquid collateral, the value of which has appreciated in the past year," adds Anbarasu. During the loan moratorium period, the liquidity of the three companies will worsen as loan collections decline. Furthermore, their modest balance sheet liquidity offers limited support if loan collections remain at materially lower levels once the moratorium is lifted. While these companies have been able to attract new loans and roll forward maturing obligations from Indian banks, increasing risk aversion amongst Indian banks, especially after RBI imposed a moratorium on Yes Bank Limited (Caa1 positive, ca), as well as global financial sector volatility, will result in a more challenging funding environment. Furthermore, in the case of India Infoline Finance, the moratorium on debt repayments can affect its ability to conduct loan assignments and securitization, which have been a source of immediate liquidity since the middle of 2018. Loan assignment refers to the outright sale of loans to banks. The other two companies have not conducted any loan assignments or securitizations. The profitability of the three companies will also come under pressure because of lower revenues, higher credit charges and higher cost-to-income ratios as business activity declines. That said, capital remains a key credit strength for the three companies. Moody's expects the companies' capital reserves to largely remain stable, or decline modestly, as the companies look to conserve liquidity and avoid expanding balance sheets, until funding conditions normalize. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Hero FinCorp: Given the review for downgrade, an upgrade is unlikely for Hero Fincorp in the near term. However, the outlook could return to stable if the company's asset quality and profitability remain stable over the next few quarters. A substantial capital raise that improves the company's loss absorbing buffer can also help stabilize the rating. Moody's could downgrade the company's ratings if (1) there is a material deterioration in its asset quality, which leads to more pressure on its profitability, and/or (2) its funding and liquidity profile deteriorates. Hero FinCorp's Baa3 issuer ratings is three notches higher than its standalone assessment of ba3, reflecting Moody's assumption of a very high likelihood of support from its key shareholder, Hero MotoCorp Limited (HMCL), in times of need. Any change to Moody's expectation of support from HMCL will also lead to pressure on Hero FinCorp's rating. Muthoot: Given the negative outlook, an upgrade is unlikely for Muthoot Finance in the near term. However, the outlook could return to stable if the company's solvency and liquidity remain stable over the next few quarters. Muthoot's ratings could be downgraded if the company's funding and liquidity profile materially deteriorates during the next 12-18 months. India Infoline Finance: Given the review for downgrade, an upgrade is unlikely for India Infoline Finance in the near term. However, the outlook could return to stable if the company's solvency and liquidity remain stable over the next few quarters. Moody's could downgrade India Infoline Finance's ratings if (1) there is a material deterioration in its asset quality, which leads to more pressure on its profitability, and/or (2) its funding and liquidity profile deteriorates. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. Headquartered in New Delhi, Hero FinCorp Limited reported total assets of INR 229 billion at September 30, 2019. Headquartered in Mumbai, India Infoline Finance Limited reported total assets of INR 312 billion at December 31, 2019. Headquartered in Kochi, Muthoot Finance Limited reported total assets of INR 498 billion at December 31, 2019. LIST OF AFFECTED RATINGS: On Review for Downgrade: Issuer: Hero FinCorp Limited Issuer Rating (Foreign Currency and Local Currency), Placed on Review for Downgrade, currently Baa3 Issuer: India Infoline Finance Limited Corporate Family Rating, Placed on Review for Downgrade, currently Ba3 Senior Secured Medium-Term Note Program (Foreign Currency and Local Currency), Placed on Review for Downgrade, currently (P)Ba3 Senior Secured Regular Bond/Debenture (Foreign Currency), Placed on Review for Downgrade, currently Ba3 Affirmations: Issuer: Muthoot Finance Limited Corporate Family Rating, Affirmed at Ba2 Outlook Actions: Issuer: Hero FinCorp Limited Outlook, changed to Rating Under Review from Negative Issuer: India Infoline Finance Limited Outlook, changed to Rating Under Review from Stable Issuer: Muthoot Finance Limited Outlook, changed to Negative from Stable OSM PROJECTS: CRISIL Withdraws B+ Rating on INR9.9cr Cash Loan -------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of OSM Projects Private Limited (OSMPL) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 9.9 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Withdrawn) Letter Of Guarantee 8.0 CRISIL A4 (ISSUER NOT COOPERATING; Rating Withdrawn) Term Loan 0.1 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Withdrawn) CRISIL has been consistently following up with OSMPL for obtaining information through letters and emails dated May 30, 2019, August 9, 2019 and August 13, 2019 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 OSMPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for OSMPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has Continues the ratings on the bank facilities of OSMPL to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of OSMPL on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Established in 2000 as a proprietorship firm by Mr Surender Sharma, OSMPL was reconstituted as a private limited company in 2004. The company mainly executes turnkey projects in ash handling, material handling, and coal handling systems, and provides operation and maintenance service for power, sugar, cement, paper, and other process industries. Its manufacturing facilities are in Kot, Uttar Pradesh, and Sikri, at Faridabad, Haryana. P KRISHNA PILLAI: CRISIL Withdraws B+ Rating on INR8cr LT Loan -------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of P Krishna Pillai Memorial Printing and Publishing Company Private Limited (PKP) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Long Term Loan 8 CRISIL B+/Stable (ISSUER NOT COOPERATING; Migrated from 'CRISIL B+/Stable'; Rating Withdrawn) CRISIL has been consistently following up with PKP for obtaining information through letters and emails dated March 23, 2020 and March 27, 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 PKP. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for PKP is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of ABCF to 'CRISIL B+/Stable Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of PKP on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Established in 1984, PKP is engaged in printing and publishing activities. It is based out of Trivandrum and prints the Trivandrum edition of the popular Malayalam newspaper, Deshabhimani. Day to day operations are managed by managing director, Mr. Thomas Joseph Kollamparambil. PACIFIC CYBER: CRISIL Lowers Rating on INR1cr Loan to B+ -------------------------------------------------------- CRISIL has downgraded its rating on long-term bank facilities of Pacific Cyber Technology Private Limited (PCTL) to 'CRISIL B+/Stable' from 'CRISIL BB-/Negative'. The short-term rating has been reaffirmed at 'CRISIL A4'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 19 CRISIL A4 (Reaffirmed) Proposed Long Term 1 CRISIL B+/Stable (Downgraded Bank Loan Facility from 'CRISIL BB-/Negative') The downgrade reflects weakening in PCTL's business and financial risk profiles on account of industrial slowdown resulting in dismal order flow, with revenue expected to fall by around 60% in fiscal 2020 as compared to previous fiscal. Moreover, operating profitability is expected to decline below 1% in fiscal 2020 from 1.2% in fiscal 2019 on account of moderation in prices. As a result, accrual shall more than halve to INR5.8 - INR6 crores in fiscal 2020 from around INR16.66 crores in fiscal 2019. Additionally, in the wake of ongoing corona virus pandemic, the business activities of PCTL will continue to remain under pressure, as its products are entirely imported. Revenue is expected to decline sharply in the next quarter; this could negatively impact the business and liquidity risk profiles of the company. Furthermore, the financial risk profile should remain under pressure over the medium term, due to subdued profitability in current fiscal. The ratings continue to reflect PCTPL's below-average financial risk profile and large working capital requirement. These weaknesses are partially offset by the extensive experience of the promoters in the electronic manufacturing services industry and their funding support. Analytical Approach Unsecured loans of INR8.59 crore provided by the promoters as on March 31, 2019, have been treated as debt. Key Rating Drivers & Detailed Description Weaknesses * Below-average financial risk profile: Total outside liabilities to tangible net worth was high at 132.77 times as on March 31, 2019, increasing from 32.5 times a year earlier due to low net worth of INR9.70 crores as on March 31, 2019. Debt protection metrics are moderate, indicated by interest coverage and net cash accrual to total debt ratios of 12 times and 1.44 times, respectively, in fiscal 2019. The financial risk profile is expected to weaken over the medium term due expected PAT losses in fiscal 2020. * Low operating margin: The margin in the business is low due to limited value addition. The margin of the company has been at 0.2-1.2% in the past two fiscals. A very low net margin leaves cash accrual highly vulnerable to changes in operating cost. Any revision in terms with vendors or pressure to enhance margin sharing with the customer network amid intensifying competition will remain a key monitorable. * Large working capital requirement: The electronic manufacturing services industry is inherently working capital-intensive. Gross current assets were high at 229 days as on March 31, 2019, driven by sizeable inventory of 74 days and stretched receivables of 135 days. Strength * Extensive experience of the promoters: The four-decade-long experience of the promoters, their keen insight into the industry dynamics, and healthy relationships with customers should continue to support the business risk profile. Liquidity Stretched The liquidity is stretched due to expected subdued profitability in fiscal 2020 and fiscal 2021. Further, with absence of any working capital limits, the company relied on cash accrual to support its working capital requirements. The accruals are expected at just above INR6 crore over fiscal 2020 and fiscal 2021. Current ratio was low at 0.93 time on March 31, 2019. The liquidity however is partially supported by fund infusion by promoters (Rs. 8.59 crores as on March 31, 2019) to meet its working capital requirements and is expected to remain in the company over medium term. Outlook: Stable CRISIL believes PCTL will continue to benefit from its healthy relationships with customers. Rating Sensitivity Factors Upward factors * Sustained improvement in scale and sustained operating margin above 3%, leading to higher cash accruals. * Improved working capital management, indicated by gross current assets of 150 days. Downward factors * Decline in scale of operations leading to further fall in revenue and profitability margin below 0.8%, resulting in reduced net cash accruals. * Substantial increase in the working capital requirement weakening liquidity and the financial risk profile. PCTL, incorporated in December 2015, is a joint venture (JV) in the business of providing electronic manufacturing services (contract manufacturing) to original equipment manufacturers of telecommunication equipment, that is, mobile phones, tablets, adapters, power banks, battery packs, USB dongles/3G/LTE hotspot/routers, wearables, and virtual reality devices. In the JV, Mumbai-based Mr Rakesh Garodia and his family members are 26% partners, while the Hong-Kong-based Chiva group hold the remaining 74%. SARAVANA HI-TECH: CRISIL Reaffirms B+ Rating on INR6cr Loan ----------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long-term bank facilities of Sri Saravana Hi-Tech Agro Foods (SSHAF). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 6 CRISIL B+/Stable (Reaffirmed) Long Term Loan 1.5 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 1 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect SSHAF's modest scale of operations in an intensely competitive segment, large working capital requirements and below-average financial risk profile. These weaknesses are partially offset by the extensive experience of its partners. Key Rating Drivers & Detailed Description Weaknesses: * Modest scale of operations in an intensely competitive segment: The modest scale of operations with revenue of INR33.83 crore limits pricing power in the highly fragmented and intensely competitive rice mill industry. The industry is highly competitive comprising both organised as well as unorganised players catering to regional demand, * Large working capital requirement: Operations remain capital intensive with gross current assets (GCAs) at 181 days as on March 31, 2019 on account of large inventory of 133 days and moderate receivables of 50 days. However, payables of 119 days support working capital. * Below-average financial risk profile: Debt protection metrics is modest marked Interest coverage ratio of 1.66 times and net cash accrual to adjusted debt ratio of 0.05 time in Fiscal 2019. Networth is also modest at 5.32 crore while the gearing is moderate at 1.69 times as on 31st March 2019. Strength: * Extensive experience of the partners: The partners' experience of around three decades and healthy relationships with suppliers and customers should continue to support the business. Liquidity Stretched Fund-based limit of INR6 crore was utilised 95% on an average in the 12 months through December 2019. With the completion of repayment obligation in fiscal 2020, cash accrual expected at INR0.9 to 1.2 crore will aid liquidity and aid any incremental working capital requirement. Outlook: Stable CRISIL believes SSHAF will continue to benefit from the extensive experience of its partners. Rating Sensitivity factors Upward factors * Increase in revenue or improvement in operating margin leading to cash accruals of more than INR1 crore. * Improvement in working capital cycle. Downward factors * Decline in profitability or de-growth in revenue * Increase in working capital requirements leading to GCAs of more than 200 days thus weakening the financial risk profile, especially liquidity. Set up in 2013 as a partnership firm by Mr M Rajendran and his family members, SSHAF processes paddy into rice. SARAVANA HOSPITAL: CRISIL Hikes Rating on INR5.08cr Loan to B- -------------------------------------------------------------- CRISIL has upgraded its rating on the bank facilities of Saravana Hospital Private Limited (SHPL) to 'CRISIL B-/Stable' from 'CRISIL D'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit .6 CRISIL B-/Stable (Upgraded from 'CRISIL D') Term Loan 5.08 CRISIL B-/Stable (Upgraded from 'CRISIL D') The upgrade reflects timely debt servicing over the past six months, supported by improved liquidity due steady scale of operations and support from the promoters. The rating reflects a modest scale of operations with geographic concentration in revenues and weak financial risk profile. These weaknesses have been partially offset by the extensive experience of the promoters. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operation and geographic concentration in revenue: Intense competition continues to constrain scalability: revenue estimated at around INR7 crore in fiscal 2020. This, in turn, limits operating flexibility. Furthermore, operations are localised, compared with other corporate hospitals, such as Apollo Hospitals Enterprise Ltd (rated 'CRISIL AA/FAA+/Stable/CRISIL A1+'). This renders entities in the segment susceptible to the dynamics of a single market. * Weak financial risk profile: Financial risk profile is weak. Networth was modest at INR5 crore as on March 31, 2019, but are expected to improve with the steady accretion to reserves over the medium term. Further debt protection metrics is modest, with interest coverage and net cash accruals to total debt at 1.69 times and 0.07 times as on March 31, 2019.TOLTNW was at 1.08 times as on March 31, 2019 and is expected to improve with the repayment of loans and in the absence of any major debt-funded capital expenditure over the medium term. Strength * Extensive experience of the promoters: Benefits from the promoters' experience of over 2 decades, and their sound understanding of market dynamics should continue to support business risk profile. Liquidity Poor Liquidity is weak. Net cash accruals in the range of INR0.5 ' 1 crore over the medium term, will remain insufficient to meet the maturing debt obligations at INR1.02 crore during the corresponding period. Nevertheless, promoter funding support to bridge this gap between accruals and repayments. Unsecured loans stood at INR0.32 crores as on March 31, 2019. The sanctioned bank limits of INR0.60 crores were utilised on an average of 97% over the 12 months through February 2020. Outlook: Stable CRISIL believes SHPL will continue to benefit from the liquidity support from its promoters. Rating Sensitivity Factors Upward Factors * Sustained improvement in scale of operations by 25% and break-even at operating margin level, leading to higher cash accruals * Improvement in debt protection metrics Downward Factors * Decline in operating profitability by over 200 basis point * Reduced support from promoters for meeting liquidity requirements * Delay in repayment obligations. Incorporated in 2008, SHPL operates a 65-bed hospital in Salem (Tamil Nadu). It is owned and managed by Dr. R. Ravichandran, Dr S. Ashok and Dr. K. Murugesan. SARVODAYA MARKETING: CRISIL Migrates B+ Rating to Not Cooperating ----------------------------------------------------------------- CRISIL has migrated the rating on bank facilities of Sarvodaya Marketing Private Limited (SMPL) to 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Overdraft 5 CRISIL B+/Stable (ISSUER NOT COOPERATING; Rating Migrated) CRISIL has been consistently following up with SMPL for obtaining information through letters and emails dated March 20, 2020 and March 27, 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 SMPL, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on SMPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Therefore, on account of inadequate information and lack of management cooperation, CRISIL has migrated the rating on bank facilities of SMPL to 'CRISIL B+/Stable Issuer not cooperating'. Incorporated in 1997, SMPL is engaged in residential real estate development. The day to day operations of the company are looked after by Mr. D. K. Singh. SREEMA MAHILA: CRISIL Keeps B+ on INR6cr Debt in Not Cooperating ---------------------------------------------------------------- CRISIL said the ratings on bank facilities of Sreema Mahila Samity (Sreema Mahila) continues to be 'CRISIL B+/Stable Issuer not cooperating'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 6 CRISIL B+/Stable (ISSUER NOT COOPERATING) CRISIL has been consistently following up with Sreema Mahila for obtaining information through letters and emails dated August 31, 2019 and February 28, 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 Sreema Mahila, which restricts CRISIL's ability to take a forward looking view on the entity's credit quality. CRISIL believes information available on Sreema Mahila is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower'. Based on the last available information, the ratings on bank facilities of Sreema Mahila continues to be 'CRISIL B+/Stable Issuer not cooperating'. Sreema Mahila, set up in 1972 as a not-for-profit organisation, is primarily engaged in education and healthcare, poverty alleviation, disaster management, and rural development, especially among women in rural West Bengal (WB). It operates in four districts'Nadia, North 24 Parganas, Burdwan and Murshidabad, all in WB. Microfinance activities commenced in 2000 with loans being offered to self-help groups. Since 2007, the society has transitioned gradually to the joint liability group lending model. As on December 31, 2015, it had 44,356 borrowers across 4362 groups, and an outstanding loan portfolio of INR21.4 crore. SWAPNIL AGRO: CRISIL Withdraws 'B' Rating on INR15cr Cash Loan -------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Swapnil Agro Private Limited (SAPL) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 2 CRISIL A4 (ISSUER NOT COOPERATING; Rating Withdrawn) Cash Credit 15 CRISIL B/Stable (ISSUER NOT COOPERATING; Rating Withdrawn) CRISIL has been consistently following up with SAPL for obtaining information through letters and emails dated November 30, 2019, February 11, 2020 and February 18, 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 SAPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for SAPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has Continues the ratings on the bank facilities of SAPL to 'CRISIL B/Stable/CRISIL A4 Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of SAPL on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Incorporated in 1999, Nagpur-based SAPL is promoted by Mr Satish Munde. It supplies jaggery, chickpea, green gram, and edible oil to Vyankateshwara Mahila Audyogik Utpadak Sahakari Sanstha. TOMCO ENGINEERING: CRISIL Withdraws B+ Rating on INR12cr Loan ------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Tomco Engineering Private Limited (TEPL) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 5 CRISIL A4 (ISSUER NOT COOPERATING; Migrated from 'CRISIL A4'; Rating Withdrawn) Cash Credit 12 CRISIL B+/Stable (ISSUER NOT COOPERATING; Migrated from 'CRISIL B+/Stable'; Rating Withdrawn) CRISIL has been consistently following up with TEPL for obtaining information through letters and emails dated March 23, 2020 and March 27, 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 TEPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for TEPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of TEPL to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of TEPL on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Established as a proprietorship firm in 1960 and later converted into a private limited company in 1999, TEPL undertakes projects in civil construction, primarily irrigation and water treatment segment, in Kerala. TEPL is promoted by its Mr. Paul P Thomas and his wife Mrs. P.V. Elizabeth, and his son Mr. P. Thomas. TULSI DAL MILL: CRISIL Withdraws 'B' Rating on INR9.9cr Cash Loan ----------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Tulsi Dal Mill (TDM) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 9.9 CRISIL B/Stable (ISSUER NOT COOPERATING; Migrated from 'CRISIL B/Stable'; Rating Withdrawn) CRISIL has been consistently following up with TDM for obtaining information through letters and emails dated March 23, 2020 and March 27, 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 TDM. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for TDM is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of TDM to 'CRISIL B/Stable Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of TDM on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Set up in 1987 as a partnership firm by Mr Mohandas Aswani and Mr Tulsi Aswani, Nagpur-based TDM processes and trades in pulses such as toor dal, chana dal (split chickpeas), and green peas. UNITON ENTERPRISE: CRISIL Withdraws B+ Ratings on INR10cr Loans --------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Uniton Enterprise Private Limited (UEPL) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Proposed Long Term 2 CRISIL B+/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Migrated from 'CRISIL B+/Stable'; Rating Withdrawn) Secured Overdraft 8 CRISIL B+/Stable (ISSUER NOT Facility COOPERATING; Migrated from 'CRISIL B+/Stable'; Rating Withdrawn) CRISIL has been consistently following up with UEPL for obtaining information through letters and emails dated March 23, 2020 and March 27, 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 UEPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for UEPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of UEPL to 'CRISIL B+/Stable Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of UEPL on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Established in 2012 as a private limited company, Uniton Enterprises Pvt Ltd (UEPL) is engaged in providing consultancy and education services, trading of bio-diesel and construction material. It is expected to venture into trading of paper in FY20. Based in Hyderabad (Telangana), the company is promoted and managed by Mr. Mahesh Bigala. VINAYAK AGRO: CRISIL Withdraws B+ Rating on INR10cr Receipts ------------------------------------------------------------ CRISIL has withdrawn its rating on the bank facilities of Shree Vinayak Agro (SVA) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Warehouse Receipts 10 CRISIL B+/Stable (ISSUER NOT COOPERATING; Migrated from 'CRISIL B+/Stable'; Rating Withdrawn) CRISIL has been consistently following up with SVA for obtaining information through letters and emails dated March 23, 2020 and March 27, 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 SVA. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for SVA is consistent with 'Scenario 2' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BBB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of SVA to 'CRISIL B+/Stable Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of SVA on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. SVA is Hisar, Haryana based partnership firm established by Ajay Munjal, Ram dass, Pankaj Bhatia, Sanjeev Bhatia and Alpana Taneja is engaged in trading of Cotton yarn, Polyster staple fibre and Cotton. VISHAL CONSTRUCTION: CRISIL Reaffirms 'B' Rating on INR3cr Loan --------------------------------------------------------------- CRISIL has reaffirmed its rating on the bank facilities of Vishal Construction (VC) at 'CRISIL B/Stable/CRISIL A4'. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 5.55 CRISIL A4 (Reaffirmed) Cash Credit 3.00 CRISIL B/Stable (Reaffirmed) Proposed Fund- Based Bank Limits 1.45 CRISIL B/Stable (Reaffirmed) The ratings continue to reflect below average financial risk profile and modest scale of operations. These rating strengths are partially offset by the extensive experience of its promoters in the civil construction industry. Key Rating Drivers & Detailed Description Weaknesses: * Below-average financial risk profile: The small scale of operations have resulted in a modest networth of INR 4.11 crore as on March 31, 2019. Owing to high reliance on external debt and creditors, gearing and total outside liabilities to tangible networth ratio (TOLTNW) are high at 2.24 times and 4.74 times, respectively as on March 31, 2019. Debt-protection metrics are below-average: moderate interest coverage of 2.54 times and weak net cash accruals to adjusted debt (NCAAD) ratio of 0.02 time fiscal 2019. NCAAD is weak due to capital withdrawal of INR 95 lakhs in fiscal 2019. * Modest scale of operations: The firm has modest scale of operations marked by an operating income of INR 26.14 crore in fiscal 2019 against INR 15.04 crores in fiscal 2018. Strength: * Extensive experience of promoters: Firm is promoted by Mr. Vikas Kakad, a first generation entrepreneur and a civil engineer by qualification. Mr. Vikas Kakad has been in this industry for more than 2 decades. CRISIL believes that the business risk profile would continue to benefit over the medium term on account of the promoter's extensive experience in the industry. Liquidity Poor The firm has poor liquidity reflected in fully utilized bank lines over the 12 months ended January 2020. The firm is expected to generate net cash accruals of INR 0.55 crore against repayment obligations of INR 3.46 crore in fiscal 2020. Repayment though higher than accruals are being met on time through unsecured loans and through cash and bank balance. The repayments for the term loans have closed in February 2020 and hence all the term loans have been closed in February 2020. Further, net cash accruals are expected at INR 0.90-1.10 crore per fiscal against nil repayments going forward. Unsecured loans of INR 2.68 crore as on March 31, 2019 infused by partners, friends and family, support the liquidity. Cash and bank balance was INR 8.29 crore as on March 31, 2019: of this cash encumbered as FD was INR 8.22 crore and unencumbered cash was INR 0.07 crore. Capital withdrawal of INR 95 lakhs in fiscal 2019 constrains the liquidity and the same is expected at around INR 90 lakhs going forward. Outlook: Stable CRISIL believes that VC will continue to benefit over the medium term from the industry experience of its promoters in the civil construction industry. Rating Sensitivity Factors Upward Factors: * Significant improvement in the firm's scale of operations and operating margin resulting in higher-than-expected cash accruals * Enhancement in bank lines or improvement in working capital cycle leading to bank limit utilization under 90% thus adding cushion to liquidity Downward Factors: * Decline in scale of operations and operating margin, or large capital withdrawal resulting in net cash accruals below INR 30 lakhs * Significant debt-funded capex or further stretch in working capital requirements leading to contraction of higher external debt thus further weakening the liquidity and financial risk profile VC is a partnership firm set up in 1996 by Mr Vikas Kakad and Ms Shakuntala Kakad. Based in Mumbai, the firm primarily undertakes construction of bridges in Maharashtra. VISHNU SALES: CRISIL Assigns 'B' Ratings to INR10cr Loans --------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of Vishnu Sales Agencies (VSA). Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit .3 CRISIL B/Stable (Assigned) Proposed Long Term Bank Loan Facility .7 CRISIL B/Stable (Assigned) The rating reflects the modest scale of VSA's operation, and large working capital requirement. These weaknesses are partially offset by the extensive experience of the proprietor. Key Rating Drivers & Detailed Description Weaknesses * Low profitability: Intense competition and the trading nature of business may continue to constrain scalability, pricing power and profitability. Thus, the operating margin was low at 2.12% in fiscal 2019. * Large working capital requirement: The working capital cycle has been stretched and may remain so even over the medium term; hence, its efficient management will be closely monitored. Gross current assets (GCAs) have been sizeable at 1236-196 days during the three fiscals ended March 31, 2019. GCAs were 1,236 days as on March 31, 2019, driven by substantial debtors of 691 days and huge inventory of 317 days; also, creditors extended by the suppliers stood at 619 days. Strength * Extensive experience of the proprietor: Benefits from the proprietor's experience of over three decades, his strong understanding of local market dynamics, and healthy relations with suppliers and customers should continue to support the business. Liquidity Poor Liquidity has been healthy and should remain so going forward as well, supported by the absence of any large, debt-funded capital expenditure plans. Absence of any yearly maturing debt permits the entire cash accrual, to aid financial flexibility. Current ratio was comfortable at over 2.25 times as on March 31, 2019. Outlook: Stable CRISIL believes VSA will continue to benefit from longstanding relationships with clients and the extensive experience of the proprietor. Rating Sensitivity factors Upward factors * Revenue growth of over 20%, with the operating margin increasing by 100 basis points, leading to higher-than- expected cash accrual * Prudent working capital management Downward factors * Revenue falling by more than 10% as compared to levels of fiscal 2019 along with a steep decline in profitability * Weakening of capital structure VSA was set up in 2013 by the proprietor, Mr Vishnu Kumar Rajput. This Mathura (Uttar Pradesh)-based firm trades in textile products. Mr Kapil Rajput currently manages the business. YADAV TRACTOR: CRISIL Withdraws B+ Rating on INR3.5cr Cash Loan --------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Yadav Tractor Company (YTC) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Bank Guarantee 3 CRISIL A4 (ISSUER NOT COOPERATING; Migrated from 'CRISIL A4'; Rating Withdrawn) Cash Credit 3.5 CRISIL B+/Stable (ISSUER NOT COOPERATING; Migrated from 'CRISIL B+/Stable'; Rating Withdrawn) CRISIL has been consistently following up with YTC for obtaining information through letters and emails dated March 16, 2020 and March 20, 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 YTC. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for YTC is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of YTC to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of YTC on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. YTC is a Lucknow based partnership firm set up by Mr Ram Yadav and Mr Dwarika Yadav in 1990. It is an authorised dealer of Mahindra and Mahindra Tractors and also operates a workshop. The firm has seven branches spread across different areas of Lucknow. YARLAGADDA EXPORTS: CRISIL Withdraws B+ Rating on INR17cr Credit ---------------------------------------------------------------- CRISIL has withdrawn its rating on the bank facilities of Yarlagadda Exports Private Limited (YEPL) on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Amount Facilities (INR Crore) Ratings ---------- ----------- ------- Cash Credit 17 CRISIL B+/Stable (ISSUER NOT COOPERATING; Migrated from 'CRISIL B+/Stable'; Rating Withdrawn) Foreign Exchange .25 CRISIL A4 (ISSUER NOT Forward COOPERATING; Migrated from 'CRISIL A4'; Rating Withdrawn) Proposed Long Term 10.75 CRISIL B+/Stable (ISSUER NOT Bank Loan Facility COOPERATING; Migrated from 'CRISIL B+/Stable'; Rating Withdrawn) CRISIL has been consistently following up with YEPL for obtaining information through letters and emails dated March 18, 2020 and March 24, 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 YEPL. This restricts CRISIL's ability to take a forward looking view on the credit quality of the entity. CRISIL believes that the information available for YEPL is consistent with 'Scenario 1' outlined in the 'Framework for Assessing Consistency of Information with CRISIL BB' rating category or lower. Based on the last available information, CRISIL has migrated the ratings on the bank facilities of YEPL to 'CRISIL B+/Stable/CRISIL A4 Issuer not cooperating'. CRISIL has withdrawn its rating on the bank facilities of YEPL on the request of the company and after receiving no objection certificate from the bank. The rating action is in-line with CRISIL's policy on withdrawal of its rating on bank loan facilities. Incorporated in 1990 and promoted Mr Y A Chowdary, YEPL processes and sells tobacco. Its office is in Guntur, Andhra Pradesh. ================= I N D O N E S I A ================= BANK BRISYARIAH: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Rating on state-owned bank PT Bank Rakyat Indonesia Tbk at 'BBB-' and that on its sharia banking subsidiary PT Bank BRIsyariah Tbk at 'BB+'. BRI's other international ratings have also been affirmed. At the same time, Fitch Ratings Indonesia has affirmed the National Long-Term Ratings on BRI at 'AA+(idn)' and that on BRIS at 'AA(idn)'. The Outlooks on all long-term ratings are Stable. Fitch expects the performance of Indonesian banks, including BRI, to deteriorate in the short term as the coronavirus pandemic leads to weaker economic growth and business activity stemming from trade disruption, lower manufacturing output, and diminished consumer confidence and spending. This will put pressure on banks' asset quality, profitability and credit growth. Fitch has revised its operating environment score for Indonesia's banks to 'bb+', from 'bbb-' reflecting these risks. 'AA(idn)' National Long-Term Ratings denote expectations of a very low level of default risk relative to other issuers or obligations in the same country or monetary union. The default risk inherent differs only slightly from that of the country's highest rated issuers or obligations. 'F1(idn)' National Short-Term Ratings indicate the strongest capacity for timely payment of financial commitments relative to other issuers or obligations in the same country. Under the agency's National Rating scale, this rating is assigned to the lowest default risk relative to others in the same country. Where the liquidity profile is particularly strong, a "+" is added to the assigned rating. KEY RATING DRIVERS IDRS, SUPPORT RATING, SUPPORT RATING FLOOR AND NATIONAL RATINGS BRI's IDRs and National Ratings are support-driven. Its Support Rating and Support Rating Floor reflect Fitch's belief that there is a high probability that the bank would receive extraordinary sovereign support in the event of need. Fitch's assessment is based on BRI's systemic importance as Indonesia's largest commercial bank with a 16% share of industry assets and the state's majority ownership. The Outlook on the support-driven Long-Term IDR is Stable, in line with that of the sovereign (BBB/Stable). VIABILITY RATING BRI's Viability Rating reflects its capitalization, which is among the highest of its peers; its position as the largest Indonesian bank with a distribution network that is the most extensive in the country; and an unchallenged franchise in rural micro-lending. The VR also reflects the bank's above-peer profitability and margins, and a stable funding and liquidity profile that benefits from its government ownership. Fitch believes that BRI's above-peer capital buffer provides a significant cushion to withstand coronavirus-related market and financial stress, supported by satisfactory internal capital generation stemming from its above-peer profitability. Fitch expects most local banks - including BRI - to report higher credit costs and lower capitalization ratios following the introduction of the IFRS 9 accounting standard in Indonesia from January 2020. Fitch expects the change to be manageable for BRI as its common equity Tier 1 ratio is likely to remain around 20%. However, Fitch has lowered its capitalization and leverage mid-point to 'bbb-' from 'bbb' as its expected ratio is commensurate with a score at the lower end of the 'bbb' category. The bank's CET1 capital ratio of 21.7% at end-2019 was in line with the industry average of 21.9%. BRI's asset quality will come under pressure in the near term as credit growth slows and borrower repayment capacity is challenged. This will result in an increase in non-performing, "special-mention" and restructured loans. Fitch has lowered the asset quality factor mid-point to 'bb' from 'bb+' as a result and assigned a negative outlook on the factor, reflecting the risk that economic deterioration could be worse than its base case. Deterioration could become most visible in the bank's micro and SME segments, which accounted for around 61% of the bank's total loans at end-2019, as these segments consist of loans to low-income borrowers and businesses that are typically more susceptible to economic changes, respectively. BRI's NPL ratio increased to 2.8% by end-2019 (end-2018: 2.3%), higher the industry's 2.5% average due to weaker loan quality in its corporate segment. Its "special-mention" loan ratio of 3.9% was below the sector average of 5.1% and loan-loss allowance at 154% of NPLs was higher than the industry's 116% average. Fitch expects BRI's profitability to suffer in the near term from higher provisioning as asset quality worsens. However, Fitch expects BRI to fare better than most domestic peers due to its high-yielding micro-lending business and stable low-cost deposit base. These contributed to its higher-than-peer operating profit/risk weighted assets ratio of 4.8% at end-2019 (2018: 5.0%, industry at end-2019: around 3.3%) and net interest margin of 7.1% (industry: 4.9%), which should help to maintain the bank's above-average earnings buffer. Fitch has maintained the profitability and earnings mid-point at 'bbb-' but Fitch has assigned a negative outlook on the factor reflecting downside risk to earnings should developments turn out worse than in its base case. BRI's funding is supported by its status as the largest state-owned bank and its extensive rural distribution network, which should continue to provide the bank with a stable source of lower-cost funding in the medium term. The bank's loans/deposits ratio of 89% at end-2019 was below the industry average of 94% and its lower-cost funds/total deposits ratio of 58% was in line with the industry's 57%. Liquidity should remain ample as reflected in liquidity coverage and net stable funding ratios of 227% and 136%, respectively, which were well above its 100% minimum requirement. Fitch has maintained BRI's funding and liquidity mid-point at 'bbb-' with a stable outlook. SUBSIDIARY RATING The Long-Term IDR and National Ratings on BRIS reflect Fitch's expectation that the bank would benefit from extraordinary support from its parent BRI, if needed. Fitch views BRIS as a strategically important subsidiary that has a key role in expanding BRI's sharia business in Indonesia. BRI's support is manifested in its majority ownership of the bank, name association and common branding between the two, and operational alignment in key areas. BRI has significant ability to support BRIS, as the latter accounted for only around 3% and 2% of its parent's consolidated assets and equity, respectively, at end-2019. SENIOR DEBT RATINGS BRI's foreign-currency denominated senior unsecured bonds are rated at the same level as its Long-Term IDR in accordance with Fitch's rating criteria, as the bonds represent direct, senior obligations of the bank and rank equally with the bank's other senior unsecured obligations. SUBORDINATED DEBT RATING BRIS's subordinated sukuk securities are rated three notches below its National Long-Term Rating of 'AA(idn)'. One notch is for loss-severity risk to reflect the sukuk's subordination relative to senior unsecured instruments, the presence of a non-viability clause and the partial or full write-down feature at the point of non-viability. Two additional notches are for non-performance to reflect the risk that distributions must be deferred and accumulated if they could cause BRIS's capital ratios to breach minimum regulatory requirements. Fitch believes these going-concern loss-absorption features significantly increase the risk of non-payment prior to any point of non-viability trigger. RATING SENSITIVITIES IDRS, SUPPORT RATING, SUPPORT RATING FLOOR AND NATIONAL RATINGS Factors that could, individually or collectively, lead to negative rating action/downgrade: A downgrade of Indonesia's sovereign rating or a perceived weakening of support propensity from the government could lead to a downgrade of BRI's Support Rating and Support Rating Floor, which would also lead to a downgrade of its IDRs. A downgrade of BRI's National Long-Term Rating would likely arise from a weakening in its overall credit profile relative to the national-rating universe of Indonesian rated entities. Factors that could, individually or collectively, lead to positive rating action/upgrade: An upgrade of Indonesia's sovereign rating or its view of an increased support propensity from the government could lead to an upgrade of BRI's Support Rating Floor, which would also lead to an upgrade of its Long-Term IDR. An upgrade of BRI's National Long-Term Rating would likely arise from a strengthening in its overall credit profile relative to Indonesia's national-rating universe. There is no upside for the bank's National Short-Term Rating, which is already at the highest point on the scale. VIABILITY RATING Factors that could, individually or collectively, lead to negative rating action/downgrade: A VR downgrade could stem from a significantly greater coronavirus-related deterioration in BRI's financial position than Fitch currently expects. A decline - actual or expected - in its CET1 capital ratio significantly below its expected floor of around 20% would lead us to lower the bank's capitalization and leverage score and result in a VR downgrade. Significantly weaker asset quality, as likely reflected in asset quality metrics - including non-performing, "special-mention" and restructured loan ratios - that deteriorate more than expected under its base case, would also put pressure on the rating. Negative rating action could also be triggered by a prolonged and severe economic disruption from the coronavirus pandemic. Such a scenario could lead to a lowering of the operating environment score for Indonesia's banks to 'bb', which would also put pressure on the bank's VR. However, BRI's IDRs and National Long-Term Rating would only be affected by a downgrade of the VR if, at the same time, Fitch also downgraded the bank's Support Rating Floor. A downgrade of Indonesia's sovereign rating would not necessarily lead to a downgrade of the bank's VR. Factors that could, individually or collectively, lead to positive rating action/upgrade: Fitch believes that upside on BRI's VR is unlikely in the near term, given current industry operating conditions and prospects. Rating upside may result from enhanced corporate governance and a more visible improvement in the bank's risk-management and financial profile. Upside could also stem from improvement in the operating environment, such as evidence of greater resilience to economic shocks, and continued development of the capital markets, which could lead to better and stable financial performance by BRI. An upgrade of its VR would lead to an upgrade of its IDRs and - assuming no change in the sovereign rating - its National Long-Term Rating. SUBSIDIARY RATINGS Factors that could, individually or collectively, lead to negative rating action/downgrade: A downgrade of BRI's ratings would likely lead to a downgrade of the ratings on BRIS. A perceived weakening of support from BRI, most likely indicated through a lower contribution by BRIS to its parent's business targets, would also be negative for the subsidiary's ratings. Factors that could, individually or collectively, lead to positive rating action/upgrade: An upgrade of BRI's ratings would likely lead to an upgrade of BRIS's ratings. A significantly greater contribution to its parent and stronger control of the subsidiary by BRI could also lead to an upgrade. SENIOR DEBT RATINGS Factors that could, individually or collectively, lead to negative rating action/downgrade: A downgrade of BRI's Long-Term IDR would result in a downgrade of the rating on the banks' foreign-currency denominated senior bond. Factors that could, individually or collectively, lead to positive rating action/upgrade: An upgrade of BRI's Long-Term IDR would result in a corresponding upgrade of the bank's senior bond issue rating. SUBORDINATED DEBT RATINGS Factors that could, individually or collectively, lead to negative rating action/downgrade: A downgrade of parent BRI's VR, would lead to a downgrade of the rating on BRIS's subordinated sukuk securities. A downgrade could also result from a widening of the notching on these securities following an update to Fitch's Bank Rating Criteria on February 28, 2020. Fitch intends to review the notching on national ratings assigned to Indonesian banks' Tier 2 debt issuance by end-August 2020 at the latest. Factors that could, individually or collectively, lead to positive rating action/upgrade: An upgrade of BRI's VR, would likely lead to an upgrade of the rating on BRIS's subordinated sukuk securities. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS BRI's ratings are linked to those of the Indonesian sovereign (BBB/Stable) based on its view of potential extraordinary support. The ratings on BRIS are linked to those of BRI, reflecting its view of potential extraordinary support from its parent, if needed. ESG CONSIDERATIONS Fitch has assigned ESG scores to BRI and BRIS. Both banks have an ESG Relevance Score of '4' for Governance Structure due to its belief that there is a moderate risk that the government may use its majority ownership to exert undue influence on the banks' boards - for example, to support government policy initiatives - which may constrain senior management's independence and effectiveness. This has a negative impact on the banks' credit profiles, and is relevant to the ratings in conjunction with other factors. 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 entities, either due to their nature or the way in which they are being managed by the entities. PT Bank Rakyat Indonesia (Persero) Tbk - LT IDR BBB-; Affirmed - ST IDR F3; Affirmed - Natl LT AA+(idn); Affirmed - Natl ST F1+(idn); Affirmed - Viability bbb-; Affirmed - Support 2; Affirmed - Support Floor BBB-; Affirmed - Senior unsecured; LT BBB-; Affirmed PT Bank BRIsyariah Tbk - LT IDR BB+; Affirmed - Natl LT AA(idn); Affirmed - Natl ST F1+(idn); Affirmed - Subordinated Natl LT A(idn); Affirmed ========= J A P A N ========= SOFTBANK GROUP: Sees US$12.5BB Losses as Startup Bets Backfire -------------------------------------------------------------- Bloomberg News reports that SoftBank Group Corp. forecast a record JPY1.35 trillion (US$12.5 billion) operating loss for the fiscal year ended in March, a sign of how badly Masayoshi Son's bets on technology startups have been battered in recent months. Bloomberg relates that the Japanese company expects to record a JPY1.8 trillion loss from its Vision Fund and another JPY800 billion in losses from SoftBank's own investments. It has written down the value of investments in companies, including office-rental startup WeWork and satellite operator OneWeb, which filed for bankruptcy last month. According to Bloomberg, Mr. Son's conglomerate has taken one blow after another since the implosion of WeWork's initial public offering last year and SoftBank's subsequent bailout. It bet heavily on sharing-economy startups, which allow people to split the use of offices or cars, but those investments have been particularly hard hit as the coronavirus pandemic curbs unnecessary human interaction. "This is looking more and more like the perfect storm for SoftBank," the report quotes Justin Tang, head of Asian Research at United First Partners, as saying. "The question is whether there is more to come." The Vision Fund probably wrote down about JPY1 trillion in assets in the March quarter, based on its earlier earnings reports, Bloomberg says. SoftBank didn't detail all the startups that took hits. Bloomberg relates that investors have become increasingly spooked about the stability of Mr. Son's empire and its $100 billion Vision Fund amid the virus outbreak. Shares tumbled at one point more than 50% from their peak this year, and SoftBank's credit default swaps -- the cost of insuring debt against default -- spiked to their highest levels in about decade, according to Bloomberg. Bloomberg says Mr. Son has also drawn unusual pressure from some investors. The U.S. activist investor Elliott Management Corp. took a substantial stake in the company, advocating for changes in governance and investing practices. The billionaire responded with a strategy to part with some of his precious holdings, unloading about $41 billion in assets to buy back shares and pay off debts, Bloomberg notes. SoftBank plans to sell about $14 billion of shares in Chinese e-commerce leader Alibaba Group Holding Ltd. as part of an effort, Bloomberg News has reported. "This will only make asset sales even more urgent for SoftBank," Bloomberg quotes Koji Hirai, the head of M&A at advisory firm Kachitas Corp. in Tokyo, as saying. It's a dramatic turnaround for the 62-year-old Son, Bloomberg says. Just two months ago, he declared on stage in Tokyo that SoftBank's fortunes were turning around after the WeWork meltdown. "After a difficult winter always comes spring," Son said at the time. He highlighted a big surge in the shares of Uber Technologies Inc., one of SoftBank's bigger holdings, explaining that his company would likely be able to book a profit on the stake. He also declared WeWork poised for a comeback, recalls Bloomberg. But the coronavirus outbreak wreaked havoc on those plans. With fear of contagion, people stopped sharing offices from Beijing to New York. Ride-hailing companies -- SoftBank has stakes in four of the biggest worldwide -- saw business evaporate, according to Bloomberg. Another sign of the troubles is Oyo, a hotel-booking service into which SoftBank invested about $1.5 billion, Bloomberg relates. Its business model has been slammed as global travel screeched to a halt. This month, Ritesh Agarwal, founder and chief executive officer, said the company would furlough employees in countries outside India as it struggles to survive the virus, Bloomberg relays. Complicating the situation is that Agarwal, 26, borrowed about $2 billion to buy more shares in his own company. Son personally guaranteed the loans, Bloomberg News has reported. Bloomberg adds that SoftBank's controversial accounting practices have aggravated the volatility of its earnings. The Vision Fund booked profits on startups as their valuations rose, even if the gains were only on paper and no shares were sold. WeWork and Oyo both contributed to profits early on in the fund's lifetime. Now the Vision Fund, which Mr. Son has declared is the future of his company, is piling up losses as valuations are written down again. The fund has lost a cumulative JPY240 billion since SoftBank began breaking out its results, including the most recent quarter forecast, according to Bloomberg calculations. SoftBank's operating loss for the current fiscal year is the most ever for the company, which Mr. Son took public in 1994. Its projected net loss of JPY750 billion would also be a record and compares with a JPY1.41 trillion profit the year earlier, Bloomberg discloses. Sales for the fiscal year are expected to fall about 36% to JPY6.15 trillion after SoftBank removed U.S. unit Sprint Corp. from its balance sheet to account for its merger with T-Mobile US Inc., Bloomberg says. "The coronavirus was the final blow, but bad investments and misjudgments were the start," Hirai of Kachitas said. About Softbank Group Headquartered in Tokyo, SoftBank Group Corp. provides telecommunication services. The Company also operates ADSL (Asymmetric Digital Subscriber Line) and fiber optic high-speed Internet connection, e-Commerce businesses, and Internet based advertising and auction businesses. As reported in the Troubled Company Reporter-Asia Pacific, Egan-Jones Ratings Company, on March 26, 2020, downgraded the foreign currency and local currency senior unsecured ratings on debt issued by SoftBank Group Corporation to BB- from BB. The TCR-AP also reported that Moody's Japan K.K. downgraded SoftBank Group Corp.'s corporate family rating and senior unsecured rating to Ba3 from Ba1, and its subordinate rating to B2 from Ba3 in March 2020. At the same time, Moody's has placed the ratings under review for further downgrade. The rating action follows SBG's announcement on March 23, 2020 that it will monetize up to JPY4.5 trillion (about $41 billion) of its investment portfolio and use the proceeds to repurchase up to JPY2 trillion ($18 billion) of its own shares. It will use the remaining JPY2.5 trillion ($23 billion) to pay back its debt at the holding company. The company plans to execute these transactions over the next four quarters. ===================== N E W Z E A L A N D ===================== TANGO FINANCE: Burger King NZ Placed in Receivership ---------------------------------------------------- Mark Quinlivan at Newshub reports that the owners of New Zealand's Burger King franchise have been placed in receivership. KordaMentha restructuring partner Grant Graham said the COVID-19 lockdown has significantly impacted the food giant's finances, Newshub relates. Mr. Graham has been appointed as the company's receiver along with Brendon Gibson, also of KordaMentha, Newshub discloses. According to the report, Mr. Graham said the receivership is part of a plan to restart the businesses post-lockdown and transition to a new owner. The parent shareholding companies that have been placed in receivership are Tango Finance Ltd, Tango New Zealand Ltd, and Antares New Zealand Holdings Ltd. Newshub relates that Mr. Gibson said senior management teams remain committed to the business and serving customers. "The team is also focused on the reopening plan to be implemented once the lockdown is lifted and conditions allow the business to restart." Speaking to the Epidemic Response Committee on April 13, Finance Minister Grant Robertson said it was important to reiterate that it's the parent company in receivership, not the franchise itself, according to Newshub. "The operating subsidiary here in New Zealand is not actually in receivership and I understand that there is a significant amount of work going on a creditor compromise," Newshub quotes Mr. Robertson as saying. "That means, I think, if that creditor compromise comes through, we'll see the operating arm of Burger King in New Zealand continue to be able to trade and then as we move through the [alert] levels continue to be able to operate." ============= V I E T N A M ============= VIETNAM ELECTRICITY: Fitch Alters Outlook on 'BB' LT IDR to Stable ------------------------------------------------------------------ Fitch Ratings has revised the Outlooks on Vietnam Electricity, National Power Transmission Corporation and Vietnam Oil and Gas Group to Stable from Positive. The agency has affirmed the three companies' Issuer Default Ratings and senior unsecured ratings at 'BB'. The rating actions follow the revision of the Outlook on Vietnam (BB/Stable) to Stable from Positive on April 8, 2020. KEY RATING DRIVERS EVN's ratings reflect its Standalone Credit Profile, which is at the same level as the Vietnam sovereign rating. Under Fitch's Government-Related Entities Rating Criteria, EVN's ratings will be equalized to that of the sovereign in case of any weakening in its SCP given the company's strong linkages with the state. PVN's ratings are capped by those of the sovereign under Fitch's Government-Related Entities Rating Criteria given the company's strong linkages with the state. PVN's SCP is assessed at 'bb+'. EVNNPT's ratings are based on the consolidated profile of EVN, which owns 100% of EVNNPT, in line with Fitch's Parent and Subsidiary Rating Linkage criteria. The consolidated rating approach is driven by strong linkages between EVNNPT and its parent. EVNNPT's SCP is assessed at 'bb+'. DERIVATION SUMMARY Not applicable KEY ASSUMPTIONS Not applicable RATING SENSITIVITIES EVN Factors that could, individually or collectively, lead to positive rating action/upgrade: - Positive rating action on the sovereign, provided the likelihood of state support does not deteriorate significantly Factors that could, individually or collectively, lead to negative rating action/downgrade: - Negative rating action on the sovereign - Deterioration in EVN's SCP, along with significant weakening in linkages with the state EVNNPT Factors that could, individually or collectively, lead to positive rating action/upgrade: - Positive rating action on EVN - Fitch does not expect positive action on EVNNPT's SCP in the absence of consistent implementation of the current tariff framework and improvement in EVN's credit profile Factors that could, individually or collectively, lead to negative rating action/downgrade: - Negative rating action on EVN - Fitch would lower the company's SCP upon adverse regulatory changes that result in deterioration of EVNNPT's business profile PVN Factors that could, individually or collectively, lead to positive rating action/upgrade: - Positive rating action on the sovereign Factors that could, individually or collectively, lead to negative rating action/downgrade: - Negative rating action on the sovereign BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Not applicable SUMMARY OF FINANCIAL ADJUSTMENTS Not applicable REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS The ratings of EVN, PVN and EVNNPT are directly linked to the credit quality of their parents, the sovereign in the case of EVN and PVN, and EVN in the case of EVNNPT. A change in Fitch's assessment of the credit quality of the respective parent would automatically result in a change in the rating on EVN, PVN and EVNNPT. ESG CONSIDERATIONS PVN has an ESG relevance score of 4 for financial transparency, due to the below-average timeliness and transparency of financial disclosure compared with other rated corporates, which has a negative effect on the credit profile, and is relevant to the ratings in conjunction with other factors. Except for the matters discussed above, the highest level of ESG credit relevance, if present, is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entities, either due to their nature or the way in which they are being managed by the entities. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman, Editors. Copyright 2020. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. *** End of Transmission ***